The economic expansion—already the worst on record since World War II—is weaker than previously thought, according to newly revised data.
From 2012 through 2014, the economy grew at an all-too-familiar rate of 2% annually, according to three years of revised figures the Commerce Department released Thursday. That’s a 0.3 percentage point downgrade from prior estimates. (USA)
The Conference Board of Canada has downgraded its forecast for the Canadian economy.
On Wednesday, the board predicted the economy will grow by 1.6 per cent this year, Canada’s worst showing since 2009. In May, it forecast growth of 1.9 per cent. The Canadian economy grew by 2.4 per cent last year.
The board said the contraction of the Canadian economy in the first quarter of the year, lower oil prices, a near-record trade deficit and uncertainty in global markets have dimmed the growth outlook for Canada.
“There has been much speculation on whether the Canadian economy has dipped into recession,” Matthew Stewart, associate director, national forecast, said in a release. “We expect the numbers to show economic growth tracking close to zero in the second quarter.
“But even if Canada slips into mild recession, we expect it to be small and short-lived, with the economy picking up through the rest of the year.”
Todd Hirsch, chief economist with ATB Financial, said the economic picture has gotten progressively worse over the year both for Canada and Alberta.
“Part of it is energy prices. That’s the Alberta story. These energy prices are in our sort of lower case scenario that we thought we would see by the middle of the year,” he said. “Those haven’t recovered yet. For Canada, it’s really an export story which is a big puzzle.
#3NEW YORK (Standard & Poor’s) July 27, 2015–Standard & Poor’s Ratings Services downgraded 244 issuers worth $1.2 trillion in rated debt and upgraded 125 issuers with $621 billion in rated debt in the second quarter of 2015.
Downgrades eclipsed upgrades around the world as geopolitical and economic risks rose, including Greece’s potential exit from the eurozone (the “Grexit”), a slowdown in economic growth in China, and the credit effect from interest rate normalization on part of the Federal Reserve System in the U.S., according to Standard & Poor’s “Global Corporate And Sovereign Rating Actions And Outlook–Downgrades Surpass Upgrades Around The World As Geopolitical And Economic Risks Increase,” published today on RatingsDirect.
“Downgrades surpassed upgrades across the globe in the second quarter of 2015, with most regions seeing two downgrades for every one upgrade—slightly above historical averages,” said Diane Vazza, head of Standard & Poor’s Global Fixed Income Research Group.
#4* Q2 GDP growth below forecast, lowest since early 2012
* Collapse in exports hits economy
* Government to downgrade full year GDP forecast
* Central bank can't do much -analyst (Adds further analyst comments, context on monetary policy)
WE’RE still in a super commodity cycle — except that Credit Suisse says it’s a “super down” cycle.
And have we got further to fall? Perhaps, considering that oil prices are still 35 per cent above their 40-year inflation-adjusted norm, and minerals are 41 per cent above.
Real commodity prices are not that low. Credit Suisse shows that, in real terms and over a trajectory of the past 50 years, present prices are still well above the norm. In fact, on only four occasions since 1964 have commodities in real terms been higher than now: during the two oil shocks of the 1970s, then in the 2007 culmination of the recent commodity boom and finally during the temporary recovery surge after the GFC. We’re still well ahead of what miners and oil drillers received right from the early 1980s through to about 2005.
The one piece of good news in the Credit Suisse report is that iron ore prices might soon level off. In the previous iron ore bear market prices fell 54 per cent. This time they are down 55 per cent.
What has got the analysts at Credit Suisse really worried, though, is the Chinese triple bubble: credit, real estate and investment. China’s private sector debt to GDP ratio is 30 per cent above trend; property prices are down six months in a row; China’s investment share of GDP is now 48 per cent, significantly higher than in Japan and South Korea at similar stages in their industrialisation.
“We think there is a high probability of a hard landing for China at some point over the next three years,” the report concludes.
Big important slide.
32% IRR at $50 Oil. Very Impressive.
Concho says 70% IRR: same area, $60 assumption here. Note that Concho is shortening its laterals.In April 2015, Shell announced its recommended combination with BG.
- Enhanced free cash flow - this enhances Shell’s dividend potential in any expected oil price environment.
- An IOC LNG and deep water innovation leader – accelerating and de-risking our current strategy.
- Springboard to change Shell – asset sales and refocused spending would result in a simpler, more focused company, concentrated around three pillars – upstream and downstream engines, deep water and LNG.
Consensus in November 2014. Average ~$60
Reality today. Average <$50University researchers and government agencies are pumping up the Utica shale play.
It turns out that the natural-gas heavy underground formation that's led to millions of dollars in investment in eastern Ohio probably holds more gas than initially estimated.
"(The Utica) is much larger than original estimates, and its size and potential recoverable resources are comparable to the Marcellus play, the largest shale oil and gas play in the U.S. and the second-largest
The Utica, which is also increasingly being drilled in West Virginia and Pennsylvania, could have recoverable volumes of 782 trillion cubic feet of natural gas and almost 2 billion barrels of oil. That's about 20 times more than the U.S. Geological Survey's estimate just three years ago of 38 trillion cubic feet of gas. It also projected 940 million barrels of oil then.The Utica Shale Play Book Study comes from two years of research sponsored in part by a consortium of drillers in the area, including Chevron Corp. (NYSE: CVX), EnerVest Ltd. and Range Resources (NYSE:RRC).
Chicago • U.S. egg prices, already at a record after an outbreak of avian influenza earlier this year, will rise even higher in the fall with the onset of the so-called holiday baking season, according to one supplier.
While prices are stabilizing now, supplies of eggs won't recover until farms affected by bird flu come back online, which may take about 18 months, said Charles Lanktree, chief executive officer of Eggland's Best Inc.
In November with colder temperatures, Americans will fire up their ovens to bake holiday fare such as Christmas cookies, weakening supplies and lifting prices again, he said Monday in a Bloomberg Television interview.
