The world has suffered a recession every time the oil price has reached current levels. And as the blog has warned for months, this time is unlikely to be different. The reason is captured in the above chart. This uses: • Oil production since 1970 as reported in BP’s annual review • Average annual oil […]
Chemicals and the Economy
Groundhog Day again as Quarter 4 starts
The great film comedy Groundhog Day saw Bill Murray doomed to repeat the same day in his life, until he learnt to become a better person. Sadly, financial markets have yet to learn from his example. Every quarter, the investment banks produce new stories aimed at pushing stock/oil markets higher. Then high-frequency traders make $millions […]
OECD warns economic growth “close to a halt”
The IeC Downturn Alert has hopefully done the job for which it was intended. It was launched at the end of April, when the blog became convinced that the global economy was highly likely to enter a new downturn. It also realised from its experience in 2007-8, when it later became known as ‘The Crystal […]
Boom/Gloom Index suggests downturn resuming
A recession is often defined as being when your neighbour loses their job. A depression is when you lose your job. Latest industrial production data shows output is falling around the world. And US unemployment is rising again, with the wider measure at 16.2% as long-term joblessness becomes a major problem. Last month’s IeC Boom/Gloom […]
August highlights
Many readers have been taking a well-earned break over the past few weeks. The blog also continues to gain large numbers of new readers, as the financial crisis intensifies. As usual, therefore, it is highlighting key posts during August, to help you catch up as you return to the office. Boom/Gloom Index suggests markets on […]
US polymer demand slows as consumers cut back
The above chart, from the invaluable American Chemistry Council (ACC) weekly report, highlights the scale of Q1’s inventory build in N American polymer markets (polyethylene, polypropylene, PVC). This build took place as consumers down the value chain rushed to buy forward, as WTI oil prices surged 41% between November – April. Their buying was not […]
Downturn continues as financial markets sink
ICIS pricing is a very valuable resource, particularly at market turning points. It highlighted the start of the current downturn in April, when reporting that buyers had moved to operating on a ‘hand to mouth’ basis. Now, its market editors are highlighting the fragility of demand due to ‘economic uncertainty’. This is the moment when […]
Policymakers remain in the Denial phase
A year ago, the blog feared we were “still towards the beginning of the crisis”, not at its end. Sadly, its judgement seems to have been correct. 2 weeks after that post, the US Federal Reserve launched its now infamous $600bn QE2 programme. The aim was to provide further massive stimulus to the global economy. […]
Wal-Mart sends a message
The blog is a great believer in the predictive power of the retail sector. Wal-Mart and Tesco were the first to spot the downturn in the summer of 2007, a year before it became obvious to everyone else. Now Wal-Mart’s problems are providing some important messages about how companies need to adjust their strategies to […]
Boom/Gloom Index suggests markets on the edge
There’s “a 50% chance that the US could slide into a new recession“, according to Harvard’s Prof Martin Feldstein. He sees the economy as “really balanced on the edge“, with housing still depressed and consumer spending flat. The blog’s own IeC Boom/Gloom Index is flagging similar concerns. As the chart shows, the Index for July […]
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