About Paul Hodges

Paul Hodges is Chairman of International eChem, trusted commercial advisers to the global chemical industry. The aim of this blog is to share ideas about the influences that may shape the chemical industry over the next 12 – 18 months. It will try to look behind today’s headlines, to understand what may happen next in important issues such oil prices, economic growth and the environment. We may also have some fun, investigating a few of the more offbeat events that take place from time to time. Please do join me and share your thoughts. Between us, we will hopefully develop useful insights into the key factors that will drive the industry's future performance.

Author Archive | Paul Hodges

STOCKS.jpg

The global stock market decline

Alan Greenspan’s comments (below), led the blog to investigate how the world’s major stock markets had moved since their recent peaks. All, as shown in the chart, are now in bear markets. Stock markets often forecast economic developments 6 – 12 months ahead, and so this represents a negative indicator for future chemical demand. Also […]

Continue Reading

UK’s largest mortgage lender rescued

Another day, another rescue. This time on the other side of the Atlantic. HBOS, the UK’s largest mortgage lender, with a 20% market share, announced this morning that it was being rescued via a merger with the Lloyds TSB bank. The deal was brokered by the UK government. UK Finance Minister, Alastair Darling, told the […]

Continue Reading

AIG rescued

‘A disorderly failure of AIG could add to already significant levels of financial market fragility and lead to substantially higher borrowing costs, reduced household wealth, and materially weaker economic performance,’ according to the US Federal Reserve last night. As a result, the US government now owns 79.9% of the nation’s largest insurer, in return for […]

Continue Reading
Minsky.jpg

The ‘Minsky moment’ unfolds

Pimco, the world’s largest bond fund, have repeated their belief that we are facing a ‘Minsky moment’, named after Hyman Minsky (pictured). His insight was that a long period of stability, such as that experienced over the past decade, eventually leads to major instability. This is because investors forget that higher reward equals higher risk. […]

Continue Reading

Lehman goes bust, Merrill rescued

The blog has never liked disaster movies, but it was quite a weekend for those who do. First, there was the hurricane hitting Houston and Texas. I used to live in Houston, and watching the pictures of the damage, could recognise familiar places washed away, or burnt down. The blog’s sympathy goes to all those […]

Continue Reading
AUTO AUG08.jpg

Auto sales fall around the world

August was a bad month for US auto sales. GM sales were down 20% versus 2007, Toyota down 9%, Ford down 26% and Chrysler fell 35%. This set the blog wondering about relative performance , and the chart shows the result. 2007 wasn’t a great year, with only Toyota (the red column) showing a sales […]

Continue Reading

CFOs see lending ‘drying up’

A year ago, Tesco, the UK supermarket giant, were early to see problems ahead in consumer markets. Now, they see problems developing for corporate lending. Last week, Tesco paid €100m more than expected when borrowing €3bn. But Nick Mourtant, group Treasurer, still thought it a good deal. He said ‘the company wanted to raise as […]

Continue Reading

OPEC says oil market ‘over-supplied’

This morning, the blog is awarding itself a pat on the back. This is because, almost alone, it forecast in mid-July that oil prices ‘could easily fall $50/bbl to $100/bbl’ in the absence of any military action on Iran. And it had the courage to repeat this comment on 4 August. It added that if […]

Continue Reading

Sinopec cuts back (a little) on petchems

China’s Sinopec has taken a lead in reviewing its petrochemical expansion plans. Speaking to employees last week, Wang Tianpu, CPC division President, noted that ‘global crude prices may remain high and the petrochemical industry may become even more competitive’. Today, he gave more details, saying that they plan to lower 2008 petchem expenditure by 4.6bn […]

Continue Reading

The $5 trillion bailout

The US government has finally decided to nationalise the two home loan giants, Fannie Mae and Freddie Mac. Readers will remember I forecast this would be necessary a year ago, in a letter to the Financial Times. I argued then that ‘a buyer of last resort, such as the Federal government, would probably now need […]

Continue Reading