“Humankind cannot bear very much reality” TS Eliot, 4 Quartets, 1936 Who now remembers the stock market rally that followed 1929′s initial collapse? By November 1929, the US Dow Jones Index had fallen to 195 from its September high of 386. But by April it had rallied 52% to 297. At the time, this seemed […]
Tag Archives | downturn
As noted by a blog reader last week, retail investors are throwing caution to the winds. Unwilling, or unable, to adjust their lifestyles to cope with lower interest rates on government bonds, they have rushed to instead buy higher-yielding ‘junk bonds’. These are less than normal ‘investment’ grade, and offer increased yield in exchange for […]
The blog has been revisiting the Bank of England’s 2008 analysis of the likely impact of the financial Crisis. This reviewed 33 banking crises between 1977-2002 and found that: • The average length of each crisis was 4.3 years • The median loss of GDP was 7.1% • Major crises (such as today’s) caused GDP […]
The American Chemistry Council has recently updated its invaluable work on US polymer chain inventories. Last December this led the blog to conclude that we would see “a strong H1“, as inventories were low, whilst demand was likely to rise supported by seasonal and stimulus factors. But the ACC’s latest analysis (above) leads to a […]
There was good and bad news from the latest IeC Boom/Gloom Index. The good news was that the Austerity reading fell quite sharply. Markets have moved on from the Greek crisis. And confidence seems to have been restored, at least temporarily, by the results of the ‘stress tests’ on the major European banks. But the […]
Undertaking fundamental analysis of a market can be a tedious business. You have to try and understand what uses the product might have, and the alternatives for the feedstocks. You might even have to look at inventory, and forecast future supply/demand levels. Luckily, however, for the modern financial investor, these sad disciplines have been resigned […]
There are mounting signs that 2010 could prove a Year of 2 Halves in terms of economic growth. Interviewed by Bloomberg last month, the MD of the Economic Cycle Research Institute (ECRI), Lakshman Achuthan, warned that their indicators showed “A real global downturn in the industrial sector is starting right here and right now“. They […]
The US Federal Reserve and the American Chemistry Council (ACC) have joined the blog in expressing concern about the outlook for the US economy. And as the chart above of the US S&P 500 shows, financial markets have continued to weaken since the blog’s advice on 8 May to “sell in May and go away“. […]
The latest IeC Boom/Gloom Index © is showing a further rise in its austerity reading (red line). This is not good news for likely future chemical sales. It is one of a number of leading indicators – housing and auto sales, unemployment, bank lending etc – which are all pointing to a potentially sharp slowdown […]
Darwin hit it on the nail when he wrote in ‘Origin of the Species’ that “Unless profitable variations occur, natural selection can do nothing“. His message is echoed today by US Fed Governor Kevin Warsh, one of the few policy-makers who deals in reality rather than wishful thinking. Warsh sets out to “debunk some popular […]
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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.