US Economic News

Fast growth rate for the US Economy in the second quarter:

 https://www.theguardian.com/business/201...department

The article suggests that the Trump tax cuts are a factor.

Is the Fed going to pull away the punch bowl? They have a good number of further interest rate rises pencilled in. I'm already noticing interest rates that were derisory a couple of years ago, on USD, CAD, HKD, are now worth looking at. Add another 1 to 1.5% by the end of next year and we are beginning to get back to something more normal. If wage inflation finally takes off in the US and the Fed needs to go beyond its current steady 0.25% per quarter, it could have a major impact on markets. Possibly another Black October? I will be particularly interested in watching the Singapore and HK property markets. All of those extra stamp duties that have been imposed over the last few years should be a big fiscal drag on the property markets. Combined with rising interest rates, and, at some time, there has to be a reaction. So far, particularly in Hong Kong, the market has been so red hot that people must have been ignoring those factors. When the market stalls, as it has to sooner or later, it could go ice cold - and where the property market in Hong Kong goes, the Hang Seng Index follows.  And where Hong Kong goes, Singapore usually follows, but on a gentler path.

One way US can prevent the over heating of economy is to increase its tapering rate. Currently the Fed is reducing its balance sheet by $50 billion per month. It can increase the reduction to $200 billion per month and I feel it wont affect the country much.

This is better than hiking interest rates

2018.10.07【文茜世界周報】乾坤挪移、空殼避稅　美國總統的致富秘密
https://www.youtube.com/watch?v=yM8cz7kp...-pKgdwMSAU

(28-07-2018, 03:44 AM)Dosser Wrote: Fast growth rate for the US Economy in the second quarter:

 https://www.theguardian.com/business/201...department

The article suggests that the Trump tax cuts are a factor.

Is the Fed going to pull away the punch bowl? They have a good number of further interest rate rises pencilled in. I'm already noticing interest rates that were derisory a couple of years ago, on USD, CAD, HKD, are now worth looking at. Add another 1 to 1.5% by the end of next year and we are beginning to get back to something more normal. If wage inflation finally takes off in the US and the Fed needs to go beyond its current steady 0.25% per quarter, it could have a major impact on markets. Possibly another Black October? I will be particularly interested in watching the Singapore and HK property markets. All of those extra stamp duties that have been imposed over the last few years should be a big fiscal drag on the property markets. Combined with rising interest rates, and, at some time, there has to be a reaction. So far, particularly in Hong Kong, the market has been so red hot that people must have been ignoring those factors. When the market stalls, as it has to sooner or later, it could go ice cold - and where the property market in Hong Kong goes, the Hang Seng Index follows.  And where Hong Kong goes, Singapore usually follows, but on a gentler path.

As you were saying(and actually I have been saying as well) and its happening now, HK property now stone cold, standby for the biggest crash in hk property history! Next stop China! ;D

https://www.scmp.com/business/article/21...s-hk800000

(09-10-2018, 09:14 PM)BlueKelah Wrote:

(28-07-2018, 03:44 AM)Dosser Wrote: Fast growth rate for the US Economy in the second quarter:

 https://www.theguardian.com/business/201...department

The article suggests that the Trump tax cuts are a factor.

Is the Fed going to pull away the punch bowl? They have a good number of further interest rate rises pencilled in. I'm already noticing interest rates that were derisory a couple of years ago, on USD, CAD, HKD, are now worth looking at. Add another 1 to 1.5% by the end of next year and we are beginning to get back to something more normal. If wage inflation finally takes off in the US and the Fed needs to go beyond its current steady 0.25% per quarter, it could have a major impact on markets. Possibly another Black October? I will be particularly interested in watching the Singapore and HK property markets. All of those extra stamp duties that have been imposed over the last few years should be a big fiscal drag on the property markets. Combined with rising interest rates, and, at some time, there has to be a reaction. So far, particularly in Hong Kong, the market has been so red hot that people must have been ignoring those factors. When the market stalls, as it has to sooner or later, it could go ice cold - and where the property market in Hong Kong goes, the Hang Seng Index follows.  And where Hong Kong goes, Singapore usually follows, but on a gentler path.

As you were saying(and actually I have been saying as well) and its happening now, HK property now stone cold, standby for the biggest crash in hk property history!  Next stop China! ;D

https://www.scmp.com/business/article/21...s-hk800000

I am not sure that Hong Kong will have its biggest property crash in history, which would mean exceeding the 70% drop between 1997 and 2003. It might, but that is a big target.

Also not sure that China is the next stop, because there seem to be so many other possible places that might be the next stop, as monetary conditions grow tighter, and the big debts run up while money was cheap, cheap, cheap come home to roost.

There are the way overvalued property markets, of which Hong Kong is No. 1, but Sydney (already falling), Vancouver, London and a bunch of others are all possibilities
There are the weak emerging markets - Argentina, Turkey, India, Indonesia, South Africa, Pakistan, and others
There are the weak European banks loaded up on Turkish and Italian debt
There are junk bonds, and the bonds of countries that should be junk
Maybe a wild card- Tesla, for example?

At the moment we are seeing creaks and groans as the system adjusts to increasing US$ interest rates. At some point those creaks and groans may turn into a rout. But where will it start? When will it start (or has it already started)? One sector, or will all of the above (and others) go domino style? I wish I knew.

(10-10-2018, 07:00 PM)Dosser Wrote:

(09-10-2018, 09:14 PM)BlueKelah Wrote:

(28-07-2018, 03:44 AM)Dosser Wrote: Fast growth rate for the US Economy in the second quarter:

 https://www.theguardian.com/business/201...department

The article suggests that the Trump tax cuts are a factor.

Is the Fed going to pull away the punch bowl? They have a good number of further interest rate rises pencilled in. I'm already noticing interest rates that were derisory a couple of years ago, on USD, CAD, HKD, are now worth looking at. Add another 1 to 1.5% by the end of next year and we are beginning to get back to something more normal. If wage inflation finally takes off in the US and the Fed needs to go beyond its current steady 0.25% per quarter, it could have a major impact on markets. Possibly another Black October? I will be particularly interested in watching the Singapore and HK property markets. All of those extra stamp duties that have been imposed over the last few years should be a big fiscal drag on the property markets. Combined with rising interest rates, and, at some time, there has to be a reaction. So far, particularly in Hong Kong, the market has been so red hot that people must have been ignoring those factors. When the market stalls, as it has to sooner or later, it could go ice cold - and where the property market in Hong Kong goes, the Hang Seng Index follows.  And where Hong Kong goes, Singapore usually follows, but on a gentler path.

As you were saying(and actually I have been saying as well) and its happening now, HK property now stone cold, standby for the biggest crash in hk property history!  Next stop China! ;D

https://www.scmp.com/business/article/21...s-hk800000

I am not sure that Hong Kong will have its biggest property crash in history, which would mean exceeding the 70% drop between 1997 and 2003. It might, but that is a big target.

Also not sure that China is the next stop, because there seem to be so many other possible places that might be the next stop, as monetary conditions grow tighter, and the big debts run up while money was cheap, cheap, cheap come home to roost.

There are the way overvalued property markets, of which Hong Kong is No. 1, but Sydney (already falling), Vancouver, London and a bunch of others are all possibilities
There are the weak emerging markets - Argentina, Turkey, India, Indonesia, South Africa, Pakistan, and others
There are the weak European banks loaded up on Turkish and Italian debt
There are junk bonds, and the bonds of countries that should be junk
Maybe a wild card- Tesla, for example?

At the moment we are seeing creaks and groans as the system adjusts to increasing US$ interest rates. At some point those creaks and groans may turn into a rout. But where will it start? When will it start (or has it already started)? One sector, or will all of the above (and others) go domino style? I wish I knew.

The possibility of a massive property crash is there, but of course there has to be some sort of GFC type event to compound it. People there flip property like they are flipping stocks, prices can go down pretty quickly as the herd rushes for the exit. I dont have ears on the ground in HK but from reports it looks like a deterioration in conditions has started already.

Things are not looking good for China as well economy wise as well as property wise.

https://www.scmp.com/property/hong-kong-...-discounts
Chinese developers set for disappointing October as cash discounts fail to spur Golden Week sales
[The bearish sentiment is also taking its toll on property stocks. The Hang Seng Mainland Properties Index has fallen to its lowest level since August 2017 and is down 17.5 per cent from its recent peak on September 21.

In Shenzhen, only 226 new homes were sold in the past week, down 49.3 per cent from the same period a year ago.
In Hangzhou, only 293 new homes were sold in the first seven days of October, the lowest since 2009. And in Nanjing, only 154 – the lowest in the past seven years.]

more action here, throw stones somemore?!!
CUSTOMERS THROW STONES AS COUNTRY GARDEN DISCOUNTS MAINLAND HOMES
[During China’s golden week, buyers of Country Garden homes mobbed the company’s sales centres in several cities after the country’s largest developer by sales began offering discounts that made new homes cheaper than the price paid by earlier customers.

The activist consumers became enraged after Country Garden had reduced home prices at some projects by as much as 30 percent compared to one year ago. Some customers storming the developer’s offices in Shanghai and in rural Jiangxi provinces, carried banners bearing slogans such as “Give back my hard-earned money” while others delivered their sentiments via rocks and bricks aimed the company’s sales offices.]

(10-10-2018, 10:46 PM)BlueKelah Wrote:

(10-10-2018, 07:00 PM)Dosser Wrote:

(09-10-2018, 09:14 PM)BlueKelah Wrote:

(28-07-2018, 03:44 AM)Dosser Wrote: Fast growth rate for the US Economy in the second quarter:

 https://www.theguardian.com/business/201...department

The article suggests that the Trump tax cuts are a factor.

Is the Fed going to pull away the punch bowl? They have a good number of further interest rate rises pencilled in. I'm already noticing interest rates that were derisory a couple of years ago, on USD, CAD, HKD, are now worth looking at. Add another 1 to 1.5% by the end of next year and we are beginning to get back to something more normal. If wage inflation finally takes off in the US and the Fed needs to go beyond its current steady 0.25% per quarter, it could have a major impact on markets. Possibly another Black October? I will be particularly interested in watching the Singapore and HK property markets. All of those extra stamp duties that have been imposed over the last few years should be a big fiscal drag on the property markets. Combined with rising interest rates, and, at some time, there has to be a reaction. So far, particularly in Hong Kong, the market has been so red hot that people must have been ignoring those factors. When the market stalls, as it has to sooner or later, it could go ice cold - and where the property market in Hong Kong goes, the Hang Seng Index follows.  And where Hong Kong goes, Singapore usually follows, but on a gentler path.

As you were saying(and actually I have been saying as well) and its happening now, HK property now stone cold, standby for the biggest crash in hk property history!  Next stop China! ;D

https://www.scmp.com/business/article/21...s-hk800000

I am not sure that Hong Kong will have its biggest property crash in history, which would mean exceeding the 70% drop between 1997 and 2003. It might, but that is a big target.

Also not sure that China is the next stop, because there seem to be so many other possible places that might be the next stop, as monetary conditions grow tighter, and the big debts run up while money was cheap, cheap, cheap come home to roost.

There are the way overvalued property markets, of which Hong Kong is No. 1, but Sydney (already falling), Vancouver, London and a bunch of others are all possibilities
There are the weak emerging markets - Argentina, Turkey, India, Indonesia, South Africa, Pakistan, and others
There are the weak European banks loaded up on Turkish and Italian debt
There are junk bonds, and the bonds of countries that should be junk
Maybe a wild card- Tesla, for example?

At the moment we are seeing creaks and groans as the system adjusts to increasing US$ interest rates. At some point those creaks and groans may turn into a rout. But where will it start? When will it start (or has it already started)? One sector, or will all of the above (and others) go domino style? I wish I knew.

The possibility of a massive property crash is there, but of course there has to be some sort of GFC type event to compound it. People there flip property like they are flipping stocks, prices can go down pretty quickly as the herd rushes for the exit. I dont have ears on the ground in HK but from reports it looks like a deterioration in conditions has started already.

Things are not looking good for China as well economy wise as well as property wise.

https://www.scmp.com/property/hong-kong-...-discounts
Chinese developers set for disappointing October as cash discounts fail to spur Golden Week sales
[The bearish sentiment is also taking its toll on property stocks. The Hang Seng Mainland Properties Index has fallen to its lowest level since August 2017 and is down 17.5 per cent from its recent peak on September 21.

In Shenzhen, only 226 new homes were sold in the past week, down 49.3 per cent from the same period a year ago.
In Hangzhou, only 293 new homes were sold in the first seven days of October, the lowest since 2009. And in Nanjing, only 154 – the lowest in the past seven years.]

more action here, throw stones somemore?!!
CUSTOMERS THROW STONES AS COUNTRY GARDEN DISCOUNTS MAINLAND HOMES
[During China’s golden week, buyers of Country Garden homes mobbed the company’s sales centres in several cities after the country’s largest developer by sales began offering discounts that made new homes cheaper than the price paid by earlier customers.

The activist consumers became enraged after Country Garden had reduced home prices at some projects by as much as 30 percent compared to one year ago. Some customers storming the developer’s offices in Shanghai and in rural Jiangxi provinces, carried banners bearing slogans such as “Give back my hard-earned money” while others delivered their sentiments via rocks and bricks aimed the company’s sales offices.]

Another sign of what is to come?

https://www.theguardian.com/business/201...ck-markets

The link to rising interest rates is explicit.

pretty bad sell down last night on american markets. Black Wednesday??

(11-10-2018, 08:20 AM)BlueKelah Wrote:
pretty bad sell down last night on american markets. Black Wednesday??

Wa...so early in the morning bring out Ding Xie already...hahahaha,,,

Haha, this time I'm pretty bearish. Lot's of uncontrollable factors and uncertainties converging: high valuation, decelerating growth due to unforeseen factors (fines, regulations, scandals, breaches etc.) higher base earnings to compare to (in the case of Amazon, with their last year revenues so high; can they still outperform in growth?), political unrest (mid-terms election, populist government taking power, Brexit), hyper/inflation in some of the weaker markets (Turkey, India, Argentina, Venezuela etc.), trade war, rising rates.

I am actually already selling stocks, probably a little too late (already 18% off peak).

Telsa my position not big, may still be a good hold, given how close they are to profitability/cash flow positive, and how close the traditional US auto industry is to imploding.

Guess my temperament doesn't allow me to sit on my ass, unlike what my signature suggest.