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Tesla Investor's General Macroeconomic / Market Discussion
- Thread starter FluxCap
- Start date
China slowdown
China's GDP expanded 7% in the first quarter of 2015. China GDP growth in 2014 was 7.4%.
Such number would have been an outstanding achievement for many economies, but for China this is disappointing and represents the worst result since GFC.
The drop in GDP rise is attributed to a waning property sector. The Chinese government is acting to counteract but seems unable to reverse the slowdown. JP Morgan estimated that the property development contributed to 20% of GDP. Excessive developments led to oversupply and unsold properties, creating a drag on the economy.
There is a significant capital flight out of China. Beijing loosened the grip on exchange rates last year and the yuan has been sliding since then. China's huge trade surplus and cash reserves provide some protection against such outflows.
Major cities around the world are feeling the influx of Chinese capital as an upward force for their real estate prices.
China's GDP expanded 7% in the first quarter of 2015. China GDP growth in 2014 was 7.4%.
Such number would have been an outstanding achievement for many economies, but for China this is disappointing and represents the worst result since GFC.
The drop in GDP rise is attributed to a waning property sector. The Chinese government is acting to counteract but seems unable to reverse the slowdown. JP Morgan estimated that the property development contributed to 20% of GDP. Excessive developments led to oversupply and unsold properties, creating a drag on the economy.
There is a significant capital flight out of China. Beijing loosened the grip on exchange rates last year and the yuan has been sliding since then. China's huge trade surplus and cash reserves provide some protection against such outflows.
Major cities around the world are feeling the influx of Chinese capital as an upward force for their real estate prices.
Yield curve, look into the future
A 3D View of The Yield Curve, by NYT
The yield curve shows how much it costs the federal gov to borrow money for a given amount of time. The price of money today, tomorrow and many years from now embeds a forecast for the future economy.
Key points
Now- the yield curve is flat, signalling the expectations of a mediocre growth ahead
The last time Fed started raising rates was in 2004 to 2006. Long term rates did not respond, raising questions about the ability of the Fed to guide the economy. Long term rates are low now as well.
Yields in Germany are negative. Bond buyers agree to lose money. Last month, 10 year yields in Germany were lower than in Japan.
With low rates in both Europe and Japan, the rates in the US are among the highest in the industrialised world.
A 3D View of The Yield Curve, by NYT
The yield curve shows how much it costs the federal gov to borrow money for a given amount of time. The price of money today, tomorrow and many years from now embeds a forecast for the future economy.
Key points
Now- the yield curve is flat, signalling the expectations of a mediocre growth ahead
The last time Fed started raising rates was in 2004 to 2006. Long term rates did not respond, raising questions about the ability of the Fed to guide the economy. Long term rates are low now as well.
Yields in Germany are negative. Bond buyers agree to lose money. Last month, 10 year yields in Germany were lower than in Japan.
With low rates in both Europe and Japan, the rates in the US are among the highest in the industrialised world.
Australia to continue with easing bias
Most likely no one here but me really cares much about what happens downunder, but here it is anyway
Further rate cuts and lower AUD expected
Highlights
Australian economic engine is located in Western Australia. That engine is quite simple, some people might describe it as 'digging stuff out, putting it on boats and selling to China'. Some people call it mining.
Mining boom is over, iron ore and coal (stuff on boats) has shrinking demand and lower prices. That is not just a drag on our economy, that is something to complain about, as now we must learn to make a living doing some more complicated stuff, like building houses, tourism, retail and similar.
The Australian economy is growing at a pace of 2-2.5%. RBA already cut rates and plans further cuts ahead, to help the struggling economy. AUD is expected to slide further, perhaps down to 0.7 USD.
Most likely no one here but me really cares much about what happens downunder, but here it is anyway
Further rate cuts and lower AUD expected
Highlights
Australian economic engine is located in Western Australia. That engine is quite simple, some people might describe it as 'digging stuff out, putting it on boats and selling to China'. Some people call it mining.
Mining boom is over, iron ore and coal (stuff on boats) has shrinking demand and lower prices. That is not just a drag on our economy, that is something to complain about, as now we must learn to make a living doing some more complicated stuff, like building houses, tourism, retail and similar.
The Australian economy is growing at a pace of 2-2.5%. RBA already cut rates and plans further cuts ahead, to help the struggling economy. AUD is expected to slide further, perhaps down to 0.7 USD.
sundaymorning
Active Member
Aussie keep it coming, most investors are in the short term thread for the latest news. I also think that most investors are likely oblivious to the macro conditions as it is one of the hardest piece of information to grasp.
sunday I guess people just follow what interests them. I think whoever can have an active trading account is more than capable of grasping anything.
I find it interesting how US really pulled out of GFC with money easing policies and now we are getting all these copy cats around the world. It took some years though for the truth to sink, what works and what does not work. In some places (countries) there is still some stubbornness and refusal to abandon not so effective policies, I will not name names
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Hey Larken, I like your new location! Now there is more than one Auzie in this cul de sac, great!:biggrin:
Yeah, for now I'm here and just got the power back after 3 days off the grid... were you ok?
I care and appreciate your invaluable input from my little viewpoint in Bensalem, Pennsylvania! I curse myself for not ever making it to your continent. That will change in the future!
Larken may I suggest you buy one of these Tesla batteries , then you will never be off grid again.
Yea I was ok, we are all very good swimmers here, even my car knows how to swim, it did a few laps on my way to work
Thank you for your kindness atang
Indeed not visiting Australia can easily be considered a missed opportunity. I highly recommend a visit, we speak a similar language so it is easy to get around, exchange rates are going in a favourable direction for you and conveniently our summer is during Christmas holiday making us a perfect holiday destination.
Long flights are the only downside, all other experiences are likely to be in the upside category. My favourite upside is that the requirement for shoes and fancy clothes is truly minimal, what a relief that is.
In Australia we receive in excess of 4 kWh per square metre per day of insolation, making Australia the continent with the highest potential for solar uptake. Solar uptake has been rapidly increasing. Still we are far behind countries like Germany. Germany has 10 w per capita solar, Australia has 2.6 w per capita. Solar installations are getting various government incentives here, and we have approximately 3400 megawatts of installed solar power. That contributes 1% of Australian electrical energy.:redface: We have a long long way to go
It could be a little bit more now, the graph is few years old, but still the contribution of solar is miniscule. It is a legacy issue. Once an industry sets its footprint, it becomes quite hard for that footprint to change and takes decades.
Solar potential is high, but the uptake is slow due to a high capital hurdle. As that hurdle diminishes, uptake will go up. The government is running a series of programs to help with the change.
Another likely reason for the slow uptake is that the energy sources issue is not high on homeowners agenda. This issue seems to be much higher in the commercial sector than in the private sector. Most businesses have sustainability plans and the energy supply is a critical issue in these plans. Businesses are pushing for the changes with the help of various government incentives.
Businesses also have another incentive for improved and interrupted energy supply. Premiums for business insurance are reduced with the reduced risk of business interruption due to the mitigated risks of energy supply interruption. We get frequent storms here, power supply drops out causing havoc with locals, see Larken's post upthread. This year there were at least several power supply interruptions at my place of work, costing a lot and causing havoc. Solar energy supply coupled with battery storage becomes a strategic project rather than just a fancy project, and capital hurdle can be higher for those.
Any mention of a plan B is profoundly anti European
Bloomberg: Euro Ministers Alarmed as Bloc Shuts Down Plan B
European ministers seem to be in a double bind situation. They seem to expect the negotiations with Greece to fail. Hence they would like to have a plan B prepared.
Talking about and having plan B broadcasts to the world their lack of faith in Greece's ability to refinance and meet its obligations. It feeds right into self fulfilling prophecy scenario.
On Friday meeting of European Finance Ministers, when Greece was supposed to present its list of reform and failed to do so, there were some attacks on Greece finance minister Yanis Varoufakis for his failure to deliver.
Plan B was mentioned but the discussion on plan B was shut down by the European Economic Commissioner as counter-productive. Other ministers were unhappy with the attitude of the Greek side in negotiations and aired their concerns about not having plan B. Varoufakis called plan B profoundly anti-European.
Bloomberg: Euro Ministers Alarmed as Bloc Shuts Down Plan B
European ministers seem to be in a double bind situation. They seem to expect the negotiations with Greece to fail. Hence they would like to have a plan B prepared.
Talking about and having plan B broadcasts to the world their lack of faith in Greece's ability to refinance and meet its obligations. It feeds right into self fulfilling prophecy scenario.
On Friday meeting of European Finance Ministers, when Greece was supposed to present its list of reform and failed to do so, there were some attacks on Greece finance minister Yanis Varoufakis for his failure to deliver.
Plan B was mentioned but the discussion on plan B was shut down by the European Economic Commissioner as counter-productive. Other ministers were unhappy with the attitude of the Greek side in negotiations and aired their concerns about not having plan B. Varoufakis called plan B profoundly anti-European.
InTheShadows
Active Member
Does anyone think the rioting in Baltimore unite will have an effect on the markets tomorrow.
I hope they get it under control tonight. I have Highschool friends that are now cops in that area, one is a Baltimore cop and the other is in DC, whom I'm sure is on some sort of standby.
I hope they get it under control tonight. I have Highschool friends that are now cops in that area, one is a Baltimore cop and the other is in DC, whom I'm sure is on some sort of standby.
Gerasimental
Member
I think the underlying cause of the anger, rather than the symptom itself is much more worrying for long-term macroeconomic and social stability.
But did Fergusen et al have an impact on markets? In any case, I hope your friends stay safe and sound and can help to de-escalate the situation!
Notes From The Road:
Am about half-way through my semi-annual 3,800 mile peregrination. For the past two days have been passing through the heart of Canada's oil patch.
Edmonton AB, the heart of their o&g world, definitely is quieter than in the past several years, but still vibrant.
Ft. St. John BC, which has been at the epicenter of a 10-year exploration/development boom, still is bustling but has slowed down more than Edmonton.
Ft. Nelson BC (whence I write this), is not yet a ghost town but is as somnolent now as it was ten or so years ago at the start of the new discoveries.
Thus, as to be expected, the peripheries of the oil boom are the first and hardest hit when the sag comes; this diminution began well before last year's price declines but obviously have been exacerbated by same.
***None of this bears on the oil sands region - that's northern Alberta, well above Edmonton. My route never passes through there***
Funny thing is.....diesel still is spendy here Up North - and I'll really begin to feel the hits in the next thousand and so miles. A litle bit ameliorated by the significantly weakened C$/US$ exchange rates.
Cheers, all -
Am about half-way through my semi-annual 3,800 mile peregrination. For the past two days have been passing through the heart of Canada's oil patch.
Edmonton AB, the heart of their o&g world, definitely is quieter than in the past several years, but still vibrant.
Ft. St. John BC, which has been at the epicenter of a 10-year exploration/development boom, still is bustling but has slowed down more than Edmonton.
Ft. Nelson BC (whence I write this), is not yet a ghost town but is as somnolent now as it was ten or so years ago at the start of the new discoveries.
Thus, as to be expected, the peripheries of the oil boom are the first and hardest hit when the sag comes; this diminution began well before last year's price declines but obviously have been exacerbated by same.
***None of this bears on the oil sands region - that's northern Alberta, well above Edmonton. My route never passes through there***
Funny thing is.....diesel still is spendy here Up North - and I'll really begin to feel the hits in the next thousand and so miles. A litle bit ameliorated by the significantly weakened C$/US$ exchange rates.
Cheers, all -
I think your comment about anger is spot on Gerasimental. Imo society that fosters such amount of anger in its population segment without addressing the underlying causes places its sustainability at risk. Very sad.
I had to google peregrination, a day feels wasted without learning something new
Google says peregrination involves travels on foot, I wonder if you are speaking metaphorically or really walking around. We call such walks 'gone walkabout' on this hemisphere.
Stay safe in your peregrinations, thank you for updates on picturesque scenery along your route. Curious TMCers would more than welcome few picks from the road less travelled
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