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Spotlight on 2010
It’s time for new year predictions hopefully consisting of a fresh look and new plans that will be vibrantly pursued and trends pointing to a successful
year for all industries.
We thought it would be interesting to poll some industry leaders and obtain their predictions to generate thought for our readers.
Here’s a condensed version of the feedback we have received.
- "2010 will be a year of recovery for the chemical industry, although a return to the 'good old days' of the pre-crisis era will remain elusive.”
- "2010 will be a year of keeping the chemical industry competitive. This can happen in two ways - an uptick in mergers and acquisitions activity, leading to stronger more capable companies. Secondly, our industry leaders will increase dialogue with policy makers at every level of government, ensuring a seat at the table when legislation is proposed that can have an impact on chemical companies."
- “Refinery capacity used to be an issue, it isn’t any more in the near term but will be in the long term, expect fuel prices to increase at the slightest uptick in demand.”
- “2010 will be another difficult year for the Venture Capitalist industry, especially as 10 year numbers are released. The silver lining will be it will be a very good year to make a few excellent investments.”
- “The scrap business will gradually get better. We’re seeing spot upticks in the industry now mainly in shipments overseas. The US market is significantly dependent upon the auto and infrastructure industries. There’s supposed to be a government plan for that.... we’ll see.”
- “C&D, waste and recycling businesses all have different make-ups. C&D will be bad for the next couple of years. Whenever you have to pay to dispose of a commodity that’s not good in a recessionary environment. MSW will be steady, not great but steady, and recycling may get some legs with government help or insistence.”
- “Rock business will be steady and possibly slightly up as the American Recovery and Reinvestment Act takes hold. Asphalt business will definitely be up particularly in summer months but cement will remain low until the building sector recovers.”
- “In general business that ship via tank cars are more recession proof than those that ship by, say covered hoppers.”
- “Grain is a push business. The farmer has a wonderfully efficient factory and will continue to generate high yields across feed and small grains. It will need to go somewhere so domestic grain shipments will be fine. Export grain is anybody’s guess.”
- “If you could magically make a centerbeam into some other car-type you’d have a great centerbeam market in 2010. That about sums up the lumber market.”
Overall, we generally find industrial people cautiously optimistic about the last half of 2010 and entrenched in simply surviving in the first half.
We find that those in the investment community whom have money to spend ecstatic about the opportunities that they believe will surface during the year and many
reminded us that we survived through the dot com bubble and the housing bubble. We believe that whatever bubbles there are to be in the future, we will
recover, be widely successful and do it all over again!
We've copied the article below from a U.S. Department of State publication.
We find it interesting in that it appears we’re at the cusp of the chasm in 2010 as we were in the 1970's.
Staflation in the 1970’s
Source: US Department of State
The term "stagflation" -- an economic condition of both continuing inflation and stagnant business activity, together with an increasing unemployment rate -- described the new economic malaise. Inflation seemed to feed on itself. People began to expect continuous increases in the price of goods, so they bought more. This increased demand pushed up prices, leading to demands for higher wages, which pushed prices higher still in a continuing upward spiral. Labor contracts increasingly came to include automatic cost-of-living clauses, and the government began to peg some payments, such as those for Social Security, to the Consumer Price Index, the best-known gauge of inflation. While these practices helped workers and retirees cope with inflation, they perpetuated inflation. The government's ever-rising need for funds swelled the budget deficit and led to greater government borrowing, which in turn pushed up interest rates and increased costs for businesses and consumers even further. With energy costs and interest rates high, business investment languished and unemployment rose to uncomfortable levels.
In desperation, President Jimmy Carter (1977-1981) tried to combat economic weakness and unemployment by increasing government spending, and he established voluntary wage and price guidelines to control inflation. Both were largely unsuccessful. A perhaps more successful but less dramatic attack on inflation involved the "deregulation" of numerous industries, including airlines, trucking, and railroads. These industries had been tightly regulated, with government controlling routes and fares. Support for deregulation continued beyond the Carter administration. In the 1980s, the government relaxed controls on bank interest rates and long-distance telephone service, and in the 1990s it moved to ease regulation of local telephone service.
But the most important element in the war against inflation was the Federal Reserve Board, which clamped down hard on the money supply beginning in 1979. By refusing to supply all the money an inflation-ravaged economy wanted, the Fed caused interest rates to rise. As a result, consumer spending and business borrowing slowed abruptly. The economy soon fell into a deep recession.
Our read on 2010 is simply that it will take a tight hand at the controls, exemplary customer service, a high degree of risk and an enormous amount of
effort for the rewards you do reap. If we can be of assistance in your preparedness, please don’t hesitate to contact us.
Best Wishes for Endless Prosperity!
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