Last week’s departure of Bill Gross from his role as Chief Investment Officer at PIMCO is likely to prove a turning point for interest rates in the West, and probably around the world. Gross founded PIMCO (Pacific Investment Management Co) more than 40 years ago. During this time he built its assets under management to around $2tn. That is […]
Tag Archives | interest rates
Interest rate risk is rising in the developed economies as the Great Unwinding of policymaker stimulus continues. Since the blog first highlighted this Unwinding last month: Oil prices have continued to tumble, with Brent now down over $15/bbl from its late-June peak The US$ has continued to rise from multi-year lows versus the yen, euro and pound And of course, […]
Coincidentally the blog began its 6-monthly review of global financial market performance on 7 March 2009, as the US market hit its post-Crisis bottom. At this point, it was possible to hope that central banks would allow markets to resolve the issues that they themselves had created. After all, there would have been no subprime crash if the US Federal […]
New Year optimism over the economic outlook is breaking out all over the USA. Weak employment numbers for December were ignored, as were weak data on housing markets. Whilst prices for benzene, the blog’s favourite sentiment indicator, not only jumped to a record high but dragged European levels to an all-time record as well. Happy Days are clearly […]
The period since March 2009 has been a wonderful time for most investors in the major markets. As the blog’s 6-monthly update shows, almost every index has increased, and by large amounts: Russia has been the biggest winner, up 151%, due to its oil and gas export position The US is up 147%, as the […]
5 years after the Crisis began, there still seems to be a worrying lack of accountability in the banking sector, even when things go wrong on an epic scale. Take JP Morgan Chase, for example: It lost $6.2bn in London last year, which its CEO Jamie Dimon initially called “a tempest in a teapot” It has now been […]
The above chart will be familiar to readers of Boom, Gloom and the New Normal. It shows the way in which Japan’s interest rates (black line, bottom axis) have been a leading indicator for US interest rates (red line, top axis) since the stock market peaks of 1990 in Japan and 2000 in the USA. […]
The world’s media are increasingly aware that economic growth is being impacted by major demographic change. Thus the leading UK weekly magazine, the New Statesman, has published this article by the blog last week. It looks at the challenges facing the UK in the next few months. These are, of course, the same challenges that face all the major economies. “The [UK […]
Newton’s 3rd Law of Motion states, “To every action there is always an equal and opposite reaction“. Thus the forces of two bodies on each other are always equal and are directed in opposite directions. Policymakers forgot this Law in their response to the 2008 financial Crisis. Instead they believed that cutting short-term interest rates in the major economies to zero, […]
Are you worried about the future direction of interest rates, and what they may mean for your pension, your family and your company? Then the chart above, showing 300 years of UK government bond yields, may just be helpful. It will probably also surprise you, as it contradicts the opinions of most ‘expert commentators’. These […]
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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.