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Chemicals and the Economy

2009 Budgets

It is nearly time for the blog’s annual forecast of chemical industry prospects. Of course, past performance is not necessarily a guide to future outcomes. But it is one of the better guides that we have. So before publishing the forecast next weekend, it makes sense to assess the blog’s credibility by looking back at […]

GM, Ford, Chrysler may face bankruptcy – S&P

Ratings agency S&P warn today that a major recession might force the 3 top US carmakers to file for bankruptcy. Clearly they share JD Power’s fears, noted yesterday, about the potential for an ‘outright collapse’ in global auto markets. S&P says operating cash-flow needs at the firms are ‘substantial’, and adds that they face a […]

OPEC tries to hold the oil price

OPEC has called an emergency summit for 18 November ‘to discuss the global financial crisis, the world economic situation and the impacts on the oil market’. Its president, Chakib Khelil, added that it was ‘very likely’ they would cut output. This morning’s price is already down to $80/bbl, with US total products demand down 8.6% […]

The last few days

Many new readers have turned to the blog, to better understand what is happening in the financial world, and to chemicals demand. They might like to start with the 7 September posting, which forecast the current collapse: ‘The price of all assets will go down’ Also, here is a list of recent postings: Financial crisis […]

US to follow UK in buying bank shares

Winston Churchill, a long-standing friend of the USA, once irritably but acutely observed that ‘one can rely on America to get to the right conclusion, when all other options have been exhausted’. So, hopefully, it will prove with the financial crisis. Tonight, Bloomberg and the New York Times are reporting that US Treasury Secretary Henry […]

Auto markets face ‘outright collapse’ in 2009

Collapsing housing markets are creating major problems for chemical companies worldwide. Now JD Power, the leading auto industry research firm, is warning that ‘the global auto market in 2009 may experience an outright collapse.’ They add that ‘while mature markets are being impacted more severely than emerging markets, no country or region is completely immune […]

‘Incompetence and denial’

The credit crunch began over a year ago. But it took until yesterday, when the UK government part-nationalised the country’s banks. for a sensible policy response to begin to emerge. Today, the excellent Gillian Tett of the Financial Times pulls no punches in her assessment of what went wrong. She believes that ‘London does now […]

Iceland calls in IMF

As the blog predicted, Iceland has been forced to call on the IMF for help. Finally, the country’s leaders have recognised that their $20bn economy couldn’t support the level of debt built up during the ‘go-go’ years. The pity is that it took them so long to recognise reality – and by then, any chance […]

A satirical look at the banking crisis

Readers may remember the satirical John Bird/John Fortune video on the causes of the housing crisis. Now the Financial Times Diary has provided a satirical view of the causes of the banking crisis: A new bank model 1) Take money from members of the public in savings accounts on pretext of keeping it safe 2) […]

Europe, N America, China cut interest rates

The blog welcomes the co-ordinated action by central banks, including the US Federal Reserve, European Central Bank, and the Banks of England and China, in cutting interest rates. Anything that suggests policymakers are starting to get their act together is good news. But as the blog has argued since February, cutting interest rates in today’s […]

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