July 16, 2022

Fun for the Weekend

The $100 Trillion Global Economy In One Chart

by Tyler DurdenFriday, Jul 15, 2022 – 08:00 PM

Surpassing the $100 trillion mark is a new milestone for global economic output.

Visual Capitalist’s Avery Koop has covered this topic in the past when the world’s GDP was $88 trillion (2020) and then $94 trillion (2021), and now according to the latest projections, the IMF expects the global economy to reach nearly $104 trillion in nominal value by the end of 2022.

Although growth keeps trending upwards, the recovery that was expected in the post-pandemic period is looking strained. Because of recent conflicts, supply chain bottlenecks, and subsequent inflation, global economic projections are getting revised downwards.

Global annual GDP growth for 2022 was initially projected to be 4.4% as of January, but this has since been adjusted to 3.6%.

Note: This data from the IMF represents the most recent nominal projections for end of year as of April 2022.

 Gross Domestic Product (GDP) is a broad indicator of the economic activity within a country. It measures the total value of economic output—goods and services—produced within a given time frame by both the private and public sectors.

The 50 Largest Economies in the World

The United States is still the economic leader worldwide, with a GDP of $25.3 trillion—making up nearly one quarter of the global economy. China follows close behind at $19.9 trillion. Here’s a look at the top 10 countries in terms of GDP:

The frontrunner in Europe is Germany at $4.3 trillion, with the UK coming in second place. One significant change since the last reported figures is that Brazil now cracks the top 10, having surpassed South Korea. Russia falls just outside, in 11th place, with a GDP of $1.8 trillion.

While China’s GDP growth has slowed in recent years, projections still indicate that the country will overtake the U.S. by 2030, dethroning the world’s economic leader.

One region also expected to experience growth in the near future is the Middle East and North Africa, thanks to higher oil prices—Iraq and Saudi Arabia in particular are leading this charge. Regional GDP growth in the area is expected to be around 5% in 2022.

The 50 Smallest Economies in the World

Some of the world’s smallest economies were hit particularly hard by the pandemic, and have subsequently been the most affected by the inflation and food supply shortages resulting from the war in Ukraine.

Here’s a look at the countries worldwide with the lowest GDP in 2022:

The smallest economy in the world measured in the IMF rankings is Tuvalu at $66 million. Most of the bottom 50 are considered low- to middle-income and emerging/developing countries. According to the World Bank, in developing countries, the level of per capita income in 2022 will be about 5% below the pre-pandemic trends.

Some countries are actually projected to experience negative GDP growth this year, particularly emerging and developing economies in Europe.

For example, Russia is expected to experience a GDP growth rate of -8.5% in 2022, though it still remains to be seen how the cost of war and increasingly harsh global sanctions impact the country’s economic prospects.

Inflation, Stagflation, Recession – How Bad is it?

While global economic growth has already been revised downwards, it’s possible the situation could be even more serious. Organizations like the World Bank say that risks of stagflation are rising. Stagflation, which hasn’t occurred since the 1970s, is defined as an economy that’s experiencing rising inflation combined with a stagnant economic output.

Currently, global consumer inflation is currently pegged at 7%. Daily goods are becoming increasingly difficult to purchase and interest rates are on the rise as central banks worldwide try to control the situation. As recent events in Sri Lanka demonstrate, low-income countries are particularly at risk to economic volatility.

https://www.zerohedge.com/economics/100-trillion-global-economy-one-chart

July 16, 2022

Fun for the Weekend

The $100 Trillion Global Economy In One Chart

by Tyler DurdenFriday, Jul 15, 2022 – 08:00 PM

Surpassing the $100 trillion mark is a new milestone for global economic output.

Visual Capitalist’s Avery Koop has covered this topic in the past when the world’s GDP was $88 trillion (2020) and then $94 trillion (2021), and now according to the latest projections, the IMF expects the global economy to reach nearly $104 trillion in nominal value by the end of 2022.

Although growth keeps trending upwards, the recovery that was expected in the post-pandemic period is looking strained. Because of recent conflicts, supply chain bottlenecks, and subsequent inflation, global economic projections are getting revised downwards.

Global annual GDP growth for 2022 was initially projected to be 4.4% as of January, but this has since been adjusted to 3.6%.

Note: This data from the IMF represents the most recent nominal projections for end of year as of April 2022.

 Gross Domestic Product (GDP) is a broad indicator of the economic activity within a country. It measures the total value of economic output—goods and services—produced within a given time frame by both the private and public sectors.

The 50 Largest Economies in the World

The United States is still the economic leader worldwide, with a GDP of $25.3 trillion—making up nearly one quarter of the global economy. China follows close behind at $19.9 trillion. Here’s a look at the top 10 countries in terms of GDP:

The frontrunner in Europe is Germany at $4.3 trillion, with the UK coming in second place. One significant change since the last reported figures is that Brazil now cracks the top 10, having surpassed South Korea. Russia falls just outside, in 11th place, with a GDP of $1.8 trillion.

While China’s GDP growth has slowed in recent years, projections still indicate that the country will overtake the U.S. by 2030, dethroning the world’s economic leader.

One region also expected to experience growth in the near future is the Middle East and North Africa, thanks to higher oil prices—Iraq and Saudi Arabia in particular are leading this charge. Regional GDP growth in the area is expected to be around 5% in 2022.

The 50 Smallest Economies in the World

Some of the world’s smallest economies were hit particularly hard by the pandemic, and have subsequently been the most affected by the inflation and food supply shortages resulting from the war in Ukraine.

Here’s a look at the countries worldwide with the lowest GDP in 2022:

The smallest economy in the world measured in the IMF rankings is Tuvalu at $66 million. Most of the bottom 50 are considered low- to middle-income and emerging/developing countries. According to the World Bank, in developing countries, the level of per capita income in 2022 will be about 5% below the pre-pandemic trends.

Some countries are actually projected to experience negative GDP growth this year, particularly emerging and developing economies in Europe.

For example, Russia is expected to experience a GDP growth rate of -8.5% in 2022, though it still remains to be seen how the cost of war and increasingly harsh global sanctions impact the country’s economic prospects.

Inflation, Stagflation, Recession – How Bad is it?

While global economic growth has already been revised downwards, it’s possible the situation could be even more serious. Organizations like the World Bank say that risks of stagflation are rising. Stagflation, which hasn’t occurred since the 1970s, is defined as an economy that’s experiencing rising inflation combined with a stagnant economic output.

Currently, global consumer inflation is currently pegged at 7%. Daily goods are becoming increasingly difficult to purchase and interest rates are on the rise as central banks worldwide try to control the situation. As recent events in Sri Lanka demonstrate, low-income countries are particularly at risk to economic volatility.

https://www.zerohedge.com/economics/100-trillion-global-economy-one-chart

July 13, 2022

Q2 Chemical M&A Activity

Chemical Deal Results

http://www.chemicaldeals.com/Results.aspx?searchtext=&quarter=2nd+Quarter+2022

July 13, 2022

Q2 Chemical M&A Activity

Chemical Deal Results

http://www.chemicaldeals.com/Results.aspx?searchtext=&quarter=2nd+Quarter+2022

July 13, 2022

Container Rates Falling

Container Rates Slump As “Bullwhip Effect” Enters Terminal Phase

by Tyler DurdenTuesday, Jul 12, 2022 – 08:25 PM

The infamous “bullwhip” effect strikes as inventory gluts force U.S. importers to dial back shipments from overseas, driving down rates for ocean freight, which could end up causing a so-called “freight recession.” 

WSJ reports U.S. companies are renegotiating shipping agreements they made during the virus pandemic highs. Some are hedging in the spot market to reduce costs associated with long-term contracts. 

San Francisco-based freight forwarder Flexport said softening demand lowers freight rates but remains well above pre-pandemic levels. 

Last week, the spot rate to ship a container from China to the U.S. West Coast was still four times higher than the same period in July 2019, online freight marketplace Freightos’ data shows. 

A recent shipment by Carbochem Inc., an importer of activated carbon used in water treatment, cost around $16k from China to Chicago, down from $21k a year ago.  

“We need to be looking at probably less than $10,000 to get anywhere close to the levels we were before and be competitive,” the firm’s president, Gavin Kahn, said. 

Shipping data from Bloomberg shows international freight rates have slumped over the last six months, mainly because of China shutdowns. However, U.S. importers reducing demand for cargo ships has accelerated the downward move. 

The $1.5bln slide in U.S. consumer goods in May might have been a clear indication that demand for overseas products was waning and comes as Americans reduced spending on durable goods, something Target and Walmart pointed out last month.

We have detailed for readers in the last two months the terminal phase of the bullwhip effect was upon us:

• Bullwhip Effect Ends With A Bang: Why Prices Are About To Fall Off A Cliff
• Deflationary Tsunami On Deck: A “Tidal Wave” Of Discounts And Crashing Prices
• Michael Burry Agrees: “Bullwhip Effect” Will Force Powell To Pivot On Rate Hikes And Q.T.

The side effect of soaring inventory to sales ratios is that retailers must liquidate inventories as consumer spending habits change. This causes retailers to reduce demand from overseas suppliers (read: Samsung Asks Component Makers To Delay Shipments Amid Build-Up In Inventories), which diminishes the need for ocean freight shipping. 

In late March, FreightWaves CEO Craig Fuller warned that retailers would need to unload inventory amid signs of demand destruction. He correctly said this would cause a freight recession now could be coming true as container rates decline. 

https://www.zerohedge.com/markets/shipping-rates-slump-bullwhip-effect-enters-terminal-phase