Beijing Real Estate Sales Hit 3-Year Low in January

Caijing: 北京1月楼市成交75亿创三年新低 本轮低迷周期低点
According to the Central Plains Real Estate Research Center statistics show that as of January 28, Beijing's new commercial housing (excluding social security room) signed a total of 1030 sets of contracts, is expected to sell the entire set of 1200 units, while the same period last year was 2,430 units, down 50% the above.

What deserves our attention is that compared with the turnover of 15 billion yuan in January 2017, the turnover in January this year is currently only 7.5 billion yuan, down by about 50% over the same period last year. At the same time, this amount is the lows of the real estate downturn and the lowest value in the recent three years.

Wuhan Land Sells at Low Price

Location, location, location or a sign of a cooling market? A month ago land sold with a 54 percent premium, yesterday Wuhan sold 7 plots all at the minimum price.

Wuhan is one of the "hot" second-tier cities that led the market in 2016 and into 2017.

iFeng: 武汉土拍“清仓大甩卖”?7宗地块全部底价成交!


Regulators Worry RE Leverage Flowing into Stocks

Sign of the times: regulators aren't worried about real estate leverage flowing into housing, they're worried about it flowing into stocks.

Caijing: 银监会:抑制居民杠杆率 严控个贷违规流入股市房市
Proposed 2018 National Banking Regulatory China Banking Regulatory Commission recently held a work meeting, China's banking sector overall risk control, but the situation is still severe and complicated, faces a number of major challenges. Held at the end of 2017 Central Economic Work Conference, to "promote the financial and real estate virtuous circle", as an important part of prevention and control of financial risks. Specifically, the CBRC will in two ways: First, efforts to suppress the residents of leverage, leverage residents focused on control of excessive growth, the fight against misappropriation of consumer loans, overdrafts and credit cards illegal behavior and strictly control illegal personal loans into the stock market and the housing market ; second is to curb real estate bubble, and severely punish violations of various types of real estate financing behavior.


Wave Goodbye to Real Estate Cycle: Govt Will Keep Restrictions for 5 Years

Chinese state media says the real estate cycle is over because government buying restrictions will be in place for the next 5 years.

iFeng: 央媒正式宣布:告别周期 未来五年调控不会退出
As for the "round of market regulation is not coming to an end" The answer to this question, just Yangmei gives the answer.

January 23, Economic Information Daily newsletter issued: Farewell cycle, the next five years, the regulation will not quit.

1, the regulation is still not relax, we will not quit over the next five years, the property market will depend on future regulatory policy, further stabilizing prices; 2, case-control fundamentals unchanged, because of the city and cities are to make changes, no longer across the board, began differentiated regulation. Price, the purchase may be appropriate to relax.

"Economic Information Daily" is sponsored by the Xinhua News Agency in charge of the press, it is China's first national economic newspaper. Can see from this identity, it tells us the Central government's attitude towards the property market. Yangmei high-profile propaganda, wheeled cycle does not apply this time round, this time round in five years will not quit, because this regulation is very special.

...As the Economic Information Daily pointed out, the only way to bid farewell to the real estate market cycle, only by ending the "repeatedly control repeatedly pump" cycle, can healthy and stable development of real estate be truly realized.

Today, housing prices have attracted the attention of central government and the country's highest leaders. Since 2017, the property market, prices are kind of high-frequency words eye appeared in the major conferences. Two of the country, nineteen Report, the finest important meeting of the Central Leading Group for Economic fifteenth meeting, the relevant leaders repeatedly stressed that China's property market sound housing properties, which shows the central determination. In China, with determination, there is no not a thing to do.

It seems, in 2018 the property market regulation policy from one city to a multi-city multi-directional-control policy, a multi-city strategy shifted from "limited" to represent the short-acting mechanism for the transition to long-term mechanism, the real room to live without fry.

But all of the implementation will take time, rising prices this treatment ills traditional illnesses, not be solved overnight, the implementation of all policies, laws and regulations will take time to develop research, it should be a minimum period of five years, if necessary, will be estimated longer.


China Will Start Fixing Debt Problems Sometime Before 2021

NYTimes: China Will Tame Its Growing Debt Load in 3 Years, Top Xi Adviser Says
Speaking to attendees at the World Economic Forum, the adviser, Liu He, said that the Chinese government planned to bring its debt under control within three years. Mr. Liu said Beijing intended to focus on reining in the growth of debt among local governments and companies.

“We have full confidence and a clear plan to get the job done,” he said.
Last time they tried was in Xi's first term. They aborted the attempt in 2015 and 2016. A massive increase in debt was needed to offset the downward pressure from reigning in credit growth. All else equal, the economy will slow more than before due to the increased debt load. It's simple mathematics. Credit money spends the same way as the existing money supply. A modest slowdown from current credit growth levels will shave points off of GDP growth. Downshifting credit growth to rates similar to the United States and Europe (relative to GDP growth) would cause a significant slowdown in GDP growth.

Nothing is getting better for China. Global growth is still on a downward trajectory and its increasingly tied to their own credit cycle. More importantly, as social mood remains in an overall downtrend in the West, ideas such as protectionism are gaining ground every year and will increase strongly in the future. Moves that might have elicited support in prior years, such as currency devaluation or shifting the pain abroad through increased exports will invoke retaliation. Export moves could face penalties that exceed 100 percent initially. Multiples of that if trade wars or tit-for-tat retaliation unfold.

Alhambra: The Dismal Boom

The story is the same in most of the world. Growth isn't what it used to be and requires greater amounts of credit to overcome. China was the main source of that credit growth for the 2016-2017 boomlet. If it is truly over, then global growth will go with it.


When Does the Bond Bear Market Begin?

It'll have to break the 100-month moving average that's proven to be a brick wall for 3 decades. At the current trajectory, the 100-month MA will fall from the current 3.3 percent down to 3.2 percent by the end of 2018.

Is Trump Bernie's Opening Act?

Face to Face: Trump as the Jimmy Carter of the GOP? And Bernie as the Reagan of the Dems?
The contradictions that came from re-marrying an old partner during a new stage of life -- trying to base something novel on something traditional -- led to a breakdown in the party's ability to get the government to work on a basic level. The Carter administration was wracked by multiple failures to fund the government, for the first three out of his four years -- despite the party controlling the White House and Congress. The Trump administration has been hit by its own funding failure during its first year, and the way things look going forward, there could be more in store for its second, despite Republican control of the White House and Congress.

These are the only two modern administrations to suffer from funding failures despite single-party control of the White House and Congress.

In the Carter funding failures, the contentious issue was federal funding for abortion (via Medicaid). The House wanted more stringent restrictions than the Senate did, and the House's stance reflected the change in the party owing to Carter running as a born-again evangelical Christian. In the Trump funding failure, the sticking point was immigration, with the House in favor of more restrictions than the Senate, and the House reflecting Trump's campaign as a hardliner on immigration.

Being pulled in two different directions, old and new, also meant there were no major changes to national policy under Carter. He did kick off the deregulatory mania that has reined since his term, but it was fairly limited in scope (targeting mostly transportation). But there were too many of the old school New Deal Democrats in his coalition to permit an unfettered pursuit of laissez-faire policies. That would have to wait until Reagan.

Given the schizophrenia of the current government, we can't expect to see major changes of a populist or nationalist sort either. Trump will probably score a noteworthy change here or there in the new populist zeitgeist, like Carter kicking off the deregulation craze, but nothing major. There are too many old school corporatist Republicans in Trump's coalition to permit a full-throttle populist transformation. That will have to wait until Bernie after him.
This view lines up with Mark Yusko's interpretation of market/political events using the 1928/29 framework.

CNBC: 'We're flowing toward the path' similar to time before Great Depression, analyst says

Although I'm not sure about the prediction, it wholly fits withing the context of falling social mood. New trends are underway. Trump broke the ice on nationalism, immigration and protectionism because he was able to penetrate the official narrative on these topics, but these were rising in popularity since the turn of the millennium. Add in declining support for democracy and Constitutional rights among Millennials and it's very possible this is formalized as national socialism under Sanders or another Democrat.

Political variance increases greatly as mood declines. Small things, like the charisma of the leading candidates, become far more important. Which party wins could come down to something as simple as musical chairs: who is in office when the crisis hits?

Trump Delivers Trade Appetizers

Here is USA Today giving the two sides of the story, from the American manufacturers and the foreign manufacturers targeted by the tariffs.

USA Today: Trump tariffs on solar panels, washing machines could raise prices

This isn't a sop to the protectionists. It is the appetizer for what's coming. Trump makes small moves before making bigger strides in the same policy direction.


First Time Since 1978: Beijing, Shanghai Population Drops

iFeng: 1978年来首次!京沪常住人口同时下降
On January 19, a news conference on the operation of the national economy held respectively by Beijing and Shanghai showed that the resident population in Beijing and Shanghai will decline at the same time in 2017, the first time since 1978.

According to 21st Century Business Herald reporter, Shanghai's resident population saw its first drop since 1978 in 2015, but a rebound ensued. In 2016, the resident population in Beijing increased by 24,000, an increase of 0.1%. There were forecasts at that time that Beijing's resident population would decline in 2017.

At present, this forecast has become a reality. But is the decline of the resident population in Beijing and Shanghai a long-term trend? This conclusion is still difficult to set.


81pc of Americans Want Immigration Reduced

WashTimes: Shock poll: Americans want massive cuts to legal immigration
Americans strongly back giving illegal immigrant “Dreamers” a pathway to citizenship — but a new poll found they also strongly back the other changes President Trump is pushing to build a border wall system, eliminate the visa lottery and curtail the chain of family migration.

The Harvard-Harris Poll, taken in the run-up to the government shutdown, even found huge support for cutting the level of legal immigration, which stands at more than 1 million a year, to less than half that.
Not a shock if you ever came across in-depth polling on the topic. What has happened in the past 2 years is the media and government's hold on the narrative was broken. Many who don't want to see probably still don't understand how Trump won, but looking at the data, it's surprising it was that close. As social mood declines, immigration will move even further in favor of nationalists.

The poll is here: Monthly Harvard-Harris Poll: January 2018 Re-Field


QE Is Over: More Breakdowns in Utilities, Real Estate, 30-Year Bond

The key to it all is interest rates. Here's the 30-year ETF TLT. There's a small H&S pattern that has formed. If it completes, the target is around $112. That will break the trendline that goes back to 2006. Utilities and real estate are forecasting a break here, but the 30-year yield has to break to set off the market fireworks.
However if you prefer the U.S. Treasury futures, the break has already occurred:
A completion of the pattern would take US to 141, below the 36-year supporting trendline.

A break looks like it would be a tradable short-term rally. Whether it would represent the end of the bond bull market or the last move designed to make sure the maximum number of investors are crushed by the next bear market, remains an open question. The developed world and China are bugs in search of a windshields when it comes to debt levels. A rise in interest rates could be the catalyst for the biggest economic crisis since the Great Depression. Barring that, the global economy looks closer to the end than the beginning of the growth cycle.

Bitcoin Running Into Trouble at 50pc Retrace

China Economic Indicator: Maotai Prices Soaring

Caijing: 茅台酒价格暴涨:市场上一瓶难求 或有公款消费影子
January 8, Guizhou Maotai issued a notice on the Moutai price adjustment to require all levels of Moutai subsidiaries, Maotai Group subsidiaries at all levels must be sold in accordance with the price of 1499 yuan / bottle 53 degrees 500ml Maotai liquor, and recommendations Discretionary reference to the seller, not stocking cover, not tied tying.

This is not the first time Maotai limit, the Internet can even find "Maotai limit order" entry. As early as the end of 2010, Maotai announced the price adjustment, had requested dealers selling ordinary Maotai price of not more than 959 yuan per bottle. The passage of time, Maotai limit "threshold" has soared. The last time was in April last year, when Guizhou Moutai Co., Ltd. ordered dealers across the country, 53 degrees 500ml Flying Maotai prices can not exceed 1299 yuan / bottle.

Chinese Commercial Daily reporter learned that, starting from the Spring Festival last year, high-end liquor has re-displayed gains. Maotai put the official retail price of 1299 yuan per bottle, but the market has emerged out of stock situation. Now, Maotai terminal retail price adjusted to 1499 yuan, although the price has increased, but to successfully buy is still not an easy task.
Maotai price gains have beaten the hottest real estate markets in China:
Some organizations statistics over the years Maotai price changes. Thirty years ago, the retail price was then checked by the state at 140 yuan / bottle. Twenty years ago, the retail price of Maotai 53 degrees at 200 yuan / bottle or so. After 2000, the ex-factory price increased at the same time, the market price also began to accelerate the climb, from 300,400,500 in 2011 up to a maximum of 2,000 yuan.

Since 2012, the liquor market has declined, while the retail price of Maotai once fell below 1,000 yuan. Then the market warming, Maotai prices back in the past two years to rise channel. Before last year's Mid-Autumn Festival, many consumers reflected that it was necessary to buy Maotai at a price of over 1,500 yuan and the maximum was 1,800 yuan. Even if all Moutai are sold at the latest price of $ 1,499, the price has risen by more than 70% from the trough two years ago.

Real estate prices often attract attention. According to the recently announced index of new commercial housing prices in the 70th City of December last year, the National Bureau of Statistics of China reported 51.8% of the increase in Xiamen compared with the same period of 2015, up 34.9%, 45.8% and 37.8% respectively over the same period of the previous year 45.7%. Xi'an prices, the last two years rose 21.3%. It can be said that in the past two years, the price increase of Maotai has "outperformed" the prices of major cities in China.

"Hot City" Home Prices Down YoY, No Widespread Easing Coming

A bit of contrast to the prior story about local governments trying to adjust policy in the face of a bursting bubble.

Caijing: 北京深圳等多城房价低于一年前水平 今年调控基调不变
Recently, the Department of Housing and reiterated, Nanjing, Chengdu and other places relaxed regulatory system misreading, our unwavering goal adhere to the regulation of real estate. This year will strictly implement control policies and measures to crack down on various illegal activities, resolutely curb speculative real estate, further implement the local main responsibility to ensure the stability of the real estate market.

While the tone of the continuation of the regulation, also continues to promote long-term mechanism. Jiang Daming, Minister of Land and Resources recently said that China will study the development of the ownership change, in line with the planning under conditions of non-real estate enterprises to obtain the right to use the land - residential land as a way to deepen the use of land for the construction and operation of rural collective construction of rental housing pilot, promote the establishment of multi-agent supply, hire purchase multiple channels simultaneously protect the housing system, the entire population and housing. The government will no longer be the sole provider of residential land.

Chinese Govt Hopes for Soft Landing After Housing Bubble

Local governments don't want a repeat of 2014.

Caijing: 解剖楼市调控松绑摆乌龙戏码:让泡沫渐进实现软着陆
To put it plainly, the local government can not stand the impact of the property market downturn on finance, taxation, fixed asset investment and the economy began tentatively to relax the policy, in a similar way to signal the release signal to the market deregulation policy and observe the market reaction and the upper layer. If the upper layer does not respond, then relaxed to achieve the purpose.

Another Breakout Chart: XME

Credit Bubble in U.S. Stocks

Two other charts showing an extremely highly valued market here: According To These 3 Measures The Stock Market Is Now Literally Off The Charts


Here Comes the Russia Rope-A-Dope; Confidence in US Media Will Collapse

The rumors in DC are that the entire Russia investigation is a fabrication made possible by FBI and DoJ, and possibly Obama administration officials re-purposing laws designed for stopping foreign terrorists to spy on their American political enemies. With the full collusion of sympathetic media who refused to investigate and instead acted as propaganda mouthpieces for the regime. It will be the greatest scandal in American history by a long-shot if true. Officials at the highest levels of government effectively made a coup attempt. This is how Hollywood portrays the American government at its most villainous in movies.

ZH: "Explosive", "Shocking" And "Alarming" FISA Memo Set To Rock DC, "End Mueller Investigation"
A source close to the matter tells Fox News that "the memo details the Intelligence Committee's oversight work for the FBI and Justice, including the controversy over unmasking and FISA surveillance." An educated guess by anyone who's been paying attention for the last year leads to the obvious conclusion that the report reveals extensive abuse of power and highly illegal collusion between the Obama administration, the FBI, the DOJ and the Clinton Campaign against Donald Trump and his team during and after the 2016 presidential election.
If this is confirmed, confidence in the U.S. media will collapse because the remaining people who trust the media will turn on it. Democrat turnout in the mid-term election could collapse if its shown that members of the Democrat Party are the real villains. Republicans would likely gain a lot seats in the mid-term elections as Democrat turnout falls and voters look to clean out the "deep state." President Trump will consolidate power and push forward with trade protectionism among other policy goals.

More broadly, periods of negative social mood need a scapegoat. If there's a bear market in stocks this year or next, if the economy goes into recession, President Trump is most likely to take the blame. If this story breaks around the same time, then it could blow economic woes off the front page. Without this scandal Trump might be Hoover. With it, he could end up the most powerful president since FDR.

Chinese Buying or Not of UST Doesn't Matter

Carnegie: Why China Likely Won’t Buy Fewer U.S. Treasury Bonds
Even if Beijing forced institutions like the People’s Bank of China to purchase fewer U.S. government bonds, such a step cannot credibly be seen as meaningful retaliation against rising trade protectionism in the United States. As I have tried to show, Beijing’s decision would either have no impact at all on the U.S. balance of payments, or it would have a positive impact. It would have almost no impact on U.S. interest rates, except to the extent perhaps of a slight narrowing of credit spreads to balance a slight increase in riskless rates.
Pettis lays out several scenarios, a great antidote to a lot of nonsense in the financial media. Whether China is buying or selling UST because of fundamental economic factors is important, but if they make a political policy decision to not accumulate USTs with dollar inflows, it doesn't mean what most people think it means.

More broadly, too much "pop" analysis only focuses on one possible direction when it comes to China, the USA and the dollar. As I was saying here years ago, if China is selling USTs to prop up the yuan, it will be dollar positive. And that was exactly as it happened from 2014-2016.

A lot of "common widsom" analysis ignores the difference between a lack of buyers and motivated sellers. Most bull markets end because buying power exhausts, not because people decided it was time to sell. Volume declines before the price turns. U.S. trade deficits rise and fall with economic activity for structural reasons. "Make America Great Again" pro-U.S. manufacturing President Trump has sent the U.S. trade deficit near its post-2007 high because economic activity picked up. Even if he's able to structurally reform the economy through trade policy and deregulation, in the short-term the deficit is tied to economic activity. A rising dollar also typically coincides with global weakness and the value of imports declines.

Rising U.S. imports of oil and Chinese goods fuel demand for dollar assets. If U.S. oil production rises and trade policy reduces trade, the overall demand for Treasuries falls along with a falling outflow of dollars. Increased economic activity in the U.S. lifts U.S. tax receipts, inflation and interest rates. If the global economy is expanding as this happens, credit growth will move overseas and some of that credit will flow into U.S. assets, pushing up the exchange rate of the U.S. dollar.

Where's The Wage Growth?

Financial services.
Overall wage growth:

Yuan Breaks 6.40

CNY looks like EUR because it's all about USD.

No Petrodollar If No Oil Imports

WSJ: U.S. Oil Output Expected to Surpass Saudi Arabia, Rivaling Russia for Top Spot
Surging U.S. crude oil production this year is expected to surpass output in Saudi Arabia and rival that of Russia, the world’s two largest oil producers, the International Energy Agency said Friday.

Boosted by a resurgent shale industry, U.S. crude production will likely climb above 10 million barrels a day in 2018, an all-time high not seen since 1970, the agency said in its closely watched monthly oil market report. The IEA raised its outlook for U.S. crude supply this year by 260,000 barrels a day, to a record 10.4 million barrels a day, largely a result of the recent rally in crude prices.

CASS Sees Single Digit Home Prices Increase in 2018

iFeng: 预计2018年商品房价涨3.7% 住宅涨4.2%
hinese Academy of Sciences Research Center forecast released the "2018 Chinese real estate industry trends Outlook" forecast. The report predicts that in real estate prices, it is expected 2018 commercial housing sales price for 8122 yuan / square meter, an increase of 3.7%, an increase over 2017 by about 1.0 percentage points, the average residential sales price rose 4.2% compared with 2017, an increase of compared with 2017 decreased by about 1.3 percentage points.

2017 in the presence of downward pressure on the economy, influenced by short-term control policies, the housing needs of first-tier cities and some second-tier cities have been effectively curbed, market price stabilization in some areas prices have come down, market transactions and third tier cities more active. 2018 macroeconomic still many uncertainties, the real estate market is still in a down cycle, the interaction of many factors that influence the development trend of China's real estate market.

Marriott Freezes Social Media Accounts Around World on China Ban

The Verge: Marriott says it chose to stop posting on social media after China ban
Marriott International’s social media accounts across Instagram, Facebook, and Twitter have been dark since China accused the company of breaking a cybersecurity law and advertisement law on January 11th. The accounts have resumed posting within the past few hours, one week after they stopped.

The Shanghai government had shut down Marriott’s Chinese website and mobile app for a week as punishment for a Mandarin-language survey sent to customers that listed Tibet, Taiwan, Hong Kong, and Macau as separate countries, as reported by Reuters. There was backlash from the Chinese public as well. Marriott’s Instagram posts from a week ago are littered with comments like “get out of China” and “remember!people’s republic of china!only one!marriott hotels roll out of china!”
This isn't too different from how every company and individual are treated in the age of social media. The main difference is China focuses the outrage using state power. If everyone on Twitter gets outraged because a commercial is X, the company can fold or not. It probably won't hurt to fight in the long-run, although the company could become a permanent target of mob justice. It must use it as a marketing strategy once was is chosen (free advertising). Maybe "banned in China" might work with some products and services, or perhaps for someone with political ambition. Otherwise, individuals and companies can't go to war with China. Either they do and say as China tells them, or they leave the country. (Long time the past the time foreigners were made of sterner stuff, at least if they were British.)

As with the Twitter mobs (and Google employees) in America, this action by China comes from a position of weakness, not strength. Speaking a taboo thought is threatening because it's mostly backed by threats, not reality. In this case, China can claim Taiwan, but cannot be certain of enforcing its position. Tibet is more secure, but popular global opinion and NGO infiltration could make problems that China doesn't want. On the other hand, China is relatively secure otherwise. If you want to say Taiwan is a country and have no Chinese operations and don't export to China, they probably won't hound you. Whereas if you violate taboos in America, you must be destroyed because if people don't believe enforced orthodoxy, the whole house of cards comes crashing down. If James Damore said Taiwan is a country in China, they'd send him back to America. But if he says men and women are different in Silicon Valley, he must be blacklisted everywhere.

Finally, wait until nationalism kicks up a notch in the rest of the world and Twitter mobs are combined with state power. There has already been a football war, perhaps there will one day be a kinetic Twiiter war when social mood trends negative again.


Defacto Secession in America

The authority of the federal government is collapsing. This isn't going to stop when administrations change. The right will find laws to ignore such as abortion and gun control too.

SacBee: ‘We will prosecute’ employers who help immigration sweeps, California AG says
The state’s top cop issued a warning to California employers Thursday that businesses face legal repercussions, including fines up to $10,000, if they assist federal immigration authorities with a potential widespread immigration crackdown.

Did China Revise Data or Did Growth Collapse? FAI, PFAI Contracts 2.3pc in December

I take the official growth rate for China as given (the cumulative YTD growth rate) and calculate the single month, yoy change for the charts I put out each month. I didn't notice a discrepancy the past few months, but this month I noticed a discrepancy in fixed asset investment.

I calculated a 2.3 percent drop in private fixed asset investment, but China says the cumulative YTD rate went up from 5.7 percent in November to 6.0 percent in December.

I rechecked the December 2016 release and did a database query: National Data. I see no revision to show my calculation is an error and my raw data is what NBS reports for fixed asset investment and private fixed asset investment covering all the relevant time periods.

When I calculate the cumulative YTD growth rate, using NBS figure, I'm accurate for years until October. The NBS says cumulative YTD private fixed asset investment growth in October, November and December was 5.8, 5.7 and 6.0 percent.
My calculation says cumulative YTD private fixed asset investment growth in those three months was 5.4, 5.2 and 4.5 percent.

I always assume I've made an error first, but I didn't change anything in my calculations. Was there a new seasonal adjustment that kicked off in October? I don't see any announcement. I also assume I didn't catch the NBS making a booboo (reporting the wrong headline number) because I would think someone would have caught it before me in the past three months. The real estate investment data matches up, I don't see any discrepancy there.

Here's private fixed asset investment, the green line in my cumulative YTD total against the official reported number in yellow.

I see a similar divergence in fixed asset investment, but it starts in August.

NBS reports cumulative YTD growth for August through December: 7.8, 7.5, 7.3, 7.2, 7.2 percent.
I calculate: 7.6, 7.4, 6.9, 6.8 and 5.9 percent.
As with PFAI my numbers line up going back years until August.

I also calculate a 2.3 percent decline in fixed asset investment for the month of December.

Here's the breakdown showing the drop. The December decline is consistent with end of 2015.

The breakdown of private fixed asset investment shows a contraction in services and manufacturing for the month of December. Last time it went negative was mid-2016.

Assuming my calculations are correct, we don't have to wait to see the impact of the credit slowdown. It is already here.

Reuters reports the official NBS number: China 2017 fixed asset investment grows 7.2 pct, slowest since 1999

Real Estate Investment Growth Slows to 2.4pc in December

Real estate investment growth peaked in late 2016 and fairly steadily declined throughout 2017. The government's reflation efforts are getting weaker both in time and strength.

I don't have a crystal ball, but I am definitely hedging my commodities bets heading into March. (Spring Festival is late this year, February 16.) The market looks extremely out of whack with fundamentals in the short-term, heavily overbought when China looks about where it was when financial markets went sideways in 2014.


Another Make or Break: Spain Approaching Resistance

iShares MSCI Spain (EWP)

China RRR Cut Takes Effect Next Week

The PBoC cut the RRR in September 2017, but it takes effect on January 25, 2018.

iFeng: 央行:预计普惠金融定向降准2018年1月25日全面实施

Real Estate Stocks Limit Up on Increased Rural Property Rights

China's trump card has always been increased economic liberty. Transferring economic rights/property from the state to the people will boost asset prices and alleviate the debt situation. It's probably too late to forestall a crisis now, but it's still offers the best cost/benefit of any potential policy.

iFeng: 中国土地制度巨变!宅基地入市利好 地产股爆发


Technical Analysis Works Well in Bitcoin Market

A market dominated by amateurs and emotion. If TA and Elliot Wave work, this is when they should shine.
Someone on Reddit predicted a crash on January 15 based on Elliot Wave. Off by only one day.

China Increases Property Rights

ECNS: Gov't to stop being single supplier of residential land: official
China's land resources minister said on Monday that China is studying ways to allow rural land to be sold for rental housing, a policy that, if implemented, could terminate the State monopoly over land sales, a media outlet belonging to the Xinhua News Agency reported on Monday.

Minister of Land and Resources Jiang Daming said China will explore ways to separate three rights of countryside homesteads: to ensure the collective ownership rights for such land, to ensure farmers' qualification rights and to reasonably relax usage rights.

Jiang noted that this would be a major innovation in both theory and practice.
iFeng: 政府将不再垄断住房供地 这些影响你要知道


Dollar Breaks Again

There are some signs of improved growth in U.S. rail traffic and home construction remains a bright spot, but otherwise I don't see a pickup where it needs to be, in credit. I still expect China will pour cold water on the rally. As the euro climbs higher, pushing up unemployment, and the swelling migrant population pushes up the crime rate, the populists will only increase in strength.

However, the chart is the chart. A lot of markets are extended (overbought) such as coal and steel. I expect U.S. tariffs, owning U.S. steel producers is a good target. If the weaker dollar lifts all boats, natural gas is still dirt cheap. If a stock like SWN can get above its long-term trendline, I'd be a speculative buyer. Gold has started moving; another high beta pick is gold and silver miners. With a nod to silver for the most aggressive.

Caution is warranted here because of the early run in January. I also see some parallels to the start of 2008 with oil and commodities going vertical, oil climbed 50 percent (and $50 a barrel). The economy had already turned, but the financial markets didn't get the memo. I don't get the sense that markets expect weakness in China.

The dollar also did a throwover in August before it reversed.
As I wrote before, 2018 is the The Pivot Year. The break in the dollar warrants shifting some chips in the direction of commodity plays and related emerging markets. But many of these charts make me think the break in the dollar is a culmination move, at least in very the short-term. Intermediate-term, I have to respect another downside break as indicating the trend.


Still No Growth Momentum in China

Jeffrey Snider at Alhambra: The Dea(r)th of Economic Momentum
For as much as officials and Western Economists keep pushing the “rebalancing” idea, China’s economy remains an investment-led system where FAI (the investment) is derived from the industrial sector and therefore exports. China is inside and out, as it has been for a long time, the barometer of global growth because it is all the all-important marginal pivot in the process.

When industry/manufacturing/exports was booming before the Great “Recession”, and then appeared to again in its immediate aftermath, the Chinese were perfectly content with their so-called ghost cities. The reason was that that empty construction wouldn’t stay unused for very long, so long as economic growth, based on global trade growth, kept up its expected pace.

In very simple terms, there will be more ghost cities built if private entities in China, with some direction from (mostly local) government, feel that they won’t be ghost-towns for very long. If, however, it starts to feel like they might stay empty for too long, or have been already, then you will see less of them being developed and constructed. What ultimately dictates that difference is the export sector, no matter how much “rebalancing” is claimed.
The bump in investment created when China boosted credit in early 2016 led to a boost in global growth as Chinese demand worked through the economy. Now that bump is gone. Without a new source of growth, it will slowly drain out of the global economy.

American Left In Extreme Negative Mood

Socionomics posits that mood is not influenced by a happy song or a sad movie, but instead people seek out songs and movies that match their current mood. Horror movies did well in the 1930s, 1970s, and has been growing steadily as a genre since 2000.

It follows that people in a negative mood will focus on negative news items. I was watching the morning news today and saw a montage video of generally left-wing news outlets and guests saying "shithole" over and over and over. And I wondered, if it is really triggering to hear that term, why repeat it over and over? Every time they hear it, it must induce some negative feeling, but they keep doing it. It is as if President Trump dropped an atomic bomb that set off a chain reaction. It was by far the most talked about topic. If people were in a good mood, they would ignore it or downplay it. People in a negative mood will focus on it and look for ways to be offended or triggered. They want to feel angry and this provided a great excuse.

I wonder if Trump even said this word though. It certainly isn't impossible, but seeing people say this word over and over on TV and other people in meeting not hearing it, it made me think he may have achieved an amygdala hijack. It's a case of someone hearing what they want to hear. Trump may have said he doesn't want immigrants from certain countries, with or without a descriptor. He may have simply said the deal is dead. But the person hearing it immediately has an extreme emotional response and "hears" the term that most closely aligns with their feeling.

The takeaway is that President Trump is not causing the negative mood among a subset of the left. They are in a negative mood and if they didn't have Trump, they would find something else to get outraged about. Also, the negative mood exhibited is a warning of what is coming for America. At some point in the coming decade, there may be a president (it could be Trump) who is as hated by most Americans as a subset of the left hates Trump. Those who do not hate that President will hate the rest of America.

While the political/media complex are stewing in extreme negative mood, most Democrats are more influenced by the broader society's rising social mood. ZH: Americans' Confidence Hits 17-Year High As Democrats Throw In The Misery Towel

The rising stock market and cryptocurrencies point to euphoria, even if it is only a bear market peak. It's not a new high in social mood because the nominal indexes are inflated by central bank policies. This doesn't feel like the 2000 peak outside of the stock market because it's a reversal within a larger context of falling mood. To the extent central banks have pushed mood higher than it should be, they will cause an overreaction in the reversal, increasing the risk of civil war, political collapse and violence at the trough.


Bubbly Housing in the Lands of Oz and Leafs

There are lots of ways to show Australia and Canada have overvalued/bubbly housing markets. This one jumped out at me: construction cranes working on residential projects.

Sydney has 239 cranes in operation.

USA and Canada combined: 194.

Negative gearing:


A podcast with Josh Steiner goes into the details here: Global Housing Market Analysis.

This is consistent with my intermediate-term outlook, that the next global recession/financial crisis will be China-centric.


Chinese PPI Rises 0.8pc in December

Chinese inflation ran hot in December, even if the 12-month figure tumbled. The PPI increased 0.8 percent, down from 1.6 percent a year earlier, but the fastest reading since September. U.S. PPI wasn't affected by rising Chinese PPI: Deflation's Back? Core Import Prices Tumble In December.

Consumer prices rose 0.3 percent.

Apocalypse 2016: China Sold U.S. Treasuries

Financial markets are in a minor tizzy because China said it might stop purchasing U.S. treasuries! Wow! The dollar is screwed! Except, they already sold U.S. Treasuries and "halted purchases" in recent years.

Bloomberg: China Weighs Slowing or Halting Purchases of U.S. Treasuries
Officials in Beijing reviewing the nation’s foreign-exchange holdings have recommended slowing or halting purchases of U.S. Treasuries, according to people familiar with the matter. Benchmark bonds reversed earlier gains on the news, with the yield on 10-year Treasuries climbing for a fifth day.

China holds the world’s largest foreign-exchange reserves, at $3.1 trillion, and regularly assesses its strategy for investing them. It isn’t clear whether the recommendations of the officials have been adopted. The market for U.S. government bonds is becoming less attractive relative to other assets, and trade tensions with the U.S. may provide a reason to slow or stop buying American debt, the thinking of these officials goes, according to the people, who asked not to be named as they aren’t allowed to discuss the matter publicly. China’s State Administration of Foreign Exchange didn’t immediately reply to a fax seeking comment on the matter.
Since the U.S. began aggressively using financial assets and Treasury holdings as political weapons, it makes sense for any state to reduce Treasury holdings and diversify into other assets including gold. Particularly for competitor states such as Russia and China who could run into direct conflict with the United States. If this is a surprise to anyone, they are not paying attention to global politics. Long-term, the U.S. dollar will lose its status as sole reserve currency, if it doesn't lose reserve status entirely. The last major bull rally in the dollar is a trading opportunity, not a buy-and-hold strategy.

March 2017, ZH: China Is Again Selling US Treasuries As Foreign Central Banks Liquidate $45BN
After December's brief dead cat bounce, in which foreign central banks bought $18.6 billion in US Treasuries, breaking a streak of 12 consecutive months of selling, in January they resumed their liquidation. According to the just released TIC data, foreign official institutions, which includes mostly central banks, but also sovereign wealth funds and various other official entities, sold another $44.9 billion in Treasuries, in line with the aggressive selling seen for most of 2016.
Huh, but why would China be selling?

CNN: China is no longer the biggest foreign holder of U.S. debt
Beijing has been dumping U.S. government debt to prop up its currency. China uses the dollars it gets from selling U.S. Treasuries to buy the yuan, which has sunk to an 8-year low as the world's second largest economy slows.

January 2009, NYTimes: China Losing Taste for Debt From U.S.

Yesterday, the PBoC changed its fixing policy, a move that I interpret as signaling a bottom in the USD. Today's news is in the same vein. I don't think the PBoC is this cynical, but it also provides a modicum of CYA if they do start selling Treasuries.

Finally, if financial markets are getting nervous about something that isn't news, it may be a sign that confidence has peaked.


Average Home Prices in Each District of 28 Chinese Cities

Divide by 70 to get a roughly equivalent price per square foot.

Here's Beijing:

iFeng: 全国28个热点城市当前真实的房价地图!

Confident PBoC Signals Yuan Reversal With Fixing Adjustment

Bloomberg: Fixing Tweak Shows China Confident in Steady Yuan, Analysts Say
The yuan may trade more flexibly in the near term because of the change, though authorities won’t hesitate to reintroduce the factor if market volatility increases, economists and strategists say. China’s currency strengthened 6.8 percent against the dollar in 2017 after three years of depreciation.
In other words, "let's see what happens." Because they have no idea if the dollar will continue to weaken or not. This is all window dressing. They're as beholden to the market as everyone else. It's only valuable as a psychological signal. The PBoC put it on at the "worst time" (when it was no longer needed) and they're taking it off right as USDCNY may have double-bottomed.


China Fights For Young Talent, West Fights for Low IQ Criminals

Lanzhou has eased housing restrictions.

Several cities, including Nanjing, have eased policy amid a war for talent as demographic reality kicks in. Skilled workers, those with degrees, and under the age of 40, are being exempted from rules. Wuhan, Changsha, Suzhou, Jinan are also mentioned as having launched similar policies.

iFeng: 新趋势来了!这些城市限购"松绑" 买不买房都要看

I take a quite negative view of China's credit situation on this blog, but the above story crystallizes why China stands a good chance of surpassing the West. In China, capital and policy work in favor of the young, hardworking and talented. In America and Europe, the political elite are fighting to flood the nation with low skilled, low IQ, criminal population:
Heritage: DACA Is Not What the Democrats Say It Is. Here Are the Facts
Only 49 percent of DACA beneficiaries have a high school education—despite the fact that a majority of them are adults.

How thorough was Homeland Security vetting? In February 2017, after the arrest of a DACA beneficiary for gang membership, the Department of Homeland Security admitted that at least 1,500 DACA beneficiaries had their eligibility terminated “due to a criminal conviction, gang affiliation, or a criminal conviction related to gang affiliation.”

By August 2017, that number had surged to 2,139.

In fact, based on documents obtained by Judicial Watch, it is apparent that the Obama administration used a “lean and light” system of background checks in which only a few, randomly selected DACA applicants were ever actually vetted.

Additionally, DACA only excluded individuals for convictions. Thus, even if a Homeland Security background investigation—which apparently was almost never done—produced substantial evidence that an illegal alien might have committed multiple crimes, the alien would still be eligible for DACA unless Homeland Security referred the violation to state or federal prosecutors and the alien was convicted.

DACA had no requirement of English fluency either. In fact, the original application requested applicants to answer whether the form had been “read” to the alien by a translator “in a language in which [the applicant is] fluent.”

The Center for Immigration Studies estimates that “perhaps 24 percent of the DACA-eligible population fall into the functionally illiterate category and another 46 percent have only ‘basic’ English ability.”
Bonus: the hot topic in America this weekend was President Trump's mental health.

Here We Go Again: WMP Failures

Aside from the 2017 National Congress, not much happened last year. The good times rolled as they had in 2016. Now the bill is coming due and Chinese media headlines are swinging from optimism to pessimism.

iFeng: 招行10亿理财违约 违约潮或至你躲得过吗?
China Merchants Bank 1 billion product default!

Millions in investors' interest disappears without a trace! Shouldn't you go to the bank to see if your money is still there?
That's sounds a little alarmish.
Recently, a China Merchants Bank private banking clients broke the news that its first branch in China Merchants Bank Beijing Branch of customers manager body, to invest in financial products in 2013, suffered a breach of contract in September 2017.

The following is a contract product, according to the contract ( "investment wealth - China Merchants Bank - Hony sandwich special asset management plan asset management contract"):

The information management program held by China Merchants wealth asset managers Asset Management Co., Ltd., China Merchants Bank Beijing Branch as the custodian of assets, corresponding to the subject of raising capital for mezzanine fund subsidiary of Legend Holdings Hony Capital - the size of 1 billion Hony one ( Shenzhen) mezzanine investment Center (limited partnership).
What can investors look forward to after putting up 20 million yuan that was supposed to pay 11 to 13 percent in interest and profits? Return of their capital.
By convention and banks, investors in September 2, 2016 you can get back the principal and interest from the bank's own investment, but the question arises, Merchants Bank account manager, said:

The fund deadline 3 + 1 structure, according to "information management contract", the general partner is entitled to the funds extended period of one year. In other words, the fund management reserves the right to postpone the deadline fund to September 2, 2017.

Then China Merchants Bank one-year extension of the expiration date of the product, but in September 2, 2017, the product was in default, Merchants Bank account manager again declared:

Investors of 20 million yuan investment funds, or can only recover the principal, can not guarantee interest or "very little."

20 million of principal, in accordance with the annual yield of 11% to be considered, the amount of interest after 4 years will be 10.36 million yuan, China Merchants Bank twice defaults, investors lost millions of dollars in interest!
Three of the fund's six investments failed:
Failed to exit the three projects are:

Rongzhong small loans (two)

According to the fund management reports for the first pen into the public 150 million yuan investment in small loan, quit in October 2014, realized investment gains 22.9 million yuan; later, Hony an additional $ 150 million to carry out two investment, annual interest rate 16%, but by the end of 2015, six months after the extension, due to the liquidity reasons, failed to repay small loans into the public when the loan matures in June 2016, it has been delayed due. "

In the heavy machine

Hony Hony a joint investment in August 2014 invested enterprises Zoomlion, investment Chery Heavy Industry (later renamed the United Heavy Machinery). Among them, a contribution Hony 113 million expected annual rate of return of 15% in the heavy machine plan by the end of 2015 listed three new board.

But with the United Heavy Machinery sprint three new board is blocked, the program read: major shareholders repurchase will be the way to achieve out in 2017. But so far, the project still failed to exit.

Shanghai Yu Feng project

Hony one in June 2015, July and October, a total of three times to provide 130 million yuan to Shanghai Yu Feng, respectively, the use of funds to supplement working capital borrowers. As banks pump-prime crisis caused by debt, funding strand breaks Shanghai Yu Feng, Yu Feng Shanghai is expected to total liabilities of $ 1.0 billion, total assets may be disposed of only 320 million yuan, seriously insolvent.

Invested in six projects, three there is a problem, this is the root cause of product breach!


WSJ: China’s Most Dangerous Bank
Bloomberg: Bad-Debt Experts, China's Calling


Real Estate Sales Cool in 2017

The E-House 50 city survey shows real estate sales by area sold fell for 10 consecutive months into December. December sales fell 13 percent yoy, sales fell 18 percent in 2017.

Sales growth in Beijing, Guangzhou, Shanghai and Shenzhen was -38 percent, -24 percent, -28 percent and 50 percent. Combined total area sold fell by 25 percent in these four cities.
Caijing: 2017年50城住宅成交同比降幅近两成 京津冀领跌全国

Zaijian Renminbi Internationlization

Bloomberg: China’s Foreign Reserves Extend Rising Streak Amid Capital Curbs
China’s foreign-exchange reserves posted an 11th straight monthly increase, capping a year of recovery amid tighter capital controls, a stronger yuan and resilient economic growth.

The reserves climbed $20.7 billion to $3.14 trillion in December, according to a People’s Bank of China statement on Sunday, compared with a $3.13 trillion median estimate in a Bloomberg survey. That brought the full-year increase to $129 billion.
Japan launched QE back in 2001. It was supposed to be temporary, but is ongoing to this day. The Federal Reserve began quantitative easing during the 2008/9 financial crisis. It stopped in 2014 and began reversing course in 2017. We will know in the next recession if it was a temporary solution or a generational policy as it became in Japan. China began capital controls in 2015 and has tightened them throughout the past two years, including an escalating crackdown on Bitcoin.

Over the past year, reserves increased from a low of $3.0 trillion to $3.14 trillion last month, a rise of $140 billion. Turning around capital flows was like turning the Titanic in the sense that it takes time to accelerate, but we can pinpoint exactly when things turned around for China. It was the moment the global economy and commodity prices turned around: February 2016. The month China flooded its economy with new credit and the rumored Shanghai Agreement was made.
There's a lot for China bulls and bulls in general to like. China saved the day again, it reversed its outflow problem, it boosted global growth*.

On the other hand, a 50,000-ft view of the situation shows Chinese reserves peaked in June 2014. The U.S. dollar rally began at the end of June 2014. The entire move in Chinese reserves lines up with the movement in the U.S. dollar index.
China may be responsible for breaking the trends in February 2016, but it did so at a very high cost: credit creation worth trillions of USD and a major reversal of yuan internationalization. Over the past 11 months, reserves increased by less than 2 months of peak outflows (Nov 15-Jan 16). Assuming the next crisis is larger (as is typically the case), we'll see one month of outflows reverse all of these gains.

I still expect a major yuan devaluation. Given China's use of capital controls and the deteriorating trade relations, China will wait for a crisis to cry uncle and revalue the yuan. I don't see signs of a reversal in the global economy yet, only a shift towards the high-end of post-2008 growth rates. China bought a lot of time with their actions, we're going on 2 years and market volatility has collapsed to all-time lows. Equity markets are at new highs, the S&P 500 at its most overbought in history.
If the U.S. dollar weakens, then China's currency problems ease considerably. If the dollar instead strengthens, China will need even tighter capital controls to prevent outflows.


Solar Highway in China

This is how solar technology takes off and shows up everywhere: passively.

Alert: China "Hot City" Loosens Price Controls on Real Estate

This is huge if it spreads. Not sure how to interpret it, but the hot take is this might signal China will intensify deleveraging efforts.

iFeng: 突发!热点城市新房限价正式松动
Hefei Municipal Price Bureau and the Bureau of Land and Resources, said: real estate developers should set its own prices, and the land transferred before November 2016 prices not restricted! This is about the limit of Hefei official 2nd sound, so a lot of the position to break the yoke of the king, Hefei prices will rise to a new level!

Lenovo Nanjing, since the limit, the district has been strictly enforced, but recently there are many signs of loosening, after the opening of Mountain View Yue, China Resources and other international community compared with the previous price, have varying degrees of price increases. The Home @ Jun Meng far too exclusive predict, 2018, Nanjing price may also be relaxed!

How to Lie With Statistics

This isn't exactly a statistical trick, but a trick with statistics to make people think your numbers are accurate: make a very small correction that is meaningless against the total figure.

ZH: China Admits 2016 GDP Was "Miscalculated" After "Routine Vertification"
According to SCMP, China’s economic figures for 2016 were revised lower by 54.2 billion yuan (US$8.34 billion) to 74.36 trillion yuan following a "miscalculation" revealed after a routine verification of the numbers, the National Statistics Bureau said on Friday.

In the financial sector, for instance, output had been overestimated by 101.1 billion yuan, while in the telecoms and software industry, the figures were 92.9 billion yuan higher then they should have been, the statement said.

At the same time, performance was underestimated in other sectors, including construction, retail and entertainment, with the combined total for “other services” adding 139.4 billion yuan to the bottom line.


Which City Will Be More Livable in 2035, NYC or Shanghai?

Shanghai might become the world's first gated city.

Reuters: China's Shanghai to battle 'big city disease' by limiting population to 25 million
China’s financial hub of Shanghai will limit its population to 25 million people by 2035 as part of a quest to manage “big city disease”, the cabinet has said.

...“By 2035, the resident population in Shanghai will be controlled at around 25 million and the total amount of land made available for construction will not exceed 3,200 square kilometres,” it said.

State media has defined “big city disease” as arising when a megacity becomes plagued with environmental pollution, traffic congestion and a shortage of public services, including education and medical care.

Many of China’s biggest cities also face surging house prices, stirring fears of a property bubble.
The difference between a city such as Shanghai and San Francisco is that Shanghai has formalized political power. It can cap its population and that is that. In San Francisco the people want the same thing, but they have to use environmental regulations, minimum wage laws, permitting and other policies to drive poor people away. It creates a complex mess of economic regulations that could be solved if San Franciscans had ownership of their city.

America and China are different countries and cultures, with different political systems, but the complex ways the American wealthy "gentrify" urban areas is a result of severely weakened property rights. Which is ironic because individual Chinese property rights are even weaker, but they have much greater ability to organize and act as a group. In the United States, city and state power has been greatly diminished by a rising federal bureaucracy, while individuals are constrained by various housing laws.

For those interested, here's coverage of Shanghai's master plan at iFeng: “上海2035”规划正式发布:探索建设自由贸易港


Yanjiao: Real Estate Manager to Vegetable Vendor as Home Prices Fall 33pc

Caijing: 燕郊谢幕:房价下跌67%?房产经理转行当菜摊老板
With Langfang City, Hebei Province issued a strict restriction policy in March and June, twice, Yanjiao real estate market has experienced double ice and fire situation. "Sweet Seoul city price almost halved, Ocean City days the fourth generation of second-hand house prices fell two-thirds." This message is frequently exposed in the media and social networks, the same variety of different information can not help but wonder.

House prices fell 67%: "Impossible!"

The third week of December, China Real Estate News reporter went to Yanjiao foot plate, in the deserted city of Tianyang sales department, property consultant Liu Xin told reporters:?? "67% down is absolutely impossible, it is not yet present-day ocean crash City average price of second-hand housing prices were flat base and Yanjiao residential unit price of about 23,000 yuan, residential apartments around 1.4 million, at higher bit 35,000 yuan residential, commercial and residential twenty thousand, fell by about one-third. "

According to Liu Xin said that day four generations of Ocean City house three cases: senior 70 years of property rights, the unit price of about 35,000 yuan from time highs this year, down to the unit price of about 23,000 yuan; 40 years of ownership apartment, when from a high level unit price fell to around twenty thousand unit price of 13,000 yuan now; mini villa, now priced at 25,000 yuan, down situations when there is a higher position.

"Internet rumors of day four generations of Ocean City house prices plunged 67 percent simply do not exist, everyone confuses the difference between 70-year and 40-year residential apartments, apartment prices to be mistaken identity after residential high prices and falling to compare, day come to ocean City house prices fell two-thirds of the conclusion, which is obviously wrong. "Liu Xin told reporters.
Although the drop in price isn't as dramatic as rumored, the collapse in the industry is real:
Property manager career as a vegetable stall owner

Yanjiao former bustling lively streets, few pedestrians now. Once a prosperous real estate agent on Elm Street Beijing Street, now the shop wants to come, even in the less busy places, on the glass door it has been labeled the transfer of information.

Yanjiao real estate agent was the busiest, most decent job, and now because of flagging real estate market, resulting in a large number of stores close, professional managers who change jobs situation. Li Bai told reporters: "In the real estate market peak, there is a one thousand Yanjiao intermediary stores, chain near the family had only six stores now bad market, a sharp decline in trading volume, all in order to survive, forced to start merger stores, reducing practitioners. staff in order to survive this difficult stage. "

SkyOcean City area north of the vegetable stall attracted the attention of reporters, stood next to a stall Xingda home of real estate information cards. Vegetable stall owner told reporters that he could have been real estate professional managers, but in this market regulation, people who want to buy don't qualify, people want to sell but there's no buyers, only by selling vegetable part-time can he supplement the family income.

"Now the whole Yanjiao real estate market, shops closed their rate of more than 50% of employees change jobs rate of over 70%, with practitioners struggling to describe the current environment is not an exaggeration." Bai told reporters.


Social Mood 2018: End of the #@$%&&# World

Decider: EXCLUSIVE: Netflix Releases The Trailer For Its Dark Rom-Com, ‘The End Of The F***ing World’
Created by Jonathan Entwistle and based on Charles S. Forsman’s graphic novel series of the same name, The End of the F****ing World follows James (Alex Lawther), a 17-year-old misanthropic teenager who thinks he may be a psychopath. James only has one goal — to kill someone. In his quest to end someone’s life and prove to himself whether or not he’s as dark as he suspects he is, he chooses his first victim, a rebellious and foul-mouthed classmate named Alyssa (Jessica Barden).

Despite its dark premise, there’s an inherent and quirky sweetness to the series. What may start off the dream of a potential serial killer blossoms into a heartfelt romance.

Speaking of Commodities: FCG Breakout

2018: The Pivot Year

Coming into 2017, I expected USDCNY would dip to around 6.60 and then resume its rise. Instead, it got as low as 6.48 and closed the year at 6.51. Overall, this remains a dollar story, but there's two possible paths for the greenback.

I still lean towards a finally rally in the U.S. dollar as the next economic crisis/global recession comes into focus. The dollar is above the long-term resistance line.
However, the analog to prior bull market advance is in limbo. I think a compelling case can be made for a dollar top being in:
There are two potential analogs then. We could be at June 2002 and already past the first drop in the greenback. Or we're still somewhere in 1999, consolidating before the next advance.
I lean towards one more surge in the dollar during the next recession as dollar credits default or are repaid. There's no sign yet of credit growth, indicators such as consumer confidence and unemployment are coincident with the peak of an economic expansion, not the middle. Things could get much better considering growth was below trend for a decade, but there's little sign yet of a breakout.

Politically, Trump was unable to push his agenda because the Russia-collusion story derailed his administration for the first six months or so. This delayed action on trade reform/tariffs. I expected these actions to spark instability in financial markets. Instead, volatility went to new lows. It looks like the Russia-collusion narrative is doing a rope-a-dope now. If this dossier was the main piece of evidence for FISA warrants, this is already a bigger scandal than Watergate. Not only will the investigation go away for Trump, but he could have several high ranking Democrats under investigation by a special counsel in addition to having a free hand to clear the decks at Justice and the FBI. At worst, Trump's political capital recovers (he loses the weight of the investigation). At best, his enemies are under severe threat of prosecution or the stink of using the defense-intelligence apparatus to spy on a domestic political opponent.

On the other side, Chinese growth is slowing and they recently eliminated tariffs on steel exports. Tensions in North Korea aren't improving U.S.-China relations. One way or another, I expect action on trade in 2018.

Finally, the overall trend in social mood remains negative. I believe this is a higher order decline as in the 1930s, and thus dollar positive (deflation) rather than a correction and inflationary (1970s).

As I said above, I could be wrong. And the best case for my being wrong is still the commodities markets. Several funds such as steel, copper and coal (and related emerging market countries reliant on natural resource exports) are on the verge of breakouts. I expect China to slow, but FXI recently broke out above its resistance again and opened up 3 percent on Tuesday.

Smaller commodity ETFs such as rare earths (REMX) and Lithium (LIT) have the strongest momentum in the market now, along with crude oil (BNO, DBO). I remain bullish on the USD, but hedged with high volatility commodity plays.