Will 2014 turn out to be a repeat of 2008 for the US economy? 6 years ago, after all, not a single mainstream forecaster – including the IMF and World Bank – was forecasting a recession. Even in September 2008, the consensus was still confident about the economic outlook. Yet the National Bureau for Economic Research […]
Chemicals and the Economy
Nobody realised the BabyBoom had happened till long after it finished
Milton Friedman received a Nobel Prize for economics in 1976, partly on the basis of his analysis that ‘inflation is everywhere and always a monetary phenomenon’. It sounds an appealing insight, but of course it is wrong. The reason is that it confuses cause and effect. The above chart presents a different view, highlighting the […]
Ethylene demand weak as eurozone flirts with recession and deflation
So this is as good as it gets in 2013. That seems to be the sad conclusion from analysis of Q3 operating rate (OR%) data for Europe’s crackers. Actual Q3 OR% inched up to 81%, which was slightly better than 2012’s 80% rate and 2009’s 79% rate. But its a very long way from the […]
Investors decide central banks may not know what they are doing
The blog was speaking last week at the major Euromoney investor conference on bond markets. It followed a keynote by the head of the UK’s Debt Management Office, who noted that the Bank of England now ‘owned’ ~30% of total UK government debt compared to none in 2008 The reaction to his speech revealed just how investor […]
Key China data suggest economic growth already less than 5%
China’s economy is continuing to slow, as the new leadership takes power. As the chart shows of H1 performance: Electricity consumption (red line) was up 5% versus H1 2012 Bank lending was up 4% These levels are of course well below the published GDP figure of 7.5% for Q2, but the two types of data […]
Drug supplies cut to Greece as capital controls return to Europe
Don’t be surprised if your finance team starts working even longer hours over the next few weeks. Not only will they have to worry about revising profit forecasts and working capital issues, as demand weakens in some core markets. Now they have to worry about what might happen to the cash actually in some company […]
S&P 500 hits new record as Kem One files for bankruptcy
The divergence between the real world and financial markets was sharply clarified last week: • The world’s major stock index, the US S&P 500, hit a record new closing high of 1569 • Sadly, Europe’s 3rd largest PVC producer, Kem One, filed for bankruptcy These developments are clearly not mutually supportive. As we enter Q2, […]
Demand weakness spreads across Europe and Asia
The blog was in sober mood when giving its usual New Year Outlook in January, warning that “renewed global recession appears to be the major risk facing us at the start of 2013“. Developments since then only reinforce its caution. Europe and Asia are now seeing widespread weakness in demand: • In Europe, the chairman […]
Lanxess temporarily closes plants, as demand remains slow
Chemical markets continue to paint a very worrying picture of the state of the global economy. There has been no improvement in demand over the past week, since the blog first raised the alarm. Instead, plants are being temporarily closed because of the slowdown. Lanxess, for example, announced the closure of two plants in Belgium […]
Company results show few signs of any upturn
Economic recovery is already underway, according to the optimists who have bid up financial markets in recent weeks. But the blog’s quarterly review of company results shows little evidence of it on the ground. Phrases such as ‘challenging’, ‘economic uncertainty’, ‘deterioration’ and ‘decline’ dominate the reports across all major regions: • Europe is clearly in […]
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