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China focuses on domestic issues, risks US anger

China is a very difficult country for foreigners to understand. The blog suspects that the best approach is to apply Winston Churchill’s insight on Russia, namely “I cannot forecast to you the action of Russia. It is a riddle, wrapped in a mystery, inside an enigma; but perhaps there is a key. That key is […]

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Obama’s BP attack will impact chemicals

For the past 20 years, the chemical industry has been making steady progress in improving its environmental, health and safety performance. More recently, security has been added to the list of key items covered by the voluntary Responsible Care initiative, which covers c90% of chemical production. Now, however, this enormously important activity has moved into […]

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G20 abandons the Stimulus economy

Politicians finally seem to be giving up on the Stimulus economy. 9 months ago, the leaders of the G20 Group (the world’s major economies) were congratulating themselves on having delivered “the largest and most coordinated fiscal and monetary Stimulus ever undertaken“, and claiming “it worked“. Now, Germany, Europe’s largest economy, has announced €80bn ($96bn) of […]

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USA money supply slows to near-record lows

“Money makes the world go round” as the song from the musical Cabaret tells us. But the chart above, from BofA Merrill Lynch, suggests there isn’t too much money circulating in the world’s largest economy today. It shows M3 (the broadest measure of money supply). Merrill note that its growth is now close to the […]

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Q3 may see seasonal weakness

6 months ago, the blog suggested that normal seasonal demand patterns could resume in 2010. And it optimistically forecast “a strong H1“, on the basis that “consumers should need to restock ahead of the usual Q2 demand peak in autos/construction“. This optimism was based on the American Chemistry Council’s excellent analysis of polymer demand, which […]

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Another “unexpected” economic report

Every day, the word “unexpected” appears next to a downbeat economic report. The latest example was yesterday’s US employment report, where the consensus forecast was for a jobs gain of 180k. Yet it has been clear for months that this has been a ‘jobless recovery’, and so the actual figure of only 41k new jobs […]

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Fear of Austerity replaces hopes of Green Shoots

A year ago, the blog launched its IeC Boom/Gloom Index. This was based on the concept that markets are driven by both sentiment and fundamentals. And whilst fundamentals can be understood by analysing hard data (eg auto sales, housing starts), it is equally important to understand sentiment, and what markets think will happen next. Analysing […]

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Budgeting for a New Normal: a mid-year Update

The blog’s White Paper, ‘Budgeting for a New Normal’, proved enormously popular when it was published earlier this year. ICIS therefore suggested that it would be useful to update it, 6 months later. This Update is now published. It looks at the current state of the global economy, six months on, and then covers the […]

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Dalian polymer volumes remain under pressure

China’s Dalian futures market has been the global centre of speculative polymers trading for over a year. It traded an amazing 80 million tonnes of LLDPE in April 2009, as excitement built. And volume (blue line) remained positive on a year-on-year basis until January. But since then, comparisons have been negative: • February’s volumes were […]

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Dow Jones Index has worst May since 1940

‘Sell in May and go away’ seemed a good tactic to the blog at the beginning of the month. It worried that we might now be approaching the ‘drawn-out fundamental downtrend’ phase of the current cycle. And in spite of several major ‘relief’ and ‘short-covering’ rallies, financial markets have continued to suffer. The US Dow […]

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