Alan Greenspan’s comments (below), led the blog to investigate how the world’s major stock markets had moved since their recent peaks. All, as shown in the chart, are now in bear markets. Stock markets often forecast economic developments 6 – 12 months ahead, and so this represents a negative indicator for future chemical demand. Also […]
Chemicals and the Economy
UK’s largest mortgage lender rescued
Another day, another rescue. This time on the other side of the Atlantic. HBOS, the UK’s largest mortgage lender, with a 20% market share, announced this morning that it was being rescued via a merger with the Lloyds TSB bank. The deal was brokered by the UK government. UK Finance Minister, Alastair Darling, told the […]
AIG rescued
‘A disorderly failure of AIG could add to already significant levels of financial market fragility and lead to substantially higher borrowing costs, reduced household wealth, and materially weaker economic performance,’ according to the US Federal Reserve last night. As a result, the US government now owns 79.9% of the nation’s largest insurer, in return for […]
The ‘Minsky moment’ unfolds
Pimco, the world’s largest bond fund, have repeated their belief that we are facing a ‘Minsky moment’, named after Hyman Minsky (pictured). His insight was that a long period of stability, such as that experienced over the past decade, eventually leads to major instability. This is because investors forget that higher reward equals higher risk. […]
Lehman goes bust, Merrill rescued
The blog has never liked disaster movies, but it was quite a weekend for those who do. First, there was the hurricane hitting Houston and Texas. I used to live in Houston, and watching the pictures of the damage, could recognise familiar places washed away, or burnt down. The blog’s sympathy goes to all those […]
Auto sales fall around the world
August was a bad month for US auto sales. GM sales were down 20% versus 2007, Toyota down 9%, Ford down 26% and Chrysler fell 35%. This set the blog wondering about relative performance , and the chart shows the result. 2007 wasn’t a great year, with only Toyota (the red column) showing a sales […]
CFOs see lending ‘drying up’
A year ago, Tesco, the UK supermarket giant, were early to see problems ahead in consumer markets. Now, they see problems developing for corporate lending. Last week, Tesco paid €100m more than expected when borrowing €3bn. But Nick Mourtant, group Treasurer, still thought it a good deal. He said ‘the company wanted to raise as […]
OPEC says oil market ‘over-supplied’
This morning, the blog is awarding itself a pat on the back. This is because, almost alone, it forecast in mid-July that oil prices ‘could easily fall $50/bbl to $100/bbl’ in the absence of any military action on Iran. And it had the courage to repeat this comment on 4 August. It added that if […]
Sinopec cuts back (a little) on petchems
China’s Sinopec has taken a lead in reviewing its petrochemical expansion plans. Speaking to employees last week, Wang Tianpu, CPC division President, noted that ‘global crude prices may remain high and the petrochemical industry may become even more competitive’. Today, he gave more details, saying that they plan to lower 2008 petchem expenditure by 4.6bn […]
The $5 trillion bailout
The US government has finally decided to nationalise the two home loan giants, Fannie Mae and Freddie Mac. Readers will remember I forecast this would be necessary a year ago, in a letter to the Financial Times. I argued then that ‘a buyer of last resort, such as the Federal government, would probably now need […]
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