Entries from Chemicals & The Economy tagged with 'leverage'
Leverage returns to financial markets
Gillian Tett, the blog's favourite financial journalist, highlights today the rampant speculative behaviour in financial markets around the world. Quoting a senior banker, she notes that "highly leveraged short-term trades are back in vogue". She adds that "traders feel stupid...
G-20 moves on financial regulation
Last April's G-20 Summit brought together the leaders of the major world economies. Yet in terms of their announced goals for the Summit, financial regulation seemed to be the only one that gained traction. That impression is confirmed by the...
V-shaped sellers meet L-shaped buyers
Picture: www.businessoffashion.com A senior figure in the investment community told the blog recently that companies' views on the outlook for the economy seemed to vary according to their own financial position: "the stronger the balance sheet, the more realistic (and...
Dow Chemical moves to Plan B
A month ago, after the collapse of the K-Dow deal, the blog suggested that Dow would need to move quickly to a Plan B. It added that "nobody would be very surprised if it now sought to renegotiate the proposed...
INEOS, Georgia Gulf, Chemtura bond prices plunge
Bond markets are a good place to look if you want to understand the outlook for major companies in the chemical industry. A key market is in 'credit default swaps' (CDS), which offer insurance against the possibility that a company...
Moody's worries about the chemical industry
Moody's, the global ratings agency, is today forecasting a 70% chance of a U-shaped recession, and a 15% chance of either a V or L-shaped downturn. This broadly agrees with the blog's own view, set out a month ago. Moody's...
Soros on leverage
George Soros is one of the most successful investors in recent decades. The blog came across today a report of Soros' graphic description of the dangers of having too much debt in a business, or personally: "Leverage was like driving...
'The price of all assets will go down'
'Deleveraging' is an ugly word, and it has ugly implications. Bill Gross of Pimco, who manages the world's largest bond fund, has done us all a favour by trying to explain its impact, and why it is likely to continue...
INEOS’ Grangemouth plants on strike
Ineos’ 200,000bpd Grangemouth refinery in Scotland is on strike today and tomorrow, over a pension dispute. This will presumably cost the workers 2 days pay. The costs for INEOS and the UK are enormous in comparison. BP, for example, has...
‘Too big to rescue’
Readers will know that I am a great admirer of Gillian Tett’s analyses of banking issues in the Financial Times. Today, she has another thought-provoking article, this time on the emergence of Iceland as ‘the world’s first country run like...
SABIC – S&P follow Moody’s
S&P have quickly followed Moody’s in putting SABIC Innovative Plastics’ debt on creditwatch for a downgrade. As I commented with the Moody’s downgrade, this is not really to do with a newly discovered decline in the polycarbonate market. S&P have...
What next for the credit crunch?
For the chemical industry, much depends on whether the US economy goes into recession during 2008. The signs are not encouraging, with even former Fed Chairman Alan Greenspan believing it is a 50:50 chance. So how would any recession impact...
Moody’s seasonal 'gift' for SABIC
Its always interesting to see the news stories that are slipped out just before major public holidays, when media attention is likely to be low. Only ICIS news seemed to spot the announcement by Moody’s that they were placing SABIC...
Credit markets ‘worst in 47 years’
Central banks seem to have their work cut out if they are to restore normality to global credit markets. The famed head of Legg Mason, Chip Mason, who manages over $100 billion of assets, and is one of the world’s...
5 risks to 2008 budgets
The consensus viewpoint is an easy way of keeping up to speed on a variety of issues outside one’s daily experience. But the signs are that the consensus may be leading to complacency, when it comes to the assumptions being...
Private Equity and the credit crunch
I recently had the opportunity to attend a workshop organised by Pilko & Associates with leading figures from the private equity (PE) industry. It was fascinating to hear their views on how the current credit crunch is affecting M&A activity....
Leverage and bad debts
Some 20 years ago, after a couple of senior management jobs, I was sent off to study for a month at the IMD business school in Switzerland. There I spent time with Prof Jim Ellert, a noted financial analyst, who...
Hedge fund woes and the chemical industry
The US Senate thinks the Amaranth hedge fund increased the costs of natural gas futures contracts last year. Any pension funds invested in Bear Stearns' hedge funds might want to check on the current value of their holdings....
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