If you only read one newspaper article this year on the economic outlook, then the blog would recommend Martin Wolf’s recent analysis ‘Why America is going to win the global currency battle’. Wolf is a former EPCA speaker, and he sets out very convincingly the rationale for the US Federal Reserve’s planned move to restart […]
Tag Archives | US Federal Reserve
Warren Buffett, the legendary US investor once cautioned that “over time, markets will do extraordinary, even bizarre, things.” We are certainly living through such times today. In August, the US S&P 500 Index fell 5%, as investors worried about the end of stimulus packages, and the return of banking problems in Europe. The IeC Boom/Gloom […]
The good news this week was that the body responsible for dating US recessions, the National Bureau of Economic Research, finally declared that the so-called Great Recession was over. It was the longest since the Depression, running from December 2007 to June 2009, and twice as deep as in 1981-2, causing a 4% loss in […]
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 is a great fan of Pimco, the world’s largest bond fund managers. They were the first people to spot the housing bust developing in the USA, and to suggest the scale of the damage it might cause. More recently, they have pioneered the concept of the ‘new normal’. Thus a new analysis by […]
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“. […]
Paul Volcker was the last US Federal Reserve chairman who believed that a key part of its role was “to take away the punchbowl just when the party starts getting interesting“. He successfully brought inflation back to single figures during the 1980′s downturn, setting the scene for the major economic recovery that followed. Now head […]
The US accounts for 23% of global GDP. Its economy is 3 times larger than the No 2 country, Japan. And most critically for the chemical industry, 70% of US GDP is consumer-based. Developments in US housing/construction, auto and electronics industries are therefore the biggest single influence on global chemical sales. In turn, the level […]
In 2006, there were 2.2 million US housing starts. These were worth $35bn of chemical sales. Currently, and even with the support of an $8k tax credit, they are running at an annual rate of just 600k, worth $10bn. This is the lowest level since records began in 1960. Even in 1975, 1981 and 1981, […]
During the growth years, it became fashionable for politicians to claim that central banks were “independent”. But as the current crisis has grown, this has been increasingly exposed as a myth. As the blog noted back in September 2007, Alan Greenspan (former US Federal Reserve Chairman), revealed that ‘the presumption that we were fully independent […]
FREE TRIAL TO ICIS NEWS
LATEST CHEMICAL INDUSTRY NEWS
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 as 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.