New analysis by Bloomberg supports the blog’s view last month that the arrest of former IMF head Dominique Strauss-Kahn (DSK) probably marked a critical turning-point in the Eurozone debt crisis Not only was DSK no longer able to persuade German chancellor Merkel that the problems needed just “a little more time, a little more money”. […]
Chemicals and the Economy
An unmanaged Greek default gets closer
The Dominique Strauss-Kahn affair may come to be seen as a critical turning point, when the story of the Greek default is written. The then IMF head was en route to meet German Chancellor Merkel, when arrested in New York last month. He had been at the forefront of the campaign to pretend that Greece […]
Greece needs a managed default
Many Greeks have always preferred not to pay taxes, and to retire in their 50s. This lifestyle was well understood by their new partners when they joined the Eurozone a decade ago, since when German/French banks have happily funded it with support from their governments. The chart, from the Bank of International Settlements (the central […]
OECD indicators signal slower growth
The OECD’s leading indicators for the global economy suggest that GDP growth is continuing to slow. As the above chart from the American Chemistry Council shows, the OECD’s three key indicators have all slipped from H1 2010’s peaks. The composite indicator (blue) has fallen sharply to +5% from +13%, whilst industrial production (red) is down […]
China’s December surge makes it largest auto market
December was a good month for global auto sales. China’s volume jumped to 1.3 million, as buyers rushed to capture stimulus discounts before they ended. In Beijing, many ‘brought forward’ planned 2011 purchases, in order to beat the new quota system, which aims to reduce congestion by capping 2011 sales at just 240k versus 891k […]
France, Germany, discuss EU fiscal union, as loan problems increase
The EU loans crisis began 6 months ago, when it became likely that Greece was never going to be able to repay its debts in full. Since then, Ireland has moved into a similar position. And there are expectations that Portugal and Spain will follow during 2011. Unsurprisingly, however, given the general lack of transparency […]
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% […]
EU auto sales top USA and China in 2009
Almost unnoticed, the EU became the largest regional auto market last year. Thanks to the support of scrappage programmes (particularly Germany’s €5bn scheme) it sold 14.4 million autos, compared to just 10.4m in the USA and 13.6m in China. W Europe continued to see higher sales than Central Europe, due to greater government support. But […]
Germany sees 5% GDP fall in 2009
The blog has been worrying for some time about what will happen when governments end their stimulus programmes. It does not share the optimism of financial markets, that these will provide to be the “escape velocity” for a quick return to 2003-7 Boom conditions. Today’s data from Germany seems to support its concerns. According to […]
China gains as world trade slows
Sometimes a picture is worth 1000 words. The chart above, from the New York Times, highlights the massive changes that are taking place in world trade flows. These are of critical importance to the chemical industry, one of the world’s most globalised businesses. • Firstly, the volume of world trade has fallen to 2006 levels, […]
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