There are increasing signs that China is getting serious about tightening its lending policies. The above chart, from China’s central bank, shows how lending has fallen since January. Then, it was 14% down versus 2009. But by the end of Q1, lending was down 43% versus Q1 2009. In addition, the government has begun to […]
Chemicals and the Economy
UK voters want clarity on spending cuts
The UK has long had a tradition of two-party government, whereby the Labour party will alternate with the Conservatives. Thus Mrs Thatcher became Prime Minister in 1979 for the Conservatives, and was followed by John Major. Then Tony Blair won for Labour in 1997, with Gordon Brown taking over two years ago. Now, however, this […]
US regulators accuse Goldman Sachs of fraud
Every now and then, a single quotation summarises a complex situation. In August 2007, CitiGroup CEO, Chuck Prince, described their blindness to the financial crisis about to unfold. “We see a lot of people on the Street who are scared. We are not scared. We are not panicked. We are not rattled. Our team has […]
Iceland’s volcano shuts down European airspace
Many chemical industry executives will be grounded for at least the next 24 hours, as a major volcanic eruption in Iceland is shutting down airspace in most parts of NW Europe this afternoon. UK and Scandinavian airspace is totally closed as a result of the eruption, pictured above. The dust cloud contains minute particles of […]
US natural gas prices tumble
The blog’s early career, as a petchems trader in Houston, taught it to look out for moments when prices in one market start to diverge from those of a related product. These can often provide advance warning that a trend change is underway. Thus it is fascinated by the above chart, from commoditycharts.com. It shows […]
Eurozone, IMF, offer €45bn aid package to Greece
After 3 months of agonising, it seems that a €45bn ($61bn) aid package will be offered to Greece. The Eurozone will offer €30bn, with a further €15bn coming from the IMF. Greece’s GDP fell 2% in 2009. Experts now forecast a 4% fall this year. The government plans higher taxes, lower spending, and a 10% […]
China aims to boost domestic consumption
The dramatic rise of Asia’s economies, including China, has been based on an export-driven model. Their growth powered ahead as long as the West grew, and companies continued to outsource much of their basic manufacturing activity to lower-cost countries. In 2001, for example, China’s exports were just 20% of GDP. But by 2007, they had […]
US consumers enter the ‘new normal’
The US consumer accounts for 16% of total global GDP, with a value of $10trn. By comparison, total Asian consumption is under $5trn. China’s consumption in 2008 was just $1.6trn, about equal to the UK. Changes in US consumer behaviour are therefore critical to global GDP, and hence to chemical demand. The chart above, from […]
US oil stocks remain at multi-year highs
The chart above, from the insightful Petromatrix report, highlights the on-going divergence between the bullish sentiment driving prices, and the fundamental reality of crude oil markets. It totals US stocks of crude oil and the main products (gasoline, distillate and jet kero), by year. And it shows very clearly that stocks in 2010 (red line) […]
US company earnings still 40% below 2007 peak
The US 2009/Q4 reporting season is now virtually complete. It provides a valuable snapshot of company health as the US recession ends: • Reported earnings (red line) for the S&P 500 have recovered to $51. This is partly due to loss-makers such as GM having dropped out of the index due to bankruptcy. But it […]
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