I had a breakfast meeting yesterday with the investment head of one of the world’s major asset managers. He wanted to understand more about our Great Unwinding concept, and our correct mid-August forecast of $70/bbl oil prices. After that, we went on to discuss two critical and related areas: Would the oil price stay at today’s […]
Signs of stress seem to be appearing in the US housing market once more. Thus the Wall Street Journal reports: “An estimated one in seven appraisals conducted from 2011 through early 2014 inflated home values by 20% or more..Bankers, appraisers and federal officials in interviews said inflated appraisals are becoming more widespread as the recovery […]
It feels like the end of an era, as we survey the usual quarterly update of chemical company results. For several years, there have been 3 or 4 key dimensions: US companies have been very profitable due to shale gas Asian companies have done well with volume, due to Chinese demand Middle Eastern companies have done well due to […]
Can you imagine your government publishing a report that showed $6.8tn has been wasted in “ineffective investment” in the past 4 years? That is $6.8tn, by the way, not a typo. And it is more than Japan’s total annual GDP, or the combined annual GDP of Germany and France. No, I thought not. I certainly cannot remember […]
Brent oil prices closed at $104.71/bbl on Friday 15 August. On the following Monday morning, I published the first post in my Great Unwinding series, arguing that: “The Great Unwinding of the failed stimulus policies since 2008 has now begun…oil markets are starting to follow cotton and other commodities in refocusing on the fundamentals of supply and […]
Oil prices have collapsed to the $70/bbl level, as I forecast in August. And the new Chinese government has just reported there was $6.8tn of “wasted investment” between 2009 – 2013, confirming my long-standing argument about China’s wasted stimulus efforts. Neither news item will be any surprise to blog readers, although they may be a complete shock to others. If you know […]
Tomorrow is the great American shopping day, Black Friday. In the past, every true American would head for the malls, to shop till they dropped. But more and more evidence keeps emerging that consumer habits are rapidly entering the New Normal, as I discussed last week. Thus a detailed study by the Wall Street Journal highlights, as […]
“The basic function of a central bank is to defend the value of the currency.” Paul Volcker was the great US central banker of our time. Unlike Alan Greenspan and Ben Bernanke, he believed in taking firm action to avoid crises, rather than trusting in financial markets to regulate themselves. He also believed that politicians had […]
I worry about the $100bn+ investment that it currently being made in new US chemical output. On paper, it seems a ‘slam dunk’ as a US College basketball player might say: Shale gas has created a massive surplus of ethane feedstocks that can provide low-cost production for export Oil prices are very high, and so all […]
I am very much looking forward to presenting ‘The pH Report’ free webinar tomorrow, Tuesday 25 November. This will take place twice, at 08.00 GMT and 15.00 GMT, to enable everyone to take part from different regions. It will include a Q&A, to cover the critical questions for your business and investments. Please register here to join the […]
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Paul Hodges is Chairman of International eChem, trusted commercial advisers to the global chemical industry.
The aim of this blog is to share ideas about the influences that may shape the chemical industry over the next 12 – 18 months. It will try to look behind today’s headlines, to understand what may happen next in important issues such oil prices, economic growth and the environment. We may also have some fun, investigating a few of the more offbeat events that take place from time to time. Please do join me and share your thoughts.
Between us, we will hopefully develop useful insights into the key factors that will drive the industry's future performance.