If you want to know what is happening to the global economy, the chemical industry will provide the answers. It has an excellent correlation with IMF data, and also benefits from the fact it has no “political bias”. It simply tells us what is happening in real-time in the world’s 3rd largest industry. The chart above confirms the extremely high correlation: ? It shows annual GDP % growth figures from the IMF on the vertical axis from 2000, including the 2016 forecast ? The horizontal axis shows the annual change in Capacity Utilisation % data for the global chemical industry The correlation is remarkable at 88%. Nothing that I ha...
Wall Street stalwart Goldman Sachs is set to pay an $100m exit package to Gary Cohn, its former President and COO. In December, Cohn announced he would be leaving his position at the bank in order to take over as President Trump’s chief economic advisor. Over the course of Cohn’s 25-year career at Goldman, the investment banker acquired many bonuses and stock awards, which he was due to receive in the coming years. However, government ethics rules state these investments are subject to a “conflicted employment provision”, meaning Cohn is eligible to receive an accelerated payout upon joining the Trump administration. The president has...
On January 23, newly appointed US President Donald Trump signed an executive order to scrap the Trans Pacific Partnership (TPP), bringing an end to the US’ long held commitment to free trade. By terminating the pact, Trump is making good on his ‘America First’ campaign, through which he vowed to block multilateral trade agreements in favour of brokering bipartisan deals in the US’ interest. The deal ultimately held the potential to become a single market comparable to the EU The ambitious 12-nation trade deal – negotiated by Barack Obama – covered 40 percent of the world’s economy, including Mexico, Australia, Japan and Malay...
New capital controls have been implemented in China, marking the latest in a series of efforts by Chinese authorities to support the country’s struggling currency, which fell 6.5 percent against the dollar in 2016. The currency has been gradually falling against the dollar since August 2015, when the Chinese central bank allowed the markets to play a stronger role in determining the value of the yuan. As part of its efforts to relieve this downward pressure, the Chinese central bank has relied heavily on its foreign currency reserves, which have now dipped below $3trn. [The growing use of bitcoin has] prompt[ed] experts to speculate the cur...
Donald Trump’s incoming administration is to start renegotiating the North American Free Trade Agreement (NAFTA) with Mexico and Canada in a series of upcoming meetings. Trump first pledged to overhaul the trade pact during his presidential campaign, vowing to provide more favourable terms for the US and address trade deficits with Mexico and Canada. Speaking at a swearing-in ceremony for senior White House advisors, the newly inaugurated President confirmed: “We are going to start renegotiating on NAFTA, on immigration and on security at the border.” Critics from both parties [have] suggested [NAFTA] has ultimately harmed US businesses...
With the pharmaceutical industry under substantial political and public scrutiny, many drug makers are finding themselves forced to justify their pricing methods. The Organisation for Economic Co-operation and Development (OECD) has now added to the debate, releasing a new report criticising the value for money offered by many new drugs. In the New Health Technologies: Managing Access, Value and Sustainability report, the OECD claims that while the price of newly developed drugs has substantially increased, the relative benefits for patients have not. Additionally, with healthcare’s future focusing on specialised and tailor-made treatments,...
On January 16, French lens producer Essilor announced it will merge with Ray-Ban designer, Luxottica, in a deal worth €50bn ($53bn) – creating a powerhouse in the global eyewear market. [The merger could] substantially shake up the international eyewear industry… with the combined company operat[ing] in over 150 countries Leonardo Del Vecchio, Chairman of Delfin and Executive Chairman of Luxottica Group, said: “Finally, after 50 years, two products which are naturally complementary, namely frames and lenses, will be designed, manufactured and distributed under the same roof.” Luxottica, which is based in Milan, is a world leader i...
According to data released by Spain’s Office of National Statistics on January 13, Spanish inflation jumped to a three-year high in December 2016. The annual change in the consumer price index reached 1.6 percent in December, up 0.9 percent from the previous month. Meanwhile, the annual change in the Harmonised Index of Consumer Prices hit 1.4 percent – a substantial boost on the below zero figures posted in the last two years. [Spain] has continued to struggle with high unemployment levels since the Global Financial Recession The nation has continued to struggle with high unemployment levels since the Global Financial Recession, with r...
A World Bank report has branded 2016 as the worst year for global growth since the Global Financial Crisis, with growth estimated at just 2.3 percent. While the forecast for 2017 is slightly more optimistic – at 2.7 percent – the World Bank warns many uncertainties remain and political risks have the potential to undermine recovery. The report suggests a US fiscal stimulus package could help to accelerate the global growth rate, with the US economy large enough to significantly influence global trends: “Economic policy initiatives in the United States can have sizable ripple effects around the world – a testament to the US’ size and...
China’s state control of the salt sector – thought to date back to the seventh century BC – was officially dismantled on January 1 as salt producers were exposed to market forces. The monopolistic system was previously under full state control, with producers required to operate under a national quota. Under the new reforms, licensed companies will now be permitted to set their own production rates and distribution patterns, as well as being able to run their own marketing campaigns. Companies will also be permitted to operate outside their previously designated areas for the first time. Additionally, the reforms will allow new openings...