Alchemists have always claimed to be able to perform the impossible. The most common claim was that they could turn lead into gold. In Europe, the European Central Bank has been trying the same trick. It claimed to turn near-worthless Greek bonds into German-quality euros. Now its German board member Jürgen Stark has followed German […]
Tag Archives | European Central Bank
Last year, governments focused on stimulus measures, to support the global economy. Now Jean-Claude Trichet, head of the European Central Bank (ECB), says that “with hindsight, we see how unfortunate was the oversimplified message of fiscal stimulus given to all industrial economies under the motto ‘stimulate’, ‘activate’,’ spend’!” Writing in the Financial Times, he is […]
Over the past year, much of the Western financial system has been on life support. Now the European Central Bank (ECB), like its peers, is grappling with the question of ‘What happens next?’ ECB Board member Lorenzo Smaghi set out the key issues yesterday: • “Our role (as a central bank) is limited to the […]
The blog is very interested to see the different outlooks being proposed by central bank heads. US Fed Chairman Ben Bernanke claimed Friday that the financial crisis was due to “panic”, rather than fundamental problems such as reckless lending. As a result, with the “panic” over, he now saw the potential for securing “a sustained […]
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 […]
Central bankers had it easy over the past decade. Now they are going to have to earn their money. Inflation is rising rapidly, and growth rates are falling. But unfortunately, as I first noted back in March, they still seem to have differing ideas about what policies will best counter these twin challenges.
Housing, as we know, is an absolutely key market for the chemical industry, both directly and indirectly. Directly, each new house accounts for $16k of chemical demand, whilst indirectly, years of rising western house prices has allowed consumers to cash out their gains to spend on Asian imports. Now this virtuous circle has turned with […]
English children have a card game called ‘Beggar my Neighbour’, where the aim is to win all the cards from your opponents. Central bankers seem to be learning its rules, and applying them to currency trading. OPEC’s weekend summit showed it is clearly worried that it will have a losing hand if oil remains priced […]
Yesterday, the ECB (European Central Bank) provided an unprecedented €95bn into the region’s credit markets, to maintain liquidity. Otherwise, firms would have had problems paying their bills, and employees might not have been paid their wages. This is serious stuff, and it was followed by the US Fed providing $24bn into US markets, and the […]
Yesterday’s “swings in financial derivative prices were so extreme that they implied scenarios in which the core of the global liquidity system suffers a serious assault”, according to JP Morgan, the investment bank. Watch out, if current US sub-prime mortgage problems turn into a more general “flight from risk”.
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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.