2017-09-22

AfD Could Become Largest Opposition Party in Germany; Catalonia Crackdown in Spain

Alternative for Germany (AfD) is currently polling in third place ahead of Sunday's election.

German election 2017: Polls and odds tracker as Merkel seeks fourth term as Chancellor

German social mood is among the strongest in Europe, yet the anti-immigration populists are moving into the pole position for opposition against what could be a "grand coalition" between the center-right and center-left parties. When social mood has its next leg down, the centrist parties will collapse and the leading opposition parties will take power.

Meanwhile in Spain, where social mood is already negative, the secessionist movement in Catalnia is spiraling towards Exit.

ZH: Unintended Consequences & Ugly Repercussions: It's Getting Worse In Catalonia
But, as WolfStreet.com's Don Quijones points out Madrid’s crackdown on Catalonia is already having one major consequence, presumably unintended: many Catalans who were until recently staunchly opposed to the idea of national independence are now reconsidering their options.

A case in point: At last night’s demonstration, spread across multiple locations in Barcelona, were two friends of mine, one who is fanatically apolitical and the other who is a strong Catalan nationalist but who believes that independence would be a political and financial disaster for the region. It was their first ever political demonstration. If there is a vote on Oct-1, they will probably vote to secede.

The middle ground they and hundreds of thousands of others once occupied was obliterated yesterday when a judge in Barcelona ordered Spain’s militarized police force, the Civil Guard, to round up over a dozen Catalan officials in dawn raids. Many of them now face crushing daily fines of up to €12,000.
Spain offered some concessions to Catalonia, similar to those given to the Basque region.
Catalans want a new constitution to replace the one adopted in 1978 following the death of longtime dictator Francisco Franco and a statute like the one in place in the northern Basque Country which collects its own taxes and contributes little to Spain's central coffers, Bartomeus said.

Juan Montades, a political scientist at the University of Granada, said that if the rules are changed, Andalusia, Spain's most populous region which benefits from the redistribution of wealth from Catalonia, has warned that it would "be in the front line to defend its interests."
The battle in Spain is strong because Catalonia is wealthy. It is more leftist than the rest of Spain. It also has a long and unique regional history, including local dialect. The last part is the most important for most secessionist movements.

Meanwhile in America, getting a raw deal (or seeing that the future is set) is enough to propel separatist movements such as the American Revolution and Confederacy in 1861. American secession seems laughable with social mood at a bear market peak, but #CalExit is getting off the ground. Many residents in California are foreigners, recent immigrants from all over the world, but mostly from South and Central America. This doesn't create ethnic unity, but it adds a layer of ethnic separation from the rest of the country on top of political and economic issues.

Furthermore, blue states such as California are the strongest opponents of secession and devolution of powers favored by red states. Both left and right will see themselves as winners if California leaves. Although negative social mood and hateful rhetoric will fuel a separation, it is more likely to be amicable given the political background. The risk is that other blue states such as New York threaten to leave as well because the country will move right, and then blue states such as Washington, Illinois, New York threaten to kick out the blue cities such as New York, Seattle and Chicago, turning the states as red as the Deep South.

2017-09-19

Beijing Banks Raise Mortgage Interest to 20pc Premium

iFeng: 央行北京营管部:支持北京房贷利率调整
According to Securities Daily informed that since September 14, a number of banks in Beijing the first suite of lending rates continue to rise, after the adjustment, the first suite of mortgage interest rates go up 5% to 10% into the mainstream, while individual banks adjusted to the lowest performing reference interest rates go up 20% of the interest rate policy, there are more outlets of individual banks first suite collective "pause orders."

"Securities Daily" quoted the news that the number of real estate agent, has been notified of two state-owned big firms, September 14 started the first suite of 5% of the lowest floating interest rate policy; at the same time, the implementation of individual banks adjusted to the lowest benchmark interest rates go up 20% of the interest rate policy; as well as the first suite of individual banks to suspend orders.

New Home Prices Rise 0.2pc in August

Although prices rose in 46 cities last month, the number of cities seeing price declines jumped to 18 as the average increased fell to 0.2 percent. Existing home prices increased 0.3 percent, with 54 cities seeing rising prices.

Recent months still saw large single month prices increases, but that wasn't the case in August. Guilin and Harbin saw the largest increase in new and existing home prices respectively, both rising 1.1 percent.

2017-09-18

Everything is Destroyed, Even the Dreams: Huobi, OKCoin Executives Told to Stay in Beijing

iFeng: 火币网、OKCoin负责人、高管被要求不得离京
A number of informed sources, the current Bitcoin trading platform each person in charge, and so not to leave Beijing executives to cooperate with the investigation. In accordance with regulatory requirements, the trading platform for shareholders, actual controllers, executives, such as chief financial officer during the cleanup exit to fully cooperate with relevant work in Beijing.

The industry believes that, with the two virtual currency trading platform shut down all operations, is expected to Bitcoin prices will fall. However, now with the basic out to do bad, investor sentiment being stable, Bitcoin stabilize prices for the time being. As of press time yesterday, reporters, Bitcoin prices declined slightly, quoted near 19,000 yuan.

2017-09-17

Why Did Real Estate Stocks Skyrocket in the Past 6 Months?

An article in iFeng asks why real estate stocks skyrocketed: 地产股为何半年内普遍疯涨三到五倍?答案令人震惊
So the question is: In the past six months is the period of the country continue to tighten regulation of the property market, the property market is gradually cooling. Now, the regulation has been extended to the northeast and western regions, in which case, why real estate stocks also so cattle?

A few examples from the article:
Two days ago, our team of "Financial Powerhouse (ID: tttmoney8)" by National Bureau of Statistics has just released analysis of the current dangerous situation facing the housing market. In a nutshell - due to the inventory moving very quickly, the current average digestion cycle of new housing is only three months or so; overall, the average real estate digestion period (including office buildings, commercial property) is only over five months a. But the "office" and "commercial space business" is still very long period of digestion, were 10.6 months and 18.4 months.

In other words, residential developers to continue re-stocking phase (of course, there is still excess partial).

But this is far from the real estate reason leading shares rose.

The core reason is the rapid rise in land prices, so that value of the large land banks rose significantly.

...A large international investment bank for this housing prices made an estimate, this time scored above the land of housing prices is to spend 458 billion yuan, but now the value has risen to 9,000 billion yuan. In other words, this intrinsic value of housing prices rose by 450 billion yuan, but its total current market value of only 300 billion yuan (RMB) or so.

Do not think the developers have significant "cover" behavior, in my observation, this is a fast development, rapid sales characterized by housing prices, the products are mostly for just need to improve the type of demand, rarely engage in particularly high real estate. However, the past couple of years land prices rising too fast, so reserve value of the land it has quickly doubled!

And that is an important reason for the stock price soaring ward rate.

2017-09-15

TSF Credit Growth Up 21.5pc YoY

Too soon to say if growth peaked in July at 24.3 percent, but it may have given the crackdown on shadow lending. If both TSF and M2 decelerate together, credit growth contraction in China will finally begin in earnest.

China's Reserve Coverage of M2 Slips to 12.4pc

The yuan is rising, but there's no fundamental pressure pushing the yuan up. It is solely dollar weakness. Chinese FX reserves are down to 12.4 percent of M2. This number does not matter to the markets and it may never matter if the fundamentals reverse, but we're getting within striking distance of 10 percent.

The Chinese government cracked down on overseas acquisitions, requires paperwork for foreign currency transactions over $147 and told multinationals not to take their money home for a reason, and it isn't because the yuan is fundamentally strong. The yuan was more useful three years ago.

M2 Slows to New Low in August

M2 growth slowed to 8.9 percent over the past 12 months, but 3-month annualized growth ticked up to 11.3 percent. The latter number is 2.8 percentage points below the August 2016 pace.

M2 historically slows sharply in September and October.