The ‘slow motion train wreck’ continues


A year ago, the noted investment analyst, Jeremy Grantham, described the credit crisis as a ‘slow motion train wreck’. The Financial Times has now updated the metaphor to describe what has happened since. It notes that train crashes happen more quickly than economic ones, and that there are pauses before the next carriage hits the one in front. It believes this explains how we have since ‘moved from crisis to crisis, with rallies in between, as participants persuade themselves that the worst is over’.

Its conclusion is not encouraging for chemical companies. It expects that the problems in banking, housing and consumer markets will continue to play out ‘in very slow motion’. As a result, it warns that ‘we may have much longer to wait until the final impact has juddered through the train’.

About Paul Hodges

Paul Hodges is Chairman of International eChem, trusted commercial advisers to the global chemical industry. He also serves as a Global Expert for the World Economic Forum. The aim of this blog is to share ideas about the influences that may shape the chemical industry and the global economy over the next 12 – 18 months. It looks behind today’s headlines, to understand what may happen next in critical areas such as oil prices, China and Emerging Markets, currencies, autos, housing, economic growth and the environment. 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.

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One Response to The ‘slow motion train wreck’ continues

  1. Biofuelsimon 20 August, 2008 at 12:19 pm #

    I sort of remember reading something about previous crashes, which have been marked by the market rising on more days than it dropped. It’s just that the drops were much bigger than the rallies. A the moment I suspect the best way to make a little money on the markets is to start with a lot.

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