As we enter the fifth year of the 2020s, it's an opportune time to assess global economic growth trends across decades. Despite a strong post-pandemic recovery leading to the fastest expansion since the 1970s, lingering damage from COVID-19 makes this decade the weakest in 60 years per World Bank and IMF data. Intriguingly, the vaunted 1990s, a golden era for the US economy, were only slightly better globally. This likely reflects the deep contraction in post-Soviet states transitioning away from communism. Meanwhile, China was already growing quickly but from a much smaller base than today. In summary, while the 2020s recovery has been brisk, the decade still ranks near the bottom historically for worldwide GDP growth. This underscores both the tremendous damage wrought by the pandemic and the geographic shifts in economic power over recent decades.

"Hamstrung by the COVID-19 pandemic, then the war in Ukraine and ensuing spikes in inflation and interest rates around the world, the first half of the 2020s now looks like it will be the worst half-decade performance in 30 years..."

The World Bank

A record $2.2 trillion in commercial real estate debt will mature through 2027, presenting a major refinancing challenge as property values decline amid rising vacancies and interest rates. Most commercial mortgages are interest-only, so borrowers must pay off or refinance the full principal when loans come due. Many have tapped extensions to delay refinancing at higher rates, but those options are expiring. The wave of maturing debt, combined with weakening property fundamentals, is expected to spur a sharp rise in delinquencies and defaults. Lenders like banks and private equity funds face significant exposure, prompting warnings from regulators. Workout negotiations between borrowers and lenders will likely increase to avoid foreclosures. But agreeing on property values is difficult with distressed sales scarce. The mountain of expiring commercial debt threatens to further depress the property market while generating losses for real estate investors and creditors.

Grayscale Investments, a leading digital currency asset manager, is facing new competition in the Bitcoin exchange-traded fund (ETF) space. Last week, the U.S. Securities and Exchange Commission approved several rival Bitcoin ETFs, some with significantly lower fees than Grayscale's popular Grayscale Bitcoin Trust which charges a 1.5% management fee. The new competitors aim to win over investors by offering zero or extremely low fees. Since the new ETFs launched, Grayscale's fund has seen about $1.2B in outflows as investors explore cheaper options. However, Grayscale CEO Michael Sonnenshein defended the higher fees by citing the fund's long track record and liquidity. The influx of new Bitcoin ETFs suggests growing mainstream acceptance of cryptocurrencies as an investable asset class. While lower fees may attract some investors, Grayscale is betting its established brand and performance history will retain assets despite the increased competition. The development of ETF products like covered call strategies also indicates a maturing market.

Riverstone Spinout 'Breakwall' Splits Energy Lending Between Clean and Traditional

https://www.wsj.com/articles/riverstone-spinout-breakwall-spreads-bets-across-traditional-and-clean-energy-ae59f774?tpl=pe&mod=hp_lead_pos2

Written by:

Andrew Popp | Sr. Research Associate