Mystery Buyer Of ‘Most Expensive Apartment In Asia’ Revealed

A month ago, we highlighted a disturbing new record in the Hong Kong real-estate market – a market that received a ranking of ‘high’ from Algebris Investment’s Alberto Gallo in his annual ranking of the world’s biggest asset bubbles.
According to a report in the South China Morning Post, the record price per square foot for a residence in Hong Kong was obliterated when a mystery buyer purchased two apartments in ‘The Peak’ – an exclusive district.
At 132,000 Hong Kong dollars per square foot, the purchases made them the two most expensive apartments in Asia in terms of square footage. In total, the mystery buyer spent an astonishing 1.16 billion Hong Kong dollars (nearly $200 million) on the two apartments.

This post was published at Zero Hedge on Dec 24, 2017.

Pakistan Plans Replacing Dollar With Yuan In Trade With China

Pakistan is considering replacing the U. S. dollar with the Chinese yuan for bilateral trade between Pakistan and China, Pakistan’s Minister for Planning and Development Ahsan Iqbal said according to Dawn Online and The Economic Times. Interior Minister Iqbal, who has been central to the planning and implementation of China-Pakistan economic ties, was reported discussing the proposal after unveiling a long-term economic development cooperation plan for the two countries, Reuters added.
***
Iqbal spoke to journalists after the formal launch of Long Term Plan (LTP) for the China-Pakistan Economic Corridor (CPEC) signed by the two sides on November 21, Dawn online reported on Tuesday. The CPEC is a flagship project of China’s Belt and Road initiative. The 3,000 km, over $50 billion corridor stretches from Kashgar in western China to Gwadar port in Pakistan on the Arabian sea.
Asked if the Chinese currency could be allowed for use in Pakistan, the minister said the Pakistani currency would be used within the country but China desired that bilateral trade should take place in yuan instead of dollars, in yet another push to de-dollarize what China considers its sphere of influence.

This post was published at Zero Hedge on Dec 21, 2017.

Asian Metals Market Update: December-21-2017

‘Spend wisely and Invest lavishly should be life mantra for 2018’
American companies announcing large bonuses for its employees after the passage of Tax bill will result in higher consumption in the first quarter of next year. Higher retail consumption in the USA will result in higher employment and higher profitability. Global stock markets will remain firm and result in rosier projections for economic growth in the USA and China.
Negative news surrounding crypto currencies like hacking etc this week is state manipulated. States know that block chain technology is like the Linux of the world (which is free) and not windows (which is very expensive).

This post was published at GoldSeek on 21 December 2017.

In Dramatic Reversal, China Gives Up On Deleveraging Pledge

Last week, when looking at the latest Chinese credit data, we made two troubling observations: first, China’s economic growth was slowing across a number of key data points despite massive new credit injected into the economy over the past year. Second, that the formerly massive credit impulse – which was responsible for pushing the global economy and markets out of the early 2016 rut – was no more, and that overall system credit growth slowed to 14.4% yoy from 14.9% the prior month, which was the slowest total credit growth in the past 27 months.
While there were some nuances, such as where in China’s economy was credit being overstimulated (household) and where it was stifled (shadow banking), the bottom line as we showed in one chart is that absent a significant burst in credit creation, or credit impulse, China’s real estate prices – the backbone of the entire economy and its “wealth effect” – was lookingat a hard landing.

This post was published at Zero Hedge on Dec 19, 2017.

What China Can Learn from America’s Great Depression

When Murray Rothbard’s America’s Great Depression first appeared in print in 1963, the economics profession was still completely dominated by the Keynesian Revolution that began in the 1930s. Rothbard, instead, employed the ‘Austrian’ approach to money and the business cycle to explain the causes for the Great Depression, and to analyze the misguided and counterproductive policies that were followed in the early 1930s, which, in fact, only intensified and prolonged the economic downturn.
To many of the economists in the early 1960s, Rothbard’s ‘Austrian’ approach seemed out-of-step with the then generally accepted textbook, macroeconomic approach that focused on a highly ‘aggregate’ analysis of economic changes and fluctuations on general output and employment as a whole. There was also the widely held presumption that governments could easily maintain economy-wide growth and stability through the use of a variety of monetary and fiscal policy tools.
Mises, Hayek and the Austrian Theory of Money and the Business Cycle However, in the early and middle years of the 1930s, the Austrian explanation of the Great Depression was at the forefront of the theoretical and policy debates of the time. Ludwig von Mises (1881 – 1973), first developed this ‘Austrian’ theory of the causes of inflations and depressions in his book, The Theory of Money and Credit(1912; 2nd revised ed., 1924) and then in his monograph, Monetary Stabilization and Cyclical Policy (1928).
But its international recognition and role in the business cycle debates and controversies in the 1930s were particularly due to Friedrich A. Hayek’s (1899 – 1992) version of the theory as presented in his works, Prices and Production (1932) Monetary Theory and the Trade Cycle (1933), and Profits, Interest and Investment (1939). A professor of economics at the London School of Economics throughout the 1930s and 1940s, Hayek was, at the time, considered by many to be the main competitor against John Maynard Keynes’s ‘New Economics’ that emerged out of Keynes’s 1936 book, The General Theory of Employment, Interest and Money.

This post was published at Ludwig von Mises Institute on 12/19/2017.

A Nightmare Before Christmas: China Set to Launch Yuan-Denominated Oil Contracts

China wants to dethrone the dollar and it could take a step in that direction before the end of the year.
According to numerous reports, China is prepared to launch a yuan-denominated oil futures contract before Christmas. Last week, the Shanghai International Energy Exchange successfully completed a fifth round of yuan-backed oil futures testing. According to a report by RT, the organization has met all the listing requirements and is set for an official launch.
Chinese trader Yuan Quwei told Bloomberg the holiday season would be the perfect time to get oil trading in yuan off the ground.
An official launch during Christmas would be appropriate. The Western market would be quiet and allow the Shanghai exchange as well as Chinese investors to adjust in the early days.’
This could be a nightmare before Christmas for the petrodollar.

This post was published at Schiffgold on DECEMBER 19, 2017.

China Systemic Risk: Liquidity Problem Surfaces At HNA Group Less Than Two Weeks After Company’s Denial

Here we go again…
On December 8, we lamented how every few days we return to the subject of systemic risk in China related to its big four highly-indebted conglomerates, HNA, Anbang, Evergrande and Dalian Wanda. We also noted how our chief source of concern had become HNA, after it issued a bond with less than one year to maturity with the extortionately high coupon of 9%. And S&P downgraded HNA’s credit rating from b+ to b, five levels below investment grade. The reason for our continuing focus on HNA is its $28bn of short-term debt which matures before the end of next June, much of it accumulated during a $40 billion binge of acquisition-driven growth which saw it become a major shareholder in Deutsche Bank, Hilton Worldwide and others.
In our update less than two weeks ago, we noted how HNA business units had suffered further credit downgrades and been forced into cancelling bond issues. For example, Hainan Airlines cancelled a 1 billion yuan ($151.2 billion) issue of perpetual bonds to repay maturing debt, HNA Investment Group (hotels and real estate) cancelled a 5.22 billion yuan ($790 million) issue and S&P cut the long-term credit rating of HNA’s Swissport Group Sarl to b-, six levels below investment grade, citing concerns about its parent.

This post was published at Zero Hedge on Dec 18, 2017.

The Limits of China’s Economic Power

The countries of East Asia are worried about the coercive power of Beijing’s pocketbook. And perhaps they should be. China is flush with money, and as it continues to pour massive amounts of aid and investment into the region, it’s only a matter of time before Beijing tries to cash in.
China’s overseas investments are being pushed, at least in part, for strategic reasons. This is evident in the high number of projects included in China’s One Belt, One Road initiative that make little commercial sense and fail to perform their stated purpose: to bypass chokepoints that a hostile power could use to asphyxiate the Chinese. In areas such as the Philippines, the primary goal appears to be the cultivation of political influence in foreign capitals or, more cynically, the creation of dependence on Chinese investment or consumers, which Beijing could someday exploit.

This post was published at Mauldin Economics on DECEMBER 18, 2017.

Will Myanmar Embrace Market Reforms?

The economic growth in Myanmar is now among the highest in Asia, and it’s come a long way since the 1960’s when it was considered one of the world’s most impoverished countries. It’s instructive to understand how this change took place, what some of the current economic metrics indicate, and current pressures being placed on Myanmar from the outside.
For starters, the general history of Myanmar (also known as Burma, and the reason for the two names is interesting in itself) is long and fascinating. More recently, Myanmar was conquered by Great Britain (it was actually a part of British India, which was responsible for much of the administration) in 1855, and became relatively affluent in this part of the world, primarily due to the trade of rice and oil.
However, even before British rule, Myanmar was already relatively well off due to its strategic location along important trade routes. Myanmar is located between India and China – Indian influence is still present, even today, and was resented, along with British control – and this trading activity helped offset a country based on self-sufficient agriculture and centralized control via a king.
Britain ruled Myanmar until independence in 1948, when a series of nationalization and central planning efforts created a welfare state. The results were disastrous. Rice exports fell by two-thirds in the 1950’s, along with a 96% decline in mineral exports. In order to maintain central planning efforts, the government resorted to printing money, and runaway prices resulted from this inflation of the money supply.

This post was published at Ludwig von Mises Institute on Dec 18, 2017.

Key Events In The Last Week Before Christmas

It might be the last full week before Christmas – with both newsflow and trading volumes set to slide substantially – but there’s still a few interesting events and data releases to look forward to next week. Among the relatively sparse data releases schedule, we get US GDP, core PCE, housing and durable goods orders in the US, as well as CPI and GDP across Euro area and UK PMI. After last week’s central bank deluge, there are a handful of leftover DM central bank meetings include the BOJ and Riksbank, with rates expected to remain on hold for both. In Emerging markets, there will be monetary policy meetings in Czech Republic, Hungary, Thailand, Taiwan and Hong Kong.
Perhaps the most significant will be in China when on Monday the three-day Central Economic Work Conference kicks off. This event will see Party leaders discuss economic policies for the next year and the market will probably be most interested in the GDP growth target. Deutsche Bank economists have noted that it will be interesting to see if the government will change the tone on its growth target by lowering it explicitly from 6.5% to 6% or fine-tuning the wording to reflect more tolerance for slower growth.
Away from this, tax reform in the US will once again be a topic for markets to keep an eye on with final votes on the Republican legislation in the Senate (possibly Monday or Tuesday) and House (possibly Tuesday or Wednesday) tentatively scheduled. Also worth flagging in the US is Friday’s release of the November personal income and spending reports and the Fed’s preferred inflation measure – the core PCE print. Current market expectations are for a modest +0.1% mom rise in the core PCE which translates into a one-tenth uptick in the YoY rate to +1.5%.

This post was published at Zero Hedge on Dec 18, 2017.

The Year Of The Headless Liberal Chicken

Authored by CJ Hopkins via Counterpunch.org,
According to the Chinese zodiac, 2017 has been the Year of the Rooster. Myself, I’ve decided to designate it the Year of the Headless Liberal Chicken.
***
I don’t mean that to be insulting … or, all right, I guess I do, a little. But my heart goes out to liberals, seriously. At this point, the amount of utterly baseless, contradictory propaganda, mass hysteria, and just flat out insanity the ruling classes have demanded they swallow is more than any human mind, no matter how medicated, could possibly handle. Is it any wonder so many of them of lost it and started seeing Nazis and Russians coming out of the woodwork?

This post was published at Zero Hedge on Dec 17, 2017.

Goldman Sachs: 2017 In 100 Charts

Goldman Sachs’ Sumana Manoghar, Hugo Scott-Gall, and Navreen Sandhu wax lyrical in their introduction to the 100 most interesting charts of 2017…
In this very special edition, straight from our hearts, We pro?le 100 of our best and most compelling charts. They tell the story of a changing world; and below it starts. But for now we’ll quickly run you through the major parts.
We begin with rising capex: Who is spending to defend? Is disruption overrated? Who else can Amazon upend? The potential in India? Can China’s overcapacity mend? Are people eating healthier? How do millennials spend?
We explore each of these themes and tell you how they link. We have some fun charts in here too. And surprises. Wink wink. We hope they join the thematic dots as you see them in sync, But most of all we hope that these charts make you think.
There are quotes, stats, and a crossword also in here, Plus a thematic poster to spread the holiday cheer. Let us know what you think and if anything is unclear, We’ll be back soon with more. Until then, Happy New Year.

This post was published at Zero Hedge on Dec 16, 2017.

Alibaba Launches Giant Car Vending Machines In China

Shares of Alibaba fell on Thursday morning, despite an exciting news story involving the Chinese e-commerce juggernaut, which is rushing to shake up the way people buy cars in China. Alibaba seems to be taking a page from Amazon’s acquisition of Whole Foods, with the continued push into physical retail. The plan outlined by Alibaba, is to open two giant car vending machines in early 2018, shaped like a futuristic tubular building with a giant cat’s head on top.
Having monopolized the online world, Alibaba continues to push offline with investments in Chinese bricks and mortar retailers.
Alibaba CEO Daniel Zhang said back in November, ‘physical stores serve an indispensable role during the consumer journey, and should be enhanced through data-driven technology and personalized services in the digital economy.’

This post was published at Zero Hedge on Dec 15, 2017.

Why We Should Worry About China

Many of our readers might remember the late 80s. There were hundreds of movies, songs and books about the inevitable Japanese economic invasion. The ones of you that did not live that period can see that it did not happen.
Why? Because the Japanese growth miracle was built on a massive debt bubble and, once it burst, the country fell into stagnation for the better part of two decades. It still has not recovered.
China presents many similarities in its economic model. Massive debt, overcapacity and central planned growth targets.
Many economists and investors feel relieved because China is still growing at 6.8%. They should think twice. On one side, that level of growth is clearly overestimated. By any realistic measure of growth, China’s Gross Domestic Product annual increase is significantly lower than the official figures show. Patrick Artus, global chief economist at Natixis Global Asset Management, as well as other economists have noted that there has been a significant decoupling since mid-2014 between the government’s official growth reading and more reliable indicators. On the other hand, even if we agree with the official readings, this growth has been achieved using a worryingly high level of debt.

This post was published at Ludwig von Mises Institute on December 15, 2017.

Stocks, Yield Curve Slammed After China Hike, Draghi Taper, & Tax Tumult

Did Senators Lee and Rubio (and Hatch) just go full “Leeroy Jenkins”?
A surprise China rate hike (and disappointing retail sales) sparked weakness in Chinese stocks…
Mario Draghi managed to talk the Euro and Bund yields lower (despite attemptting to raise inflation forecasts)…
Since the FOMC meeting, Bonds and Bullion are well bid as stocks and the dollar sink…

This post was published at Zero Hedge on Dec 14, 2017.

Toronto’s Housing Bubble Is Crushing The Strip Club Industry

Until now, Canada’s soaring housing prices were just another innocent asset bubble spawned by low interest rates and an endless supply of Chinese cash that needed to get laundered. That said, massive bubbles are almost always followed by severe unintended consequences that can have a crippling impact on society as a whole…and in Toronto those unintended consequences are now manifesting themselves in the form of a rapidly deteriorating supply of strip clubs.
As Bloomberg points out today, the soaring value of Toronto real estate has made it all but impossible for strip club owners to turn down multi-million offers from condo developers leaving only a dozen strip clubs in a city whose purple neon lights used to be easily visible from the distant fringes of our solar system.
Condos are killing the Toronto strip club. In a city that once had more than 60 bars with nude dancers, only a dozen remain, the rest replaced by condominiums, restaurants, and housewares stores. Demand for homes downtown and for the retailers that serve them is driving land prices to records, tempting owners of the clubs, most of which are family-run, to sell at a time when business is slowing.
‘Sometimes I feel like the last living dinosaur along Yonge Street,’ says Allen Cooper, the second-generation owner of the famous – or infamous – Zanzibar Tavern. The former divorce lawyer says he has been approached by at least 30 suitors for his property in the past few years but is holding out for a ‘blow my socks off’ offer. ‘I don’t know how many condos we’re going to get, but it seems like just a wall’ of them, Cooper says.

This post was published at Zero Hedge on Dec 12, 2017.

Satellite Images Show North Korea Building New Tunnel At Nuclear-Test Site

Despite earlier hope amid Tillerson’s comments on diplomacy with North Korea, a new batch of satellite images suggests that North Korean leader Kim Jong Un is ignoring warnings from Chinese (as well as American and South Korean) scientists and instead pressing ahead with the country’s nuclear testing regimen at Punggye-ri, a facility situated in the country’s mountainous northeast.
As scientist from several countries have tried to explain, satellite images suggest Punggye-ri is suffering from ‘Tired Mountain Syndrome’ – a phenomenon first documented by spy satellites examining Soviet nuclear test sites. After being warned by Chinese scientists about the dangers, two tunnels collapsed near the testing chamber back in October, killing 200 North Korean workers.
According to 38North, a blog that closely tracks North Korea related news, work on what appears to be a new tunnel near the site’s West Portal is progressing, leaving the North Portal – where the last five tests were conducted – mostly dormant and likely abandoned, at least for the time being.

This post was published at Zero Hedge on Dec 12, 2017.

Five European Nations Issue Warning To America On Tax Reform

First it was the Chinese, now it’s the Europeans, as the rest of the world is suddenly very unhappy with the prospect of US tax reform (or maybe it is an unexpectedly strong US economy). As we discussed yesterday, with the historic Trump tax reforms on the verge of passage and the Fed’s dot plot signalling another 7-8 rate hikes (soon to be revised much lower), China is nervous that the capital outflows, which it thought it had bottled up, might be about to return. China is preparing a contingency plan which includes ‘higher interest rates, tighter capital controls and more-frequent currency intervention to keep money at home and support the yuan’.
Amusingly, the Wall Street Journal quoted a Chinese official who described Washington’s tax plan as a ‘gray rhino’. The latter is a combination of an ‘elephant in the room’ and a ‘black swan’, i.e. a high probability threat which people should see coming, but don’t. The focal point of China’s fears is the Yuan, which the authorities have spent so much time and effort stabilising during the last two years. Speaking to the WSJ, the Chinese official sounded a warning: ‘We’ll likely have some tough battles in the first quarter.’
Switching to Europe and five European finance ministers have sent a letter criticising the US for undermining the ‘rules of the game’ and international trade. Notwithstanding Brexit, the signatories included the UK Chancellor, Philip Hammond, as well as his counterparts in Germany, France, Italy and Spain. Essentially, the European nations are warning the US that it risks starting a trade dispute.

This post was published at Zero Hedge on Dec 12, 2017.

US Futures Hit New All Time High Following Asian Shares Higher; European Stocks, Dollar Mixed

U. S. equity index futures pointed to early gains and fresh record highs, following Asian markets higher, as European shares were mixed and oil was little changed, although it is unclear if anyone noticed with bitcoin stealing the spotlight, after futures of the cryptocurrency began trading on Cboe Global Markets.
In early trading, European stocks struggled for traction, failing to capitalize on gains for their Asian counterparts after another record close in the U. S. on Friday. On Friday, the S&P 500 index gained 0.6% to a new record after the U. S. added more jobs than forecast in November and the unemployment rate held at an almost 17-year low. In Asia, the Nikkei 225 reclaimed a 26-year high as stocks in Tokyo closed higher although amid tepid volumes. Equities also gained in Hong Kong and China. Most European bonds rose and the euro climbed. Sterling slipped as some of the promises made to clinch a breakthrough Brexit deal last week started to fray.
‘Strong jobs U. S. data is giving investors reason to buy equities,’ said Jonathan Ravelas, chief market strategist at BDO Unibank Inc. ‘The better-than-expected jobs number supports the outlook that there is a synchronized global economic upturn led by the U. S.”
The dollar drifted and Treasuries steadied as investor focus turned from US jobs to this week’s central bank meetings. Europe’s Stoxx 600 Index pared early gains as losses for telecom and utilities shares offset gains for miners and banks. Tech stocks were again pressured, with Dialog Semiconductor -4.1%, AMS -1.9%, and Temenos -1.7% all sliding. Volume on the Stoxx 600 was about 17% lower than 30-day average at this time of day, with trading especially thin in Germany and France.
The dollar dipped 0.1 percent to 93.801 against a basket of major currencies, pulling away from a two-week high hit on Friday.

This post was published at Zero Hedge on Dec 11, 2017.