“Buy on the rumour, sell on the news” is one of the most reliable definitions for a weak market. And that seems to have been the picture in Q1 across commodity, stock and bond markets. The key issue is the ongoing battle between Reality and Illusion: Reality accepts that ageing populations have lower levels of […]
Tag Archives | central banks
Trillions of dollars have been spent on stimulus by central banks in the developed world since the financial crisis began in 2008. Clearly these policies haven’t worked – but they are now lining up to do more of them. In this interview with Tom Brown, deputy editor of ICIS news, I argue that their analysis […]
Oil markets are entering a very dangerous phase. Already, many US energy companies have gone bankrupt, having believed that $100/bbl prices would justify their drilling costs. Now the pain is moving downstream. The problem is the central banks. Hedge funds have piled into the oil futures markets since January, betting that there would be lots […]
The Financial Times has kindly printed my letter below, arguing that central bank stimulus can’t restore growth to previous Super Cycle levels. Sir, John Plender’s excellent analysis “Central banks’ waning credibility is the real threat to confidence” (Insight, February 17) highlights the need for a new narrative to explain the economic slowdown of recent years. […]
More than $2.3tn was wiped off the value of global stocks last week as China’s slowing economy and currency depreciations spooked investors around the world, leading to the worst start to a year for markets in at least two decades. This is the Great Unwinding of policymaker stimulus in action. Worse is likely to come. […]
“There is no doubt that if we had to intensify the use of our instruments to ensure we achieve our price stability mandate, then we would.” (Mario Draghi, New York, Friday) Pity poor Mario Draghi, President of the European Central Bank (ECB). He is used to the adulation of markets – and adores his nickname […]
There have been 35 “flash crashes” in US oil markets so far this year, when prices swung up or down by 200 basis points (2%) – before reversing the move by > 0.75%. That’s 35 occasions when the markets were out of control. It is tempting to blame this on misfiring algorithms at the […]
More and more people are lining up to support our argument that central bank stimulus programmes are damaging the economy, not helping it. The latest is bond guru Bill Gross, who wrote yesterday: “Zero bound interest rates destroy the savings function of capitalism….(whilst companies) have plowed trillions into the financial economy as they buy back […]
Financial markets are slowly descending into chaos. The process began in China over the summer, and has now started to impact Wall Street and other developed markets as the Great Unwinding of policymaker stimulus continues. The problem is that successful investment, whether in financial or chemical markets, requires the combination of A clear understanding of […]
Should it really matter that the US Federal Reserve might raise US interest rates by 0.25% tomorrow? Surely the IMF/World Bank should not need to argue that such a small increase could really be critical for the world economy? The fact that such a debate has been taking place at all, highlights the damage done by stimulus […]
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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 as 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.