The IMF now sees a 25% chance of a world recession this year, in which global growth would fall below 3%. Its base forecast is just 3.7%, compared to 5.2% before the credit crunch began. Sales growth for most chemicals is tied to GDP growth, so companies should expect volumes to come under pressure as […]
Chemicals and the Economy
A simple guide to the credit crisis
The New York Times has an excellent feature today that aims to explain how ‘US sub-prime mortgages could take out the whole global financial system’. I know that many readers found the Bird/Fortune video on the subject very useful last December. So I thought you might like to know about this new analysis. The Times […]
Benzene prices hit a ceiling
Benzene prices may be about to tell us something quite important about future profitability trends for the chemical industry. As the chart shows, benzene has hit a price ceiling at around $1200/t over the past 4 years in European markets. Yet crude has been climbing, from an average $38/bbl in 2004 to average $95/bbl so […]
OPEC holds production as oil prices rise
OPEC today decided to hold oil production at current levels, even though prices are at a level which clearly threaten economic growth. They even recognised this risk in their statement, ‘highlighting the economic slowdown in the USA, which together with the deepening credit crisis in financial markets, is increasing the downside risks for world economic […]
3 ways to spot a failing business
Anthony Bolton of Fidelity has been the UK’s premier stock picker for 30 years. His learnings from his ‘worst disasters’ provide an insider’s perspective on how to spot a company that’s about to fail. He revealed his top 3 warning signs in the Financial Times this weekend:
4 issues driving today’s oil price
Quietly, oil has moved back to the $100/bbl level. This is quite different from January, when it first hit the magic $100/bbl number. Financial players had jumped on the trend from November as crude rose above $80/bbl, and then wanted to ‘get out at the top’. Their thinking was that a US recession would reduce […]
$100 crude – US manufacturing close to recession
Oil prices touched $100/bbl today, a new record in nominal and inflation-adjusted terms. At the same time, the US Institute of Supply Management (ISM) index signalled that the manufacturing sector ‘failed to grow in December’, with ‘industries close to the housing market struggling more than others’. All the ISM’s main indicators were negative, with inventories […]
What next for the credit crunch?
For the chemical industry, much depends on whether the US economy goes into recession during 2008. The signs are not encouraging, with even former Fed Chairman Alan Greenspan believing it is a 50:50 chance. So how would any recession impact the current credit crisis? Writing in the Financial Times their banking editor, Gillian Tett, provides […]
Dow warns
Dow CEO Andrew Liveris has spelled out very clearly his concerns about the impact of the US subprime crisis and high energy prices. He said that last week’s Fed Funds cut ‘flirted with danger’ in terms of the risks it took with inflation, although it was clearly necessary in order to tackle other problem areas. […]
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