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Dow’s debt ratings cut – could hit junk status

Over the last few weeks, INEOS had to scramble to get a covenant waiver from its lenders, and Lyondell went into Chapter 11. Now Dow’s debt is facing a potential cut to junk status from the main ratings agencies. Dow’s rating has already been cut, following the collapse of the K-Dow deal with Kuwait. And […]

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Crude oil trading hits new record

The ever-interesting PetroMatrix report notes that 2008 saw record volumes of crude oil trading. As their chart shows (above), the volume of trading on futures markets in 1995 was equal to daily oil production volumes. By 2000, the ratio had reached 2 : 1, and by 2005 it was 3 : 1. The ratio then […]

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European auto sales to fall 16% in 2009

European auto sales fell 8.4% in 2008, versus 2007. Sales of 13.56m autos were just ahead of the USA’s 13.2m. European volumes continue on a worsening trend, with December down 19% versus last year: • Spanish sales were down 50% • Sweden was down 45% • The UK was down 21% • The Netherlands were […]

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IMF warns on recession’s “social consequences”

Dominique Strauss-Kahn, MD of the International Monetary Fund (IMF), has a surprisingly hard-hitting interview today in Bloomberg. Casting aside normal central bank reticence he warns: • Their current $1.4 trillion forecast of global financial losses will soon be increased by a “significant” amount. • They will have to further reduce their November GDP forecast, which […]

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Obama’s new Plan reveals “uncertainty”

The new ACC weekly report rightly notes that “any economic recovery will likely begin with a turnaround in the residential housing situation”. This is also the critical issue for the chemical industry, still reeling from last week’s Lyondell bankruptcy filing. Yet as the ACC’s chart shows above, no improvement is yet in sight. New home […]

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US job losses worst since 1945

The US suffered 2.589 million job losses in 2008, making it the worst year since 1945. December’s 524k losses caused the jobless rate to rise to 7.2%, the highest since 1993. Equally, the average work week fell to a record low of 33.3 hours. Stock markets are still forecasting a V-shaped recession, but as the […]

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Bank shares drop on LyondellBasell exposure

The fallout from the Lyondell bankruptcy continues to grow. One analyst has suggested Swiss bank UBS has exposure of $500m – $1.5bn. Other banks, including Citi and the UK’s RBS, also have large exposures. Writing-off these debts will in turn reduce the banks’ own capital. And so it will further reduce overall credit availability. Meanwhile […]

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Sponsor a financial executive

Those who liked the blog’s earlier satirical postings on the banking crisis and subprime disaster, may enjoy this video from the Canadian show “This hour has 22 minutes”, kindly sent to me by a US reader. The sketch’s punchline – “The money you give won’t just save a life, it’ll save a lifestyle” – says […]

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LyondellBasell files for bankruptcy

LyondellBasell has become the largest-ever chemical company bankruptcy, just 12 months after its formation. Its US operations (Lyondell Chemical Co), and Basell Germany Holdings GmbH, filed for Chapter 11 protection in New York tonight. The company expects its other non-US operating entities to continue to function independently of the Chapter 11 process. The blog is […]

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US auto sales at 1992 levels

December was another bad month for US auto sales, with volumes down 36% versus 2007. Total 2008 sales of 13.2 million were the lowest since 1992, when the economy bottomed in the 1990-4 recession. As the chart shows, sales volumes dropped continuously during 2008. They were down 10% in Q1, and then Chrysler and Ford’s […]

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