By John Richardson ALL the excitement over the positive impact of US tax cuts should be placed very firmly in this context from an early July Reuters article: US budget analysts generally look at the impact of tax changes over a ten-year period. The tax cuts approved at the end of 2017 were estimated to […]
Asian Chemical Connections
Asian Naphtha-PE Spreads Collapse By 80% As 2018 Challenges Build
By John Richardson ASIAN naphtha-to-polyethylene (PE) spreads collapsed by 80% in the first week of January compared with December last year because of the failure to pass on the rise in naphtha feedstock costs resulting from higher oil prices. In an update of the chart I’ve been running since late last year, what you see […]
Central Banks: 672 Failed Interest Rate Cuts And Counting
By John Richardson THE world’s top 50 central banks have cut interest rates at least 672 times since the Lehman Bros crisis – perhaps 673 if you include yesterday’s decision by the Bank of England to lower the UK’s cost of borrowing (it is very hard to keep track of the exact number, as interest rates have […]
Chasing Inflation: When Something Doesn’t Work, Stop Doing It
By John Richardson In Greek mythology Sisyphus was punished for chronic deceitfulness by being compelled to roll an immense boulder up a hill, only to watch it roll back down, repeating this action forever. There is a good comparison here with what the Fed and the European Central Bank have been trying to do with inflation. […]
Central Banks Risk Being Behind The Curve
By John Richardson BACK in 2003 the Bank for International Settlements (BIS) predicted that dangerous imbalances were building up in the global financial system. The BIS, a Brussels-based international organisation for central banks, was worried that the Fed and other central banks were compromising long term stability in favour of short-term growth. Sadly, policymakers didn’t […]
Managing European Volatility
By John Richardson THE blog was in Amsterdam this week for an ICIS training event involving delegates who were European chemicals and polymer buyers. They had one overriding question for us: “How on earth do we manage the extreme volatility in our raw-material costs?” The answer we gave was to not confuse oil-price driven temporary surges […]