Markets
Video: How Much Money Have Humans Created?
The Money Project is an ongoing collaboration between Visual Capitalist and Texas Precious Metals that seeks to use intuitive visualizations to explore the origins, nature, and use of money.
How Much Money Have Humans Created?
The dollar amounts are so staggering, that simply telling you how much money humans have created probably wouldn’t convey the magnitude.
However, by using data visualization in this video, we can relate numbers in the millions, billions, and trillions to create the context to make it more understandable.
Starting With Context
The median U.S. household income of $54,000 is a number that most people can relate to. It’s enough money to save up to buy a car, or maybe even a house depending on where you live.
Multiply that income by eight, and that number is now big enough to count as being in the top 1% of earners. People in the “one percent” make at least $430,000 per year.
Famous celebrities and businesspeople have fortunes that dwarf those of many “one percenters”. Actor George Clooney, for example, has a net worth of $180 million. Meanwhile, author J.K. Rowling is estimated to have a net worth of roughly $1 billion according to Forbes.
Zuckerberg takes things to a whole new level. His net worth worth is $53 billion, thanks to the value of Facebook stock. Lastly, Bill Gates regularly tops the “richest people” lists with a wealth of $75 billion – though lately that number has been a little higher based on stock fluctuations.
However, even the wealth of the richest human on Earth is not enough to get up to our unit of measurement that we use in the video: each square is equal to $100 billion.
The World’s Money
Some of the world’s biggest companies take up just a few squares with our unit of measurement. ExxonMobil for example has a market capitalization of about $350 billion, and the world’s largest public company by market capitalization, Apple, is at about $600 billion.
The total of the world’s physical currency – all coins and bills denominated in dollars, euros, yen, and other currencies – is about $5 trillion.
Meanwhile, if we add checking accounts to the equation, the number for the amount of money in the world goes up to $28.6 trillion according to the CIA World Factbook. This is called “narrow money”.
Add all money market, savings, and time deposits, and the number jumps up to $80.9 trillion – or “broad money”.
But that’s nothing compared to the world of Wall Street.
Wall Street
All stock markets added together are worth $70 trillion, and global debt is $199 trillion.
That’s all impressive, but the derivatives market takes the cake. Derivatives are contracts between parties that derive value from the performance of underlying assets, indices, or entities. On the low end, the notional value of the derivatives market is estimated to be a whopping $630 trillion according to the Bank of International Settlements.
However, that only accounts for OTC (over-the-counter) derivatives, and the truth is that no one actually knows the size of the derivatives market. It’s been estimated by some that it could be as high as $1.2 quadrillion, and others estimate it could be even higher.
There are many financial critics who worry about the risk that these contracts pile onto the global financial system. With the sheer size of the derivative market dwarfing all others, it’s understandable why business mogul Warren Buffett has called derivatives “financial weapons of mass destruction”.
About the Money Project
The Money Project aims to use intuitive visualizations to explore ideas around the very concept of money itself. Founded in 2015 by Visual Capitalist and Texas Precious Metals, the Money Project will look at the evolving nature of money, and will try to answer the difficult questions that prevent us from truly understanding the role that money plays in finance, investments, and accumulating wealth.
Technology
Thematic Investing: 3 Key Trends in Cybersecurity
Cyberattacks are becoming more frequent and sophisticated. Here’s what investors need to know about the future of cybersecurity.
Thematic Investing: 3 Key Trends in Cybersecurity
In 2020, the global cost of cybercrime was estimated to be around $945 billion, according to McAfee.
It’s likely even higher today, as multiple sources have recorded an increase in the frequency and sophistication of cyberattacks during the pandemic.
In this infographic from Global X ETFs, we highlight three major trends that are shaping the future of the cybersecurity industry that investors need to know.
Trend 1: Increasing Costs
Research from IBM determined that the average data breach cost businesses $4.2 million in 2021, up from $3.6 million in 2017. The following table breaks this figure into four components:
| Cost Component | Value ($) |
|---|---|
| Cost of lost business | $1.6M |
| Detection and escalation | $1.2M |
| Post breach response | $1.1M |
| Notification | $0.3M |
| Total | $4.2M |
The greatest cost of a data breach is lost business, which results from system downtimes, reputational losses, and lost customers. Second is detection and escalation, including investigative activities, audit services, and communications to stakeholders.
Post breach response includes costs such as legal expenditures, issuing new accounts or credit cards (in the case of financial institutions), and other monitoring services. Lastly, notification refers to the cost of notifying regulators, stakeholders, and other third parties.
To stay ahead of these rising costs, businesses are placing more emphasis on cybersecurity. For example, Microsoft announced in September 2021 that it would quadruple its cybersecurity investments to $20 billion over the next five years.
Trend 2: Remote Work Opens New Vulnerabilities
According to IBM, companies that rely more on remote work experience greater losses from data breaches. For companies where 81 to 100% of employees were remote, the average cost of a data breach was $5.5 million (2021). This dropped to $3.7 million for companies that had under 10% of employees working from home.
A major reason for this gap is that work-from-home setups are typically less secure. Phishing attacks surged in 2021, taking advantage of the fact that many employees access corporate systems through their personal devices.
| Type of Attack | Number of attacks in 2020 | Number of attacks in 2021 | Growth (%) |
|---|---|---|---|
| Spam phishing | 1.5M | 10.1M | +573% |
| Credential phishing | 5.5M | 6.2M | +13% |
As detected by Trend Micro’s Cloud App Security.
Spam phishing refers to “fake” emails that trick users by impersonating company management. They can include malicious links that download ransomware onto the users device. Credential phishing is similar in concept, though the goal is to steal a person’s account credentials.
A tactic you may have seen before is the Amazon scam, where senders impersonate Amazon and convince users to update their payment methods. This strategy could also be used to gain access to a company’s internal systems.
Trend 3: AI Can Reduce the Cost of a Data Breach
AI-based cybersecurity can detect and respond to cyberattacks without any human intervention. When fully deployed, IBM measured a 20% reduction in the time it takes to identify and contain a breach. It also resulted in cost savings upwards of 60%.
A prominent user of AI-based cybersecurity is Google, which uses machine learning to detect phishing attacks within Gmail.
Machine learning helps Gmail block spam and phishing messages from showing up in your inbox with over 99.9% accuracy. This is huge, given that 50-70% of messages that Gmail receives are spam.
– Andy Wen, Google
As cybercrime escalates, Acumen Research and Consulting believes the market for AI-based security solutions will reach $134 billion by 2030, up from $15 billion in 2021.
Introducing the Global X Cybersecurity ETF
The Global X Cybersecurity ETF (Ticker: BUG) seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of the Indxx Cybersecurity Index. See below for industry and country-level breakdowns, as of June 2022.
| Sector (By security type) | Weight |
|---|---|
| Cloud | 28.0% |
| Network | 25.1% |
| Identity | 17.7% |
| Internet | 15.0% |
| Endpoint | 12.8% |
| Country | Weight |
|---|---|
| 🇺🇸 U.S. | 71.6% |
| 🇮🇱 Israel | 13.2% |
| 🇬🇧 UK | 8.2% |
| 🇯🇵 Japan | 5.5% |
| 🇰🇷 South Korea | 0.9% |
| 🇨🇦 Canada | 0.6% |
Totals may not equal 100% due to rounding.
Investors can use this passively managed solution to gain exposure to the rising adoption of cybersecurity technologies.
-
Green18 hours agoExplained: The Relationship Between Climate Change and Wildfires
More carbon in the atmosphere is creating a hotter world—and gradually fueling both climate change and instances of wildfires.
-
Economy3 days agoVisualized: The Value of U.S. Imports of Goods by State
U.S. goods imports were worth $2.8T in 2021. From east coast to west, this visualization breaks down imports on a state-by-state basis
-
Misc3 days agoSharpen Your Thinking with These 10 Powerful Cognitive Razors
Here are 10 razors, or rules of thumb, that help simplify decision-making, inspired by a list curated by the investor and thought leader Sahil Bloom.
-
Misc6 days agoBrand Loyalty is Declining for Most Luxury Automakers
Brand loyalty has declined for most luxury automakers, but three brands—Tesla, Maserati, and Genesis—appear to have bucked the trend.
-
Demographics7 days agoRanked: The Most and Least Livable Cities in 2022
Which cities rank as the best places to live worldwide? This map reveals the world’s most and least livable cities.
-
Markets1 week agoVisualizing Major Layoffs At U.S. Corporations
This infographic highlights the accelerating pace of layoffs so far in 2022, as businesses cut costs ahead of a potential recession.
Markets
Visualizing Major Layoffs At U.S. Corporations
This infographic highlights the accelerating pace of layoffs so far in 2022, as businesses cut costs ahead of a potential recession.
Visualizing Major Layoffs at U.S. Corporations
Hiring freezes and layoffs are becoming more common in 2022, as U.S. businesses look to slash costs ahead of a possible recession.
Understandably, this has a lot of people worried. In June 2022, Insight Global found that 78% of American workers fear they will lose their job in the next recession. Additionally, 56% said they aren’t financially prepared, and 54% said they would take a pay cut to avoid being laid off.
In this infographic, we’ve visualized major layoffs announced in 2022 by publicly-traded U.S. corporations.
Note: Due to gaps in reporting, as well as the very large number of U.S. corporations, this list may not be comprehensive.
An Emerging Trend
Layoffs have surged considerably since April of this year. See the table below for high-profile instances of mass layoffs.
| Company | Industry | Layoffs (#) | Month |
|---|---|---|---|
| Peloton | Consumer Discretionary | 2,800 | February |
| Funko | Consumer Discretionary | 258 | April |
| Robinhood | Financial Services | ~400 | April |
| Nektar Therapeutics | Biotechnology | 500 | April |
| Carvana | Automotive | 2,500 | May |
| Doma | Financial Services | 310 | May |
| JP Morgan Chase & Co. | Financial Services | ~500 | June |
| Tesla | Automotive | 200 | June |
| Coinbase | Financial Services | 1,100 | June |
| Netflix | Technology | 300 | June |
| CVS Health | Pharmaceutical | 208 | June |
| StartTek | Technology | 472 | June |
| Ford | Automotive | 8,000 | July |
| Rivian | Automotive | 840 | July |
| Peloton | Consumer Discretionary | 2,000 | July |
| LoanDepot | Financial Services | 2,000 | July |
| Invitae | Biotechnology | 1,000 | July |
| Lyft | Technology | 60 | July |
| Meta | Technology | 350 | July |
| Technology | <30 | July | |
| Vimeo | Technology | 72 | July |
| Robinhood | Financial Services | ~795 | August |
Here’s a brief rundown of these layoffs, sorted by industry.
Automotive
Ford has announced the biggest round of layoffs this year, totalling roughly 8,000 salaried employees. Many of these jobs are in Ford’s legacy combustion engine business. According to CEO Jim Farley, these cuts are necessary to fund the company’s transition to EVs.
We absolutely have too many people in some places, no doubt about it.
– Jim Farley, CEO, Ford
Speaking of EVs, Rivian laid off 840 employees in July, amounting to 6% of its total workforce. The EV startup pointed to inflation, rising interest rates, and increasing commodity prices as factors. The firm’s more established competitor, Tesla, cut 200 jobs from its autopilot division in the month prior.
Last but not least is online used car retailer, Carvana, which cut 2,500 jobs in May. The company experienced rapid growth during the pandemic, but has since fallen out of grace. Year-to-date, the company’s shares are down more than 80%.
Financial Services
Fearing an impending recession, Coinbase has shed 1,100 employees, or 18% of its total workforce. Interestingly, Coinbase does not have a physical headquarters, meaning the entire company operates remotely.
A recession could lead to another crypto winter, and could last for an extended period. In past crypto winters, trading revenue declined significantly.
Brian Armstrong, CEO, Coinbase
Around the same time, JPMorgan Chase & Co. announced it would fire hundreds of home-lending employees. While an exact number isn’t available, we’ve estimated this to be around 500 jobs, based on the original Bloomberg article. Wells Fargo, another major U.S. bank, has also cut 197 jobs from its home mortgage division.
The primary reason for these cuts is rising mortgage rates, which are negatively impacting the demand for homes.
Technology
Within tech, Meta and Twitter are two of the most high profile companies to begin making layoffs. In Meta’s case, 350 custodial staff have been let go due to reduced usage of the company’s offices.
Many more cuts are expected, however, as Facebook recently reported its first revenue decline in 10 years. CEO Mark Zuckerberg has made it clear he expects the company to do more with fewer resources, and managers have been encouraged to report “low performers” for “failing the company”.
Realistically, there are probably a bunch of people at the company who shouldn’t be here.
– Mark Zuckerberg, CEO, Meta
Also in July, Twitter laid off 30% of its talent acquisition team. An exact number was not available, but the team was estimated to have less than 100 employees. The company has also enacted a hiring freeze as it stumbles through a botched acquisition by Elon Musk.
More Layoffs to Come…
Layoffs are expected to continue throughout the rest of this year, as metrics like consumer sentiment enter a decline. Rising interest rates, which make it more expensive for businesses to borrow money, are also having a negative impact on growth.
In fact just a few days ago, trading platform Robinhood announced it was letting go 23% of its staff. After accounting for its previous layoffs in April (9% of the workforce), it’s fair to estimate that this latest round will impact nearly 800 people.
-
Misc2 weeks agoVisualizing Which Countries Drink the Most Beer
-
Demographics4 weeks agoRanked: The 20 Countries With the Fastest Declining Populations
-
Personal Finance2 weeks agoMapped: The Salary You Need to Buy a Home in 50 U.S. Cities
-
Energy3 weeks agoVisualizing the World’s Largest Oil Producers
-
Energy2 weeks agoWhich Countries Produce the Most Natural Gas?
-
Agriculture4 weeks agoTimeline: The Domestication of Animals
-
Business3 weeks agoRanked: The World’s Largest Container Shipping Companies
-
Misc6 days ago
Brand Loyalty is Declining for Most Luxury Automakers