Last week the IMF warned there was a 25% chance of a global recession in 2008. Today, it said that the ‘crisis (was) creating serious macroeconomic feedback effects’ and could have ‘profound financial system and macroeconomic implications’. We normally expect central bankers to weigh their words carefully. But now the IMF has decided to throw […]
Chemicals and the Economy
US housing markets are getting worse. Today’s S&P/Case-Schiller index showed prices declined 8.9% in December. Moody’s said that 10% of homeowners (8.8 million people) had negative equity in their homes. And unsurprisingly, given this background, bank repossessions rose 90% versus January 2007 levels. Price changes generally follow changes in volume, up or down. And so […]
The consensus viewpoint is an easy way of keeping up to speed on a variety of issues outside one’s daily experience. But the signs are that the consensus may be leading to complacency, when it comes to the assumptions being used to finalise 2008 budgets. There are a number of areas where some new thinking […]
Oil prices last week rose to an all-time, inflation-adjusted, high in New York at over $92/bbl. Meanwhile food and commodity prices have continued their upward march. In China, the rate of consumer price inflation hit a decade-high of 6.5% in August. So why are we still seeing rates of around 2% reported in the USA […]
Its now 3 months since we first saw the impact of the subprime crisis. At that time, the main impact was on poor Americans, who were losing their homes. Then, in August, banks stopped lending to each other, causing credit conditions to tighten. By September, central banks were fighting fires on several fronts: • Injecting […]
A week ago, I wrote that it would be important to see if ‘the US Federal Reserve can pull a rabbit out of its hat’ at its meeting later that day. The dust has now settled on its 0.5% Fed Funds rate cut, and one can see that short term liquidity has certainly been improved, […]
Housing and autos have always been key drivers for the US chemicals industry. We should be concerned if the housing market weakens further.
The latest report from the ‘central bankers’ bank’ provides an excellent analysis of what might go wrong in the world economy over the next 2 – 3 years. Anyone interested in scenario planning will find its conclusions valuable.