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US autos/housing worsen

1 in every 196 US households was in receipt of a foreclosure filing at the end of September, according to Bloomberg. This is a scary number for anyone who owns a house. And Quarter 4 is likely to be worse. Latest figures from the Realtors Association show September’s existing home sales down 19.1% from a […]

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TOTAL’s new CEO warns on oil supplies

Christophe de Margerie, the new TOTAL CEO, has burst the bubble of complacency that has surrounded discussion of future oil supply. The ‘business as usual’ forecasts of both the International Energy Agency and the US government assume that the world will be producing c120m bbls/day by 2030. But de Margerie said he wished to ‘speak […]

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Supermodels prefer euros

Gisele Bundchen, the world’s richest supermodel, has joined the list of those who refuse to be paid in US dollars. As a Brazilian, she has had plenty of experience to help her recognise a depreciating currency. According to Bloomberg, she even insisted that a recent contract with US-based Proctor and Gamble for ‘Pantene’ hair products […]

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Subprime claims its first casualties

Back at the end of August, I suggested that we had only reached the end of Phase1 of the credit crunch. I feared that it had the potential to get much worse, and to damage the ‘real economy’ where all of us in the chemical industry live and work. This was definitely a minority view […]

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3 key questions for any Board

What are the key questions that need to be asked when discussing any budget or strategy proposal? I have just found the answer, from a master in the field. Sir Maurice Hodgson is recognised as one of the greatest ICI Chairmen. Under him, the company became a truly global leader, moving away from its ‘imperial’ […]

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Pricing power – ING’s concerns

Since posting yesterday, oil prices have moved further ahead, with WTI closing at $93.53. I have also had an interesting dialogue with Paul Satchell of ING Bank, one of the leading chemical analysts, who has kindly allowed me to summarise his comments. Paul believes that investors have become ‘dangerously complacent’ about the industry’s ability to […]

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Inflation makes a comeback

Oil prices last week rose to an all-time, inflation-adjusted, high in New York at over $92/bbl. Meanwhile food and commodity prices have continued their upward march. In China, the rate of consumer price inflation hit a decade-high of 6.5% in August. So why are we still seeing rates of around 2% reported in the USA […]

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4 risks from the credit crisis

The Bank of England correctly predicted in April this year that the risks associated with US subprime lending had increased, that credit risk monitoring was poor, and that markets should be prepared for liquidity to dry up in parts of the financial sector. It must therefore, as the Financial Times said, ‘have required some restraint […]

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Private Equity and the credit crunch

I recently had the opportunity to attend a workshop organised by Pilko & Associates with leading figures from the private equity (PE) industry. It was fascinating to hear their views on how the current credit crunch is affecting M&A activity. The days when some PE players were acclaimed as geniuses simply for loading up a […]

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Budgeting for a downturn

The ‘consensus forecast’ for 2008 is very optimistic, as I commented in my post-EPCA note. It says oil will remain at $70/bbl, that debt market problems will be contained, and that petchem margins will remain at 2007 levels. This is unusual, as the consensus is normally a base case scenario, with upside and downside variants. […]

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