Thursday, May 29, 2008

Who To Believe?

This was an interesting announcement yesterday:

Dow Chemicals said it is being forced to carry out an across-the-board price hike due to increasing energy costs. The move is particularly significant because Dow Chemicals is one of the world's largest chemical manufacturers, and its products are used to make a wide variety of consumer goods. Dow's CEO issued a statement where he squarely put the blame on Washington for failing to deal with "rising energy costs and, as a result, the country now faces a true energy crisis, one that is causing serious harm."
Let's add it up. Govument says inflation is at a 4% rate. Dow says they need to raise prices 20%. Who do you believe? Unfortunately (and as I wrote about the other day), the bond market continues to think that Dow is right. Interest rates are rising, which will be very bad news for the housing bidness.


Anonymous said...

Dow is just coming out of bankruptcy (or a portion of them is) and they are facing the payoff on the asbestos lawsuits. It is the last class action lawsuit my late husband's family was a part of and the payoff should be one of the largest. They have waited for over 17 years for their money.
This is probably part of Dow's "money problem". Their own fault--they knew about the asbestos dangers for decades and did nothing.
Lynne (too lazy to sign in)

Greyhair said...

Lynne, I believe they've also been underwater due to the silicon breast implants suits.