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 […]
Chemicals and the Economy
Uncertainty rules
Our annual European conference, organised with ICIS, always provides an excellent opportunity to gain a snapshot of industry views as we move into a new year. At this week’s event in Antwerp, Belgium, the prevailing mood was uncertainty, for the first time since 2002: • Oil prices are high, and volatile. This makes it difficult […]
The subprime black hole
Black holes are an apparently empty region of space, with the power to destroy anything that comes too close. The US subprime crisis seems to be turning into their financial equivalent. It never seems to get resolved. It just gets worse. The last few days have demonstrated this key learning once again. One might have […]
US autos/housing worsen
1 in every 196 US households was in receipt of a foreclosure filing at the end of September, according to Bloomberg. This is a scary number for anyone who owns a house. And Quarter 4 is likely to be worse. Latest figures from the Realtors Association show September’s existing home sales down 19.1% from a […]
Subprime claims its first casualties
Back at the end of August, I suggested that we had only reached the end of Phase1 of the credit crunch. I feared that it had the potential to get much worse, and to damage the ‘real economy’ where all of us in the chemical industry live and work. This was definitely a minority view […]
3 key questions for any Board
What are the key questions that need to be asked when discussing any budget or strategy proposal? I have just found the answer, from a master in the field. Sir Maurice Hodgson is recognised as one of the greatest ICI Chairmen. Under him, the company became a truly global leader, moving away from its ‘imperial’ […]
4 risks from the credit crisis
The Bank of England correctly predicted in April this year that the risks associated with US subprime lending had increased, that credit risk monitoring was poor, and that markets should be prepared for liquidity to dry up in parts of the financial sector. It must therefore, as the Financial Times said, ‘have required some restraint […]
Private Equity and the credit crunch
I recently had the opportunity to attend a workshop organised by Pilko & Associates with leading figures from the private equity (PE) industry. It was fascinating to hear their views on how the current credit crunch is affecting M&A activity. The days when some PE players were acclaimed as geniuses simply for loading up a […]
The hurricane touches down
Extraordinary events have taken place in the UK since my posting on Friday: • A bankrun took place on the 8th largest bank, Northern Rock, with lines of depositors queuing for hours outside its branches all over the weekend and Monday. • Faced with this, the UK Finance Minister was forced to announce that the […]
Northern Rock – subprime contagion spreads
When the US subprime crisis began, we were assured by the ‘experts’ that it was only a small problem, involving a minor segment of an otherwise robust market. However, the more one read about the situation, the more untenable this view seemed to be. Equally, we were told by other ‘experts’ that there was no […]
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