Tag Archives | liquidity

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Financial markets reach the ‘melt-up stage’

A month ago, the blog highlighted the potentially major implications of the Bank of Japan’s (BOJ) push to devalue the yen as follows: “However, the BOJ has a slightly different agenda. It aims to devalue the yen, not the US$. And the yen has already fallen close to $1: ¥100 compared to $1: ¥93 before […]

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Demand collapses as stock markets hit new records

Financial markets long ago lost all touch with reality. Not only have central banks provided $tns of cheap liquidity with the specific aim of pushing stock markets higher. But they have also allowed computers to dominate trading, so no single market now knows what it is pricing. Chemical markets, and those who operate in them, […]

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Western stock markets in bubble-mode, again

The blog’s 6 monthly review of global stock markets highlights a very unusual pattern since global demand and chemical markets peaked on 29 April 2011, as the chart shows: • Markets in developed economies have powered ahead with Japan up 24%, the US S&P 500 up 14%, the UK up 8% and Germany up 6% […]

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Policy makers reach the fork in the road, again

“Two roads diverged in a yellow wood, And sorry I could not travel both” These lines by famous American poet Robert Frost provide a good description of the critical cross-roads now being approached for the 3rd time since June 2008, as the impact of the QE3 stimulus reduces. Each time previously, policy makers have simply […]

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Slowing markets underline failure of central bank policies

As we approach year-end, it is interesting to review performance of the blog’s 3 benchmark products since the start of the major central bank liquidity programmes. The chart begins in January 2009 when the G20 stimulus programme was being prepared, and then follows the impact of the QE2 programme in H2 2010, Twist in H2 […]

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Central bankers fail to learn the Wellington lesson

‘Masterly inactivity’ was Wellington’s policy in his successful European wars against Napoleon in the early 19th century. The English general was always under great pressure from the politicians to ‘do something’. But Wellington knew he had to defeat Napoleon decisively, and could not risk losing men and resources in irrelevant actions. His Waterloo victory then […]

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Spain’s economy in “extreme difficulty”

Some things are too ‘obvious’ for highly-paid professionals in the financial world to accept. If life was this simple, then clients might ask why their fees were so high. Therefore they maintain a fiction that what is obvious is not the full story. Interest rates are a classic example of a simple issue which is […]

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Oil prices remain in their triangle

A year ago, Petromatrix highlighted the short-term ‘triangle’ that was being drawn by oil prices. This describes a period when sellers and buyers are evenly balanced, and neither side can gain momentum to take prices in their favoured direction. It usually leads to a sharp move, either up or down, when one side wins. At […]

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US polymer demand slows as consumers cut back

The above chart, from the invaluable American Chemistry Council (ACC) weekly report, highlights the scale of Q1′s inventory build in N American polymer markets (polyethylene, polypropylene, PVC). This build took place as consumers down the value chain rushed to buy forward, as WTI oil prices surged 41% between November – April. Their buying was not […]

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US Fed policy may be going Back to the Future

Today’s 419 point fall on the Dow Jones Average, and $6/bbl fall in WTI crude oil prices, may not be just another example of the wild volatility that has come to seem normal in financial markets. It may also mark the end of an era. Since 1994, the US Federal Reserve has used all its […]

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