Posts Tagged ‘Beijing’

Rosenberg On The Visible Hand Of Central Planning

Rosenberg On The Visible Hand Of Central Planning

Courtesy of Tyler Durden

 

 I’m this many, how many are you?

So you thought communist states go down without a fight? Wrong: here is Rosenberg who explains why both China and the US are now actively involved in the business of propping up anything and everything. And totally off topic, Rosie confirms that the liquidity trends in the mutual fund industry continue to deteriorate: "As for liquidity ratios, equity funds portfolio manages have theirs at an all-time low of 3.4%, down from 3.8% in June. Tack on the fact that there are really not very many shorts to be covered – since the market peaked in April, short interest is 4.3% of the S&P 500 market cap (in August 2008 it was 6%) and there’s not a whole lot of underlying fund-flow support for the stock market here." In other words, throw in a few more market down days, a few more weeks of redemptions (and at 16 weeks in a row, there is no reason why this should change), and the liquidation theme will promptly be added to the new normal.

 

THE VISIBLE HAND

The two largest economies in the world are being sustained by the long arm of the law. At least in China it’s to be expected that a communist country would be fuelled by command central, but in this miracle story, below the surface it is becoming abundantly clear that Beijing is becoming increasingly involved. The front page article of the Monday NYT uncovered how the economy is delivering its red-hot growth rates: “New data from the World Bank show that the proportion of industrial production by companies controlled by the Chinese state edged up last year … investment by state-controlled companies skyrocketed, driven by hundreds of billions of government spending and state bank lending.” No wonder the Chinese economy and stock market have diverged.

Is it really much different in the U.S.A. today with every 1 in 6 Americans now receiving some form of government assistance? More than 50 million Americans, from food stamps, to Medicaid, to extended jobless benefits, are on one or more taxpayer-supported programs. This likely explains why this depression does not have that 1930s feel of despair to it. But a depression it is.

In a depression, radical


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Ugly 2010 for China’s Stock Market

Collective effort, Ugly 2010 by Rom at Bondsquawk, with introduction by Pragcap:

We’ve often noted the fact that China’s equity market has served as a very reliable leading indicator over the last few years.  They led the way with a dramatic market crash that started in 2007 and they bottomed several months in advance of the 2009 bottom in the S&P.  We recently highlighted the bearish action in Chinese stocks while U.S. investors continued to pile into the S&P (one of three primary reasons we built short positions for the first time in 2 years prior to the recent stock collapse).  Ultimately the market faltered and China’s equity market is once again looking prescient. China is displaying classic post-bubble market action.  Our friends at Bondsquawk ask the important question that should be on everyone’s mind:

"Could the Chinese markets lead the rest of the world back down?"

[BEWARE THE BIG RED LEADING INDICATOR, The Pragmatic Capitalist]

Ugly 2010 for China’s Stock Market

Courtesy of Rom at Bondsquawk

China’s Shanghai Composite Index has led the rally in the global markets after sinking in late October 2008, almost 5 month ahead of the lows seen in the US markets. However, the rally has stalled as China’s equity markets have declined by 20.9 percent in 2010. Could the Chinese markets lead the rest of the world back down?

China’s Shanghai Composite Index 2-Year Historical Chart

The New York Times reported the following:

After a spectacular rise last year, China’s stock market has plummeted on growing concerns about Europe’s debt crisis and expectations that Beijing is about to take strong action to slow the nation’s booming economy and prevent it from overheating, analysts say.

Investors are worried that Chinese exports to Europe will slow in the coming months and that government efforts to tame this country’s economy by tightening credit will hamper a wide array of industries, including the nation’s fast-growing real estate market.

Read the Full Article>>


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Beijing Real Estate Association Admits There’s A ‘Big Bubble’…

Beijing Real Estate Association Admits There’s A ‘Big Bubble’, Supports New Measure To Ban Home Buying

beijing, clusterstock photo Courtesy of Vincent Fernando at Clusterstock 

Beijing on Friday announced a ban on families buying more than one home, in addition to other measures aimed at cooling the city’s hot property market.

China Daily:

As of Friday, "one family can only buy one new apartment in the city for the time being," the municipal government said in a statement. The government also ordered the implementation of central government policies that ban mortgages for purchases of a third or third-plus home.

It also instigated a central government ban on mortgages to non-local residents who cannot provide more than one year of tax returns or proof of social security payments in Beijing. The statement called for "resolutely curbing unreasonable housing demand." It ordered the implementation of measures earlier unveiled by the State Council on second-home purchases.

One of these days, property market tightening measures are going to hit the market hard. It’s fat chance that these regulatory efforts can perfectly balance out the market so that prices simply stop rising and all is calm.

The latest measures, more harsh than those released by the State Council, are aimed clearly at curbing speculation and promoting healthy and stable development of the property sector, Chen Zhi, deputy secretary-general of Beijing Real Estate Association, told Xinhua.

Speculation is the main reason behind high home prices in Beijing, Chen said.

"There exists a rather big bubble in the city’s real estate market. Housing has become more unaffordable for many," he added.

So even the Beijing real estate association is worrying about a bubble. At least give them some credit here. Did America’s National Association of Realtors (NAR) ever caution that the U.S. housing market has a ‘big bubble’? If they did, we don’t recall it.

****

See also:  Beijing city limits home-buyers to one new apartment: Media

In The Economic Times

BEIJING: The city of Beijing has issued rules limiting families to one new apartment purchase as authorities try to rein in rampant property speculation and soaring prices, state media reported Friday.  More here.>>


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Strained U.S.-Beijing Ties Could Cripple Boeing’s China Strategy

Strained U.S.-Beijing Ties Could Cripple Boeing’s China Strategy 

Boeing 747 at PSN SM terminal, elevated view

Courtesy of PETER COHAN at Daily Finance 

You might think that with China owning at least $1.3 trillion of the U.S.’s $12 trillion in national debt that Washington would tread carefully when making moves that annoy Beijing. That’s hardly the case. Cases in point: The U.S. is selling $6.4 billion in military equipment to Taiwan, and President Obama is planning a meeting with the Dalai Lama.

These moves upset China, and it’s threatening to retaliate — in part by possibly sanctioning companies like Boeing (BA) — which is selling some of those arms to Taiwan, according to China Daily. The details of such sanctions have yet to be announced — but China’s threat could prompt Boeing executives to fly to Washington and Beijing to try calming things down.

Boeing needs China badly. According to China Daily, the planemaker sells over half the aircraft that Chinese airlines fly. And Boeing is purchasing hundreds of millions worth of parts from China for its new aircraft, the 787 Dreamliner. Moreover, over a third of Boeing’s total aircraft parts come from China. As I’ve posted, some observers think Boeing CEO Jim McNerney would even like to move Boeing to China to save money.

Continue here.>>

 


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China: Lending Restrictions and Beijing’s Predicament

China: Lending Restrictions and Beijing’s Predicament

Courtesy of John Mauldin, Outside the Box

Solar Eclipse Observed in Asia

China has long been a mystery to foreign investors. Deeply involved in trade and commerce since the ancient days of the Silk Road, China has continued to maintain the appearance of closed economic borders and, even past these hardened gates, undeniable risk. Like any investor, you’ve probably been tempted to look at the prospects, and you’ve probably been met with a barricade of warnings about corruption and internal strife that quickly bounces you away. In the case of this sleeping dragon, knowing isn’t half the battle, the battle is in knowing.

I want to share with you my source for what is really going on globally – I get it from my friends at STRATFOR. They’ve got a unique way of measuring past events and analyzing geopolitical foundations to project the future. It’s not investment advice – it’s the geopolitical information you need to understand a region before you evaluate any investment opportunities.

This week I’m including an article with STRATFOR’s take on recent developments in Chinese banking restructuring. Give it a read and sign up for their free intelligence reports here.

John Mauldin
Editor, Outside the Box

China: Lending Restrictions and Beijing’s Predicament

Stratfor Today | January 20, 2010 | 1808 GMT

China Banking Regulatory Commission chief Liu Mingkang at the Asian Financial Forum in Hong Kong on Jan. 20

Liu Mingkang, head of the China Banking Regulatory Commission (CBRC), said in an interview Jan. 20 that several Chinese banks had been asked to restrain their lending after proving to have inadequate capital reserves. Chinese media reports claimed that new bank loans so far in January have risen to as high as 1 and 1.5 trillion yuan ($146-$220 billion) — approaching or equaling the massive hike in January 2009. As a result, several major Chinese commercial banks (whose names were not given) were given oral commands to stop new lending for the rest of the month.

While the regulators will strive to control credit flows, the broader Chinese imperative to maintain growth at any cost contradicts the ability to preserve loan quality and allocate capital efficiently.

Under the guidance of the central government, bank lending — the dominant form of financing in China — has skyrocketed in the past year to spur growth, fend…
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China

So is China the next best thing since sliced bread, or another bubble in the baking?

Contrarian Investor Sees Economic Crash in China

By DAVID BARBOZA, NY Times

Heavy Snow Fall Causes Disruption In Beijing

SHANGHAI — James S. Chanos built one of the largest fortunes on Wall Street by foreseeing the collapse of Enron and other highflying companies whose stories were too good to be true.

Now Mr. Chanos, a wealthy hedge fund investor, is working to bust the myth of the biggest conglomerate of all: China Inc.

As most of the world bets on China to help lift the global economy out of recession, Mr. Chanos is warning that China’s hyperstimulated economy is headed for a crash, rather than the sustained boom that most economists predict. Its surging real estate sector, buoyed by a flood of speculative capital, looks like “Dubai times 1,000 — or worse,” he frets. He even suspects that Beijing is cooking its books, faking, among other things, its eye-popping growth rates of more than 8 percent.

“Bubbles are best identified by credit excesses, not valuation excesses,” he said in a recent appearance on CNBC. “And there’s no bigger credit excess than in China.”… continue here.>>

See also

Zero Hedge’s China Begins Liquidity Tightening, As Bubble Threat Looms

While the domestic money printing syndicate refuses to accept the glaring reality that endless money printing causes unavoidable hyperinflation (the only question being when), China has decided it is time to start closing the spigot. Bloomberg reports that, "China’s central bank began to roll back its monetary stimulus for an economy poised to become the world’s second-biggest this year, seeking to reduce the danger of asset-price inflation after a record surge in credit. The People’s Bank of China yesterday sold three-month bills at a higher interest rate for the first time in 19 weeks." Ah the benefits of a planned economy: controlling the supply and the demand at the same time. And further, being pegged to the dollar, China receives all the secondary benefits of the Chairman’s endless dollar printing. Ain’t life grand in Beijing…

 “It’s a signal toward the commercial banks, because the commercial banks allocate their lending at the


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Zero Hedge

Yuan Tumbles After Navarro Warns "No Indication That Tariffs Will Be Delayed"

Courtesy of ZeroHedge View original post here.

While US equity futures have barely dipped, offshore yuan has tumbled - erasing the earlier optimistic spike - after White House Trade Advisor Peter Navarro told Fox News that he has "no indication that December tariffs will not be put on."

Additionally Navarro said that China "was trying to shape the narrative on trade talks to affect the futures market," and that is up to the Chinese if a trade deal can get done.

Yuan erased all of the gains from China's comments this morning.....



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Phil's Favorites

In its anti-'Medicare for All' push, the health insurance industry pulls from an old playbook

 

In its anti-'Medicare for All' push, the health insurance industry pulls from an old playbook

If you’re strangled by health care costs, are you really ‘free’? jwblinn/Shutterstock.com

Courtesy of Burton St. John III, University of Colorado Boulder

As a debate continues to rage within the Democratic Party over “Medicare for All,” the health care industry has quietly girded itself to fight the elimination of for-profit health care.

In the summer of 2018, trade groups rep...



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Insider Scoop

5 Stocks Moving In Tuesday's After-Hours Session

Courtesy of Benzinga

Gainers
  • Ollie’s Bargain Outlet Holdings Inc (NASDAQ: OLLI) shares are up 11% after reporting a third-quarter earnings beat. Earnings came in at 41 cents per share, beating estimates by 3 cents. Sales came in at $327.049 million, beating estimates by $4.549 million.
  • Dave & Buster’s Entertainment Inc (NASDAQ: ...


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Kimble Charting Solutions

Are Bank Stocks Sending Bullish Message To Investors?

Courtesy of Chris Kimble

Just as the health of the banking sector is a big deal to the economy, it’s equally important to the S&P 500 (SPY) and broader stock market.

Although the bull market has grinding higher, it’s awaiting confirmation from the banks and banks stocks.

Today’s chart is of the S&P 500 Bank ETF (KBE) and shows how the banks are at an important juncture in time and price.

KBE (the bank ETF) is testing the upper end of a falling channel, offering bulls an opportunity for a breakout – see point (2).

The banks were at a similar juncture nearl...



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Digital Currencies

The Road To Retirement: Millennials Put Their Faith In Bitcoin But Goldman Says Go With Gold

Courtesy of ZeroHedge View original post here.

"Drop Gold" - the ever-present tagline of Grayscale's Bitcoin Trust TV commercial - appears to be working its magic on a certain cohort of society.

2019 has seen assets under management in GBTC soar...

Source: Bloomberg

And for Millennials, according to the lates...



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Lee's Free Thinking

Chart Shows the Fed Ramping Up Not QE - Funding Almost All Treasury Issuance

 

Chart Shows the Fed Ramping Up Not QE – Funding Almost All Treasury Issuance

Courtesy of Lee Adler, Wall Street Examiner 

The Fed is ramping up “Not QE” .

The Fed bought $2.2 billion in notes today in its POMO, “not QE,” operations. Actually $2.15 billion because they sold back a whole $50 million. Must have been a little glitch in the force.

This brings the Fed’s total outright purchases of Treasuries to $170 billion since it started Not QE, on September 17.

It also did $107 billion in gross new repo loans to Primary Dealers to buy Tre...



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Chart School

Silver stock taking the sector higher

Courtesy of Read the Ticker

As the US economy begins to show late cycle characteristics like: GDP slowing, higher inflation, higher wage costs, CEO confidence slump. 

Previous Post: Gold Stocks Review

The big players in the market are looking for the next swing off good value lows. This means more money is finding it way into the gold and silver sector, and it is said gold and silver stocks actually lead the metal prices.

The cycle below shows prices are ready to move in the months ahead (older chart re posted).


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Members' Corner

Sacha Baron Cohen Uses ADL Speech to Tear Apart Mark Zuckerberg and Facebook

 

Sacha Baron Cohen Uses ADL Speech to Tear Apart Mark Zuckerberg and Facebook

By Matt Wilstein

Excerpt:

Sacha Baron Cohen accepted the International Leadership Award at the Anti-Defamation League’s Never is Now summit on anti-Semitism and hate Thursday. And the comedian and actor used his keynote speech to single out the one Jewish-American who he believes is doing the most to facilitate “hate and violence” in America: Facebook founder and CEO Mark Zuckerberg.

He began with a joke at the Trump administration’s expense. “Thank you, ADL, for this recognition and your work in fighting racism, hate and bigotry,” Baron Cohen said, according to his prepared...



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The Technical Traders

VIX Warns Of Imminent Market Correction

Courtesy of Technical Traders

The VIX is warning that a market peak may be setting up in the global markets and that investors should be cautious of the extremely low price in the VIX. These extremely low prices in the VIX are typically followed by some type of increased volatility in the markets.

The US Federal Reserve continues to push an easy money policy and has recently begun acquiring more dept allowing a deeper move towards a Quantitative Easing stance. This move, along with investor confidence in the US markets, has prompted early warning signs that the market has reached near extreme levels/peaks. 

Vix Value Drops Before Monthly Expiration

When the VIX falls to levels below 12~13, this typically v...



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Biotech

Why telling people with diabetes to use Walmart insulin can be dangerous advice

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

 

Why telling people with diabetes to use Walmart insulin can be dangerous advice

A vial of insulin. Prices for the drug, crucial for those with diabetes, have soared in recent years. Oleksandr Nagaiets/Shutterstock.com

Courtesy of Jeffrey Bennett, Vanderbilt University

About 7.4 million people ...



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Mapping The Market

How IPOs Are Priced

Via Jean Luc 

Funny but probably true:

...

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Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

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