Credit crunch jokes – an update

Q. How do you know your bank is in trouble? A. When its share price is less than the cost of taking money out of one of its ATMs. The blog is indebted to Thomas Friedman for this gem. Thanks also to a blog reader for these 2 jokes from the Jay Leno show: ‘The […]

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Another US Treasury Secretary speaks out

James Baker was Treasury Secretary to President Reagan. When he says that the US is “repeating Japan’s mistake by viewing our banking crisis as one of liquidity and not solvency”, the blog listens. His prescription is stark: “we should divide the banks into 3 groups – the healthy, the hopeless and the needy”. And he […]

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BASF – the German oil and gas company

BASF’s reported results for 2008 show that its profits are increasingly coming from the oil and gas sector. Geographically, it is becoming similarly dependent on its German operations. Agricultural and performance products put in a strong performance during the year, with their combined EBIT rising €300m to €1.5bn. But the chemicals, plastics and functional businesses, […]

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US home sales keep falling

Kevin Swift at the American Chemistry Council issued a new 2009 Outlook this week. His analysis suggests that we will see a V-shaped recession, as the “massive stimulus being injected into the US and other world economies will foster demand and a virtuous cycle of recovery will engage”. His optimism is very welcome, given the […]

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The cycle of deflation

US fund managers Comstock Partners reported a 50+% gain on their flagship Capital Value Fund in 2008. The logic behind their out- performance is summarised in the chart, which depicts their belief that we are now in a global cycle of deflation. Their analysis is that this cycle: • Began with a rise in savings […]

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Asian exports collapse – Japan’s fall 46%

Japan’s exports fell 46% in January, after a 35% fall in December. Exports to the US fell 53%, and to China fell 45%. This makes it likely that Japan’s economy will shrink further, after the 3.3% decline in 2008. It could soon become the first G-7 economy to fall into depression – defined as a […]

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Arise, Sir Evil?

Apparently its not just Jim Cramer who is less than happy with the current performance of Dow CEO, Andrew Liveris. The New York Times notes that merger arbitrageurs on Wall Street have started to spell his surname backwards, and re-christened him accordingly.

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Knowing what we don’t know

At a time of uncertainty, its sometimes helpful just to frame the questions that need to be answered about the future. Pimco, the world’s largest bond fund managers, have done just this in two separate analyses. Their answers mirror those advanced by former Treasury Secretary Nicholas Brady, and make good sense to the blog: Q1. […]

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Destocking follows previous recession experience

Destocking is currently a key issue for the chemical industry. The above chart, from Andrew Sentance of the Bank of England, provides some useful clues as to where we are in the cycle. It shows current performance (the green line) versus the history of stock levels in the recessions of the early 1980′s (blue) and […]

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Abu Dhabi snaps up Nova Chemicals

Nova’s CEO, Jeffrey Lipton, has always been the great optimist of the petrochemical industry. As recently as December, he was arguing at the GPCA meeting that “demand forecasts will prove to be too low”, and forecasting a shortage of ethylene and polyethylene in 2012. However, optimism isn’t a business strategy, particularly when it leads to […]

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