Yesterday's action in financial markets reminded me of the Bird/Fortune video (noted here in December), where they took a satirical look at the causes of the sub-prime debacle. Specifically, the question in the interview where Fortune describes Bird as a 'sophisticated investment banker, with his fingers right on the pulse'.
The moment that recalled this was after the opening bell on Wall Street, when the Dow was trading happily, so it seemed, above 12500. Then General Motors released its auto sales figures for May, and the market promptly collapsed nearly 200 points. One wondered why? I can't believe any chemical industry executive was surprised to see that GM sales were down 16% YTD, given that April had been down 17%, and that all the major companies had said the industry's slide was continuing.
It seems that all these 'sophisticated' investors had assumed that Father Christmas had been going to appear (presumably in the shape of the US Treasury tax rebates that were mailed in April), to single-handedly rescue the US auto industry? This would indeed have been a triumph of wish-fulfilment. For as every Western child knows, Father Christmas visits in December, and only if you've been good during the year.
In the meantime, the bad news for chemical sales is that the 2 key US market sectors, housing and autos, are continuing to get worse, not better. The second half of the year is shaping up to be very difficult indeed.