Tag: finance

As China’s shift to a consumer economy progresses based on the urbanization of its agrarian ‘poor’ population, an odd thing is happening at the other end of the demographic wealth spectrum. As WSJ reports, nearly half of wealthy Chinese are planning to move to another country within the next five years, according to a new Barclays survey. The top reasons 47% of these individuals – with net worths over $1.5 billion – cite for fleeing China include educational and employment opportunities, economic security, and climate. Ironically, none mentioned ‘running away from potential prosecution for graft’.

 

 

As WSJ reports,

Nearly half of wealthy Chinese are planning to move to another country within the next five years, according to a new Barclays survey.

 

The survey, which questioned more than 2,000 high net-worth individuals with more than $1.5 billion in total net worth, found that 47% of Chinese respondents said they want to move, compared with a global average of 29%.

 

…

 

Singaporeans were the second-most eager to flee home, with 23% planning to relocate in five years, followed by 20% for the U.K. and 16% for Hong Kong. Indian and American rich are the least likely to move, with only 5% and 6% of respondents saying they would relocate.

 

 

The top reasons Chinese cite for moving abroad are better educational and employment opportunities for children (78%), economic security and desirable climate (73%), and better health care and social services (18%). Hong Kong is their top destination (30%), followed by Canada (23%).

 

*  *  *
If the richest – and therefore ‘smartest’ if we are to believe the two are eqauted – are looking for leave China in such numbers, then why are US investors being piled in? And what do these wealthy people know that the urbanizers do not? For China’s planners, the scent of capital flight is the scariest of all signals when trying to control a populace facing a real estate collapse and credit crisis (having been promised utopia)… that is why this is the scariest chart for China.

via Zero Hedge http://ift.tt/1q9AtO6 Tyler Durden

Japan’s broad TOPIX index is lower this evening after the holiday weekend – following a six-day rise – led by Real Estate, Mining, and Banking sectors as traders suggest “the mood is to hold back ahead of the Fed meeting.” China’s dismal data and comments about no imminent rate cut have done nothing to tamp down enthusiasm for Shanghai Composite stocks as the Chinese government “unveiled guidelines to support the development of the stock market, pledging to make blue chips bigger and stronger and more actively traded,” though HKSE is delayed for now due to Typhoon warnings. MSCI Asia-Pac is down at the open for the 9th day in a row – the longest losing streak since 2002.

 

Japanese stocks lower led by Banks and Real Estate…

 

Chinese stocks delayed open but have screamed to 18-month highs after the unveiling of QE-lite… up 16.5% since QE-lite

 

and added this evening:

The Shanghai government unveiled guidelines to support the development of the stock market, pledging to make blue chips bigger and stronger and more active trading. The government said it will actively support the Shanghai-Hong Kong Stock Connect arrangement and improve the international influence of Shanghai’s capital markets. It also pledged to expand the size of foreign investment programs and and allow them invest more in financial futures products. (Shanghai Securities News)

So clearly – now they have lost housing as wealth creation policy mechanism, they are herding everyone into stocks… we are sure that will end well!

But oddly – Bloomberg’s China -US equity iundex (most traded Chinese firms in US) has plunged for longest streak since March (making room for Alibaba?)

 

And Asia-Pac stocks in general are down for the 9th day in a row…

 

The worst streak since 2002!

via Zero Hedge http://ift.tt/1tZ62hr Tyler Durden

Never waste a good crisis. While we already knew a major reason for The West chasing into Africa was to leverage its relatively low credit levels as the last bastion of Keynesian-stimulus-hope in the world (estimated at between $5 and $10 trillion in secured debt, using its extensive untapped resources as first-lien collateral). And so it is little surprise that, as The WSJ reports, The International Monetary Fund on Thursday warned the West African Ebola epidemic requires a “large scale” global intervention to control a crisis that is ravaging economies in the region. All three major Ebola-suffering countries were already in bailout programs ($200mm loan in 2012 for Guinea, $100mm loan for Sierra Leone, and $80mm credit facility for Liberia) but with the “world community taking forever to respond,” The IMF is happy to step in and secure some assets / lend over $100mm more to each nation to fill financing gaps.

 

As The Wall Street Journal reports,

The International Monetary Fund on Thursday warned the West African Ebola epidemic requires a “large scale” global intervention to control a crisis that is ravaging economies in the region.

 

The IMF, the world’s emergency lender, said it is in talks to boost bailouts for Sierra Leone, Guinea and Liberia as the disaster slams economic output and overwhelms government financing.

 

“Beyond the human toll that this outbreak is exacting, the Ebola outbreak looks set to cause significant harm to the economies of Guinea, Liberia and Sierra Leone,” IMF spokesman William Murray said in a news conference Thursday.

Of course, we noted previously the economic collapse this epidemic was having

This year was supposed to be a bright one for the three deeply poor governments bearing the brunt of West Africa’s Ebola problem. After 50 unbroken years of dictatorial misrule, Guinea—a democracy since 2010—had planned to auction off a multibillion iron-ore concession. Liberia, scene of a horrific 14-year-long civil war, had begun auctioning off offshore oil blocks. Sierra Leone was set to be Africa’s fastest-growing economy for the second time in three years, the IMF had projected.

 

But now the fund estimates the epidemic will cut growth in Sierra Leone to 8% this year from a previous rate of 11.3%. Liberia’s growth will more than halve to 2.5%. Guinea will see its prospects fall to 2.4% from a previously expected rate of 3.5%, the fund said.

So The IMF will lend them even more money, putting them in even more debt…

All three countries were already in bailout programs. The IMF approved a $200 million loan in 2012 for Guinea, a $100 million loan for Sierra Leone late last year and signed an $80 million credit facility for Liberia two years ago.

 

The World Bank has also boosted its financing to the region, mobilizing a $230 million package for the three worst-hit countries, including $105 million in emergency grants.

 

Each of the three countries faces a financing gap of between $100 million and $130 million due to the havoc hitting agriculture, trade and other commerce, the fund said.

*  *  *

 

 

Finally, as we noted before, this move by The IMF appears to be exactly what they hoped for…

While those in the power and money echelons of the “developed” world scramble day after day to hold the pieces of the collapsing tower of cards in place (and manipulating public perception that all is well), knowing full well what the final outcome eventually will be, those who still have the capacity to look, and invest, in the future, are looking neither toward the US, nor Asia, and certainly not Europe, for one simple reason: there is no more incremental debt capacity at any level: sovereign, household, financial or corporate. Because without the ability to create debt out of thin air, be it on a secured or unsecured basis, the ability to “create” growth, at least in the current Keynesian paradigm, goes away with it.

 

Yet there is one place where there is untapped credit creation potential, if not on an unsecured (i.e., future cash flow discounting), then certainly on a secured (hard asset collateral) basis. The place is Africa, and according to some estimates the continent, Africa can create between $5 and $10 trillion in secured debt, using its extensive untapped resources as first-lien collateral.

via Zero Hedge http://ift.tt/X9yr9M Tyler Durden

Submitted by Jeff Thomas via Doug Casey's International Man blog,

[A] crash is coming, and it may be terrific. …. The vicious circle will get in full swing and the result will be a serious business depression. There may be a stampede for selling which will exceed anything that the Stock Exchange has ever witnessed. Wise are those investors who now get out of debt.

The above words could easily have been stated by me or another of the (very) few others who currently predict the coming of crashes in the markets.

But they were not. The statements above were made by investor Roger Babson at a speech at the Annual Business Conference in Massachusetts on 5^th September, 1929.

Mr. Babson’s prediction was not a sudden one. In fact, he had been making the same prediction for the previous two years, although he, in September of 1929, felt the crash was much closer.

News of his speech reached Wall Street by mid-afternoon, causing the market to retreat about 3%. The sudden decline was named the “Babson Break.”

The reaction from business insiders was immediate. Rather than respond by saying, “Thanks for the warning—we’ll proceed cautiously,” Wall Street vilified him. The Chicago Tribune published numerous rebuffs from a host of economists and Wall Street leaders. Even Mr. Babson’s patriotism was taken into question for making so rash a projection. Noted economist Professor Irving Fisher stated emphatically, “There may be a recession in stock prices, but not anything in the nature of a crash.” He and many others repeatedly soothed investors, advising them that a resumption in the boom was imminent. Financier Bernard Baruch famously cabled Winston Churchill, “Financial storm definitely passed.” Even President Herbert Hoover assured Americans that the market was sound.

But, 55 days after Mr. Babson’s speech, on 29^th October, 1929, the market suddenly went into a free-fall, dropping 12% in its first day.

Today, most people have the general impression that on Black Friday, the market crashed and almost immediately, there were breadlines. Not so. In the Great Depression, as in any depression, the market collapsed in stages. The market did not reach its bottom of 89% losses until July of 1932.

Along the way, thousands of banks and lending institutions went belly-up. Thirteen million jobs disappeared.

And of course, the political leaders of the day did their bit. They implemented knee-jerk “solutions” that actually worsened the situation. Restrictive tariffs, gold confiscation, and a more dominant government were employed, just as they will be this time around.

So, as the market tumbled, we would imagine that Babson came to be praised by Wall Street for his insight, but in fact, the opposite occurred. Having accused him of being utterly incorrect in September, they later accused him of having caused the depression.

So, was Babson’s prediction a lucky guess? Did he simply observe the bull market and arbitrarily predict the opposite of the trend of the day to see what would happen? Not at all.

Such predictions are not guesswork, nor are they attributable to a vision seen in some crystal ball. Such crashes are entirely predictable. When any major bull market becomes overbought; when too many investors begin buying on margin because they can’t come up with the purchase price for stocks; when they then become even more obsessive and borrow money to buy on margin, the market has become a house of cards, waiting for the slightest breeze to come along.

So what do we take away from this? First, we can be certain that as the present-day house of cards begins to shake, there will be no warnings from Wall Street. In fact, quite the opposite. Their bread gets buttered by buyers. They will be adamant (and even, in many cases, truly believe) that the sky is the limit and investors should buy, buy, buy, as there are fortunes to be made by doing so. And investors, watching the rise, will fall all over each other, just as in 1929, buying with both hands.

This time around, the crash and its byproducts will be more extreme than in 1929, as the bubble itself is more extreme. And Wall Street can count on television and a media that has a vested interest in keeping the charade going as long as possible. It will also be more extreme, as the governments of much of the world are now broke and can only worsen their respective economies through the customary “solutions” that governments always employ—tariffs, confiscations, greater government control, etc.

Finally, the aftermath will be more extreme, as—unlike in 1929, when most people actually believed in the government—this time around, there will be dramatic unrest.

Just as in 1929, those who are declaring that “the Emperor has no clothes” are few in number, and their viewpoint is most certainly not put forth in the conventional media. For this reason, it’s understandable that the great majority of people invariably ignore the Babsons of the world as Chicken Littles and blithely charge toward the cliff like lemmings.

Those who do think independently and become convinced that history is repeating itself are focusing their attention on finding a way out of being a casualty in the train wreck that’s coming. This is difficult to do, as invariably, the closer the event becomes, the more difficult it is to swim against the tide. For this reason, even many who conclude that the end is near often fail to act to save themselves and their families.

Internationalisation is both time-consuming and costly. Additionally, it’s lonely, as it’s considered foolish and unnecessary by more than 99% of the population.

The great temptation is to decide, “Maybe it won’t be so bad. Maybe I can live with it.” And in fact, for most people, this will be the prevailing view—that although their personal situation will be diminished in many ways, the crashes will be tolerable.

The question is whether we wish to make the pre-emptive effort to create a life that is far better than tolerable, and possibly even improved, whist the opportunity for doing so still exists.

Editor’s Note: Be sure to check out our free resources and guides for the latest on the best international diversification strategies.

via Zero Hedge http://ift.tt/X9ysuj Tyler Durden

Submitted by Jeff Thomas via Doug Casey's International Man blog,

[A] crash is coming, and it may be terrific. …. The vicious circle will get in full swing and the result will be a serious business depression. There may be a stampede for selling which will exceed anything that the Stock Exchange has ever witnessed. Wise are those investors who now get out of debt.

The above words could easily have been stated by me or another of the (very) few others who currently predict the coming of crashes in the markets.

But they were not. The statements above were made by investor Roger Babson at a speech at the Annual Business Conference in Massachusetts on 5^th September, 1929.

Mr. Babson’s prediction was not a sudden one. In fact, he had been making the same prediction for the previous two years, although he, in September of 1929, felt the crash was much closer.

News of his speech reached Wall Street by mid-afternoon, causing the market to retreat about 3%. The sudden decline was named the “Babson Break.”

The reaction from business insiders was immediate. Rather than respond by saying, “Thanks for the warning—we’ll proceed cautiously,” Wall Street vilified him. The Chicago Tribune published numerous rebuffs from a host of economists and Wall Street leaders. Even Mr. Babson’s patriotism was taken into question for making so rash a projection. Noted economist Professor Irving Fisher stated emphatically, “There may be a recession in stock prices, but not anything in the nature of a crash.” He and many others repeatedly soothed investors, advising them that a resumption in the boom was imminent. Financier Bernard Baruch famously cabled Winston Churchill, “Financial storm definitely passed.” Even President Herbert Hoover assured Americans that the market was sound.

But, 55 days after Mr. Babson’s speech, on 29^th October, 1929, the market suddenly went into a free-fall, dropping 12% in its first day.

Today, most people have the general impression that on Black Friday, the market crashed and almost immediately, there were breadlines. Not so. In the Great Depression, as in any depression, the market collapsed in stages. The market did not reach its bottom of 89% losses until July of 1932.

Along the way, thousands of banks and lending institutions went belly-up. Thirteen million jobs disappeared.

And of course, the political leaders of the day did their bit. They implemented knee-jerk “solutions” that actually worsened the situation. Restrictive tariffs, gold confiscation, and a more dominant government were employed, just as they will be this time around.

So, as the market tumbled, we would imagine that Babson came to be praised by Wall Street for his insight, but in fact, the opposite occurred. Having accused him of being utterly incorrect in September, they later accused him of having caused the depression.

So, was Babson’s prediction a lucky guess? Did he simply observe the bull market and arbitrarily predict the opposite of the trend of the day to see what would happen? Not at all.

Such predictions are not guesswork, nor are they attributable to a vision seen in some crystal ball. Such crashes are entirely predictable. When any major bull market becomes overbought; when too many investors begin buying on margin because they can’t come up with the purchase price for stocks; when they then become even more obsessive and borrow money to buy on margin, the market has become a house of cards, waiting for the slightest breeze to come along.

So what do we take away from this? First, we can be certain that as the present-day house of cards begins to shake, there will be no warnings from Wall Street. In fact, quite the opposite. Their bread gets buttered by buyers. They will be adamant (and even, in many cases, truly believe) that the sky is the limit and investors should buy, buy, buy, as there are fortunes to be made by doing so. And investors, watching the rise, will fall all over each other, just as in 1929, buying with both hands.

This time around, the crash and its byproducts will be more extreme than in 1929, as the bubble itself is more extreme. And Wall Street can count on television and a media that has a vested interest in keeping the charade going as long as possible. It will also be more extreme, as the governments of much of the world are now broke and can only worsen their respective economies through the customary “solutions” that governments always employ—tariffs, confiscations, greater government control, etc.

Finally, the aftermath will be more extreme, as—unlike in 1929, when most people actually believed in the government—this time around, there will be dramatic unrest.

Just as in 1929, those who are declaring that “the Emperor has no clothes” are few in number, and their viewpoint is most certainly not put forth in the conventional media. For this reason, it’s understandable that the great majority of people invariably ignore the Babsons of the world as Chicken Littles and blithely charge toward the cliff like lemmings.

Those who do think independently and become convinced that history is repeating itself are focusing their attention on finding a way out of being a casualty in the train wreck that’s coming. This is difficult to do, as invariably, the closer the event becomes, the more difficult it is to swim against the tide. For this reason, even many who conclude that the end is near often fail to act to save themselves and their families.

Internationalisation is both time-consuming and costly. Additionally, it’s lonely, as it’s considered foolish and unnecessary by more than 99% of the population.

The great temptation is to decide, “Maybe it won’t be so bad. Maybe I can live with it.” And in fact, for most people, this will be the prevailing view—that although their personal situation will be diminished in many ways, the crashes will be tolerable.

The question is whether we wish to make the pre-emptive effort to create a life that is far better than tolerable, and possibly even improved, whist the opportunity for doing so still exists.

Editor’s Note: Be sure to check out our free resources and guides for the latest on the best international diversification strategies.

via Zero Hedge http://ift.tt/X9ysuj Tyler Durden

.

 

So many candidates to choose from…What sayeth you?

via Zero Hedge http://ift.tt/X9ysdQ williambanzai7

The rise of Islamic State has upended geopolitics in the Middle East and, as The Economist notes, drawn America’s military back to the region. Though ISIS is popular among militants, the group has no allies on the political stage, making it even more isolated than the official al-Qaeda affiliate, Jabhat al-Nusra. As The Economist’s “relationship mosaic” above visualizes the rapports among countries, political groups and militant organizations in the Middle East.

 

 

It provides a quick glimpse of who is friends with whom (albeit a simplified depiction of relationships; the “neutral” category, for instance, embraces a large number of possibilities). The Syrian government is disliked by many countries but supported by Iran and Russia. The Iraqi Kurds count numerous friends and no sworn enemies among the entities listed.

And the chart shows the degree to which America needs to play a delicate diplomatic game in holding together allies that may not always be friends with each other.

 

Source: The Economist

via Zero Hedge http://ift.tt/XrTo05 Tyler Durden

The rise of Islamic State has upended geopolitics in the Middle East and, as The Economist notes, drawn America’s military back to the region. Though ISIS is popular among militants, the group has no allies on the political stage, making it even more isolated than the official al-Qaeda affiliate, Jabhat al-Nusra. As The Economist’s “relationship mosaic” above visualizes the rapports among countries, political groups and militant organizations in the Middle East.

 

 

It provides a quick glimpse of who is friends with whom (albeit a simplified depiction of relationships; the “neutral” category, for instance, embraces a large number of possibilities). The Syrian government is disliked by many countries but supported by Iran and Russia. The Iraqi Kurds count numerous friends and no sworn enemies among the entities listed.

And the chart shows the degree to which America needs to play a delicate diplomatic game in holding together allies that may not always be friends with each other.

 

Source: The Economist

via Zero Hedge http://ift.tt/XrTo05 Tyler Durden

In January we noted ‘Smart Restaurant’ – the burger-flipping robot – and just last month we reported on China’s robotification of the fast-food business; but, as The Washington Post reports, the greatest enemy to the minimum-wage-demanding fast-food worker has arrived: you can now order your own quarter-pound bacon cheeseburger from a welcoming, non-judging machine. With McDonalds sales the worst in almost a decade, it appears their need to maintain profits has stoked a move towards dehumanization. One wonder how long before this action is also declared ‘unpatriotic’.

 

As WaPo reports,

If you’ve ever felt guilty ordering at McDonald’s, the fast-food mega-chain has just the fix: You can now order your own quarter-pound bacon cheeseburger from a welcoming, non-judging machine.

 

…

 

McDonald’s move towards dehumanization, launched as a pilot last winter and expanded across San Diego last week, is part of a larger trend of chain eateries turning tablets into your full-time restaurant buddy: equal parts menu, server and paycheck. Applebee’s, Panera Bread and even airport bars have installed tablets to allow diners to order food or booze without a wait.

 

Chili’s became the U.S. king of human-less ordering this summer when it installed more than 45,000 tabletop tablets nationwide.

While cost control is one factor, the tablet ordering had another silver-lining…

The move toward tablets is a bet from marketers on a quirk of buyer psychology: that customers will order more food if they can do it on a screen. While ordering from a person might lead you to rein in your appetite, a tablet sits silently and harmlessly, covered in colorful ads. Ordering off a tablet can also lead customers to try something new, which might make them happier and more likely to come back.

 

With tablet ordering, “you can serve more lunches per hour, and the customers, since so many use their smartphone for just about everything, see it as more convenient.”

Of course, in a world of de minimus capital costs (courtesy of an apparently job-creating-mandated Fed), why wouldn’t the McDonalds of the world adopt such a strategy. The outcome, as we explained before, is all too obvious…

What happens after that should be clear to everyone: more unemployment, lower wages for the remaining employees, worse worker morale, but even higher profits to holders of capital. And so on. Because in a world in which technology makes the unqualified worker utterely irrelevant, this is what is known as “progress.”

*  *  *
So much for $15 minimum-wage demands… One wonders how long before ‘tablets’ are also declared ‘unpatriotic’.

via Zero Hedge http://ift.tt/XrTm8D Tyler Durden

Submitted by Andy Tully via OilPrice.com,

Two academic studies of the health dangers of hydraulic fracturing, or fracking, have produced different conclusions.

One, conducted by Yale University, said people living near fracking sites report increased health problems. The other, by Penn State University, says fracking water stays underground, far below the groundwater supplies that people use for drinking, and poses no threat.

Both studies were conducted in Pennsylvania, part of the Marcellus Shale formation in the sprawling Appalachian Basin in the eastern United States. It holds enormous reserves of gas and has been a focus of fracking activity and protests.

In the Yale study, former Yale medical professor Dr. Peter Rabinowitz reported in the journal Environmental Health Perspectives that residents living near a fracking site in southwestern Pennsylvania were more than twice as likely to report skin problems and respiratory illnesses than those living farther away.

Rabinowitz, now at Pennsylvania’s University of Washington, surveyed 492 people in 180 households in Washington County, PA — the heart of the Marcellus Shale. Thirty-nine percent of respondents living within 0.6 of a mile of a gas well reported sinus infections and nosebleeds, compared with 18 percent who said the same and lived more than twice as far away.

The difference was even starker for those reporting skin problems: Thirteen percent reported rashes, while only 3 percent of people who lived farther away had the same complaints.

Rabinowitz said his is “the largest study to date” of its kind. But he cautioned that he isn’t directly linking fracking to the health problems. To determine that will require more research, he said, because “it’s more of an association than a causation.”

The Penn State study concluded that the water and chemicals that are injected into deep shale to help extract gas stays far below the surface and therefore doesn’t pose a serious threat to drinking water supplies.

The study, whose results were published in the Journal of Unconventional Oil and Gas Resources, was conducted by Terry Engelder, professor of geosciences at Penn State; Lawrence Cathles, professor of earth and atmospheric sciences at Cornell University; and Taras Bryndzia, a geologist at Shell International Exploration and Production, Inc.

Opponents of fracking say the contaminated water used to help extract the gas could seep toward the surface and foul clean groundwater. The Penn State study says this isn’t likely because the water would seep up too slowly, if it seeped at all.

Further, it says, upward migration of tainted water isn’t plausible because of the forces used to inject the water into the shale. “As water is wicked into gas shale, the natural gas in the shale is pushed out, Engelder says. “The capillary forces that suck the [water] into the gas shale keep it there.”

The debate continues.

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