Archive | July, 2008

Revisions, revisions

Statisticians love re-writing economic history. And a notable example of this has occurred today. US government statisticians reported that the US economy actually declined by 0.2% at the end of last year. Whereas, 6 months ago, they reported it as having grown by 0.6%. Few readers of this blog will be too surprised. Earlier this […]

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US housing ‘terrible’

When a leading banker says things look ‘terrible’, one know they must be really bad. Jamie Dimon is CEO of JP Morgan Chase, the only major US bank not to take write-downs on its housing loans to date. He described the US housing market as follows: ‘We saw subprime go first, then you see home […]

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Just saying ‘No’

I noted back in February that US banks were tightening lending standards into the housing sector. Now they are doing the same with business loans. The New York Times reports today that businesses around the country are finding it more difficult to borrow. As a result, companies that depend on bank financing are having to […]

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The cost of Asian subsidies

The Asian Development Bank (ADB) says Asian governments ‘are caught in the pincer grips of slowing growth and rising inflation’. Whilst the cost of subsidies is ballooning. India, for example, will spend $42.5bn in oil subsidies this year, ‘six times the entire education budget’. As the ADB notes, `increased food and energy subsidies erode fiscal […]

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Growth Jul08.jpg

The end of ‘stretch targets’

There is little doubt that chemical growth is weakening. The above chart, taken from Kevin Swift’s excellent weekly report for the American Chemistry Council, indicates that a serious downturn is underway.

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Germany’s growth slows

Germany is the powerhouse economy of Europe. Its also a late-cycle economy, relying more on engineering and equipment sales than consumer spending. So until recently, its growth has seemingly not been affected by the global slowdown. But Germany’s Chancellor, Angela Merkel, indicated yesterday that a ‘significant fall’ was likely in economic growth next year. Industrial […]

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European auto sales fall 8%

Europe is the world’s largest auto manufacturer, accounting for 32% of the global market. So news that European auto sales fell 8.3% last month, compared to 2007, is worrying. Italy’s sales fell 20%, and were today described as ‘disastrous’ by CEO Sergio Marchionne, who announced that 4 of their 6 plants will shut for 3 […]

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Merrill cuts back on private jets

I suppose when an industry has lost $400bn in a year, some sacrifices have to be made. In May, I documented how Deutsche Bank was no longer approving expense claims for ‘adult entertainment’. Well, things have got worse since then, as the losses have continued to mount: • Goldman staff have to contribute to repair […]

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A ‘profound’ downturn

The current downturn is different from anything that has occurred in the last 15 years. Policy makers are clearly worried. The UK’s Finance Minister, Alistair Darling, told Bloomberg today that ‘the effect of what has happened is going to be far more profound than people predicted at the start of the year’. He added that […]

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Intel’s Grove calls for electric cars

A new debate about increasing US energy security, by reducing gasoline dependence, may be getting underway. Leading the move is Andy Grove, the man who made Intel into the leading global chip company. His key phrase, and the title for his 1996 book, was ‘Only the paranoid survive’. Now he is taking this approach into […]

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