Tag Archives | downturn

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The economic SuperCycle trend is now steadily reversing

The best view is always from the top of the mountain. As the chart shows, this is where we are today – for the 4th time since the H2 2008 crisis. And just as at the previous 3 peaks, nobody seems to be noticing that demand is again weakening fast. Instead, policymakers and investors are […]

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Investment banks push oil prices higher

The start of a new half-year usually provides an excuse for the investment banks to publish bullish notes on oil markets. We discuss their role in Chapter 3 of Boom, Gloom and the New Normal, to be published later this month. Thus Goldman Sachs last week suggested oil markets will become “critically tight” in 2012, […]

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Crude stabilises as Goldman suggests $130/bbl target

Week 5 of the IeC Downturn Alert saw more stability in the markets. This was largely due to the efforts of the major investment banks. JP Morgan, Goldman Sachs and Morgan Stanley all issued ‘buy’ notes on crude oil, suggesting prices would soon return to $130/bbl, whilst Barclays said its current $102/bbl forecast was “conservative”. […]

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China battles to achieve a ‘soft landing’

China’s economy has been on steroids for the past 2 years. Faced with the loss of export sales after the financial crisis began in 2008, the government doubled bank lending overnight (red column above). It also introduced a $580bn stimulus programme (13% of GDP). This included subsidised sales of electrical appliances, and was great news […]

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China PTA market leads Downturn Alert lower

The blog launched its Downturn Alert last week, since when we have seen dramatic moves in oil markets. These may well lead to a slowdown in chemical orders, as buyers now have no need to secure supplies ahead of price increases, and may instead start reducing inventories to more ‘normal’ levels. • Brent (dotted red […]

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Chemical markets risk downturn

The blog was in Brussels this week, chairing the ICIS European Purchasing Conference. It was a packed room. Buyers are clearly very concerned about the high level of current raw material prices, and their volatility. I was also interviewed by ICIS’ Will Beacham. The discussion covered: • The effect of high oil prices on demand […]

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CEOs face dilemma over their outlook forecast

Chemical companies are about to report excellent results for Q1. Those upstream may well record even higher profits than in 2007/8. CEOs and CFOs therefore face a critical decision. Do they assume today’s trends will continue, and forecast excellent profits for the rest of the year? This would be very tempting, and is clearly the […]

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High oil prices, financial speculation, worry IEA

The IEA (International Energy Agency) is now very worried about the impact of today’s high oil prices on the global economy. Their chart above highlights the problem for the USA and EU. If oil prices average $100/bbl in 2011, then the EU (green column) will be paying more for its oil imports than in 2008, […]

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Boom/Gloom Index indicates downturn underway

Last month’s IeC Boom/Gloom Index showing a worrying weakness in sentiment, particularly when the world’s major stock markets had actually recorded good performances in July, albeit on low volume. But as the chart shows, this month confirms the downturn reading, with the Index (blue column) below the 4.0 level. Further confirmation of this reading comes […]

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US 3 year interest rates back to 1940′s levels

High quality 3 year government bond yields are now less than 1%, as shown in the above chart from thechartstore.com of the US Treasury market. US rates have not been this low since the 1940′s and 1950′s. This has also led to a major rally in corporate bonds, based on increasing fears of a double-dip […]

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