Its not normally a good sign when chemical industry bosses feel the need to cheerlead on the outlook for the economy. Dow’s CEO Andrew Liveris therefore caught my attention at Davos, when he told CNBC that talk of recession was ‘over-reaction’. Particularly when he then corrected himself, adding that what he had meant to say […]
Chemicals and the Economy
The renminbi keeps rising
I noted last month that China seemed to have changed policy with regard to the renminbi. Since then, its rise versus the US$ has accelerated, as shown in the above chart from Merrill Lynch (ML). Since August, it has been rising at an annualised rate of 13%. ML’s explanation is that the government is having […]
IMF identifies ‘serious slowdown’
The credit crunch and associated debt crisis has elicited an unprecedented response from the International Monetary Fund (IMF). Today, the head of the IMF, Dominique Strauss-Kohn, told the Financial Times that the new IMF economic forecasts would ‘show a serious economic slowdown that needs a serious response’. Just last autumn, the IMF was calling for […]
CEO confidence falls
CEOs seem to be following CFOs in worrying about the impact of the credit crunch and debt crisis. The annual CEO survey by PwC of 1150 executives shows that fears of a downturn now top their list of concerns. US CEOs are much less confident than a year ago, with only 35% now ‘very confident’ […]
Selling the rallies
Stock markets are usually good indicators of future economic conditions. Their savage downturn since the start of the year suggests that investors now feel a growth slowdown is almost inevitable. Barrons (the major US investment paper) today highlights another very worrying development. It notes that ‘selling rallies aggressively is (now) more fruitful than buying every […]
2008 crude outlook
I had the opportunity last night to learn current thinking within the oil industry on the current outlook for oil markets, by attending the annual lecture of the British Institute of Energy Economists, kindly hosted by BP. A year ago, at the same event, the crude price was $51/bbl. Last night, the headlines were ‘major […]
Growth slowdown underway
The OECD produces useful leading indicators each month, which try to capture turning points in the global economy. Its industrial production indicator is very relevant to chemicals, as 85% of demand comes from this sector. The latest outlook is summarised in Kevin Swift’s ACC report. The blue line is actual global industrial production, whilst the […]
Financial players increase their bets on crude
Financial investors are already quite disruptive in crude oil markets. And their influence is set to grow this year. That’s the message from surveys by Barclays Global Investors and JP Morgan. $120bn is now invested in commodities as a class, with oil a major target. Even your own pension fund may be about to invest, […]
China freezes energy costs, bans plastic bags
Reaction to $100 oil has been swift. Yesterday, the Chinese State Council decided to freeze the prices of oil products, natural gas and electricity, as well as public transportation. A measure of the government’s concern is that the meeting to approve the freeze was attended by premier Wen Jiabao. Chinese inflation is now at 6.9% […]
Will lower interest rates help?
A reader has kindly sent me an interesting analysis from Richard Bernstein, Chief Investment Strategist at Merrill Lynch (ML)*. He argues that ‘the Fed can lower interest rates quite a lot, but they will likely have minimal impact on the economy unless credit creation grows’. Bernstein says their research indicates that US credit availability is […]
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