James_Burke.jpg

A consultant once told me a wonderful story – so wonderful I don’t even care whether it’s true or not – about how the monthly European benzene price in the 1950s was calculated based on the US price once the latest issue of Chemical Market Reporter had arrived in Rotterdam by boat.

Are we now wasting time and money on dealing with market volatility that’s the result of how we gather and process information?

Nicholas Carr of The Atlantic.com argues that the Google age is making us think and behave differently.

The furious linking between one site and the next, the feeling of never knowing enough, of never being entirely up-to-date, might have turned us into what the playwright Richard Foreman calls “pancake people”. In other words we have a broad range of knowledge thanks to all that surfing – but have an inability to read more than a couple of pages of text at any one time and to take a break from information-trawling long enough to consider what we have read. We have, as a result, lost our intellectual depth.

As our attention spans ever-shorten with the volume of information and information-solutions out there, are we making energy and chemical markets more volatile?

Are we no longer able to take a deep breath and stand back and contemplate what is really going on?

The financial players and the physical traders contribute to erratic price movements because they have an interest in volatility, but to what extent?

Could it be that the way we gather and process information plays a bigger role in erratic price movements than the speculators?

Fundamentals still play the biggest role. For example, oil supply is so stretched that the slightest disruption to production – or even only rumours of a disruption – can have a big effect on pricing.

But the speed with which information is flashed around the globe and how we react to that information might be increasing volatility in tight markets such as crude.

Quantifying the impact of the way the Internet is shaping the way pricing markets behave could be a job for the nueroeconomists who I wrote about earlier this month.

Perhaps the good old days were better, when CMR arrived by boat and a few wise old men with leather patches on their jackets puffed on their pipes and came up with a benzene price that was more stable and less damaging to both buyers and sellers. Or is this just rose-tinted and ill-informed nonsense?

James Burke (see picture above) has so far been proved wrong about the information technology revolution giving us the ability to be free, to create our own realities and to not be dictated to by governments, companies or other institutions.

In this clip from his wonderful series, Connections, he envisages such an era because knowledge will be freely available.

This is the great democratisation of knowledge written about by Chris Anderson in The Long Tail.

Sadly, the reverse has happened. We have become a slave to our machines – from our mobile phones, to our Blackberries to our PCs – and a slave to markets that we are nowhere close to predicting or controlling.

But give Mr Burke a break. His programme was broadcast in the 1970s, was way ahead of its time and perhaps so far ahead that one day his prophesies will come true.

PREVIOUS POST

Japan's corporate hero

11/08/2008

manga, Japanese conformism, losing face, Lost Decade

Learn more
NEXT POST

Want a place on the Board?

13/08/2008

The loneliness of the long distance CEO, CEO board game, the slippery career pol...

Learn more
More posts
China 2020 polyethylene demand 4.1m tonnes lower on single-use plastics ban and coronavirus
27/01/2020

By John Richardson CHINA was supposed to be the one polyethylene (PE) market we could all depend on ...

Read
China single-use plastic bans: Polyethylene imports 68m tonnes lower in 2020-2030
24/01/2020

By John Richardson THE good news from a “business as usual” perspective is that China’...

Read
China’s bans on single-use plastics: The impact on polyethylene demand
21/01/2020

    By John Richardson DON’T SAY I didn’t tell you. It has always been just a question...

Read
Why the trade deal is much ado about almost nothing
20/01/2020

These are, as always, my personal views and do not express the views of ICIS. Thanks By John Richard...

Read
The polymers industry, climate change and a call to action
13/01/2020

By John Richardson MUCH OF the debate about plastics and the environment is, I fear, missing the big...

Read
Why President Trump, unlike with Iran, will find it harder to shift course on China
10/01/2020

As always, these are my personal views only and do not represent the views of ICIS. Thank you  ...

Read
US and Iran conflict in a world of declining growth and fragile supply chains
08/01/2020

By John Richardson THINK of the Fukushima disaster in 2011 and multiply its impact on global supply ...

Read
Iran and the US: Assessing the risks for petrochemicals and the global economy
06/01/2020

As always, these are my personal views only and don’t reflect the views of ICIS By John Richar...

Read

Market Intelligence

ICIS provides market intelligence that help businesses in the energy, petrochemical and fertilizer industries.

Learn more

Analytics

Across the globe, ICIS consultants provide detailed analysis and forecasting for the petrochemical, energy and fertilizer markets.

Learn more

Specialist Services

Find out more about how our specialist consulting services, events, conferences and training courses can help your teams.

Learn more

ICIS Insight

From our news service to our thought-leadership content, ICIS experts bring you the latest news and insight, when you need it.

Learn more