Its bad enough that many of the world’s major banks collectively lost $4 trn, whilst continuing to pay themselves $bns in bonuses. Equally sad was the fact that the heads of these banks seemed unable to understand the simple principle of fiduciary duty, when asked by the US Congress about their responsibilities to clients. But […]
Chemicals and the Economy
US housing remains weak as foreclosures rise
The problems in US housing remain a major cause of concern for global chemical markets. As the above chart shows – from the American Chemistry Council (ACC) weekly report – housing starts (blue line) and building permits (red) are still at very low levels. April’s housing starts were up 41% versus 2009 to 672k. And […]
Preparing for an Age of Austerity in public spending
The blog has sometimes despaired of the cheer-leading and wishful thinking of too many leading policy-makers. As I argued in the Financial Times in March 2007, before the Crisis began, “they seem to confuse being market-friendly with being friendly to markets“. It therefore welcomes the realism being shown by the UK’s new coalition government. Today, […]
Crude oil falls as markets reassess economic outlook
On 6 May, the blog warned that “it would be very nervous indeed about holding a long position” in crude oil. And as the chart shows, its fears were well-founded. Since 4 May: • WTI has fallen 19%, and $16/bbl, from its $86/bbl peak • The euro has also fallen 8%, and 6c, versus the […]
IMF warns on government spending
The global economy and the chemical industry have been boosted, since the Crisis began in 2008, by massive government stimulus programmes in areas such as autos and housing. Now the International Monetary Fund (IMF) has released a new report, focusing on what happens next. It warns that “general government debt is expected to rise by […]
The Bank of Dad and Mum rules
Paul McCulley of Pimco, the world’s largest bond fund managers, has been continually insightful about the lead-up to the current Crisis and its fall-out. He first alerted the blog to the work of Hyman Minsky, which is the best (and so far only) explanation for the disaster that is continuing to hit the world financial […]
Markets approach the “drawn-out fundamental downtrend” phase
Sell in May and Go Away” is the oldest rule in stock market investment. This week has certainly provided further support for it: • The major Western stock markets are down c8% • The major emerging markets are down between 4% – 13% • Crude oil prices are down 13% This May panic may well […]
US house prices face ‘double-dip’ risk
February was a milestone in US house markets. For the first time since December 2006, prices were higher than a year ago, according to today’s authoritative S&P/Case Shiller Index. But the rise in the 10 City and 20 City indices was just 1%. And as the above S&P chart shows, prices are still only at […]
INEOS was refused help by the UK government
INEOS CEO Jim Ratcliffe has told the Sunday Times that the UK government “refused financial help” last year, when sales collapsed. He revealed that: • The company had approached the UK government for help with liquidity, including deferral of VAT (sales tax) payments, but “got absolutely nowhere“. • Ratcliffe had even found it “quite difficult […]
Betting against the American dream
The political firestorm inspired by the SEC’s citing of Goldman Sachs for fraud shows no sign of dying down. It has even inspired a Broadway song that describes how another hedge fund, Magnetar, allegedly made money out of betting against the housing securities it helped to create. Click here to see it (the video is […]
Jump to page: