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“Fundamental reassessment of the value of virtually every asset”

“Our normal customers have no orders to place with us, and our credit department won’t let us sell to others who might want to buy”. The blog was given this plain-spoken assessment of current chemical market conditions by one of the majors yesterday. Coincidentally, US Fed Governor Kevin Warsh was making one of his rare […]

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4 tips for survival

Last month, the blog titled its 2009 Outlook, Budgeting for Survival. This week, the Financial Times has begun a series on developing recession survival strategy. Its key tips are: • Manage your cash. Don’t spend money unnecessarily. • Keep a strong balance sheet. Have as little debt as possible. • Price your products/services keenly. Be […]

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Bank of England cuts to 3%, warns on deflation

UK interest rates have just been cut by 1.5% to 3%. They were last at this level in 1955. The Bank of England had been very concerned about inflation, currently at 5.2%, compared to a target of 2%. But the Bank now sees no danger from inflation in the future. Instead, it is warning that […]

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GM – “time is very short”

Earlier this week, the blog noted GM’s dire October performance, with its US sales down 45% on last year, following the ending of its price promotions. Now, Roger Altman, the former US Treasury official who is advising GM on its loan application, has told Bloomberg “time is very short” to avoid its collapse. Normally it […]

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Obama wins, Bush stays in office

Sen. Barack Obama duly won a landslide victory in yesterday’s US Presidential election, but will not take office until 20 January. I suggested last month in ICB, that “this delay, at such a critical moment, is not good news for chemical companies or for their customers”. The blog therefore congratulates the new President, and expresses […]

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TOTAL focus on lower debt, higher oil prices

TOTAL have adopted a very clear strategy for surviving the downturn. The results statement today particularly highlights their success in strengthening their balance sheet. Net debt to equity now stands at just 15.4%, whilst they are “maintaining a high-level of liquidity and divesting non-strategic holdings”. TOTAL also see a need “in the short-term” to adjust […]

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Asian naphtha falls below $300/t

ICIS is reporting today that Shell sold open spec naphtha to Cargill at $267 CFR Japan, for the first half of January. Normally the naphtha: crude ratio is around 9.5: 1. But with January Brent at $66/bbl, the ratio is now just 4:1. The blog can safely say we have never seen it this low […]

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Rolls Royce prices start to slide

BMW, the world’s largest luxury car manufacturer and owner of Rolls Royce motors, today abandoned its August forecast of record auto sales and a 4% operating margin for 2008. CEO, Norbert Reithofer, was in downbeat mood, saying that “the financial crisis is by no means behind us yet, particularly its impact on the real economy […]

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GM’s October sales collapse

October’s US auto sales were as bad as expected. But even so, GM still managed a surprise. Once the undisputed market leader, its sales were truly awful, falling 45% versus October last year, as shown in the chart above. A sign of GM’s own shock is that its inventory ballooned to 141 days, whilst Chrysler’s […]

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A fistful of dollars

The US Federal Reserve used just to manage monetary policy for the 12 ‘districts’ of the USA. But now, it is going global. First, it opened unlimited “swap lines” with other G7 countries through the European Central Bank, the Bank of England and the Bank of Japan, as well as the Swiss National Bank. Then, […]

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