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Late Evening Takes From Around the World June 1st/2nd
Forecasts for a rebound in U.S. growth in the second quarter and stimulus from central banks in Japan, Europe and China, along with higher-than-estimated corporate earnings, helped send the value of global shares to a record $64 trillion last week. The Chicago Board Options Exchange Volatility Index, a gauge of options prices known as VIX, slipped 1.5 percent to 11.40 on May 30. The measure closed for a fifth straight day below 12, the longest stretch since February 2007, data compiled by Bloomberg show.
The S&P 500 traded at 16.3 times estimated earnings, compared with 13 on the MSCI Asia Pacific Index and 15.4 on the Europe Stoxx 600 Index, according to data compiled by Bloomberg. China’s Communist Party has stepped up the pace of stimulus measures, including faster spending from government budgets and increased railway investment, to help meet an official growth target of about 7.5 percent this year. Asia’s biggest economy is projected by analysts to grow 7.3 percent in 2014, which would be the weakest pace since 1990. “Policy fine-tuning announcements in China continue to mount up, adding to confidence that growth will be supported around 7.5 percent this year,” said Shane Oliver, Sydney-based head of investment strategy at AMP Capital Investors Ltd., which oversees about $133 billion. “More easing measures are likely.” Economists forecast European Central Bank President Mario Draghi and policy makers will cut the deposit rate when they meet on June 5, with a euro-area factory report today estimated to hold steady at the lowest level since November. Equity markets in China, Hong Kong and New Zealand are closed today for holidays. http://www.bloomberg.com/news/2014-06-01/copper-climbs-as-japan-stock-index-futures-rise-after-china-data.html
“The so-called mini-stimulus is helping to stabilize the economy,” said Liu Li-Gang, chief Greater China economist at Australia & New Zealand Banking Group Ltd. in Hong Kong. At the same time, the rebound in PMI isn’t as strong compared with the same period in previous years, and the “central government needs to make a bigger move,” he said. http://www.bloomberg.com/news/2014-06-02/china-manufacturing-gauge-rises-to-five-month-high.html
China News Alibaba’s Listing Date Greatly Anticipated E-Commerce Feeds China Online Banking Growth China’s Provinces and Cities to Issue First Muni Bonds
China Takes Bold Steps to Develop Renewable Energy Another Chinese City to Surpass Hong Kong in Growth
Thai Army Rulers Prepare Emergency Economic Measures The military junta running Thailand has drawn up a list of emergency measures such as price caps on fuel and loan guarantees for small firms to kick-start an economy threatened by recession after months of political turmoil.
The plans, outlined by Air Chief Marshal Prajin Juntong late on Sunday after a meeting with officials at economic ministries, take in longer-term measures such as the development of special economic zones on the borders with Myanmar, Laos and Malaysia.
The military toppled the remnants of former Prime Minister Yingluck Shinawatra's administration on May 22 after months of protests that had forced government ministries to close, hurt business confidence and caused the economy to shrink. In a televised address on Friday, Prayuth said the military would need time to reconcile Thailand's antagonistic political forces and push through reforms, indicating there would be no general election for 15 months at least.
Overall: “The focus should be on minimum government but maximum governance,” announced Narenda Modi, a fierce Hindu Nationalist, born the low-caste son of a tea stall owner. India’s 15th Prime Minister presides over the 1st parliamentary majority in 25yrs, paving the way for red-tape reform. Of course, India is the great hope for a planet starved of growth. For the next decade, 1mm Indians will join the workforce each and every month. Peacefully harnessing that potential requires good governance, education, investment, innovation, infrastructure. And as Modi replaced his hopeless predecessor’s 71 ministers with a team of 45, speaking of India’s “Glorious Future,” Premier Li promised a mind-numbing series of macro-prudential policies to stimulate growth. You see, for the next decade, 100k Chinese will leave the workforce each and every month. Not even the most nimble Shanghai Acrobat, perched perilously upon earth’s most bodacious bubble, can keep so many overpriced assets spinning atop long wobbly poles. Facing such a fierce demographic headwind. Without robust growth, inflation. Or a bit of nationalist fervor. So Chinese ships sank a fishing boat. Inside Vietnam’s territorial waters. As Japan’s nationalist Abe re-armed.
Anyhow, Modi wasn’t the only nationalist elected. French and British nationalists trounced centrist opponents. Thailand’s King backed the coup. Egypt’s military dictator won a stunning 93% landslide (the remaining 7 voters posted Facebook selfies with 700 virgins). Poroshenko crushed the opposition, promising to “end the war, end chaos, and bring peace to a united Ukraine.” Then popped a bunch of Russian commandos disguised as Novorossiya nationalists. Moscow’s nationalist-in-chief declared, “Strictly speaking it was impossible to hold elections.” Assad prepared for his June 3rd landslide. And Obama rambled on about new terrorist threats now emanating from the Syrian power vacuum that he himself created. As across the globe, nationalism creeps into the cracks. Left by maximum government and minimum governance.
Comments
Forecasts for a rebound in U.S. growth in the second quarter and stimulus from central banks in Japan, Europe and China, along with higher-than-estimated corporate earnings, helped send the value of global shares to a record $64 trillion last week.
The Chicago Board Options Exchange Volatility Index, a gauge of options prices known as VIX, slipped 1.5 percent to 11.40 on May 30. The measure closed for a fifth straight day below 12, the longest stretch since February 2007, data compiled by Bloomberg show.
The S&P 500 traded at 16.3 times estimated earnings, compared with 13 on the MSCI Asia Pacific Index and 15.4 on the Europe Stoxx 600 Index, according to data compiled by Bloomberg.
China’s Communist Party has stepped up the pace of stimulus measures, including faster spending from government budgets and increased railway investment, to help meet an official growth target of about 7.5 percent this year. Asia’s biggest economy is projected by analysts to grow 7.3 percent in 2014, which would be the weakest pace since 1990.
“Policy fine-tuning announcements in China continue to mount up, adding to confidence that growth will be supported around 7.5 percent this year,” said Shane Oliver, Sydney-based head of investment strategy at AMP Capital Investors Ltd., which oversees about $133 billion. “More easing measures are likely.”
Economists forecast European Central Bank President Mario Draghi and policy makers will cut the deposit rate when they meet on June 5, with a euro-area factory report today estimated to hold steady at the lowest level since November. Equity markets in China, Hong Kong and New Zealand are closed today for holidays.
http://www.bloomberg.com/news/2014-06-01/copper-climbs-as-japan-stock-index-futures-rise-after-china-data.html
“The so-called mini-stimulus is helping to stabilize the economy,” said Liu Li-Gang, chief Greater China economist at Australia & New Zealand Banking Group Ltd. in Hong Kong. At the same time, the rebound in PMI isn’t as strong compared with the same period in previous years, and the “central government needs to make a bigger move,” he said.
http://www.bloomberg.com/news/2014-06-02/china-manufacturing-gauge-rises-to-five-month-high.html
Are China Funds a Bargain? Most are Down Y T D
http://news.morningstar.com/fund-category-returns/china-region/$FOCA$CH.aspx
China News
Alibaba’s Listing Date Greatly Anticipated
E-Commerce Feeds China Online Banking Growth
China’s Provinces and Cities to Issue First Muni Bonds
China Takes Bold Steps to Develop Renewable Energy
Another Chinese City to Surpass Hong Kong in Growth
http://kraneshares.com/resources/kraneshares_capitalvue_may20.pdf?utm_source=KraneShares+Weekly+-+General&utm_campaign=0293c09488-KraneShares_Weekly_Email10_17_2013&utm_medium=email&utm_term=0_6d32ba24ce-0293c09488-27509461
Thai Army Rulers Prepare Emergency Economic Measures
The military junta running Thailand has drawn up a list of emergency measures such as price caps on fuel and loan guarantees for small firms to kick-start an economy threatened by recession after months of political turmoil.
The plans, outlined by Air Chief Marshal Prajin Juntong late on Sunday after a meeting with officials at economic ministries, take in longer-term measures such as the development of special economic zones on the borders with Myanmar, Laos and Malaysia.
The military toppled the remnants of former Prime Minister Yingluck Shinawatra's administration on May 22 after months of protests that had forced government ministries to close, hurt business confidence and caused the economy to shrink.
In a televised address on Friday, Prayuth said the military would need time to reconcile Thailand's antagonistic political forces and push through reforms, indicating there would be no general election for 15 months at least.
The United States, European Union countries and others have called for the military to restore democracy quickly, release political detainees and end censorship.
http://www.reuters.com/article/2014/06/02/us-thailand-politics-idUSKBN0ED06C20140602?feedType=RSS&feedName=topNews
Government vs Governance
Joshua M Brown June 1st, 2014http://www.thereformedbroker.com/2014/06/01/government-vs-governance/
Eric Peters via wkndnotes:
Overall: “The focus should be on minimum government but maximum governance,” announced Narenda Modi, a fierce Hindu Nationalist, born the low-caste son of a tea stall owner. India’s 15th Prime Minister presides over the 1st parliamentary majority in 25yrs, paving the way for red-tape reform. Of course, India is the great hope for a planet starved of growth. For the next decade, 1mm Indians will join the workforce each and every month. Peacefully harnessing that potential requires good governance, education, investment, innovation, infrastructure. And as Modi replaced his hopeless predecessor’s 71 ministers with a team of 45, speaking of India’s “Glorious Future,” Premier Li promised a mind-numbing series of macro-prudential policies to stimulate growth. You see, for the next decade, 100k Chinese will leave the workforce each and every month. Not even the most nimble Shanghai Acrobat, perched perilously upon earth’s most bodacious bubble, can keep so many overpriced assets spinning atop long wobbly poles. Facing such a fierce demographic headwind. Without robust growth, inflation. Or a bit of nationalist fervor. So Chinese ships sank a fishing boat. Inside Vietnam’s territorial waters. As Japan’s nationalist Abe re-armed.
Anyhow, Modi wasn’t the only nationalist elected. French and British nationalists trounced centrist opponents. Thailand’s King backed the coup. Egypt’s military dictator won a stunning 93% landslide (the remaining 7 voters posted Facebook selfies with 700 virgins). Poroshenko crushed the opposition, promising to “end the war, end chaos, and bring peace to a united Ukraine.” Then popped a bunch of Russian commandos disguised as Novorossiya nationalists. Moscow’s nationalist-in-chief declared, “Strictly speaking it was impossible to hold elections.” Assad prepared for his June 3rd landslide. And Obama rambled on about new terrorist threats now emanating from the Syrian power vacuum that he himself created. As across the globe, nationalism creeps into the cracks. Left by maximum government and minimum governance.
***
Brilliant, as always.
http://www.wkndnotes.com/