Monthly Archives: October 2011

Shanghai New Home Sales Plunge 77% Y/y to 6-Year Low

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This doesn’t need to mean hard landing, but it means the state has to be that much more countercyclical to hold it all together, and they are facing what they consider a serious inflation problem.

Shanghai New Home Sales Plunge 77% Y/y to 6-Year Low, Uwin Says

Oct. 10 (Bloomberg) — Transactions fell to 85,400 square meters in the week ended Oct. 9, fall of 40% w/w, property consultant Shanghai Uwin Real Estate Information Services Co. says in e-mail statement today.

* New home sales in week of Oct. 9 28% lower than same period during 2008 financial crisis, Uwin chief analyst Zhijian Huang says
* New home supplies slumped 81% w/w in week of Oct.9
* Traditional “golden” September turns weakest month for home sales this year excl. Feb. and Mar.: Huang
* Situation to be more negative for developers should they continue to resist price cuts, and cuts may shift to plunging from gradually falling: Huang

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President Obama comments

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*DJ Obama: New Debit-Purchase Fees Not ‘Necessarily Fair To Consumers’

How about, US banks are public private partnerships, funded by govt. insured deposits, govt. regulated and supervised, established and sustained to provide public infrastructure for public purpose, and all permitted bank policies will be considered accordingly.

*DJ Obama: China Has Been Very Aggressive In ‘Gaming’ The Trading System
*DJ Obama: China Currency Appreciation Not Sufficient
*DJ Obama Expresses Concerns About China Currency Legislation
*DJ Obama Wants To Make Sure China Currency Bill Doesn’t Thwart WTO Rules

How about the fact that exports are real costs, imports real benefits, and optimizing real terms of trade and all that?

*DJ Obama: Biggest Headwind With US Economy Is Uncertainty With Europe

How about our biggest headwind is we are grossly overtaxed for the size govt. We have an immediate fiscal adjustment, a much larger deficit is in order?

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UK CAMERON Comments

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*DJ UK Cameron: Economic Threat As Serious As It Was In 2008
*DJ UK Cameron: “We Need To Tell Truth About Econ Situation”
*DJ UK Cameron: This Was Debt Crisis, Not Normal Recession
*DJ UK Cameron: Crisis Caused By Too Much Borrowing
*DJ UK Cameron: More Govt Borrowing Would Make Crisis Worse

???

*DJ UK Cameron: More Borrowing Risks Higher Rates, Less Confidence

???

So much for his legacy

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Japan’s Fujimura Says Japan May Boost Europe Bailout Bond Purchases

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The modern day saga of the Trojan Horse continues.
as the euro debt crisis gives Japan the cover to do something
otherwise highly problematic.

Japan buying euro zone debt is a way to bolster the euro vs the yen
and thereby support Japan’s exporters.

Fujimura Says Japan May Boost Europe Bailout Bond Purchases

October 5 (Bloomberg) — Japan may increase its purchases of bonds to finance Europe’s debt crisis rescue fund, Chief Cabinet Secretary Osamu Fujimura said.

Fujimura told reporters today in Tokyo the government “would like to consider” buying more bonds from the European Financial Stability Facility to help stabilize the region. Japan bought more than 20 percent of the fund’s initial five-year, 5 billion euro ($6.6 billion) bonds in January, and purchased another 1.1 billion euros of 10-year EFSF bonds issued in June.

“Europe’s fiscal problem is also very important for Japan in terms of restoring market confidence, and the Europeans are grappling with this,” Fujimura said.

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Merkel does not want to allow Greece to default

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To my point,
Merkel’s view is now that allowing Greece to default is a gift to the Greek govt. that
rewards bad behavior, introduces moral hazard, etc.

The trick is to support Greece and not permit default without using German taxpayer funds and without weakening the credit capacity of Germany.

Hence, the current policy of ECB bond buying,
which accomplished all of the above,
is not inflationary,
carries austerity as it’s prime term and condition,
holds Greece to it’s obligations,
enhances ECB earnings and capital,
and is operationally sustainable,
is likely to continue.

Merkel said that her “entire council” of economic advisers says Greek debt should be restructured, advice that she is not prepared to take. “If we tell a country ‘We cancel half of your debt,’ that’s a great deal,” she said. “Then the next guy will immediately show up and say he wants the same.”

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EU Ministers to Debate More Stimulus

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Interesting!

EU Ministers to Debate More Stimulus

By Matthew Dalton

October 2 —European Union finance ministers this week will discuss whether governments with the strongest public finances can provide some budget stimulus to help support flagging economic growth in the 27-nation bloc.

The debate, set for a meeting in Luxembourg on Tuesday, could signal a small reversal of a policy adopted by ministers in October 2009 that calls on all EU countries to start cutting their deficits in 2011. With postcrisis economic growth much slower than expected, the EU is under pressure from the International Monetary Fund and the U.S. to consider more stimulus.

The European Commission sought to debate the idea at the meeting. The idea is that countries not violating the EU’s deficit limit of 3% of gross domestic product could allow their “automatic stabilizers”to operate without restrictions.

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