This morning, Greece introduced capital controls. People can only withdraw €60/day ($65) from their bank accounts. The government has also called a referendum on Sunday, after Eurozone talks on a new bailout package collapsed. The key issue is that Greece will never be able to repay its debts. These are currently estimated at €322bn ($365bn) […]
Tag Archives | defaults
Who would pay the bill, if Greece defaulted on its current €320bn debt ($340bn)? This is no longer just a theoretical question. Of course, we have all known since 2012 that Greece would never be able to repay its debt. But the EU covered up this hard truth by a ‘pretend and extend’ policy: The default deal deferred repayment […]
China’s property market is the epicentre of the global debt bubble discussed yesterday. It has been red-hot since urban residents became free to buy their own home in 1998. Before then, they lived where the state told them. With interest rates held low to boost state-funded infrastructure spending, people had few options for investing their money. The […]
Global bond investors have found a new worry. 10 year interest rates in Spain, the world’s 12th largest economy, have risen alarmingly in recent weeks. As the chart shows, they are now above 7% (blue column) compared to 4% when the blog first focused on the Eurozone crisis (red). 7% is a critical level, as […]
The blog’s IeC Boom/Gloom sentiment indicator (blue column) continues to be neutral on the outlook. As the chart shows, this is quite unlike its performance in early 2009. Then it rose rapidly from February – accurately forecasting the major recovery that was about to start. The problem, of course, is that the austerity reading (red […]
Many Greeks have always preferred not to pay taxes, and to retire in their 50s. This lifestyle was well understood by their new partners when they joined the Eurozone a decade ago, since when German/French banks have happily funded it with support from their governments. The chart, from the Bank of International Settlements (the central […]
I am indebted to Paul Krugman for passing on this piece of black humour, now going the rounds in financial markets. Unfortunately, these problems are getting closer to home. Carlyle, who have a number of private equity investments in chemical companies, defaulted on a $16.6bn bond fund today.
For the chemical industry, much depends on whether the US economy goes into recession during 2008. The signs are not encouraging, with even former Fed Chairman Alan Greenspan believing it is a 50:50 chance. So how would any recession impact the current credit crisis? Writing in the Financial Times their banking editor, Gillian Tett, provides […]
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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.