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Canadian oil play proves there is still much left in the ground

The energy sector has been an engaging story for the first half…
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The energy sector has been an engaging story for the first half of 2022, and as commodity prices rise, traders are hunting for stocks that can capitalize on this movement for the best share price.

Because of the impacts of the Russian-Ukrainian conflict overseas, Canada is uniquely positioned to foster energy security abroad. The dependence on Russian energy and natural resources could mean a recovery period lasting until 2028 – and a potential 20 more years before pre-war levels are achieved.

World Bank Governance Indicators and the Yale Environmental Performance Index rank Canada as the world leader among oil-producing countries on environmental, social and governance standards. This could make Canada an attractive and viable source of oil and gas imports.

There is a natural resource exploration and production company operating in Western Canada that investors should take note of, as it is primarily engaged on optimizing hydrocarbon recovery through environmentally safe and efficient reservoir development methods and production practices.

Prospera Energy Inc. (TSXV:PEI) is an oil and gas exploration and development company focused on conventional oil and gas reservoirs, with medium to heavy oil properties in Alberta and western Saskatchewan, acquired in 2018.

With an eye to reducing its operational expenditure while increasing its margin, Prospera’s new Chief Executive Officer, Samuel David came to the role during the COVID pandemic in late 2020. He recognized the considerable oil remaining in the ground, even though the properties were older and mature, very little had been recovered.

Having settled its historical liabilities to surface landowners and local municipalities and outstanding environmental and regulatory compliance, the team set to work.

Working capital was deployed to optimize production to the current 925 barrels of oil equivalent per day (750 barrels per day (bpd) plus 1,050 thousand cubic feet per day (Mcfd)), resulting in more than C$2,000,000 peak monthly revenue.

It was an incredible turnaround that put Prospera Energy on track to its growth phase.

In the past year, the team made significant progress in restructuring by settling historical liabilities and addressing all environmental and regulatory concerns. With a clean slate, the company is able to move towards increasing production from 750+ bpd to 1,500+ bpd by the end of the year.

Early in 2021, PEI was restructured to be compliant and profitable. Soon after, the team structured equity and convertible debenture private placement financing that raised $C9.1 million. The company also restructured its Board of Directors with diverse business and technical backgrounds and formed an experienced management team focused on technical delineation and financial discipline to optimize oil recovery in a safe and cost-effective manner.

Additionally, the company’s leadership team has acquired an interest in a light oil play with a development plan to increase production by 1,000+ light oil bpd.

This marks an opportunity for the company to expand its portfolio, diversify its product mix, and accelerate its growth even further.

Operations: Source: Prospera Energy Inc.

Prospera Energy’s core properties include the Cuthbert, Luseland, and Heart Hills heavy oil projects in Saskatchewan, as well as the Red Earth, Pouce Coupe, and Brooks light oil projects in Alberta.

The company has piloted horizontal laterals to assess to improve technical and economic efficiency to effectively capture the significant remaining reserves (400milion barrels of crude oil). This is a step towards its production output increasing from 750+ bpd to 1,500+ bpd.

With half a billion barrels of oil in place, roughly 8 per cent was recovered with old vertical well technology, leaving significant reserves, and added upside recovery between 20 per cent to 40 per cent. The company’s compatible technical applications are conducive to reservoir mechanisms allowing for the capitalization on the high margin potential of these fields. On top of this, the company aims to eliminate all emissions, minimize environmental disturbances, and conduct environmentally safe operations.

The team is led by reservoir development engineers who set out to develop property interfaces by addressing the risk systematically to then prove its potential value to spend further capital by doing work in phases.

As CEO David explained in an interview with Market Herald editorial, if phase one worked, they had assurance, so they could commit more capital to do a second phase.

“If phase two works, then you’re committing even more capital to do phase three, et cetera. So, the first thing we had to do was to become functional, that was phase one, functional meaning we couldn’t go to some of the sites because the landowner blocked it because they hadn’t been paid, they want money upfront. Even if you go do all of those, the equipment or the facility infrastructure is not in a compliant, safe operating mode.”

With his work cut out for him, CEO David put money forward, and the company raised enough to do the first phase.

“Phase one was to become compliant, operate in a safe mode and address all arrears. We made a number of trips to local communities and trade owners. We made presentations, and we told them, this is what we are going to do, but we can’t pay you all a hundred per cent right up front, but we also have to optimize the production, and there are a number of options. We gave some of them an option where we can settle on a cent, on a dollar, we can pay you a certain amount, 25 per cent or so, and then put you on a payment plan after six months so that we can get our production up.”It was a strategy that paid off.

2021 year-end reserves: Source: Prospera Energy Inc.

In spring 2022, Prospera Energy released the results of its year-end reserves independently assessed by InSite Petroleum Consultants Ltd.

Prospera Energy conducted a full geological delineation substantiated by existing 3-D interpretation, backed by the report, which confirmed to the company its assessment of the significant oil in place of 387.9Mbbl, mainly in core PEI assets (more than 170 sq. km.) located in Southwest and West-Central Saskatchewan.

While historical production accounted for 8.6 per cent recovery of 33.2Mbbl from vertical wells, significant remaining proven reserves of 3,880 Mbbl gross, 2,808 Mbbl net, and a reserve life index of 23 years.

These fields have had no modern drilling or recovery methods applied, meaning there is a substantial upside for the company and shareholders here, given encouraging historical production response and recovery from vertical wells along with significant remaining recoverable reserves and the re-entry to horizontal wells.

Highlights:

Total proved plus probable (TPP) reserves increased 569 per cent from 464Mbbl to 2,644MbblA corresponding increase in NPV@10 per cent before income taxes from a loss of -$3.4 million to a gain of $56.2 millionThe TPP reserve life index also lengthened from 10.1 to 22.8 yearsPEI elected to apply a modest price of $70/bbl for the estimation of NPV, allowing for substantial NPV appreciation if the oil price sustains Meet the team:

The company restructured its board of directors and brought together a team of people from diverse business and technical backgrounds to form an experienced management team.

Led by President and CEO Samuel David, P. Eng., BA Econ, with 34 years of experience in the development and management of oil and gas companies, management is committed to technical delineation and financial discipline, the goal is to optimize oil recovery in a safe and cost-effective manner.

VP Subsurface, George Magarian P.Geo., Honors BSc., has 36 years of experience in senior geologist and exploration manager positions.

Chief Financial Officer, Matthew Kenna CMA, CPA has been leading organizations to help them expand for 30 years. CEO David praised Kenna for helping turn the company around, noting that he believed in the plan.

The company’s VP Finance and Accounting, Chris Ludtke CPA, CMA comes to the team with two decades of oil and gas executive finance, economics, and accounting experience. He worked for Husky Energy before moving into an executive role in the junior oil and gas and hydrogen space.

Investment summary:

Prospera Energy Inc. has stabilized with the steady base revenue past the break-even point and brought all operations to operating safe operating conditions. The company is set up to start its growth phase, and the services that work with the company have grown.

This represents an opportunity to invest in an ESG-driven company, coupled with the benefits of investing in the oil and gas industry.

Through its modern oil and gas technology, the team can reduce its environmental footprint and produce valuable resources through modern and cost-effective horizontal drilling techniques to reduce the environmental footprint of numerous vertical wells.

With a mantra of “treating people as you would want to be treated”, CEO David added that good people run the company, who care for the environment as much as they care for people.

Prospera presents itself as a clean and safe energy producer with oil and gas operations in Western Canada. The company has worked to make significant progress in restructuring by settling historical liabilities and addressing all environmental and regulatory concerns.

Its properties are delineated, all areas of growth have been identified, and the reservoir has been defined. This company is set up for exponential growth.

FULL DISCLOSURE:  This is a paid article produced by The Market Herald.

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September Payrolls Preview: “Bulls Need A 100k Print For The Market To Alter Its Fed Expectations”

September Payrolls Preview: "Bulls Need A 100k Print For The Market To Alter Its Fed Expectations"

Prior to Friday’s NFP (and CPI next Wednesday),…

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September Payrolls Preview: "Bulls Need A 100k Print For The Market To Alter Its Fed Expectations"

Prior to Friday's NFP (and CPI next Wednesday), the market has been oscillating between the “hawkish Fed” and “Fed pivot” narrative. While the JOLTS Job Openings and the ISM Manufacturing employment index showed more evidence of a slowing labor market...

... yesterday’s stronger than expected ADP/ISM Services once again proved the economy still remains strong and therefore weakens the hope of a near-term pivot from the Fed. In a nutshell, according to JPM's trading deks, with consensus expected tomorrow’s NFP to print +255k, Equity bulls would need a print ~100k to see the market alter its Fed expectations.

That said, many have said that in the absence of a huge outlier (to the downside) what markets and the Fed will be focusing on will be the participation rate (look for a big bounce here to confirm the recent slump in job openings) and hourly earnings: anything below 5.0% Y/Y and a 0.1% or lower sequential number will be greeted by the market.

Want more? Here is Newsquawk with a more detailed preview of what to expect tomorrow:

  • The headline rate of payrolls growth is expected to resume cooling in September, with the consensus looking for 255k payroll additions (vs 315k in August);
  • The jobless rate is seen unchanged at 3.7%, and there will also be focus on the participation rate after a welcome rise in August.
  • Wage growth is expected to continue, although the annual rate is expected to cool a touch.
  • Traders will be framing the data in the context of Fed policy; there are building hopes that the central bank might relent on some of its hawkishness if its policy tightening gives rise to financial stability concerns as it moves policy further into restrictive territory – these concerns could be exacerbated by soft economic data, as seen this week after the release of the Manufacturing ISM and JOLTs data, which fueled bets that the Fed would not be as aggressive with rate hikes ahead.

PAYROLL GROWTH: Analysts expect 255k nonfarm payrolls to be added to the US economy in September (Goldman estimates nonfarm payrolls rose by 200k in September, 50k below consensus and a slowdown from the +315k pace in August.), with the pace of jobs growth seen easing from 315k in August;

This would represent a resumption of recent trends where payroll growth has begun to cool (3-month average 378k, 6-month average 381k, 12-month average 487k). Jobless claims data that coincides with the reference period for the establishment survey in August and September augurs well for the headline: initial jobless claims eased to 209k vs the 245k level heading into the August jobs data, while continuing claims declined to 1.347mln vs 1.412mln into the previous jobs report. Meanwhile, while the ADP’s employment data bodes well for the official payrolls data (ADP printed 208k in September, a little above the expected 200k, and improving from the previous 185k), there is a great deal of scepticism about the payroll processor’s modelling, particularly given that its new methodology did not capture the trend of the August data in its inaugural release. Business surveys were mixed; the Manufacturing ISM report gave a sobering look at the labor market, where the Employment sub-index fell into contraction territory at 48.7, 5.5 points lower than the level recorded in August; the Services ISM however, saw the Employment sub-index rise to 53.0 from a previous 50.2, suggesting employment in the services sector continues to expand, while employment in the manufacturing sector is declining.

UNEMPLOYMENT: The unemployment rate is likely to have remained unchanged at 3.7%; analysts will also be watching the participation rate, which encouragingly rose by 0.3ppts in August to 62.4%. Additionally, there will also be focus on the U6 measure of underemployment after that picked-up to 7.0% in August from 6.7% in July. In terms of signposts about how these data will impact monetary policy, JPMorgan’s analysts point to the so-called non-accelerating inflation rate of unemployment (NAIRU), a level which puts neither upward nor downward pressure on inflation. JPM explains that when unemployment is above NAIRU, inflation tends to go down, and vice versa. The CBO estimates NAIRU is currently around 4.4%, but the median estimate of FOMC participants is at 4%. JPM itself argues that the actual level might have moved higher after the pandemic: "the relation between unemployment and job openings is also consistent with a higher natural rate," it writes, "massive sectoral reallocation over the past three years is a likely culprit for this increase." The Fed’s most recent economic projections envisage the jobless rate rising to 4.4%, where it is expected to stay into next year.

WAGES: Average hourly earnings are seen rising 0.3% M/M, matching the rate seen in August, but with the annual measure expected to ease a little to 5.1% Y/Y from 5.2%. The Conference Board's gauge of consumer confidence in September revealed that consumers were more optimistic about the short-term prospects for the labor market, although they were mixed about their short-term financial prospects. On this front, Fed officials have been closely monitoring the JOLTs data series, which offers a proxy on the tightness of labor market conditions (the tighter the labor market, the  more wage growth economists expect ahead). In that regard, the latest JOLTs data may be welcomed by Fed officials, given that it showed labor market tightness eased significantly in the month, which might suggest that wage growth is to cool further in the months ahead. (NOTE: the latest JOLTs report was for August, not September).

POLICY IMPLICATIONS: Analysts will be framing the data in the context of the Fed’s mission to tackle surging consumer prices. BMO’s analysts argue that “as the market can now see the end of the rate hike cycle, market volatility around employment releases will increase,” adding that “the Fed has been very effective in communicating the fact that the strong underlying labor statistics have allowed it to be more aggressive in fighting inflation than they might have otherwise been; at some point this will turn, and as a result not only will the official BLS data be pivotal.” Accordingly, BMO argues that as the real economy enters the next stage of the cycle, the market will be on guard for any signs of undue stress in the labor market, given the ramifications it could have on the speed of Fed policy. Indeed, this week, soft ISM and JOLTs data both resulted in a re-pricing of Fed hike trajectory expectations (traders reason that soft data may compel the Fed to relent on some of its hawkishness, while any particularly strong economic data will embolden the Fed to continue to act aggressively with normalizing policy).

ARGUING FOR A WEAKER-THAN-EXPECTED REPORT

  • Youth workers back to school. The loss of the youth summer workforce represents a headwind for September payrolls following strong summer employment gains for this segment. The household survey indicates that 1.3mn workers ages 16-24 were hired on net during the May-to-August payroll periods (nsa), the largest gain since 2016 outside of the 2020 reopening. As shown in Exhibit 1, September youth employment losses are strongly correlated with the summer pace of hiring in that segment, consistent with the vast majority of these workers returning to school in the fall. Additionally, this year’s particularly tight labor market suggests that many of these newly vacant positions remained unfilled during the September survey period. There is also find a negative correlation between youth summer hiring and the September nonfarm payroll surprise (relative to consensus, correlation of -0.47). These relationships would imply a roughly 35k nonfarm payroll miss and a roughly 110k drag on youth employment in tomorrow’s report (mom sa).

  • Big Data. High-frequency data on the labor market were mixed-to-weaker inn September, with each of the three measures available this month consistent with at-or-below consensus job growth (see Exhibit 2).

  • September first-print bias. As in August, payrolls have exhibited a tendency toward weak September first prints, which may reflect a recurring seasonal bias in the first vintages of the data. September job growth has missed consensus by at least 25k in 4 of the last 5 years and in 6 of the last 10 years. Relatedly, September payroll growth was subsequently revised higher by an average of 46k in the five years leading up to the pandemic, consistent with a negative bias in tomorrow’s report of roughly that magnitude.
  • Employer surveys. The employment components of business surveys generally decreased in September. Goldman's Services employment survey tracker decreased by 1.0pt to 52.2 and its manufacturing survey employment tracker decreased by 1.7pt to 52.9.
  • Job cuts. Announced layoffs reported by Challenger, Gray & Christmas increased 28.9% month-over-month in September, following a 9.3% increase in August (SA by GS).

ARGUING FOR A STRONGER-THAN-EXPECTED REPORT

  • Jobless claims. Initial jobless claims decreased during the September payroll month, averaging 220k per week vs. 246k in September but up from 175k in August. Residual seasonality and other non-economic factors explain much of the variation in initial claims over the last few months, and the overarching message from the jobless claims data is that layoff rates remained very low in Q3. Continuing claims in regular state programs decreased 66k from survey week to survey week, although they may also be affected by residual seasonality.
  • Job availability. JOLTS job openings surprised to the downside, declining by 1.1mn to 10.1 million workers in August. However, the level of job openings nonetheless remains elevated relative to history. The Conference Board labor differential—the difference between the percent of respondents saying jobs are plentiful and those saying jobs are hard to get—edged up by 2.0pp to 38.0%.

NEUTRAL/MIXED FACTORS

  • Seasonal factors. In contrast to those of the spring and summer months, the September seasonal factors have not evolved dramatically in recent years. The September month-over-month hurdle for private payrolls was -618k in 2021 compared to -665k in 2019 and -695k in 2017 (which unlike 2019 was also a 5-week September payroll). On this basis, September 2021 was sequentially more difficult by 50-75k. However, this could reverse for September 2022 based on the trend in recent months toward favorable year-on-year evolution in the factors. On net, Goldman is not assuming a significant tailwind or headwind from the seasonal factors (compared to a seasonality tailwind of as much as 100-200k in the previous report).
  • ADP. Private sector employment in the ADP report increased by 208k in September,n in line with expectations for 200k.
Tyler Durden Thu, 10/06/2022 - 22:11

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Government

What Really Divides America

What Really Divides America

Authored by Joel Kotkin via UnHerd.com,

The Midterms aren’t a battle between good and evil…

Reading the…

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What Really Divides America

Authored by Joel Kotkin via UnHerd.com,

The Midterms aren't a battle between good and evil...

Reading the mainstream media, one would be forgiven for believing that the upcoming midterms are part of a Manichaean struggle for the soul of democracy, pitting righteous progressives against the authoritarian “ultra-MAGA” hordes. The truth is nothing of the sort. Even today, the vast majority of Americans are moderate and pragmatic, with fewer than 20% combined for those identifying as either “very conservative” or “very liberal”. The apocalyptic ideological struggle envisioned by the country’s elites has little to do with how most Americans actually live and think. For most people, it is not ideology but the powerful forces of class, race, and geography that determine their political allegiances — and how they will vote come November.

Of course, it is the business of both party elites — and their media allies — to make the country seem more divided than it is. To avoid talking about the lousy economy, Democrats have sought to make the election about abortion and the alleged “threat to democracy” posed by “extremist” Republicans. But recent polls suggest that voters are still more concerned with economic issues than abortion. The warnings about extremism, meanwhile, are tough to take seriously, given that Democrats spent some $53 million to boost far-Right candidates in Republican primaries.

Republicans are contributing to the problem in their own way, too. Rather than offering any substantive governing vision of their own, they assume that voters will be repelled by unpopular progressive policies such as defunding the police, encouraging nearly unlimited illegal immigration, and promoting sexual and gender “fluidity” to schoolchildren. They ignore, of course, the fact that their own embrace of fundamentalist morality on abortion is also widely rejected by the populace. And even Right-leaning voters may doubt the sanity of some of the GOP’s eccentric candidates this November.

In short, both major parties stoke polarisation, the primary beneficiaries of which are those parties’ own political machines. But most Americans broadly want the same things: safety, economic security, a post-pandemic return to normalcy, and an end to dependence on China. Their divisions are based not so much on ideology but on the real circumstances of their everyday life.

The most critical, yet least appreciated, of these circumstances is class. America has long been celebrated as the “land of opportunity”, yet for working and middle-class people in particular, opportunity is increasingly to come by. With inflation elevated and a recession seemingly on the horizon, pocketbook issues are likely to become even more important in the coming months. According to a NBC News poll, for instance, nearly two-thirds of Americans say their pay check is falling behind the cost of living, and the Republicans hold a 19-point advantage over the Democrats on the economy.

A downturn could also benefit the Left eventually. As the American Prospect points out, proletarianised members of the middle class are increasingly shopping at the dollar stores that formerly served working and welfare populations. Labour, a critical component of the Democratic coalition, could be on the verge of a generational surge, with unionisation spreading to fast food retailers, Amazon warehouses, and Starbucks.

To take advantage of a resurgent labour movement, however, Democrats will have to move away from what Democratic strategist James Carville scathingly calls  “faculty lounge politics”: namely, their obsession with gender, race, and especially climate. For instance, by demanding “net zero” emissions on a tight deadline, without developing the natural gas and nuclear production needed to meet the country’s energy needs, progressives run the risk of inadvertently undermining the American economy. Ill-advised green policies will be particularly devastating for the once heavily Democratic workers involved in material production sectors like energy, agriculture, manufacturing, warehousing, and logistics.

To win in the coming election and beyond, Democrats need to focus instead on basic economic concerns such as higher wages, affordable housing, and improved education. They also need to address the roughly half of all small businesses reporting that inflation could force them into bankruptcy. Some progressives believe that climate change will doom the Republicans, but this is wishful thinking. According to Gallup, barely 3% of voters name environmental issues as their top concern.

Racial divides are also important — though not in the way that media hysterics about “white supremacy” would lead you to believe. Florida Governor Ron DeSantis’s decision to fly undocumented immigrants to Martha’s Vineyard was undoubtedly a political stunt, and one arguably in poor taste. But it succeeded in its main goal: highlighting the enormous divide between the border states affected by illegal immigration and the bastions of white progressivism who tend to favour it.

Under Biden, the Democrats have essentially embraced “open borders” — illegal crossings are at record levels, and few of the migrants who make it across the border are ever required to leave. This policy reflects a deep-seated belief among elite Democrats that a more diverse, less white population works to their political favour. Whether they are right to think so, however, is far from clear. Black people still overwhelmingly back the Democrats, but Asians (the fastest-growing minority) and Latinos (the largest) are more evenly divided, and have been drifting toward the Republicans in recent years.

Here, too, class is a key factor. Many middle and upper-class minorities are on board with the Democrats’ anti-racist agenda. But many working-class Hispanics and Asians have more basic concerns. After all,  notes former Democratic Strategist Ruy Teixiera, these are the people most affected by inflation, rising crime, poor schools, and threats to their livelihoods posed by draconian green policies.

Culture too plays a role. Immigrants, according to one recent survey, are twice as conservative in their social views than the general public and much more so than second generation populations of their own ethnicity. Like most Americans, they largely reject the identity politics central to the current Democratic belief system. Immigrants and other minorities also tend to be both more religious than whites; new sex education standards have provoked opposition from the Latino, Asian, African American and Muslim communities.

The final dividing line is geography, always a critical factor in American politics. For decades, the country seemed to become dominated by the great metropolitan areas of the coasts, with their tech and finance-led economies. But even before the pandemic, the coastal centres were losing their demographic and economic momentum and seeing their political influence fade. In 1960, for example, New York boasted more electoral votes than Texas and Florida combined. Today, both have more electoral votes than the Empire State. Last year, New York, California, and Illinois lost more people to outmigration than any other states. The greatest gains were in Florida, Texas, Arizona, and North Carolina. These states are high-growth, fertile, and lean toward the GOP.Likewise, regional trends suggest that elections will be decided in lower density areas; suburbs alone are  home to at least 40% of all House seats. Some of these voters may be refugees from blue areas who still favour the Democrats. But lower-density areas, which also tend to have the highest fertility rates, tend to be dominated by family concerns like inflation, public education and safety, issues that for now favour Republicans.

Put the battle between Good and Evil to one side. It is these three factors — class, race, geography — that will shape the outcome of the midterms, whatever the media says. The endless kabuki theatre pitting Trump and his minions against Democrats may delight and enrage America’s elites — but for the American people, it is still material concerns that matter.

Tyler Durden Thu, 10/06/2022 - 21:40

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Economics

Global Trade Forecast ‘Darkens’ On Central Bank Tightening, Inflation, Ukraine War

Global Trade Forecast ‘Darkens’ On Central Bank Tightening, Inflation, Ukraine War

The World Trade Organization published a new report that…

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Global Trade Forecast 'Darkens' On Central Bank Tightening, Inflation, Ukraine War

The World Trade Organization published a new report that outlines a sharp slowdown in world trade is expected for next year under the weight of skyrocketing energy prices, soaring interest rates, and war-related disruptions, with increasing risks of a global recession. 

WTO economists expect world trade to "lose momentum in the second half of 2022 and remain subdued in 2023 as multiple shocks weigh on the global economy." These economists expect global merchandise trade volumes will increase only by 3.5% in 2022, slightly better than forecasts in April of 3%. They warned that 2023 would be a doozy, forecasting only a 1% increase in trade volumes, down from the previous estimate of 3.4%. 

Source: Bloomberg 

Forecasts for world GDP will grow by 2.8% in 2022. The economists lowered their 2023 estimate to 2.3% from earlier expectations of 3.3% and warned, "major central banks are already raising interest rates in a bid to tame inflation but overshooting on tightening could trigger recessions in some countries, which would weigh on imports." This means central banks could exacerbate the downturn by tightening too much next year. 

The WTO's downgrades to global trade align with new IMF and OECD projections. This is a drastic change and a considerable deceleration from last year's 9.7% growth in international trade. Consumers, fueled by stimmy checks and ultra-low rates by central banks during Covid, are dialing back on spending as the hangover phase is underway. 

"We're looking at a situation in which a global slowdown is going to squeeze households even more, squeeze businesses and we may be edging into a recession.

 "It's looking quite grim -- a little more grim than we had thought," WTO Director-General Ngozi Okonjo-Iweala said in an interview with Bloomberg Television. 

The pandemic boom trade has ended as the global economy faces a multipronged crisis. We noted the reversal in the "shortage of everything" bullwhip effect has led to container lines on major shipping routes canceling sailings as US importers do not need to increase purchases of foreign goods because of rising domestic inventory as consumers are on strike due to negative real wage growth, low savings, and maxed out credit cards amid worst inflation in decades. 

Last month, FedEx Corp.'s CEO Raj Subramaniam delivered a chilling message while speaking with CNBC's Mad Money with Jim Crammer: The global economy is "going into a worldwide recession."

More evidence of the world stumbling into trouble is JP Morgan's Global PMIs now sub 50, which means contraction. 

WTO's latest report is a reminder that 2023 economic outlooks for the world are quickly darkening as excess tightening by central banks could spark an even more significant downturn. 

Tyler Durden Thu, 10/06/2022 - 20:00

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