Wednesday 07-20-16

Peter Boockvar – What Is Really Happening In China May Surprise People

 

On the heels of a failed coup attempt in Turkey and continued uncertainty in global markets, Peter Boockvar notes that what is really happening in China may surprise people.
Here is what Peter Boockvar wrote today as the world awaits the next round of monetary madness:  I have to admit, a Turkish coup or even an attempt at one was not on my list of focus. I’ll leave the consequences for others to discuss but realize that most geopolitical events are not market relevant for more than a few days and this may very well be just a Turkish thing. That said, disgust with the ruling class is being seen again.
As we get bombarded over the next few weeks with Q2 earnings, I’ll say what I seem to say quarterly. Expect about 70% of companies to beat earnings estimates. That is the benchmark so a beat rate around that level should not be considered good, it should be referred to as normal.
The pound is rallying again after BoE member Martin Weale said an August ease is not set in stone. “For there to be a case for easing policy I will need to expect weakness in output to be large enough more than to compensate for any overshoot in inflation.” They only have 50 bps to play with as most on the MPC don’t believe in negative interest rates. The line of the day though from Weale was this, “The old Lady of Threadneedle Street is not a nurse to markets.” We’ll see if he means it because any further amount of easing will not result in one bit of benefit to their economy as only costs are being built up.
The ECB meets on Thursday and no added policy changes are expected. After all, Mario Draghi is already killing his banking system, starving the region’s pension systems and bankrupting insurance companies for no discernible benefit. At what point does a central banker say “We’ve gone too far”?
What Is Really Happening in China May Surprise People
The number of price gains in 70 China cities surveyed moderated on a m/o/m basis. For new apartments, prices rose in 55 cities in June vs 60 in May and 65 in April. In December there 39 cities that saw price increases. For existing apartments prices rose in 48 cities, down 1 from May and down 3 from April. In December it was at 37. On a y/o/y basis for both new and existing apartments however, prices grew in even more cities than the month prior. Price gains are still out of control in the major cities with Shenzhen seeing a 47% y/o/y increase but that is actually down from 53% in May. Prices in Shanghai were up 28% vs last year, the same pace as the prior month and they were higher by 20% in Beijing. Acknowledging the bubbles, these cities have taken steps to curb the enthusiasm by raising down payment requirements for 2nd homes among other things. Prices in 2nd tier cities slowed.
Bottom line, Chinese government policy remains all about managing the excesses that have built up over the past 7 years in order to slow the pace of growth in an orderly manner. Smoke and mirrors is how they are doing it but the process continues. Either way, as seen in the US, it is taking more and more debt to generate the same level of economic growth. The Shanghai property stock index fell .7% in response to the m/o/m price slowdown while the Shanghai comp was lower by .4%. The yuan was also softer with it now above 6.70 vs the US dollar for the 1st time in 5 yrs. The H share index though was up by .5% with most of Asia modestly up. Copper is down about 1%.

http://kingworldnews.com/peter-boockvar-what-is-really-happening-in-china-may-surprise-people/

See the Sun Flip Out in Wild New Satellite View

The sun appears to take a dizzying flip in a new video captured by NASA's Solar Dynamics Observatory (SDO) spacecraft .
SDO did a full somersault on July 6 over the course of about 7 hours, taking pictures of the sun every 12 seconds all the while.
These photos, which SDO team members combined into a video, are pretty wild.
The video seems "to show the sun spinning, as if stuck on a pinwheel," NASA officials wrote in an image description Friday (July 15).

The sun appears to do a somersault in these images captured by NASA's Solar Dynamics Observatory (SDO) spacecraft on July 6, 2016 — but SDO was the one doing the spinning.

Credit: NASA’s Goddard Space Flight Center/SDO/Joy Ng

SDO does such a somersault twice a year to help its Helioseismic and Magnetic Imager (HMI) instrument take good measurements of the sun's outer edge.
"Were the sun perfectly spherical, this would be a much simpler task. But the solar surface is dynamic, leading to occasional distortions," NASA officials wrote. "This makes it hard for HMI to find the sun’s edge when it’s perfectly still. HMI’s biannual roll lets each part of the camera look at the entire perimeter of the sun, helping it map the sun’s shape much more precisely."

http://www.space.com/33462-sun-somersault-photos-nasa-sdo.html