The blog’s Boom, Gloom and the New Normal eBook highlights the impact of the ageing Western babyboomers on future demand patterns. Yet central banks such as the US Federal Reserve and the European Central Bank believe demographics have nothing to do with demand. For them, as one former central banker told the blog “demand is […]
Tag Archives | Federal Reserve
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 […]
A recession is often defined as being when your neighbour loses their job. A depression is when you lose your job. Latest industrial production data shows output is falling around the world. And US unemployment is rising again, with the wider measure at 16.2% as long-term joblessness becomes a major problem. Last month’s IeC Boom/Gloom […]
Speculators, assisted by the US Federal Reserve, have driven crude oil prices to unsustainable levels over the past year. Now, the Fed is withdrawing the liquidity that has financed this rise. The above chart from Petromatrix shows the surge in crude oil speculation on the Chicago futures market since August. The light blue line shows […]
Financial markets have been fired up over the past 2 years via the arrival of high volume computerised trading. This now dominates market action. And until recently, the US Federal Reserve was happy to finance this activity, via its $600bn QE2 programme. The Fed’s aim was to generate inflation, and so avoid the risk of […]
Crude oil has been a speculators’ paradise for the past 9 months. Central banks have been making large amounts of cash available at 0% interest. In turn, this has funded larger and larger speculative positions in financial and commodity markets. CME, the world’s largest derivatives market, saw volume up 31% in March vs 2010. The […]
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 […]
The blog has argued for some time that the chemical industry is facing a “new normal” as growth returns to the economy. Now US Federal Reserve Governor Dan Tarullo has helpfully spelt out some important changes that he expects to occur. He notes that: • “Just about everyone understands we will never return to the […]
Coincidentally, both the US Federal Reserve and the Bank of England yesterday signalled the probable end of the ‘the recession’ yesterday. But as the blog noted last month, statistics don’t tell the whole story. The issue is that economists usually define recession as simply being 2 or more quarters of negative growth. Automatically, therefore, any […]
After destocking, and then restocking, what next? The blog is a great believer in following the insights of the major retailers, who have been consistently “on the money” in their analysis. Thus it takes very seriously the comments of Wal-Mart CEO, Mike Duke, who has joined the camp of those who believe we face a […]
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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.