2019-04-30

Baseball is a Positive Mood Sport and Attendance is Crashing

Maybe a salary cap can even out competitive balance, otherwise it may not be long before we finally see contraction in major sport.

USA Today: Attendance drops for 12 MLB teams, as loss of gate takes on more permanent look
Major League Baseball’s attendance problem is not going away, as a significant dip in 2018 has endured into the new season – even with better weather and a boost from some big-name stars on the move.

As the game’s worst part of the calendar comes to a close, 12 of 30 teams will draw fewer fans in March-April than they did in a similar period last year – with seven of those teams seeing double-digit percentage dips, led by the Toronto Blue Jays’ 33% drop-off, according to research by USA TODAY Sports.

Perhaps more alarmingly, 15 teams saw a decrease in their worst March-April gate, which can serve as a relatively informed snapshot of a club’s season-ticket base. Twelve teams’ worst gate was 11,000 or less, with four teams – Pittsburgh (8,523), Cincinnati (7,799), Baltimore (6,585) and Miami (5,934) sporting a base of less than 10,000.

American Bookstores Have No Idea the Who, What or When, But They Expect Protests

SF Gate: White nationalists target bookstores and a library in protests nationwide
The bookstore began training employees earlier this year to respond to flash protests, co-owner Bradley Graham said. The decision came after previous author events, including a talk last month by former Homeland Security Secretary Janet Napolitano, drew the ire and attention of left-wing activists and agitators.

Politics and Prose isn't alone.

Bookstores, libraries and book fairs have become frequent targets of white nationalist groups, which in recent years have interrupted author talks, children's reading hours and, in one instance, threatened to burn down a bookstore in Berkeley, California.

"One of the issues is we can't always anticipate what author or event might draw protesters or a demonstration," Graham said. "Clearly, when the political climate heats up, there would seem to be more kindling that could be lit. But whether this will translate to more disturbances at author talks, I certainly hope not, but who knows."
Protests and violence come from the left and come from the right, and comes from who knows who/what/when next. The only thing they know is the protests and threats are increasing. On bookstores.

And these are the good times.

More Fallout From 2015 A-Share Bubble

Caixin: Fugitive Tycoon Jia Yueting and Leshi Under Probe
Leshi faces the risk of delisting after it posted negative net assets of 3 billion yuan at the end of 2018. The company’s shares have been suspended since Friday awaiting the regulator’s further decisions.

Jia, who has remained outside China since the summer of 2017, holds a 24.43% stake in Leshi, most of which have been frozen or pledged as collateral, Leshi’s annual report showed. He left behind massive debts, which reached 11.9 billion yuan at the end of 2018.
2018: Leshi Fails to Repay Debt on Time

2015: The Crash Isn't Only About Leverage, Insider Selling and Hot Money Also Exit
Insiders are also selling. At the end of 2014, insiders at 552 companies had 220 billion yuan in holdings, but this number was only 118 billion yuan as of June 26. The most famous example is LeTV.

Reuters: China company insiders skim the cream off frothy stock market
In May company insiders - senior executives or their relatives - sold a combined 1.68 billion shares, a tripling from April, and much more than in each of the previous months of this year, according to data compiled by Reuters.

Share sales by senior managers are sometimes taken as a worrying sign by investors, as they can indicate people who know a company best think its stock price is too high.

...Between June 1 and June 3, Jia Yueting, Chairman and president of Leshi (300104.SZ), sold 35 million shares in the internet firm he founded, making 2.5 billion yuan ($402.85 million).

Leshi said on May 25 that Jia plans in total to sell up to 148 million shares over the next six months or 8 percent of the company, though he will remain the biggest shareholder after that with a 36.85 percent holding.
Leshi went from around 8 yuan per share to near 40 yuan, a gain of 500 percent during the 2015 bubble. It's last trade was at 1.69 yuan.

2019-04-25

Corporate America is the Lobbying Arm of the CCP

"Corporate America today is the lobbying arm of the Communist Party...and Wall Street is the investor relations arm." And the mainstream media is their propaganda arm. It's all of a piece, the scaffolding of "the Cathedral" is being exposed by the Trump presidency because he surprised the establishment and caused it to launch an ill-advised Russiagate attack. The far-left has started putting the pieces together as have more centrist right-wingers, but they don't yet see the whole picture because they have ideological hang-ups when it comes to media, corporations and government. They still get confused when they read someone way across in their conception of right-left politics says things they agree 100 percent with.

ZH: Bannon And Bass: "China Is Most Significant Existential Threat The US Has Ever Faced"
Bass, who just the other day distributed his first investor letter in three years warning about a coming blowup in Hong Kong's balance of payments, argued that the immense pressure for Trump to strike a deal isn't coming from voters, but from Wall Street and corporate America, who have abetted Beijing in its efforts to maintain the status quo on trade - selling out their country in the process.

...For years, Beijing has sought to curry favor with individual companies and industries by granting them piecemeal concessions, mostly in the form of market access. And since the start of the trade war, Beijing hasn't been shy about calling in favors, which is why most of the American business and financial community just wants Trump to end the trade war, even if it means settling for a deal that achieves none of Washington's objectives on 'structural reform', kicks the can on enforcement to Trump's successor, and touts promises for purchases of billions of dollars of agricultural goods instead of meaningful changes.
As I wrote in February 2018: Russia Collusion Narrative Dead, Long Live Chinese Collusion!
The Russians sowed discord mainly by being present, allowing the creation of a false Trump-Russia collusion narrative. Basically, they got America to shoot itself in the face. The return on investment is incredible, particularly if FBI and DOJ officials eventually get indicted for turning government agencies against a political opponent and sitting president.

Now with Russia collusion out of the way, make way for Chinese collusion and trade war. Instead of an intrapolitical battle, Chinese collusion will be a bipartisan effort.
Nationalism has a way of cutting through the left-right divide and nationalism is still in its infancy. It will eventually dominate politics again.

I'm very mixed on President Trump and a trade deal because I believe he is all in on the DJIA as a metric for his presidency. If it wasn't for that, I would bet on no deal (certainly would bet that way in the market based on risk/reward) because in the zero-sum game of geopolitics, no deal is the American victory scenario.

Baizuo Confused as Australia Considers Sane Immigration Policy

Reading the NYTimes on immigration is like watching 5 blind men describe an elephant.

NYTimes: Why Has Australia Fallen Out of Love With Immigration?
Five days after 50 Muslims in New Zealand were killed in an attack attributed to an Australian white supremacist, Australia’s prime minister, Scott Morrison, unveiled a plan he said would address a fundamental challenge to the nation.

But it was not a proposal to combat hate groups and Islamophobia. It was a cut to immigration.

The government’s plan, which had been in the works for months
Whenever Baizuo diversity policy creates ultraviolence, they immediately double-down on diversity. Why would the Australian government continue with a long-term immigration reform effort? Don't they want to virtue signal?
Now, amid a global backlash against immigration that has upended politics in the United States, Britain and much of Europe, even Australia is reversing course, turning away from a policy of welcoming skilled foreigners that helped fuel decades of economic growth — and transformed a nation once closed to nonwhite immigrants into a multicultural society.

Mr. Morrison presented the move as a reaction to crowding in the nation’s largest cities, which has led to congested commutes and costlier housing. “This plan is about protecting the quality of life of Australians right across our country,” he said.
Australia economy boomed for decades because it sells resources to China. That's the Australian miracle, that and the same debt buildup you see all over the developed and developing world.

More importantly, the main argument in favor of immigration is higher GDP, but higher GDP comes with trade-offs such as higher housing costs, more pollution, crowded schools and depending on the quality of immigration, higher crime and welfare use. If you don't value GDP above all else, the case for immigration goes sour relatively quickly. When people experience rise in income, they typically move to less populated areas, with more living space per person and even erect walls to keep people out.
Such concerns are widespread as views in the country have turned sharply against population growth over the past year. There is worry, though, that these “quality-of-life” complaints have been amplified by — or perhaps have masked — a deeper ambivalence about a new wave of non-European immigration, especially from Muslim countries, along with Africa and Asia.

There’s no denying the rapid pace of change, nor its benefits. Australia’s population has grown by nearly 40 percent, from 18 million to 25 million, since the 1990s, and economists argue that the nation’s record-breaking 27 years without a recession would have been impossible if not for surging immigration.
Nope, it's China, not immigration. On a per capita quality-of-life measure, I'd reckon the average Australian would be better off if immigration was near zero since the 1990s.
Most of the 4.7 million foreigners who have arrived since 1980 have been skilled migrants, especially since 2004, when an average of more than 350,000 students and skilled workers arrived each year, according to government figures.
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According to the 2016 census, more than one in four Australians were born overseas, compared to 13.7 percent of the population in the United States and 14 percent in Britain. And six out of the top 10 source countries are now in Asia, with immigrants from China (509,558 people) and India (455,385) leading the way.
The United States exploded into civil war and violence the last two times immigration was this high, and it also banned immigration for 40 years. Australia's foreign born population is double the rate that triggers social breakdown in the USA. Australia's response thus far is extremely restrained.
Many Australians say it is time for these trends to end. In one recent poll, more than two-thirds said their country no longer needed more people. As recently as 2010, a majority of Australians disagreed with that statement.

Mr. Morrison and his Liberal Party — which has often used anti-immigrant sentiment to stir its conservative base — clearly believe that immigration will be a winning issue for them in the national election on May 18.

The government has slowed visa approvals, and plans to cut annual immigration by 30,000 people, to 160,000 a year, a reduction greater than any since the early 1980s, according to archival data.
Still far too high, especially if China's economy slows enough to trigger a recession.
Experts examining polling data and census figures have found that Australian frustration over immigration is focused around general themes: the pace of population growth (1.6 percent nationwide last year, compared to 0.7 percent for the United States) and perceptions around who wins and loses because of it.

With a landmass as big as the continental United States and one-tenth the population, Australia is one of the world’s most sparsely populated countries. It is also among the most urbanized, and it nurses a culture of high expectations; even many city dwellers expect a backyard.
"Hey you evil racist Australians who like your backyards, you live in shipping containers on feces covered streets and like it! Virtuous Baizuo live in gated communities with high walls and demographic profiles that look like they were taken from a white nationalist forum."
But Nicholas Biddle, an economist at the Australian National University who oversaw a major poll on immigration late last year, found that people living in the places most strained by population growth are not the ones most likely to demand curbs on immigration.

When Mr. Biddle mapped, using census data, the characteristics of those who were opposed to population growth and immigration, for example, he found that none of the areas in the top 20 percent of opposition to population growth and immigration were in Sydney or Melbourne.

Instead, based on the nationwide polling, the place where residents were least likely to be opposed to population growth was Surry Hills, an inner suburb of Sydney where housing prices have skyrocketed and traffic can be suffocating.
Maybe the skyrocketing home prices factor in? Also, what's the demographic profile of those residents? Do they skew towards those backyard loving Aussies or towards foreigners who are used to living in shoebox apartments back home?
But even some of the most frustrated commuters called not for fewer people, but for improved infrastructure, microcities outside Sydney’s center or changes in workplace culture that might limit rush-hour commuting.
"Called for." As you as you put the bill in front of them, they will scream.
Some residents of the area justify their opposition by asking whether Australia has enough water to support a larger population, an element of the country’s immigration debate since the 1980s, before desalination plants became more common.
Environmentalism is racist.
But there are also people like Stephen Ryan, 69, a retired power station worker who was not shy about arguing that Australia was better off when its immigrants were mostly from England.

“The Arab people, they don’t want to do anything,” he said. “They just want to go on the dole. That’s just the way I see it.”

It is the kind of attitude that, according to many immigrants in Australia, still shapes the discussion around population growth in a country that barred nonwhite immigrants until 1971.

The rise of right-wing politicians like Fraser Anning, a senator who blamed Muslim immigration for the New Zealand attacks, and Pauline Hanson, who once wore a burqa in Parliament to protest Islam, has pushed racism into mainstream public discussion.

“In the last few years, we have seen politicians state that people had a right to be bigots,” said Tim Soutphommasane, a former race commissioner in Australia and a professor at the University of Sydney. “There’s been a creeping normalization of far-right political ideas.”
Nothing validates the far-right more than making common sense development and environmental protection into far-right policies. The Baizuo have triggered a self-reinforcing cycle whereby they create a backlash to their extremist policies and then classify ever larger swaths of the population as Nazis/far-right. As a result, the center of politics accelerates to the right because they provide ever growing cover. If you're a racist Nazi for wanting to reduce immigration from 200,000 to 150,000, but you have a nagging worry maybe zero is the best number, you suffer nothing by shifting your policy to zero immigration. You become a double-secret racist Nazi.
On a local level, two competing visions of Australia are essentially fighting for votes: the Australia longing for a nostalgic past, and the Australia trying to figure out the next phase of integration for a more globalized nation.
Globalism is collapsing. Those trying to figure out the next phase of integration might as well work on Russia's next 5-year plan.
Young political candidates like Kadira Pethiyagoda are at the forefront of potential change. Mr. Pethiyagoda, 39, who immigrated from Sri Lanka and served as an Australian diplomat, is running for the Labor Party in Melbourne.

“Services are being cut, wages haven’t gone up, the cost of living is increasing. People are being squeezed,” he said. “Politicians are pointing to all these problems, trying to pretend the cause of this is only immigration.”

...“It just makes me feel confident that maybe somebody who understands the challenges that migrant families face can actually accurately represent our views and actions,” said Yvonne Maringa, 35, an English immigrant of Zimbabwean descent. “I think there’s a limited understanding still of migrant communities and their needs.”
That last quote encapsulates the whole issue. Native Australians want their government to work for them, not for migrants. Immigration was sold as helping natives, but instead the migrants demand their needs be met as life deteriorates for natives.

Baizuo have sown political conflict and division. The broadly-defined right (anyone who is nationalist and anti-immigration) will ring up political victory after victory until diversity reverses through assimilation or emigration.

CCP Has Mandate of Heaven, USG Does Not

The war for population is rapidly escalating in China. Suzhou is offering 30 percent discounts on homes to high-tech workers.

iFeng: 房价打七折!上海旁边这个名城也来“抢人”了 (The house price is 30% off! This famous city next to Shanghai has also come to "steal people.")
In 2015, Suzhou's human development index reached 0.894, which is equivalent to the 18th Israel in the world.

Today, such a city with a history and development potential that cannot be underestimated has also "humbled itself" and taken part in the war of "robbing others".

According to Suzhou WuzhongEconomic and technological development zoneWechat Official Account News, WuzhongEconomic and technological development zoneMeasures for the Implementation of Excellent Purchase and Sales Management (Trial) (hereinafter referred to as "Measures") have been officially promulgated recently.

...The "Measures" stipulate that Wuzhong District will provide a certain amount of housing every year for high-quality high-tech enterprises and high-level talents to sell at preferential prices. Enterprises or individuals that meet the purchase conditions will be given discounts ranging from 20% to 30% of the actual sales price of the superior purchase upon confirmation.

Up to 30% discount

The "Measures" show that excellent house purchase is mainly aimed at high-quality high-tech enterprises and high-level talents, and should meet the needs of development zone work and pay social security. Individuals and families have no own housing and house purchase records in Suzhou's major cities.

For an application based on an enterprise, a maximum of 10 sets of excellent houses can be purchased, and the individual needs to be an executive and technical backbone in an enterprise that meets the above conditions.

First of all, meet the requirements of the top five global enterprises or the top three domestic enterprises in the subdivided fields. Global Top 500 Enterprises; Newly registered employees of listed enterprises who set up headquarters, research and development centers or industrialization bases in the development zones. In addition, the enterprise must meet the following requirements: a registered capital of at least US$ 5 million or 300 million yuan, an accounting capital of not less than 50%, start production and smooth operation for one year.

If you work in an enterprise that has already settled in the development zone, the enterprise needs to be an industrial enterprise with a main business income of over 5 billion yuan and an average tax of 600,000 yuan or more per mu. Main business income exceeds 10 billion yuan, and the average tax per mu is 500,000 yuan or more; Enterprises listed, that is, successfully listed at home and abroad, and listed subjects in the development zone also enjoy excellent purchase.

Property buyers applying in the name of individuals must first satisfy the requirement of working in the development zone for 2 years, and individuals and families have no record of owning or buying their own houses in Suzhou's major cities.

Talents who enjoy 30% discount include Nobel Prize winners, Highest Science and Technology Awards laureates, academicians of the Chinese Academy of Sciences, academicians of the Chinese Academy of Engineering, and members of authoritative academic institutions in developed countries.

The talents who enjoy the 25% discount include "Changjiang Scholars Program" Distinguished Professor who settled in the development zone, the winner of the National Outstanding Youth Fund, and the winner of the "100-Person Plan" of the Chinese Academy of Sciences.

Those who enjoy the 20% discount include the "Changjiang Scholars Program" Award Scheme (Young Scholars Program) that has settled in the Development Zone and the National Outstanding Youth Science Foundation Winner.

In line with the enterprise application conditions, there is only one preferential purchase qualification. Each individual who applies for an excellent house purchase can only enjoy the excellent house purchase policy once. If both husband and wife are eligible for purchase, they are limited to purchase a superior set of houses.

The "Measures" also stipulate that the newly-built commercial houses shall be allocated to raise funds, and some newly-sold commercial houses in the Development Zone shall be allocated to purchase houses with good quality according to a certain proportion.
This is the latest in a long line of policies aimed at attracting population as the effects of the one-child policy hits the family-formation demographic. There aren't enough people to go around and cities that attract young, talented workers will win.
New tactics of "robbing people" come out frequently, and housing is still the focus.

It is worth noting that in 2019, more than 60 cities, especially second and third tier cities, have issued various policies on the introduction and settlement of talents, and have continuously introduced policies on the settlement of talents and subsidized purchase of houses.

However, recently, the policy of "robbing people with their houses" has been continuously upgraded all over the country, especially after Hohhot introduced the new policy of "college students buy houses at half price", which has quickly become the focus of heated discussion in the country.

On April 18, the Office of Hohhot Municipal People's Government in Inner Mongolia issued a notice on the "Implementation Measures of Hohhot University Graduates Housing Project (Pilot)". The notice pointed out that "graduates with ordinary full-time bachelor's degree or above (previous 3 years or less) can buy a house at half price".

In addition to Hohhot, Hainan and Ningbo have similar policies of "robbing people with their houses" in 2019.

On the afternoon of March 29, the Hainan Provincial Housing and Urban-Rural Construction Department and the Hainan Provincial Human Resources Development Bureau jointly issued a "Supplementary Notice on Perfecting the Human Resources Housing Policy", relaxing the eligibility and credit requirements for imported human resources to purchase houses in Hainan and stipulating that employees who move in with headquarters enterprises shall enjoy the same treatment as local residents. This means that in the future, employees of some enterprises will not be restricted by household registration when buying houses in Hainan. This is a new way to avoid "Limited Purchasing Order" in Hainan property market.

On April 21, Ningbo, Zhejiang, released the latest talent policy, involving five categories of talents: high-level talents, basic talents, fresh undergraduates and postgraduates, young elite talents, and young returned talents. According to regulations, qualified undergraduates can receive a subsidy of up to 80,000 yuan for the first set of unique housing in their families, while high-level talents can receive a subsidy of up to 600,000 yuan.
There's a lot going on with these stories. China's real estate market, current economic conditions, demographics and long-term development. Similarities to Japan and the West, and also differences. I cannot help but see the contrast between China, where the most livable cities are competing hard for young talented workers and offering discounts on homes, to the United States, where tech companies flood their work forces with H1-B visas to drive down labor costs as housing costs soar, their employees live in shipping containers in feces laden cities.

2019-04-24

Chinese Pork Industry Worse Off Than Understood

Successful Farming: WHY AFRICAN SWINE FEVER WILL HAVE A DEVASTATING IMPACT ON THE PORK INDUSTRY
SF: How long will these changes have an impact on the meat industry?

CM: China’s problem is not going away anytime soon. There is no easy way to control the disease and no way to prevent it. Operations that have been hit with ASF are unlikely to come back into production for several years. China will rebuild, it will want to produce its own pork. The government wants the country to be self-sufficient. The issue is how to repopulate the herd when the risk of reinfection is so high. There are already funds being raised to begin the work, but right now the risk is just too high.

China’s pork industry will look much different in the future. They want to build fully integrated facilities, where pigs are raised and killed at one location. That will take years. These new, larger farms just magnify the risk. Thousands of pigs at one location just concentrates the risk and magnifies the loss. I don't know if anyone has figured out the perfect solution.

SF: China says it will switch its consumers from pork to chicken.

CM: Consumers will eat more chicken (and duck, eggs, and beef) in the short run simply because pork will not be available. Some consumers have already moved to chicken out of fear of contracting ASF, despite the fact that there is no human health risk. This reflects the Chinese consumers’ lack of trust in the government after several food-related scandals.

Chinese chicken producers are already trying to increase production. The industry continues to struggle with outbreaks of avian influenza and poor genetics after restricting imports for many years. Chinese consumers still prefer to buy their chicken in the wet markets and eat a smaller, dark-feathered bird. Imported product is not well-suited to this market, aside from some foodservice and canteen business.
Article also discusses impact on foreign markets.

KRW Booster Rocket Kicks In

This might be the most macro bearish signal right now: USDKRW.

Updated: Immigration Destroying California's Air

Yet Baizuo demand unlimited immigration while screaming about climate change.

USA Today: Bad air days on the rise: The nation's most polluted city is ...
Since California is known for its strict environmental regulations, why are so many cities from the state typically on this list? It's because the state would be much worse off without its strict laws on tailpipe pollution and eliminating coal-fired power plants.

"California's air quality is worsening despite having the strongest environmental regulations in the nation," said John Balmes of the University of California at San Francisco at a press conference on Tuesday.

California's soaring population and topography allow air pollution to overcome the state's strict environmental laws, the lung association said. The boom in people brings with it an increase in cars and trucks on the roads, and many of those people live in valley and basins, right where pollution tends to settle.
Send in the clowns.

In case anyone thinks I'm overstating the impact of mass migration on the air quality, here's a chart showing the population growth of legal residents from this article: California’s Housing Bubble Counts on Blistering Population Growth, But it’s Fizzling

Narrative Shift: Cities Need to Guard Against Speculative Homebuying

For months, Chinese media and government officials have been saying the shift from a "war for talent" to a "war for population" didn't amount to policy loosening. High-level govt officials stressed that homes are for buying, not living in. Most articles stuck to saying the changes weren't loosening and wouldn't have a major impact on home prices. That is now changing.

iFeng: 各地大力引进人才 “引智”非救市、楼市莫炒作
Sogou Translation: All localities should vigorously introduce talents to "attract talents" instead of rescuing the market or speculating in the real estate market.
Recently, the new policy of introducing talents from all over the country has been upgraded again. For example, Hohhot has proposed that qualified graduates with bachelor's degree or above should be able to buy a house at half price, while talents imported from Ningbo can receive a subsidy of up to 600,000 yuan and a subsidy of 8 million yuan to settle down. Compared with the previous restrictions on settling down in some places, the recent New Deal undoubtedly has more "gold content". However, many people are also worried that from giving accounts to "giving money", will the real estate market be stimulated in disguise?

The importance of introducing high-quality talents to the future development of the city goes without saying. The reason why the "war of introducing talents" is escalating is that forerunners such as Xi 'an, Nanjing and Hefei have already tasted the benefits. Yan Yuejin, director of research at the think tank center of the Easyhouse Research Institute, said that Ningbo's talent policy is the same as the logic of major cities in the country, aiming to actively import high-quality talents to optimize the population structure and boost the level of economic development. The starting point of the recent talent policy is "attracting wisdom" rather than "rescuing the market", which has nothing to do with the property market.

According to the policy issued by Ningbo, besides the introduction of general labor force, it is hoped that the "the drinker's heart is not in the cup" of the policy is to attract high-level talents that can drive the development of enterprises or even industries in a region. For example, the top talents who can receive a subsidy of 8 million yuan for settling down include academicians of both houses of the Chinese Academy of Sciences, Nobel laureates, chief technical officers of the world's top 500 enterprises, etc. According to the data, 48 top talents and 160 leading talents were newly introduced to Ningbo in 2018, both of which achieved double growth.

Although compared with the overall real estate market, the role of high-level talents in promoting housing prices is very limited. However, in the national real estate market "spring", taking out "real money" to attract talents to buy a house and settle down will still make people think. Objectively speaking, relevant policies may stimulate the real estate market transactions, so we should avoid the phenomenon of active housing transactions caused by the talent policy bypassing the restrictions on mergers and acquisitions, and guard against risks such as house price speculation.

Zhang Dawei, chief analyst of Centaline Property Agency, said that housing prices have rebounded in several cities across the country in the past two years. Most of them have issued unprecedented talent policies, which have indeed affected the stability of the real estate market. Especially in some second-tier cities, the rise in house prices has accelerated. One of the reasons is that the talent policy has in disguised form liberalized policies such as purchase restrictions.

According to the usual concept of housing consumption, no matter which level of city, young people are the main group in the rental market. Issuing policies to promote overdraft into the housing market will become a reason for market speculation. For example, Hohhot's current policy will only be implemented within Hohhot Science and Technology City and will not be listed for trading for 5 years. According to the policy, there are very few buyers who truly meet the standards, but for college students who have just graduated within 3 years, they are encouraged to buy houses, which still reveals the local attitude towards the real estate market.

According to the latest March 70 city house price data released by the National Bureau of Statistics, the prices of newly built commercial houses in more than 60 cities rose month on month in March. On April 19, a meeting of the Political Bureau of the CPC Central Committee once again demanded to insist on the position that houses are used for living, not for speculation, and to implement a long-term control mechanism of "one city, one policy, one policy for each city" and the main responsibility of the city government.

Stabilizing the real estate market is not just a matter of words, but also a matter of determination and means. For example, recently Beijing's country fund management policy began to tighten, implementing the "recognize the room Rendezvous" policy for second homes.

As a weather vane, the property market in first-tier cities may affect the whole country. A few days ago, the adjustment of the provident fund policy showed more that Beijing has faithfully implemented the relevant policies of the central government. At the same time, it also shows that local governments can intervene at any time to stabilize market expectations in response to the upsurge of speculation. Moreover, it is necessary to find out early and make moves early, and not to deal with it hastily when it is out of control, which leads to sharp fluctuations in housing prices.

PBoC Refutes RRR Cut Rumors Again

Chinese investors and brokerages are trying to meme an RRR cut into reality, but so far no good.

Caixin: 央行辟谣定向降准、开展2674亿元TMLF 意味何在?
A week after the reduction was continued as "spicy powder" (MLF), the central bank served another bowl of "extra spicy powder" (TMLF), which was reduced in price, and explicitly denied rumors of a targeted reduction.

2019-04-23

Betting With and Against Baizuo

Convergence of corporations will accelerate as political persecution becomes a growing concern and companies that dance the tune see capital inflows.

SA: New S&P 500 ESG Index Threatens Valuations Of Ineligible Utilities
For utilities, being seen as ESG-compliant is especially important. Utilities depend on public utilities commissions, politicians, and ultimately the public for their existence and continued success. In that respect, their reputation is more dependent on the goodwill of the public than other private corporations. Utilities that are perceived as ignoring social values can be easily punished through the rate-setting mechanism used by most states.

Up to now, definitions of what constitutes “responsible investing” have varied, and companies have been allowed to self-define whether they are ESG-compliant.

But given the growing interest in ESG, it is unsurprising that major indices are taking notice and creating third-party, independent benchmarks for index-driven investment products that quantify ESG factors.
1. At one end, ESG investing avoids companies that sell arms to terrorists or use slave labor. It's a fancy name for competence and low time preference. Over time, this becomes a ban on fossil fuels, carbon emissions, any company that doesn't implement full diversity over meritocracy.

2. You have to stay solvent longer than the Baizuo who have unlimited credit via the Federal Reserve. Politically vulnerable companies must be accumulated on lows, when political persecution is peaking.

3. ESG companies can outperform thanks to irrational investors and they can stay irrational for a long time because it's effectively a luxury tax. The best niche may be companies that will benefit from Baizuo screwups. Companies immune from political pressure because they are out of jurisdiction or have critical knowledge/assets that cannot be seized.

4. Mutual fund companies, hedge funds and other prominent investors will be bullied into ESG investing. Who wants to be a racistnazi investor? It will only take one or two large profile funds or investors to move first. The first movers will profit because they'll be ahead of the crowd.

5. China has its own ESG investing, it's called compliance with the CCP.

6. Foreign stocks may eventually be shunned. It's not hard to imagine ESG indexes/funds dumping Russian and Chinese shares. It would be interesting to see if any prominent Russiagaters own any Russian shares. Think they would survive a Twitter swarm, or would they fold and end their collusion with Russia? SJW moral panics will be a source of volatility.

7. Selling ESG will be profitable. Virtue signaling with capital investments will eventually be very costly.

DeDollarization Watch: Chinese Businesses Avoid Ruble

21st Century: 卢布宽幅震荡 中企汇率风控谁在套保,谁在裸奔?
“Chinese companies are doing business in Russia. There are two main difficulties. First, the exchange rate fluctuates greatly, and the company lacks the means of hedging. The second is unfamiliar with local laws and regulations.” Recently, the Russian Express CEO CEO Yu Hang accepted 21 Century Economic Report reporter said in an interview. The sharply volatile ruble exchange rate has increased the risk of trade with Russia. Last year, the ruble against the US dollar, in just one month in April, depreciated by nearly 10%. After one year, the depreciation rate is about 20%. It is so difficult to grasp the rhythm that individual companies may even have a "waist" in trade with Russia.

...However, Yu Hang believes that although the cross-border trade between China and Russia has increased by a large margin, the overall scale is still small. The challenge between Sino-Russian trade is in factors such as exchange rate fluctuations with Russia. In recent years, Russia’s exchange rate has been showing wide fluctuations. For large enterprises, there are certain means of hedging, while most SMEs are in a “naked” state. The fluctuation of exchange rate may erode profits in an instant.

"Since the second half of last year, the amount of our denim garments exported to Russia has shrunk dramatically. Now it is basically 100,000 US dollars in shipments per year, which is less than half of that in 2017, mainly due to large exchange rate fluctuations and risk comparison. It is difficult to control. In 2018, the ruble depreciated a lot, especially in April, the ruble fell nearly 10% against the dollar, the ruble fell, leading to a passive increase in the price of exports to local products, affecting sales. In addition, the depreciation of the ruble also affected some The benefits of local import enterprises, individual businesses have difficulties in operating, and the situation of payment in arrears, so we are more cautious about large exports.” On April 16, Guangzhou Xintang a denim apparel manufacturer Chen Ming (a pseudonym) for the 21st century economy The reporter said.

2019-04-22

Latin American America

Despite the importance of ethnic television within immigrant communities, its effects on political participation are unclear. On the one hand, ethnic media can mobilize and inform voters. On the other hand, it can serve as a source of diversion and reduce the desire to participate. To evaluate these competing possibilities, we implement a geographic regression discontinuity (GRD) approach involving Federal Communication Commission reception boundaries for Spanish‐language television stations in two states. Additionally, we replicate and unpack our GRD analyses using three nationally representative samples of Latinos. Across multiple studies, we find that access to Spanish‐language television is associated with decreases in turnout, ethnic civic participation, and political knowledge. We conclude by discussing the implications of these findings on the ethnic politics, political communication, and social capital literatures.
Tuning In, Not Turning Out: Evaluating the Impact of Ethnic Television on Political Participation

Stimulus is Over

Back in January I posted: No Stimulus Coming

Chinese officials said as much and the housing market was too ripe for a reversal if the government unleashed a new stimulus. The past three months confirmed as much, albeit after a momentary blast of stimlus. In January, China printed 5 percent of GDP in new debt. Almost immediately after the data came out though, officials downplayed stimulus talk. Home prices stabilized and even started rising again in some cities, leading to a steady drumbeat of articles and comments hitting the same theme: houses are for living in, not speculating on. The easing/lifting of buying restrictions across China aren't signs of a market rebound, only an adjustment. Home prices won't rise. Officials are clearly worried about a repeat of past mistakes.

Caixin: China Shifting Focus From Further Economic Support to Structural Reforms, Analysts Say
China's top decision-makers are shifting focus away from more stimulus and back towards structural reform after positive economic performance in the first three months of 2019, say analysts.

Though the domestic economy was still “under downward pressure,” activity in the first quarter of the year was “better than expected,” said a meeting of the 25-member Politburo chaired by President Xi Jinping, according to the official Xinhua News Agency.

2019-04-19

受难节 Good Friday

Coup By Narrative Failed, Russiagate Blowback Will Generate Populist Fusion in 2020

The election of President Trump was the American electorate's attempt at government reform. Instead of working with President Trump to make substantial changes favorable to the American voter, the establishment decided to concoct a Russia lie that hijacked the government for 2 years. The media drove the lie. Democrats went wholesale for it. Even the GOP establishment went along with it because few to none in Washington want any change in the status quo. Instead of reforming the horrendous and spitefully named Affordable Care Act, reform was killed (on a personal vendetta vote by Senator McCain). Instead of working on border issues or trade as the American public voted, the GOPe decided it was time for another round of corporate tax cuts. Instead of control over the border, illegal migration is worse than ever and subversive judges undermining the democratically elected President and his executive authority have created such mayhem that even Obama officials are coming out and calling it a major crisis. Even Democrat officials who have been screaming that foreign migrants are "more American than Americans" and who encouraged millions to cross the border illegally, are now screaming at the prospect of having the hordes relocate to their communities. If you thought voters were pissed off in 2016, get ready for fury-squared.
Trump supporters are upset at no progress, such that even Ann Coulter suggested supporting Bernie Sanders if he would get control over the border.
Trump will probably be able to turn his supporters' anger at the lack of reform onto the media, Democrats and GOPe. More so if he starts governing like he promised during the 2016 election. But given the polarized nature of the polity, it is likely he can rely on Russiagate to at least animate his base.

On the Democrat side of the aisle, the establishment is in serious trouble for the first time. Unlike the GOPe that faced rebellion going back to Ron Paul in 2008 and suffered a massive defeat in 2016, the Democrat establishment nominated their candidate in 2016. President Goldman Sachs staffed his cabinet with Wall Street bankers and governed like an establishment insider on most issues. Speaker Pelosi, the consummate insider, still runs the House. Yet as the slow burn in the GOP exploded into Trump, so too will populism explode in the Democrat party.

The Guardian: Why the populist wave is setting the tone for Democratic candidates
Now Trump has become emblematic of the swamp he once promised to drain. The president has given tax cuts to America’s wealthiest, given his family White House portfolios, stacked his cabinet with friends and donors with a combined net worth estimated to be worth over $4bn, and overseen an administration that some historians argue is the most corrupt America has endured since the 1920s.

“All that is perfect terrain for a leftwing populist to pounce,” said Michael Kazin, a professor of history at Georgetown University and the author of a book on American populism.
Add hatred of the media. The media made all sorts of respectable people look like absolute fools over Russiagate. Can anyone seriously trust media outlets after this epic disaster? Institutional collapse will swiftly follow. The major media is going the way of the cassette tape and the brick-and-mortar bookstore. Independent journalism and social media exploded in 2016 and they will gain even more strength following Russiagate's conclusion. The establishment won't go down without a fight though. It tried inventing the "fake news" moniker to delegitimize social media and independent journalism, only to see the name stick to them within a week. Social media censorship has exploded in the past two years as establishment institutions try to gain control over free thought, free expression and actual journalism. All the while the establishment went all in on the ultimate "fake news", a coup attempt by narrative.

I don't expect the "far-left" and "far-right" will find common ground and unite in 2020, but they will be hitting against common enemies. The media is in deep trouble, and if the populists on the left can get a candidate such as Bernie nominated, the campaign will be about who can best deliver on Trump's core 2016 promises. Bashing Drug companies, Big Tech, the media and banks/Federal Reserve, along with anti-immigration, anti-trade and healthcare reform in the direction of socialized medicine, will be the winning issues. Even if there is no political fusion, there will be a new center in American politics. The Narrative, the controlled conversation and manufactured consent created by the media, is finished.

CMIG Triggers $800 Million Crossborder Default

Bloomberg: Crisis at China's JPMorgan Wannabe Deepens on Bond Defaults
China Minsheng Investment Group Corp. has appointed Kirkland & Ellis as legal adviser, according to a Hong Kong stock exchange filing, which also noted that banks have set up a creditor’s committee to try to stabilize the company. The cross default comes after CMIG’s problems spread to its affiliate Yida China Holdings Ltd., making some of the developer’s debt immediately payable, and causing a chain reaction back to the parent company’s own securities.
FT: Chinese company endorsed by premier embroiled in $800m defaults
An investment group often described as the “brainchild” of Chinese premier Li Keqiang has seen cross-defaults triggered on $800m in bonds after showing signs of stress earlier this year with a missed debt payment.

The troubles for China Minsheng Investment Group, the country’s largest private investment company, highlight waning government support for state-owned companies and other high-profile institutions with strong political backing.
财新:中民投8亿美元海外债交叉违约 PPN延期兑付
中民投的债务危机还在发酵。子公司亿达中国(03639.HK)的一笔贷款违约,境内一笔超短融(PPN)延期兑付,触发中民投两笔共计8亿美元的海外债交叉违约。此外,为中民投接盘董家渡地块的绿地,还有70亿元尾款未付。

  4月18日,中国民生投资有限公司(下称中民投)在港交所发布公告称,其在境内发行的非公开定向债务融资工具“16民生投资PPN2”,与持有人协商后同意本息兑付日由4月8日延至4月19日,该期债应付本息金额为9.04亿元。

  此外,中民投在上清所公告称,截至4月4日,旗下因涉诉而被查封、冻结资产共计29.59亿元,占净资产3.85%,包括与邮储银行的共计3.805亿元本金的金融借款纠纷。
The U.S. Dollar Index closed Thursday at 97.46. A slightly volatile one-day move would be enough to trigger a bullish breakout.

Again: Houses Are For Living In, Not Speculating On

There's only one line about "houses are for living in" in the story and it wasn't a focus of the Central Committee meeting, but it was the headline at the top of the finance section today.

iFeng: 中共中央政治局:要坚持房住不炒定位
The meeting held that since the beginning of this year, in the face of complex and severe situations, all localities and departments have conscientiously implemented Xi Jinping's new era of socialism with Chinese characteristics, followed the deployment of the Party Central Committee, implemented the new development concept, unswervingly promoted high-quality development, and focused on deepening the supply side. Structural reforms, continue to lay down three major battles, continue to implement a proactive fiscal policy and a prudent monetary policy, timely and moderately implement macroeconomic policy countercyclical adjustments, the main macroeconomic indicators remain in a reasonable range, market confidence is significantly improved, and new and old kinetic energy conversion is accelerated. Implementation, reform and opening up continued to be vigorously promoted. The economic operation in the first quarter was generally stable and better than expected, and the start was good.

The meeting pointed out that while fully affirming the achievements, it is necessary to be soberly aware that there are still many difficulties and problems in the economic operation. The external economic environment is generally tight, and there is downward pressure on the domestic economy. This has both cyclical factors, but more Structural and institutional, we must maintain our strength, enhance our endurance, and be brave in tackling difficulties.

The meeting stressed that to do a good job in the economic work throughout the year, we must closely focus on implementing the spirit of the Central Economic Work Conference, striving for stability, highlighting the main line, keeping the bottom line, grasping the goodness, insisting that macroeconomic policies should be stable, micro policies must be live, and social policies must be The overall thinking of the bottom is to coordinate the two major domestic and international situations, and do a good job in stabilizing growth, promoting reform, restructuring, benefiting the people, preventing risks, and ensuring stability. It is necessary to consolidate the overall situation of economic and social stability through new progress in reform, opening up, and structural adjustment. It is necessary to refine the implementation measures of the “consolidation, enhancement, promotion and smooth flow” eight-character policy, pay attention to the steady demand of supply-side structural reform, adhere to structural de-leverage, prevent and resolve risks in promoting high-quality development, and resolutely fight the three major Fighting hard. Macroeconomic policies should be based on promoting high-quality development, paying more attention to quality improvement, and paying more attention to stimulating market vitality. Active fiscal policies should be strengthened and effective, and stable monetary policies should be moderately appropriate.

The meeting called for promoting the high-quality development of manufacturing industry as an important support for steady growth, guiding traditional industries to accelerate transformation and upgrading, and strengthening and expanding emerging industries. It is necessary to effectively support the development of the private economy and small and medium-sized enterprises, accelerate the structural reform of the financial supply side, focus on solving the problems of financing difficulties and financing, and guide the advantageous private enterprises to accelerate the transformation and upgrading. It is necessary to insist that the house is used for living, not for the positioning of speculation, and to implement a long-term regulation mechanism of one city, one policy, urban policy, and the main responsibility of the city government. To promote the healthy development of the capital market with key institutional innovations, the science and technology board must truly implement the securities issuance registration system with information disclosure as its core. We must open up to the outside world at a high level to promote deep-level reforms, expand foreign market access, and implement national treatment. We must do a good job in the employment of key groups and strengthen vocational skills training. In the near future, the issue of safe production is outstanding. It is necessary to give top priority to effective prevention and precise governance.

2019-04-17

Number of Converged Companies Will Soar in Coming Years

Daily Mail: Half of Millennials and Generation Z want employers to prioritize diversity over ability when it comes to hiring, survey reveals
Roughly half (51 percent) of Millennials (age 22-39) and Generation Z (age 18-21) said that 'fair representation of race, ethnicity and religion is paramount to creating the ideal workplace,' according to the poll of 2,002 Americans conducted by John Zogby Strategies.

By comparison, 48 percent of Generation X (age 40-54) and 42 percent of Baby Boomers (age 55-74) agreed with that statement.

Just 15 percent of Generation Z and 32 percent of Millennials agreed with the statement that 'merit and competition supersede all, even if that results in a workplace that creates minimal diversity.'
It goes beyond ideas of equality, a plurality also think the environment should be the top goal of corporations, more so than creating jobs and profits.

This thinking is already visible in technology companies destroying their user bases, media companies who attack their readers. More companies will destroy their customer relationships in the future, while increasing the incompetence load in their companies. It won't result in a slow collapse, rather the risk of catastrophic failure will increase. Companies will suddenly implode when new product launches fail or a competitor siphons off their customers. It will be profitable to consider "wokeness" when investing because most college graduates are trained to think diversity is better than competence. Few to none financial firms will admit to fading this when evaluating their investments, if anything they will be locked into doing the opposite by threats/fear of mob reprisals. Therein lies the profit opportunity.

Chinese Stimulus Talk Hints at Weakness, US Leading Indicators Sink to 10yr Low

Chinese economic data and U.S. leading indicators point to a protracted slowdown in 2019.

Over the past few days the headlines here are:

Home Prices Won't Rise: Jawboning or Hammering Home Credit Policy?
Tax Cuts, Slowdown Collapse Tax, Land Revenues
Updated WTF Wednesday: Chinese Industrial Production

Now this at ZH: China Prepares New Stimulus: Will Subsidize Car, Appliance Purhcases
Earlier today we presented three reasons to doubt the veracity of China's unabashedly strong Q1 economic data: the collapse in land sales, weak imports, and the unexpected decline in electricity consumption. We can now add one more: according to Bloomberg, China is now preparing to take even more stimulus steps to boost growth.

According to the report, Chinese officials are drafting measures to bolster sales of objects which have seen a surprising decline in consumer demand, namely cars and electronics. Notably, the report coincided with the latest GDP data showing a stronger than expected 6.4% expansion in the first quarter. Yet that appears to be insufficient for Beijing - which remains stuck in a protracted trade war with the US - and Chinese leaders are "stepping up attempts to bolster consumption and mitigate the threats posed by trade tensions with the U.S."

As Bloomberg reports, "the proposals include subsidies for new-energy vehicles, smartphones and home appliances, and are at a consultation stage with other government branches, with no guarantee that they’ll be approved."
As I showed in the post on industrial production, smartphones, autos and industrial robot production remain in contraction. Cement soared along with residential real estate investment (up 17.3 percent) in March. Look at the numbers behind the headline: area under construction is down and land sales are down. The increase in activity is concentrated in high-value residential projects.
In summary, the government is worried about growth, the PBOC is worried about money supply and someone feels the daily need to reiterate that homes are for living in, not speculating on.

Meanwhile the U.S. stock market heads to new highs on the assumption of higher growth, but leading indicators point lower. Even if it doesn't signal recession, the drop in leading indicators is on par with the Asian Crisis in the mid-90s and worse than the 2015/2016 slowdown. AIER’s Leading Indicators index falls to the lowest level since the recession

Updated WTF Wednesday: Chinese Industrial Production

Update: Caixin says its all seasonal effects.
The sharp jump in March’s industrial output growth (8.5% YoY) shouldn’t be over-emphasized — seasonal factors, in part due to the timing of the Lunar New Year holidays, likely account for much of the increase. If we take the January-March period as a whole, industrial production expanded at a more modest 6.5%.
If this is the case, there is no Chinese recovery coming because the PBOC is taking the punch bowl away.

Caixin: Central Bank Refocuses on Keeping Money Supply Under Control
China’s central bank has emphasized the importance of keeping growth of the money supply under control as the economy has improved, dimming market expectations that it will soon cut the amount of money banks have to hold in reserve.

...The emphasis on keeping the money supply under control means that implementation of monetary policy is going to tighten marginally, Ming Ming, an analyst with Citic Securities Co. Ltd., said in a note on Tuesday.

Original post: China's NBS website is very slow and buggy today because everyone is trying to check their economic data. I cannot even load the page showing industrial production after trying for over an hour. There is a lot of attention on all the data, but the only one that matters is industrial production. It was far out of line and out of trend.
NBS: 2019年3月份规模以上工业增加值增长8.5%

First look at what is still contracting: autos, industrial robots, power generation and smartphones.
The 3.4 percent drop in auto production in March was a great improvement from February's drop:
What went higher? Cement exploded:
Nuclear and hydropower soared:
Here's a bunch more categories that pulled the IP number higher in March:

What does it mean?

Some immediately said fake data, but I don't think so. They had better reason to fake this number many times before and didn't.

If you have total faith in China as a market based economy, IP may signal a major turn for the Chinese and global economy. Maybe the depression is over and the global economy has turned the corner.

China's credit explosion in January, to the tune of 5 percent of GDP, finally hit. This is a big spike, but they'll spend the rest of the year tightening and dealing with the secondary and tertiary consequences.

Chinese industry expects a favorable trade deal with the USA that will unleash pent up demand for Chinese exports. What makes the IP number stick out most to me is the March imports, down 7.6 percent yoy in dollars. The economy didn't boom the way industry boomed in March.

Finally, if spiking exports and industrial production amid falling imports doesn't change, it indicates China is sticking with a development model 10 years past its sell date. Even if it drives a recovery, it's 2016 all over again, and worries of global recession will be back in 2021 with all the underlying problems worse than before.

2019-04-16

Tax Cuts, Slowdown Collapse Tax, Land Revenues

Caixin: Fiscal Revenue Growth Slowed in March Amid Tax Cuts
Government tax revenue rose 1.9% in March, down from growth of 14.3% a year ago, reflecting greater efforts to cut costs for businesses and individuals as the economy cools. Beijing promised to slash taxes and fees this year by nearly 2 trillion yuan ($297.64 billion), compared with cuts of 1.3 trillion yuan last year.

Individual tax collections recorded the biggest change after the government reformed the individual income tax regime earlier this year. Individual tax collection in March dropped 48.4% from a year ago, according to finance ministry data.

Government income from land sales also shrank further in March, dropping 9.5% from the same period last year.

Home Prices Won't Rise: Jawboning or Hammering Home Credit Policy?

Policy is loosening, the war for population is underway and credit growth/economy has picked-up, and there's an endless stream of articles saying home prices will remain stable. Is the government jawboning the market because it worries about credit flowing into real estate, or is the government sticking to its policy and hammering home the reality of slower credit growth?

The latest entry at iFeng: 多城市限售楼盘“解冻”,对市场影响大吗?
Up to now, among the first cities in the city that have imposed restrictions on sales, the “frozen” real estate will be “thawed” one after another, entering the market, and there are also rumors that “some houses can be listed or will hit the market”.

In this regard, a number of industry experts generally said in an interview with reporters that the matter has little impact on the market.
It's all about credit growth. The government's policies only serve to distort speculative activity. Instead of in this city, that city. Instead of illegal down payments via pawnbrokers and P2P lending, fake divorces.
Zhang Dawei, chief analyst of Zhongyuan Real Estate, said that the recent “Xiaoyangchun” speculation in the property market has caused property market volatility, and some cities have issued regulatory policies in time to stabilize market expectations.

According to his analysis, the real estate regulation in 2019 mainly depends on the credit policy. Zhang Dawei expects that most cities will not be allowed to cancel the sale, and the entire market will continue to develop steadily.
The reporter learned that the market generally expects that the high pressure of real estate regulation this year has not been lifted. If the real estate sales in first- and second-tier cities are excessively heated, it may even trigger real estate regulation to tighten again.

According to the CIC Research Report, the full-caliber sales of the top 100 real estate enterprises in the first quarter of 2019 reached 2,110.79 billion yuan, an increase of 8.2% year-on-year. The growth rate turned positive year-on-year, a sharp increase of 11 percentage points over the previous two months.

In March, the top 100 real estate enterprises achieved sales of 936.47 billion yuan, a substantial increase of 26.2% year-on-year. The monthly growth rate was 29.3 percentage points higher than that in February.

The reason is that the supply of real estate market in some first- and second-tier cities has increased. The concentrated push of housing enterprises after the Spring Festival has led to a significant rebound in transaction volume. The sales in March increased by 82.5% from February.

It is precisely because of the warming of the market that some experts have expressed that they do not have to worry about the “thaw” of restricted sales, which may lead to “selling tide”.

Yan Yuejin, research director of the Yiju Research Center think tank, told reporters that "if housing prices continue to fall, there may be a wave of selling. But the recent rebound in the property market means it will not happen this time."

China Prints Another Housing Rebound


Chinese new home prices increased 0.61 percent nationally, with only 1 city reporting falling prices. Existing home prices increased 0.46 percent. Gains were modest in most cities, but credit policy leads the market. China printed 5 percent of GDP in January alone. Moreover, there has been an endless stream of articles that claim the shift from "talent war" to "population war" isn't easing, that the central government's approval of "population war" policies is not easing, that this won't all lead to another round of rising prices. It is true there won't be a national housing bubble this time because third- and fourth-tier cities are shrinking, but that will push speculators into fewer markets as those markets benefit from rising population and looser credit.

NBS: 2019年3月份70个大中城市商品住宅销售价格变动情况

2019-04-15

Immigration is Why Americans/Britons/Aussies/Canadians Can't Afford a Home

The sharp rise in international migration is a pressing social and economic issue, as seen in the recent global trend towards nationalism. One major concern is the impact of immigration on housing. We assemble a comprehensive database of 474 estimates of immigration's impact on house prices in 14 destination countries and find that immigration increases house prices, on average. However, attitudes to immigrants moderate this effect. In countries less welcoming to immigrants, house price increases are more limited.
Get that? On one end of the scale is no immigration and opposition to foreigners and at the other end of the spectrum is open borders and treating foreigners better than natives. Where are the housing crises in the West? In the countries with the most extreme pro-migration policies, homes are the least affordable. Within those countries, the most extreme pro-migrant cities have the least affordable housing.
These numbers are skewed by the housing bubbles in the USA and Spain. If you strip out the bubble effects from monetary policy (or look at cities with high migration such as NYC, Seattle, San Francisco, etc.), the correlation would be much clearer and much stronger.

The most ironic finding is that "xenophobia" and "racism," whatever terms the open borders crowd might call it, depresses the impact of immigration because where people do not like living near immigrants, they naturally depress housing demand because immigrants either find it hard to buy or do not want to live where they aren't welcome.

At this point some are already chafing to scream "central bankers!" It is true central bank policies and pro-housing government policies can drive up prices, but these policies are like ammonia and immigration bleach. At a practical level, you can ban immigration much more easily than you can abolish the central bank and pro-housing policies.

Western migration policies are very extreme in the most pejorative sense of being far out of the mainstream. If the average person understood how much it was driving them out of desirable city living, the "xenophobia" would make your head spin. Extremist immigration policy is already to the point where people who are well to the left of center talk exactly like Donald Trump and his supporters.
This is why Democrats are running scared on immigration and why it is the issue that will secure a Trump victory in 2020 more so than in 2016.

More broadly, the "far-right" has an ever growing monopoly on common sense. There is rightly some fear of rising political extremism and growing support for the "far-right" because extremism on the left creates conditions for a reaction. The tragedy is the establisment, the "center" and the "centrists" cannot implement common sense because it is "far-right extremism" relative to the mainstream media-controlled narrative. Establishment politicians must virtue signal their ever more progressive views or risk being toppled. And thus reality drifts even more in a far-right direction and the more realist (reactionary) political movements have greater monopoly over truth and common sense. Victory will be theirs unless the progressive establishment can achieve Chinese levels of political, social and narrative/thought control. Hence the emergent ideological fusion of the Chinese Communist Party and Silicon Valley.



2019-04-14

PBOC Deputy Governor Bullish on Stocks

China.org: Chinese economy 'generally stable' with stock market 'bottoming out': senior official
The stock market, which has seen a slack in the past few years, is also "showing signs of bottoming out and recovering", according to Chen.

Foreign portfolio investment into China reached a record high of 120 billion U.S. dollars last year, as international institutional investors diversified their portfolio investment and China further opened up the bond market and stock market, he said.
This story was the top headline in the finance section at iFeng: 又一次!央行副行长力挺A股:正显示触底和复苏迹象
Second, the background of the voice is different. On the one hand, since the beginning of this year, A-shares have continued to strengthen. Together with the financial data released in the first quarter of this year, the market generally expects that the economic turning point has arrived, and the signal of stabilization and recovery has been established, which is obviously good for the stock market. On the other hand, this week, A-shares entered an adjustment period. Since the 3288 points on Monday, the A-share market continued to pull back, and the general trend showed a downward trend. The northbound funds started to flow out from last Friday. The net outflow of funds from April to the present has reached nearly 8.5 billion yuan.

That is to say, although the current market is generally expected to be good, this week, the market entered an adjustment period, and there was a small-scale short-term net outflow trend in the north. In the expectation and market trend, the central bank's senior officials once again made a strong voice. This is in contrast to the pessimistic market expectations of last year's vocalization and the continued unsatisfactory performance of the stock market.
The market won't inflate itself! Buy buy buy!

2019-04-13

GDP or Sovereignty, The China Policy Choice

ZH: "That's Something China Can't Tolerate": Tensions Erupt As China Slams Australia's "Irresponsible Comments"
"You can’t earn Chinese money and then politically make irresponsible comments about China and become unfriendly," said Cui Pijiang, director of the China Coking Industry Association. "I’m afraid … this is something the Chinese government can’t tolerate."
As Luttawk laid out in the Logic of Strategy and as I discussed in The Logic of Strategy: Yuan Devaluation and the Road to Trade War
If the U.S. and regional economies prefer U.S. influence in the region to that of Chinese influence (and putting aside all ideology, the distant hegemon remains more attractive than the near), they can choose a path of slower economic growth designed to keep China from becoming the dominant power.
Slower economic growth results from tariffs/restrictions on Chinese trade or in this Australian case, because the nation put sovereignty over trade.

Globalists opened their nations to Chinese economic domination and have little to no care for national sovereignty or the fate of their nations. As globalists fade from power in the West, the political calculus is changing. Australia is not a rabidly nationalist country preparing invasions of its neighbors, it is a government acting in the interests of its citizens and itself, defending its ability to act independently.

China wants a trade deal with the United States because imbalanced trade means China holds little sway over U.S. policy because it's harm is mainly limited to farmers and Boeing. When China boosts imports and trade is more balanced, and trade between the two nations grows, China will be in a position to issue similar dictates to an American President. China dislikes the U.S. abusing of its economic power and its status as issuer of the reserve currency. China also looks on with envy.

Each nation will choose its fate. Many nations have chosen GDP over sovereignty because they do not fear China. More than a few nations are breaking out of the U.S. system because American abuses of power have increased as its relative power declines. China is showing it will be no different, though cultural and political differences make for a more "abusive" China.

There's no win-win here. China isn't going to submit to Western authority and Western concepts of what is acceptable behavior by a nation state. If you can be bought they will own you, or you will lose business. China will find other resource exporters who are more politically pliable:
But one place that is sure to benefit from the escalation in trade tensions between Beijing and Canberra, is yet another Latin American nation that is slated to become China's next vassal colony. As S&P Global reports, Clombian thermal coal is proving attractive to Chinese buyers, who are picking up "super cheap" offers from producers and traders with around 1 million to 1.35 million mt of coal on its way to China from the South American exporter, plus additional cargoes to northeast Asian countries including South Korea.

In addition to not being politically charged, one other benefit of Colombia coal is that it is much cheaper: June-arrival Capesize cargoes of Colombian thermal coal are trading at $65/mt CFR China on a 5,500 kcal/kg NAR basis, which is cheaper than equivalent grade Australian cargoes priced at $68/mt.
Choosing sovereignty is best done earlier than later. The longer a nation waits, the more its economy will be entwined with trading partners, the greater the resistance to change. One need only look at President Trump potentially caving to China because he fears political losses in farming regions and wants the stock market propped up through the election. A nation's sovereignty traded away for trinkets, leaving a future President to risk full blown recession, depression or WWIII should America choose sovereignty at a later date.

Chinese Urbanization 2.0: Building an Urban Corridor

Roughly 100 cities will at the heart of sprawling urban corridors and megacities. Although it is a story about urbanization and government support for development, it's also a story about demographics. Most of the cities that are winning the population war are in these 100-cities.

iFeng: 中国开启“二次城市化” 未来大约100个城市“有戏”
Old-fashioned real estate companies are mostly cautious in choosing cities to enter. China Merchants Shekou has 60 cities and regions. At the end of 2018, the Yangtze River Delta accounted for 29% of the Yangtze River Delta, 28% of Guangdong, Hong Kong and Macau, and the Bay Area, which has 45 cities in the country. In 2018, the Beijing-Tianjin-Hebei urban agglomeration has outstanding performance, sales and The earth reserves account for 42%, ranking in the forefront of various urban agglomerations.

CITIC Jiantou Securities pointed out that the megacity and megacities will benefit from the agglomeration effect of the population will be the most significant, the proportion of the metropolitan and urban population in the total urban population will be further enhanced, which will be the real estate in the first and second tier cities. The demand side of the market produces long-term stable support.

Yan Yuejin believes that the continuous focus of housing enterprises on 100-cities is mainly due to two considerations. First, the core cities have stable industrial and population net inflows, and they have potential for development. Incremental topping can also be used for stock operations; secondly, urban investment is selected. It also requires more time and money, and companies will choose to dig deep into the cities they have entered.

"At present, housing companies attach great importance to the statistics of sales and land reserves in terms of urban agglomerations. They also reveal that they care about the development opportunities of the urban agglomerations and the market demand behind them." Yan Yuejin said.

For the “capacity” of secondary urbanization, Yu Liang believes that there are still about 20 points of space for secondary urbanization.

Zhang Dawei, chief analyst of Zhongyuan Real Estate, said that China's real estate industry cannot develop rapidly to 70%-80% of urbanization. “The urbanization rate of household registration is 16% lower than the actual urbanization rate. It proves that housing prices have restricted the speed of urbanization development. Real estate has Entering the stock era," Zhang Dawei said.

2019-04-12

Democrats Starting to Fear 2020 Loss on Immigration Issue

More than any other issue, immigration is going to put President Trump back in the White House just as it gave him the GOP nomination in 2016.

ZH: House Democrats Acknowledge Border Crisis; Blame Trump
Speaking from a Leesburg, Virginia Democratic party meeting on Thursday, House Speaker Nancy Pelosi said bipartisan immigration reform is still the solution - and in fact, "inevitable." Pelosi insisted "I'm not giving up on the president on this," adding "I still say to him, 'We've got to have comprehensive immigration reform'."

Translation; Bernie Sanders just said he's opposed to open borders which would cause an influx of migrants, so Pelosi - who has vehemently opposed every Trump border security policy since day one - now wants to appear as if she cares about stopping unchecked migration.

..."But the administration has responsibility in all these areas. And we can appropriate funding and we can pass legislation but ultimately they are responsible for executing the immigration laws in this country," said Cicilline.

On Sunday, Sen. Bernie Sanders (I-VT) pushed back against claims that he supports open borders, and said that worldwide poverty would cause an influx of migrants to the broder if that system were in place, according to Politico.

"What we need is comprehensive immigration reform,” said Sanders. "If you open the borders, my God, there's a lot of poverty in this world, and you're going to have people from all over the world. And I don't think that's something that we can do at this point. Can't do it. So that is not my position.”

And now it's Pelosi's too, except it's Trump's fault of course.
This narrative is going to fail with the general public. The fools who believed Russia collusion will parrot these talking points, but independents won't buy it. Democrats were out protesting President Trump's attempts to stabilize the border. They have supported and cheered judges who overstepped their authority and limited the President's ability to control the border, a clear power held by the executive based on that branch's responsibility for national security.

Anyone who isn't completely blinded by ideology or politics knows that most of the asylum claims are bullshit. People aren't fleeing a war zone, they are fleeing poverty. They see Democrats and even many Republican lawmakers giving welfare, free healthcare and free college educations to illegal aliens. Even Americans do not receive in-state tuition if they live out of state, but illegal aliens who are on welfare and living in a state can receive free tuition.

America already has defacto open borders because as long as you make it here, illegally or by overstaying a visa, it is very easy to avoid deportation. Make up false asylum claims and it could be years before your case is heard. By then you might have American born children and can use those anchor-babies to avoid deportation forever. Many Republicans oppose their own base on immigration and have tried to boost immigration. Much of the Democrat base is also in favor of immigration restrictions.

If Democrats and Republicans are serious about getting control over the border, they will support mass deportation of illegal aliens from the United States. Anyone who transits a third country with a U.S. embassy and does not make an asylum claim in that third county, is immediately deported. This will end the crisis because the number of asylum seekers will collapse. The number of people attempting illegal crossings will collapse.

80 Chinese Cities Are Losing Population, But Most Still Expanding

More than 10 percent of China's larger cities are declining in population, but real estate development continues unabated. One study with larger set of cities finds more than a quarter are losing population, concentrated in the Yangtze River economic zone and Northeast region.
iFeng: 80个城市正在缩小:有的人口在减少 面积在扩张
In fact, a data updated by Wu Kang, a scholar at the Capital University of Economics and Business, shows that from 2007 to 2016, a total of 80 cities in 694 cities experienced different degrees of contraction, accounting for 11.5%.
Cities of various sizes are shrinking:
Now, when it comes to Jinzhou, many people may first think of the "original" MC Tianyou of the live broadcast industry...

As a medium-sized city with a population of nearly 1 million (the urban resident population is 500,000 to 1 million), the urban population of Jinzhou has dropped from 943,700 in 2010 to 839,000 in 2016... More and more young people seem to be I don't want to go back to this industrial city that has been slightly degraded.

As one of the earliest cities in China to develop modern industries and the birthplace of national industry, the population size of Yingkou has been shrinking. The resident population of urban areas has dropped from 904,100 in 2010 to 770,600 in 2017, just 8 years. , a reduction of 133,500 people... Even as an emerging metallurgical petrochemical equipment manufacturing industrial base, Yingkou seems to be difficult to retain people who yearn for the "outside world."

...Second-tier big cities such as Anshan and Fushun are also in a state of sharp contraction. Taking Anshan as an example, the urban population has decreased by 165,500 in 8 years; even in Shenyang, the capital city, its population has contracted sharply in recent years. Compared with the urban population in 2013, the urban population in 2017 has decreased. 858,200 people...
Many smaller cities are shrinking as well:
Zhang Xueliang, executive director of the Yangtze River Delta and Yangtze River Economic Belt Development Research Institute of Shanghai University of Finance and Economics, said that according to a long-term survey by its research team, 26.71% of the prefecture-level/sub-provincial administrative units in China contracted, and 29.89% of the contracted cities There is a phenomenon of population loss in the jurisdiction, which is concentrated in the northeastern China and the Yangtze River Economic Belt.

In the Yangtze River Economic Belt, 52 of the 110 prefecture-level and above cities contracted, accounting for 47.27% of the total city; 58 were in a non-shrinking state, accounting for 52.73%; 84 municipal districts contracted, about It accounted for 26.42% of the total area under the jurisdiction of the city; 393 city-administered counties contracted, accounting for 51.98% of the total number of municipal districts.
Many cities are ignoring population, both building more and increasing urban sprawl:
The population is falling but the area is expanding

The reporter also noted that while the permanent population of urban areas has declined for three consecutive years, the built-up area of ​​some cities has continued to grow. This means that there are fewer people, but there are relatively more facilities for urban construction, which in some cases lead to resource mismatches.

Among the cities, the most prominent are Kaiyuan City (Liaoning), Jilin City (Jilin), Tonghua City (Jilin), and Daqing City (Heilongjiang).

Among them, Jilin City and Daqing City have a permanent resident population of more than 1 million, belonging to the type II big city, and also the second largest city outside the provincial capital. The resident population of the urban area and the area of ​​the built-up area have fallen by one liter, showing the “struggling” of Jilin City and Daqing City as the second largest city in the region. Their population is outflowing, but they tend to expand and build. The problem is that such a development trend will result in a reduction in the efficiency of land resource allocation, which is not conducive to the compact development of the city.

In addition to “one drop and one liter”, some cities have shown non-compact development in recent years, that is, their urban resident population has not declined continuously, but its urban population density has continued to decline. That is to say, in the whole three years, the inflow rate of the urban resident population is not as fast as the expansion of the urban area.
Economists and officials alike say cities have to change their development strategy, yet at the same time push greater urbanization:
“The local population with strong economic vitality will certainly not decrease. If the city’s own competitiveness declines, there will be better urban populations around it. It is necessary to shrink the small and medium-sized cities to improve the city’s competitiveness, develop industries and attract employment. To create more livable conditions, public services should be better." He said that the competition between cities is getting more and more fierce. If you do not do well, the population will be lost.

Yao Yongling said that for resource-exhausted cities, it is necessary to develop follow-up industries other than resource-based industries. For small and medium-sized cities that shrink, they need the inclination of national policies and exert their efforts in infrastructure integration and equalization of public services. Develop the economy, create a good business environment and promote the development of enterprises, thereby attracting more people and developing into small and beautiful cities.

The reporter noted that the NDRC's documents also explicitly mentioned that it is necessary to deepen the supporting policies such as “the link between people and land”. We will deepen the implementation of the fiscal policy to support the urbanization of agricultural transfer population, and more consider the number of agricultural transfer populations when arranging central and provincial financial transfer payments. In 2019, we will continue to arrange central financial incentive funds to support more settled areas.