Preferred stock is sending a warning signal.
Hillary Has A Big Problem With "Everyday Americans" - Is this what they call a "trust fall"?
So back to the original question WHAT NEEDS TO BE DONE. Simple?The last suggestion would work as well as the power company announcing it will stop sending you electricity and even drain your solar panels if you have them, but still send you a bill. How long before you end your relationship with the power company?
1. Recognize the problem. It is not oil, it is not in the banks..it is a run on central bank liquidity, especially dollar based and there needs to be much more ($) liquidity. Keynes said to deal with overinvestment boom you cut you don't raise rates. QE is impractical but getting the dollar down would greatly lift dollar based liquidity. So for a starter Fed shd stop raising rates and clearly signal an extended time out.
2. Draghi shd follow up with a one 2 punch, not to get rates down but open the refi spigot to banks and ease liquidity concerns.
3. China needs to come clean. Devalue, stabilize reserves and then allocate 1 tn+ to short up strategically important institutions. Stop intervening in equity markets.
4. And Basel 3 (?4) should be delayed specifically regarding leverage ratios and threat of higher. As a token move there shd be deemphasis of the SSM/bail in rules until there is clarity from the ECB on liquidity sources for stressed banks.
5. how about some fiscal stimulus
6. on negative rates -- instead of making them punitive on the banks allow the banks to earn the spread, make them punitive to savers.. Cash shd be charged interest -- put the micro chip in large denom notes/tax cash withdrawals.. encourage spending not saving .. mortgage rates can be negative and banks can still earn a spread. The spread is the problem not the rate.
Since the opening in downtown Beijing's Wangfujing Street, McDonald's "experience of the future" concept restaurant has been filled with curious customers every day.
The most distinctive feature of the restaurant is the personalized burgers, which allow customers to design their own tastes by freely choosing from 24 ingredients. With a smart phone, customers can complete the design and order anywhere in the venue, and then have staffs send food to their table with the help of table locators.
..."It makes me relax after a stressful day," said Miss Wang, who placed her order via the touchscreen. She felt happy even though it took her half an hour to get the burger.
The State Council, China's cabinet, has announced plans to cut steel production capacity by 100 million tons over the next five years.
The country will also not approve any new coal mines before the end of 2019.
...The country will also shut down 500 million tons of coal capacity and consolidate another 500 million tons into the hands of fewer but more efficient mine operators in the next three to five years.
In the past five years, China eliminated about 560 million tons of coal production capacity and closed 7,250 coal mines.
The country had about 11,000 coal mines at the end of 2015 with a total capacity of 5.7 billion tons.
The plan comes a day after similar scheme for the country’s steel industry was unveiled. The world’s biggest producer will close between 100 million and 150 million metric tons of annual crude steel capacity by 2020, according to an outline published on the state council’s website Thursday. The steel industry cuts -- amounting to 13 percent of capacity at most -- fall short what’s required, according to analysts from Capital Economics Ltd., Macquarie Group Ltd. and Argonaut Securities.Maybe it is window dressing to send a signal of "we're serious", but the ban on new mines is a red flag that the underlying problem of cheap credit may not be dealt with. The government will not cut off funding to the industry and let the inefficient producers and incompetently managed firms die, it will artificially suppress production and pick the winners. At least it makes investing easier.
Jiangxi proposed urban housing for first-time buyers, qualified to give financial subsidies to farmers, migrant workers and will explore individual businesses into the housing accumulation fund system range. Henan Province put forward to support the improvement of housing conditions for workers paid into the provident fund loans, the resident population will have a stable labor relations into the provident fund coverage, encourage farmers into the city to purchase. Meanwhile, also in an orderly Henan agricultural work Citizenship.iFeng: 一季度楼市或迎密集宽松政策 成交料稳中有升
Inner Mongolia proposed that in order to digest solid real estate inventory, Inner Mongolia will study the housing fund to support farmers and herdsmen in the city to purchase policies to encourage financial institutions to grant the transfer of migrant farmers and herdsmen purchase loans. In addition, the common property will also explore other measures to gradually absorb the large square housing stock, restrictive cancellation policy, release stiffness and improve housing demand. Hebei Province, said that to resolve the real estate stocks, advancing to meet the new demands of the public housing system reform starting point, stabilize the real estate market, household population by 2020, the resident population urbanization rate of about 48% and 67%, respectively. Jilin Province put forward to encourage and support real estate development enterprises due to lower housing prices, to help solve the problem of financing, while according to regulate the supply of land "to stock" in progress.
Hunan proposed monetization is an effective means to inventory, in principle, in 2016 shed change monetization of not less than 50% of the high proportion of resettlement areas and projects will be given funds tilt. Qinghai suggested further relaxation Xining (REF) settled in the city limits, the establishment of farmers and herdsmen town buyers and renters financial subsidies.
From the first-tier cities, the local two sessions related issues are more around the support reasonable housing needs, and promote the healthy development of the market to expand. Beijing (REF) said that this year will begin to study wards live zero level tax policy under the premise of balance, to encourage the public to change the housing from the office closer to the place. Shanghai said the purchase of the policy this year will continue to implement, but it will increase the supply of small and medium size, so that the housing price in young people after efforts can bear. During the two sessions, Guangdong Province, the Guangdong Provincial Department of Housing and Urban-Rural Construction Department, said Wang Peng, Guangdong will cancel the purchase of limited credit and other regulatory policies, but not mandatory, especially for Guangzhou (REF), Shenzhen (real estate) in big cities like specific policies still make a judgment according to the local government market.
2015 PV cumulative installed capacity of about 43GW, ranked first in the world this year in the new scale will be 20GW to 23GW, while the A shares of solar power generation concept Listed companies 70% of companies expected net profit growth of over 50%, even up to the highest 1500%. At the same time, the differentiation phenomenon is obvious, the upstream business is still mostly a loss.Lower interest rates far enough and anything can become profitable. For a time.
Insiders call on guard against a new round of power plant overcapacity, and discard light, subsidies, land three mountains obscure short-term, will continue to erode the power plant profits. Thirteen Five-Year period, with the decline in the cost of photovoltaic power generation and the development of the situation, the price level will be reduced, and strive to achieve the 2020 parity user side, multisectoral currently brewing "reduce costs" combined.
...According to the China Photovoltaic Industry Association Secretary-General Wang Bo Hua, new PV installed capacity in 2015 is about 15GW, an increase of more than 40% for three consecutive years first in the world, of which 84% was ground stations, and distributed power plants accounted for 16%. The total installed capacity of about 43GW, ranked first in the world.
Affected by this pull, midstream component of corporate earnings also improved significantly. China Photovoltaic Industry Association data show that in 2015 assembly production exceeded 43GW, an increase of 20.8%, 51 assembly enterprises average capacity utilization rate of 86.7 percent, up 6 percentage points over the first half of 2015. The top ten more than double-digit profit margins, after 33 standardized conditions by enterprises in 2015 operating results analysis (statistical excluded due to several heavy historical burden resulting from loss of business), only four business losses, the average profit margin of 4.8%, significantly higher than the 3% average for the electronics manufacturing industry, but also two to three percentage points higher than in the first half of 2015.
The fiery momentum from the earnings of listed companies can be further confirmed. According to WIND data, as of January 29, 23 of 37 listed solar companies released 2015 annual results notice, 18 had yoy net profit growth, including 15 with expected growth rates of more than 50%, Jiawei (300317) saw growth of 1490.16% to 1519.51% to come out on top, followed by Shanghai Aero Auto (600151), net profit is expected to grow 382% to 415%, and Risen Energy (300118) and ZJ Sunflower (300111) are expected to grow 363% and 393%, respectively, from 140.22% to 166.91%.
But it is worth noting that differentiation phenomenon is obvious. Scale, brand, technology components and full corporate orders, orders difficulties of SMEs, mostly for OEM products or to provide for their own power plants. Upstream polysilicon enterprises in worse trouble in the global PV market, seasonal changes, polysilicon is also under pressure than other sectors as the most important, the price all the way down, most companies are still losing money.
"At present, the polysilicon business situation remains severe and complicated, foreign polysilicon companies are still looking for loopholes in the Chinese market, duties for Korea 'dual' tax rate is too low, some companies tax rate of only 2.4%, resulting in a substantial increase in imports from South Korea polysilicon a serious impact on China's polysilicon industry, while the European Union to take the price guarantee mechanism intended effect is not obvious, a significant increase in re-exports by Taiwan polysilicon. "Vice president of China nonferrous Metals industry Association Zhao Jiasheng said.
...Brownouts problem is equally bleak. Data show that in 2015 the national grid scheduling abandoned cumulative photovoltaic capacity range of 46.5 billion kwh, abandoned solar rate 12.62%, all concentrated in Gansu, Qinghai, Ningxia and Xinjiang in Northwest China's four provinces. Wherein the Gansu abandoned solar rate of 30.7%, 22% in Xinjiang.
...According to her estimates, the cost of land in the initial investment is not higher than 0.5 yuan / kwh, to run for no more than one yuan / square meter, reflected in the cost of electricity is 0.04-0.05 / kWh. The favorable financial environment can be expected, if the financing costs lower and lower interest rates by one percentage point, electricity demand is reduced by about 0.03 yuan / kwh. In addition, tax policy also need to win, Jizhengjitui 50% VAT tax, electricity demand is reduced by about 0.04 yuan / kwh.
Under improper regulation, if asked high prices can sustain long? You can not have normal thinking or analysis to judge, it can only be resigned. And this situation, inevitably the status quo can not last long.If it continues on this way, with first-tier and top second-tier city prices rising, with land prices rising and new land kings crowned month after month:
So, in 2016, the luxury market or markets, market prices are high, the competition will become more intense, melee situation will be quite tragic. But the market is good or bad, regardless of the ups and downs of small and medium housing prices housing prices, has nothing to do with ordinary people, of course, has nothing to say small series of settling the new media is only relative. From 2015 the land market performance, if the land market, "King" continued frequent phenomenon continues, then this means that in 2016 the property market will fall into a Great Depression.The overall tone of the article is not so negative. It says prices can rise (even double) over a longer time frame, but if the frenzied pace continues, another bust will quickly follow.
Remember, decades worth of dollar claims have by now been built up against the US system. Most of this time, such dollars were reinvested right back into the US economy creating a virtuous circle of ongoing demand for value added goods produced abroad, albeit funded by the US system’s underlying and growing petrodollar debt.Snider gives some monetary history, explaining the central bankers still haven't figured out the eurodollar 50 years on:
At some point, however, these dollars also began to be reinvested abroad, funding the continued consumption of dollar-denominated goods (such as commodities) but this time in countries which had no control over the underlying dollar availability or the size of the petrodollar debt, and who certainly couldn’t afford to be gouged at the same rate that the developed US system could.
Inevitably, the commodity correction will encourage defaults in that regard. And inevitably this will see dollar surplus countries confronted with a mismatch between dollar inflows and their their dollar liabilities. Dollar stocks will have to be drawn.
Unlike August 1971 when Nixon "closed the gold window" for good, there is no parallel monetary system in place to take up the function of global financial and really exchange payment system. Then, the eurodollar had already been ceded most of the exchange function; all that was left was official acknowledgement. It was a terrible prospect in that economists really had no idea how to control an "offshore" dollar; and indeed, they never have.
This is different in that there is nothing but a yawning void at its end. As I write persistently, the end of the eurodollar would be cause for great and deserved celebration all over the world, bringing up the actual prospects for true prosperity and sustainable growth (debt nowhere near the center) if it were being done with a replacement not just in mind but likely already in place and with parallel function already begun. Instead, I am writing constantly about fifty-year old history that still hasn't been recognized for what it was; policymakers still have no idea about the eurodollar in its full agency, and economists in general still think money is something the Fed does.
According to market research by IBISWorld, a leading business intelligence firm, the total revenues for the oil and gas drilling sector came to $5 trillion in 2014. This sector is composed of companies that explore for, develop and operate oil and gas fields. It is also sometimes referred to as the oil and gas exploration and production industry, or simply as E&P. Since the 2014 estimates for global gross domestic product range between $77 trillion and $107 trillion, the oil and gas drilling sector makes up between 4.6% and 6.5% of the global economy.On one side is deflation, destruction of leveraged eurodollars. On the other side is a large and continuous demand for foreign currency from mainland China.
China has been running down its vast foreign currency reserves in an attempt to boost the value of its own currency and stem a flow of funds overseas.The average pace of decline over the past three months is $100 billion.
At $3.23 trillion, China still has the world's biggest reserve of foreign currency holdings.
But that has declined by $420bn over six months and stands at the lowest level since May 2012.
The IMF has developed a suggested framework based upon research into previous currency crises. According to this formula, countries should maintain reserves equivalent to the sum of 30 percent of their short-term foreign-denominated debt, 15 percent of other portfolio liabilities, 10 percent of the M2 or broad money supply and 10 percent of yearly exports.The piece is by Christopher Balding.
In China's case, that would add up to approximately $3 trillion.
For 2016, we are already up to say $1.5-2 trillion is needed in 2016 for foreign currency needs. Between just paying bills and having liquidity to engage in international trade, China needs about $1.5-2 trillion in FX reserves. We could move it a little lower by taking on some more risk, but you can’t move it a lot lower without increasing your risk very very fast.