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UK government expects house price falls

Yesterday the UK public had a rare view of what the government really thinks about future house price trends. Photographers snapped Housing Minister Caroline Flint arriving for a Cabinet meeting. And then journalists went to work on reading the notes in her hand. Contrary to official statements, it seems that the government expects ‘sizeable falls […]

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Interest rates to rise by the end of May

Headline interest rates are set by central banks. But the ones that we actually pay, as consumers or companies, are set by the banks themselves. And most of these are based on LIBOR – the London Inter-Bank Offer Rate – which is the main benchmark for $347 trillion of borrowing around the world. Now it […]

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Shipbuilding hit by credit squeeze and long lead-times

The chemical industry moves a lot of product by ship. Recent rises in freight rates have therefore had a major impact on costs for producers and consumers. But there was always the thought that rates would soon decline, once shipbuilders began delivering all the new ships on order. But now Bloomberg is suggesting that 10% […]

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Can $125/bbl oil be passed on downstream?

A month ago, I suggested that oil prices ‘seem set to move higher in the short-term, with $125/bbl now being talked as a target’. Readers were hopefully not too surprised, therefore, to see prices for Brent and WTI close at this level on Friday night. One of my longer-term forecasts also seems to be coming […]

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‘Lies, damned lies, and statistics’

Mark Twain’s famous quote rather sums up my current feelings about the state of the US economy. This is the most important single indicator of future chemical industry sales. And a couple of months ago, I aligned myself with Warren Buffett in suggesting that the US was probably in recession. Last week, this looked like […]

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Deutsche Bank ends porn channel expenses

Spare a thought for the plight of the world’s investment bankers. According to the Financial Times, some minor cutbacks are finally taking place in the extravagant lifestyle to which they have come accustomed: • UBS, having lost $11bn in Q1, has now told its analysts to fly economy on short-haul flights. • Merrill Lynch bankers […]

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China exports inflation (2)

I noted back in February that China is no longer exporting price deflation, and is instead causing global prices for commodities and manufactured goods to rise. A reader has now kindly sent me an interesting report from Credit Suisse, commenting on the potential inflationary impact of new labour laws in China. This is particularly important […]

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$216.9bn and still rising

After a while, large numbers lose their power to shock. So Bloomberg and the FT have performed a service this week by reminding us of the scale of losses in the financial sector. They calculate that so far, US and European banks have had to raise $216.9bn of new capital. And, of course, whilst this […]

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We all make mistakes

Anthony Bolton’s investment column this weekend contains another nugget of wisdom. Coincidentally, it is linked with Archie Norman’s ‘tip for management’ which I quote below. Bolton is the UK’s most successful fund manager. And he certainly shares Norman’s sense about the need to be humble. In fact, he goes even further, commenting that in his […]

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High CEO pay – does it really drive performance?

Archie Norman is one of the most successful CEO’s of recent years. When he joined ASDA in 1991, it was a struggling, nearly bankrupt, UK food retailer. 9 years later, it was sold to Wal-Mart, after he had transformed it. Shareholders benefited from an 8-fold increase in the share price over the period, whilst Norman […]

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