Tag Archives: GDP

by | August 14, 2020 · 8:59 am

The Eurozone has entered a steep recession and face the biggest drop in GDP on record in Q2

It is now confirmed. The Eurozone saw the biggest drop in GDP on record in Q2. The Eurozone economy dropped 12,1 percent in the three months to June 2020. But this is not as bad as the UK, which is the worst country in Europe.

COVID-19 hit the economy hard in Europe. The invisible enemy also hit the demand for services and goods. As you can see from the chart below, the Eurozone has entered a steep recession and a new wave of viruses can push the Eurozone into depression.

Poland`s GDP deopped 8,2 percent YoY in Q2 of 2020, and that is the biggest decline on record. The Dutch economy shrank 8,5 percent on quarter in the three months to June 2020, and that is the biggest pace of contraction since comparable records began in 1988.

The United States started a New World Order right after World War II, but that system is now broken. Donald Trump is making new trade deals and Brexit makes the UK Boris Johnson to do the same. They are rebuilding the system.

Looking at the growth around the world is funny. Singapore is suffering with a drop of 42,9 percent in GDP QoQ 2020. Next on the list is the US; down 32,90 percent.

But here is the funny thing; before the UK which is down 20,40 percent, communist country Venezuela`s growth dropped 23,70 percent. So, Venezuela is in the middle of the United States and the United Kingdom.

On the other end, China`s growth QoQ is up 11,50 percent, followed by Bangladesh (8,20%), Vietnam (6,88%) and Pakistan (5,79%).

The coronavirus is a threat, but a wave of corporate bankruptcies is a much bigger threat. The world is sitting on a bankruptcy time bomb.

To contact the author: post@shinybull.com

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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by | August 12, 2020 · 5:32 am

The UK GDP plummeted 20,4 percent in Q2 of 2020, and that drop is the biggest since the records began in 1955

The growth in the UK has been almost flat for a very long time, but an invisible enemy called COVID-19 made it worse for the UK. The UK GDP plummeted 20,4 percent in Q2 of 2020, and that drop is the biggest since the records began in 1955.

The drop means that the UK, like the US, is officially in a recession. People were told to stay at home and that is expensive. Private consumption accounted for more than 70 percent of the decline in the GDP in the UK, and that is down by 23,1 percent. Fixed capital formation also plummeted -25,5 percent.

At the same time, there is good news from the UK. Industrial production skyrocketed 9,3 percent month-over-month in June 2020. That is the biggest jump in industrial output since March 1972. The jump came after the lockdown due to the coronavirus pandemic.

More good news; manufacturing grew 11 percent, and that is the largest increase since records began in January 1968.

The unemployment rate in the UK came in yesterday, and it stood at 3,9 percent in Q2 of 2020. The unemployment rate is unchanged from the previous three-month period and below market ecpectations of 4,2 percent, as many people gave up looking for a job and who were therefore not considered to be unemployed.

Approximately 7,5 million workers were away from work in the UK in June with over 3 million of these being away for three months or more.

The UK is in a recession and hard times are here to stay for a while. I will not be surpriced if the unemployment rate rice in the future.

To contact the author: post@shinybull.com

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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by | April 30, 2020 · 7:26 pm

The Euro area “is facing an economic contraction of a magnitude and speed that are unprecedented in peacetime”

Europe is in trouble. The growth is plummeting. The Euro area «is facing an economic contraction of a magnitude and speed that are unprecedented in peacetime», the ECB president Christine Lagarde said on a news conference in Frankfurt, Germany earlier today.

The Eurozone economy shrank by 3,8 percent on quarter in Q1, and that was the steepest contraction since comparable records began in 1995 as a coronavirus lockdown from mid-March forced businesses to close and consumers to stay at home.

And this is just the beginning. Ms Lagarde suggested euro area GDP could fall by between 5 and 12 percent this year. I repeat: 12 percent!

Not only the euro area came out with the GDP news today. France came out with their bad news today. The French economy shrank 5,8 percent on quarter in the three months to March 2020. And you know what; they are entering a technical recession. I repeat; recession!

This is ugly. This is the steepest decline in GDP on record, as the Covid-19 outbreaks stopped the economy. Household consuption plummeted -6,1 percent, led by falls in spending on both goods and service, fixed investment; -11,8 percent. Foreign demand contributed negatively as both exports and imports fell.

Italy is also in a technical recession. Italy`s GDP shrank 4,7 percent on quarter in the three months to March of 2020. It was the steepest contraction since comparable records began in 1995, as the country was severely hurt by the coronavirus pandemic during March.

The domestic and external demand contributed negatively to the GDP in Italy.

Spain is in the same club. Their economy shrank 5,2 percent on quarter in the first three months of 2020. That is the steepest contraction since the series began in 1995, as the Covid-19 pandemic forced the government to impose lockdown measures in mid-March.

Years of economic growth is wiped out at a pace never seen before. Not only in Europe but also in the United States. The unemployment rate go straight up and the personal spending go straight down.

Personal spending in the US dropped 7,5 percent month-over-month in March 2020, and that was the largest decline in personal spending on record, as the coronavirus crisis hit households’ demand.

Within services, the leading contributor to the decrease was spending on health care.

What`s interesting to see is that France has the highest personal income tax rate in Europe, which is 45 percent. At the same time they have a very high unemployment rate; 8,1 percent. Not only that; their Dept to GDP is 98,10 percent.

Unemployment rate in Italy is 8,4. Personal income tax rate is 43 percent. Both very similar to France, but Italy`s Debt to GDP is 134,8 percent.

Government Debt to GDP in Spain is 95,5 percent with an unemployment rate of 14,41 percent. Personal income tax rate is similar to France and Italy; 45 percent.

France, Italy and Spain has also a lot of problems with the coronavirus. They are all on top of the debt burden list, but they are also on top when it comes to covid-19.

It seems like it is a correlation between debt, high unemployment rate, personal tax income and coronavirus deaths. In comparison; the US debt to GDP is 107 percent as of December 2019. Experts say it will be worse.

To contact the author of this story: Ket Garden at post@shinybull.com

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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by | April 17, 2020 · 8:12 am

The Chinese economy shrank 6,8 percent YoY in the first quarter of 2020 which is the first GDP contraction since records began in 1992

We are all in it toghether and the times we are living in right now is historic. Just take a look at China and the Chinese economy that shrank 6,8 percent YoY in the first quarter of 2020. What a drop! This is the first GDP contraction since records began in 1992. Wow.

The reason for the drop is well known; COVID-19. No doubt. Xi and the CCP took action after the virus outbreak and enforced a two-month-long shutdown of all non-essential business activity. Nor did they celebrate a new year, and a shutdown like this is of course very expensive.

Car production in China recorded the sharpest decline which dropped -44 percent. That is a big shock. Last year, approximately 21,36 million passenger cars and 4,36 million commercial vehicles had been produced in China.

The growth for passenger cars has jumped from 7 million in 2008 (financial crisis) to 25 million in 2017. In 2018, every fourth passenger vehicle in the world had been produced in China, and China is ranked first among countries with the largest production of passenger cars in 2018.

As you can see, the growth of the production and sale of vehicles in China have increased rapidly. Its interesting to see that almost all of the leading bestselling cars in China are the product of joint ventres with foreign manufacturers.

Shanghai Automotive Industry Corporation (SAIC) has an ongoing cooperation with General Motors (GM). SAIC-GM manufactures and sells Chevrolet, Buick and Cadillac brand automobiles in Mainland China. When the sales drop in China, so it does in the U.S.

Export from China also dropped 6,6 percent YoY to $185 billion in March 2020, compared with marked estimates of a 14 percent fall and after a 17 percent plunge in January-February combined amid the COVID-19 pandemic.

Among the the biggest trade partners, exports fell to the U.S by -20,8 percent. Considering the first quarter of 2020, exports declined 13,3 percent from a year earlier.

However, China`s long term growth potential will not be affected by the short term fallout of the coronavirus pandemic, as the country`s economic fundamentals remain unchanged, the authorities said.

To contact the author of this story: Ket Garden at post@shinybull.com

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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by | July 30, 2018 · 9:55 pm

The European Union rose “only” 0,4 percent in Q1 of 2018

Last week I talked about America`s fantastic growth of 4,1 percent on quarter in Q2 of 2018, and this is only the beginning. It is no doubt; President Trump must be doing something right. But, what about the European Union?

GDP in the European Union rose «only» 0,4 percent on quarter in the first three months of 2018. Not much to write home about. But the growth have never been above 1 percent since the financial crisis in 2008.

The European Union reached an all time high of 1,30 percent in 1999 and that is right before the tech bubble burst. Since then it has been a dead fish, reaching an all time low of -2,60 percent in the first quarter of 2009.

At the same time we can see that the unemployment rate reached a record low of 6,80 percent in February of 2008, and that`s right before the financial crisis. It reached an all time high of 11 percent in February 2013, but in May this year it fall down to 7 percent again.

This isn`t good enough if we are living in a capitalistic world.

The European Union in Brussels are nothing more than unelected bureaucrats. Draghi and the ECB have, just like Japan and the U.S «printed» a lot of money, and will continue to do so. If they can`t turn around the ship, they need to consider a strong cheerleader.

European Commission President Jean-Claude Juncker had a meeting with President Trump last week. They were talking about trade, free trade and tariffs. Mr Trump`s goal is to make better deals so both the U.S and the EU can take more profit and prosper.

I think that the EU should be glad for that and they need to hurry up. The U.S is the world`s third biggest exporter, yet exports account «only» for 13 percent on GDP. Exports in the U.S reached an all time high of 215328 USD million in May this year, which is pretty impressive.

The EU has 28 member states and the biggest among them all is Germany (21 percent of total GDP), the United Kingdom (15 percent), and France (15 percent).

Exports of goods and services account for 46 percent of GDP while imports account for 42 percent, adding 4 percent of total GDP. But this is about to change. If the UK contribute with 15 percent of the total GDP in the EU, then what will happen to their growth after Brexit?

That being said; nor is the UK a success story. The British economy grew by 0,1 percent in the first three months of 2018 and well below 0,4 percent in the previous period. It is the lowest growth rate since a 0,1 percent contraction in Q4 2012.

The largest contribution to growth in the UK was from household spending at 0,2 percentage points. From the production side, the service industries made the largest contribution to GDP growth, followed by production.

Agriculture, the smallest component within the output approach of GDP made no contribution to growth to one decimal place, while construction deducted from GDP growth. The service industries increased by 0,3 percent.

Positive growth was recorded within all sub-sectors of the services industries; distribution, hotels and restaurants (0,1 percent vs -0,1 percent).

President Trump have repeatedly said that the EU have treated the US very bad. I have written many articles about that long before Mr Trump`s inauguration. The European Commission has fined Google €4,34 billion for breaching EU antitrust rules this month.

In May 2009, Intel was imposed with a 1,06 billion euro fined for abusing its market dominance on central processing units. Microsoft has been in trouble with the Commission on several occasions. In 2004, the Commission ruled that Microsoft had abused its market dominance.

In 208, the Commission fined Microsoft nearly 900 million euros for charging «unreasonable» royalty fees. In 2013, another fine of 561 million euros was imposed on Microsoft. This time for failing to comply with the Commission`s ruling that it had to allow users to more easily choose a prefered web browser.

The European Commission fined Facebook for 110 million euros in May this year in relation to its takeover of WhatsApp. Facebook acquired the messaging service in 2014 for $19 billion, but provided the Commission with misleading information about the acquisition.

In August 2016, the Commission ruled that tech giant Apple had received illegal tax benefits from Ireland worth up to 13 billion euros. Ireland was ordered to recover the unpaid tax from Apple, plus interest.

As early as 1966, British Politician Tony Benn said that «Communism run by commissars from Moscow did not work, and nor will capitalism run by commissioners in Brussels. Both deny people their right to develop in their own way.»

Now, under President Donald Trump, big companies like Apple are moving home to the United States with billions of dollars. Apple alone, are bringing in $230 billion. They will build new plants and a magnificent campus.

They will spend their money wisely and the money will be in the U.S. All this is possible because of Trump`s tax cuts and reforms. This is how you make growth.

 

 

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