Posts Tagged ‘China’s real estate bubble’

Stephen Roach says China’s Housing Boom is Not a Bubble; I say “Nonsense”

Stephen Roach says China’s Housing Boom is Not a Bubble; I say "Nonsense"

Courtesy of Mish 

Stephen Roach does not seem to understand what a bubble is. He makes the same arguments in dismissing China’s property bubble that we heard in the US, regarding "solid demand".

Please consider China’s Housing Market Isn’t Overheating, Roach Says

The property boom in China isn’t a bubble because it’s supported by “solid” demand for residential housing, according to Stephen Roach, chairman of Morgan Stanley Asia Ltd.

While portions of the real-estate market such as high-end apartments are overheating, demand for residential homes will remain robust as rural Chinese migrate to bigger cities, Roach said in a radio interview from Hong Kong with Tom Keene on Bloomberg Surveillance.

“This is just a sliver of the property boom,” Roach said, citing that each year since 2000, between 15 and 20 million people migrate to Beijing, Shanghai, and second- and third-tier cities in mainland China. That’s two and a half New York Cities created annually, he said. “This underpins a huge demand for residential property. This property has not overheated and the demand for this property is very, very solid.”

The nation’s property prices rose 12.4 percent in May from a year earlier, the second-fastest pace on record. China’s banking regulator said today it sees growing credit risks in the nation’s real-estate industry and warned of increasing pressure from non-performing loans.

China’s lawmakers have raised down payment requirements and mortgage rates and restricted loans for multiple-home buyers as they seek to dampen record property price gains. The government’s “decisive” actions in April are working to cool the sections of the housing market that were overheating, according to Roach.

“By all accounts, it looks like the measures are working for now,” he said.

Demand Irrelevant

Flashback 2000: There was enormous demand for internet stocks, pushing up the price and creating a bubble.

Flashback 2005: There was enormous demand for Florida condos. People were camping out overnight and entering lotteries for the right to buy condos.

2010: There is massive demand in Australia and Canada for housing. However that demand is finally showing signs of weakening.

Certainly there is a larger population in China and somehow Roach thinks that proves there is no bubble. It doesn’t.

What Constitutes a Bubble?

In the case of internet stocks, it’s when speculative demand exceeds the fundamentals. The same…
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Zero Hedge

Austrian Court Orders Rerun Of Presidential Election After Finding "Widespread" Voting Fraud

Courtesy of ZeroHedge. View original post here.

In yet another slap in the face for an already reeling Europe, moments ago Austria's Constitutional Court ruled on Friday that the presidential runoff election must be held again, handing the Freedom Party's narrowly defeated candidate another chance to become the first right-wing head of state in the European Union. Norbert Hofer of the anti-immigration FPO lost the May 22 vote to former Greens leader Alexander Van der Bellen by less than one percentage point, or around 31,000 votes, all due to mailed-in ballots.

This prompted a loud outcry of al...



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Phil's Favorites

Diving Into Deutsche Bank's "Passion to Perform" Balance Sheet

Courtesy of Mish.

Deutsche Bank shares have collapsed to lows deep under crisis lows and collapse of Lehman in the Great Financial Crisis. What’s going on?

An investigation of Deutsche Bank’s “Passion to Perform” balance sheet provides the clues.

The above clip from Deutsche Bank’s First Quarter 2016 Statement.

Details in red from page 61 (PDF page 63) of the 126 page report.

Key Liabilities

  • €559 billion deposits
  • €562 billion negative derivatives
  • €151 billion long term debt
...

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Market News

News You Can Use From Phil's Stock World

 

Financial Markets and Economy

The world’s losers are revolting, and Brexit is only the beginning (Washington Post)

The world has enjoyed an unprecedented run of peace, prosperity and cooperation the last 25 years, but now that might be over. At least when it comes to those last two.

A Sober Economy Can Handle the Brexit Hit (Bloomberg View)

One of the main signs of the health of the global and U.S. economies is its ability to absorb a blow, and shake it off. At least tha...



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Chart School

Regression to Trend: The Latest Look at Long-Term Market Performance

Courtesy of Doug Short's Advisor Perspectives.

Quick take: At the end of June the inflation-adjusted S&P 500 index price was 82% above its long-term trend, up slightly from 81% the previous month.

About the only certainty in the stock market is that, over the long haul, over performance turns into under performance and vice versa. Is there a pattern to this movement? Let's apply some simple regression analysis (see footnote below) to the question.

Below is a chart of the S&P Composite stretching back to 1871 based on the real (inflation-adjusted) monthly average of daily closes. We're using a semi-log scale to equalize vertical distances for the same percentage change regardless of the index price range.

The regression trendline drawn through t...



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ValueWalk

John DeVoy, Former Baupost Director Hired By Loomis Sayles

By Jacob Wolinsky. Originally published at ValueWalk.

John DeVoy, a long time analyst at Seth Klarman’s Baupost Group has left the hedge fund for a position at Loomis Sayles. Devoy formerly worked at Loomis before spending close to ten years at the Boston based hedge fund. The news was announced via a press release from Loomis.  The statement says that DeVoy will be returning to the company “as a dedicated credit strategist for the flagship full discretion team.”

Also see Will Baupost Follow Its Own “North Star”

Baupost Group’s Seth Klarman Sees ’50 Shades of Value’

Devoy was a managing dir...



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Kimble Charting Solutions

Follow this leading indicator closely, resistance test in play

Courtesy of Chris Kimble.

Below compares the prices of Crude Oil and the New York Stock Exchange Index (NYSE) over the past couple of years.

Once Crude peaked in 2014, the NYSE Index make little upward movement after than, even though the trend for the prior few years was clearly up.

Over the past year (black rectangle box), the correlation has been quite high.

CLICK ON CHART TO ENLARGE

Are Crude Oil and the NYSE, both creating an inve...



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OpTrader

Swing trading portfolio - Week of June 27th, 2016

Reminder: OpTrader is available to chat with Members, comments are found below each post.

 

This post is for all our live virtual trade ideas and daily comments. Please click on "comments" below to follow our live discussion. All of our current  trades are listed in the spreadsheet below, with entry price (1/2 in and All in), and exit prices (1/3 out, 2/3 out, and All out).

We also indicate our stop, which is most of the time the "5 day moving average". All trades, unless indicated, are front-month ATM options. 

Please feel free to participate in the discussion and ask any questions you might have about this virtual portfolio, by clicking on the "comments" link right below.

To learn more about the swing trading virtual portfolio (strategy, performance, FAQ, etc.), please click here ...



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Mapping The Market

Thoughts on Brexit

I have mixed feelings about Brexit today. Clearly the European institution need reforming. The addition of so many countries in the last 20 years has created a top heavy administration. The Euro adds more complexities to the equation as the ECB policies cannot fit every country's problem. On the other hand, a unified Europe has advantages as well – some countries have benefited from the integration.

For Britain, it's hard to say what the final price will be. My guess is that Scotland might now vote for independence as they supported staying in Europe overwhelmingly. Northern Ireland might be tempted to leave as well so possibly RIP UK in the long run. I was talking to some French people and they were saying that now there might be no incentive for France to stop immigrants from crossing over to the UK like they do now and simply allow for travel there and let the UK deal with them. The end game is not clear to anyone at the moment....



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Digital Currencies

Bitcoin Tumbles 10%

Courtesy of ZeroHedge. View original post here.

One week ago, when bitcoin first crossed above $700 on the seemingly insatiable Chinese buying which we forecast last September (when bitcoin was trading at $230) would take place as a result of China's capital controls (to much pushback by the "mainstream" financial media), we tried to predict what may happen next. We said that "it could go much higher. That said, anyone who bought last September when the digital currency was trading at $230 may be advised to take some profits, and at least make...



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All About Trends

Mid-Day Update

Reminder: Harlan is available to chat with Members, comments are found below each post.

Click here for the full report.




To learn more, sign up for David's free newsletter and receive the free report from All About Trends - "How To Outperform 90% Of Wall Street With Just $500 A Week." Tell David PSW sent you. - Ilene...

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Biotech

This Is Why Biotech Stocks May Explode Again

Reminder: Pharmboy and Ilene are available to chat with Members.

Here's an interesting article from Investor's Business Daily arguing that biotech stocks are beginning to recover from their recent declines, notwithstanding current weakness.

This Is Why Biotech Stocks May Explode Again

By 

Excerpt:

After a three-year bull run that more than quadrupled its value by its peak last July, IBD’s Medical-Biomed/Biotech Industry Group plunged 50% by early February, hurt by backlashes against high drug prices and mergers that seek to lower corporate taxes.

...



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Promotions

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If you are looking for non-mainstream, provocatively-narrated news and opinion pieces which promise to make you think -- we feature Zero Hedge, ...



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Help One Of Our Own PSW Members

"Hello PSW Members –

This is a non-trading topic, but I wanted to post it during trading hours so as many eyes can see it as possible.  Feel free to contact me directly at jennifersurovy@yahoo.com with any questions.

Last fall there was some discussion on the PSW board regarding setting up a YouCaring donation page for a PSW member, Shadowfax. Since then, we have been looking into ways to help get him additional medical services and to pay down his medical debts.  After following those leads, we are ready to move ahead with the YouCaring site. (Link is posted below.)  Any help you can give will be greatly appreciated; not only to help aid in his medical bill debt, but to also show what a great community this group is.

http://www.youcaring.com/medical-fundraiser/help-get-shadowfax-out-from-the-darkness-of-medical-bills-/126743

Thank you for you time!




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