Tuesday, November 29, 2016
"Singapore image in China is so rotten!" - China perspective
https://sg.news.yahoo.com/china-paper-says-singapore-troop-carriers-melted-down-033016097.html
The truth is finally out. We've stated numerous times in our previous postings that anti-Singapore sentiment had taken root in China. Like we said, China no longer believes in what we say but rather what we do now.
The truth is finally out. We've stated numerous times in our previous postings that anti-Singapore sentiment had taken root in China. Like we said, China no longer believes in what we say but rather what we do now.
President Park has finally given up on holding her office!
https://sg.finance.yahoo.com/news/korea-president-says-willing-leave-office-early-060438322.html
As predicted in our previous post, she would step down due to her scandal.
As predicted in our previous post, she would step down due to her scandal.
One of my favourite chinese dramas - Heaven's way! 天道！
This China drama is based on European essay called the last messiah.
https://en.wikipedia.org/wiki/The_Last_Messiah
https://philosophynow.org/issues/45/The_Last_Messiah
Please watch the 24 episodes if you have the time. It is a philosophical drama which depicts human conscience, conscious and behaviour. Reading the synopsis on The Last Messiah will help you to understand the drama better.
https://en.wikipedia.org/wiki/The_Last_Messiah
https://philosophynow.org/issues/45/The_Last_Messiah
Trump is right to insist on bilateral trade talks than multi-lateral TPP. Why?
TPP primary motive was to pursue USA political interest against China and to deter China economic growth. Without TPP, It will be tough to negotiate with USA during bilateral trade talk because USA is the largest economy in the world. Japan, the 3rd largest economy, will also face tremendous difficulty against USA. As TPP was a trade weapon to be used against China, USA gave a lot of concessions to Japan as a tradeoff for being anti-China. Japan has to open up its farm and agricultural industry for bilateral FTA which is detrimental to Japan PM’s party as his supporters are mostly farmers. Donald Trump will be focusing on USA economic benefits during bilateral trade talks. Therefore, it’s tough to negotiate with USA based on economic interests.
Monday, November 28, 2016
President park approval rating dropped to 4%
http://asia.nikkei.com/Politics-Economy/Policy-Politics/South-Korean-President-Park-s-approval-rating-dips-further-to-4
We stated in our previous post that she's likely to step down as President due to her scandal and it looked like this outcome would materialize soon as her approval rating had dropped to 4%.
Her scandal also revealed that her closest friend was behind the THAAD system installation deal in which she received a huge commission from Lockheed Martin for the transaction. This showed that THAAD system installation was not to defend South Korea but for corruption. President Park disregarded South Korea interests for her friend's interest. Therefore, she should step down.
We stated in our previous post that she's likely to step down as President due to her scandal and it looked like this outcome would materialize soon as her approval rating had dropped to 4%.
Her scandal also revealed that her closest friend was behind the THAAD system installation deal in which she received a huge commission from Lockheed Martin for the transaction. This showed that THAAD system installation was not to defend South Korea but for corruption. President Park disregarded South Korea interests for her friend's interest. Therefore, she should step down.
How China views Singapore nowadays?
http://en.people.cn/n3/2016/1128/c90000-9147777.html
Anti-Singapore sentiment has taken root in China and we've already stated this in our previous post. If we don't want China to view SG as a Chinese nation, we also cannot demand any preferential treatment from China. This is how reality works!
China no longer trusts SG now. China is taking the stance that it will believe in what it sees but not what it hears. SG can explain and clarify but if we don't synchronize our verbal and non-verbal communications, China will not trust us. In other words, we cannot say one thing but do another thing.
Anti-Singapore sentiment has taken root in China and we've already stated this in our previous post. If we don't want China to view SG as a Chinese nation, we also cannot demand any preferential treatment from China. This is how reality works!
China no longer trusts SG now. China is taking the stance that it will believe in what it sees but not what it hears. SG can explain and clarify but if we don't synchronize our verbal and non-verbal communications, China will not trust us. In other words, we cannot say one thing but do another thing.
Japan has suffered a bad karma for being USA staunch ally.
Japan has shot itself in its own foot by being USA staunch ally.
Firstly, Trump had slapped Japan PM right in the face by announcing the termination of TPP after he's in office even after Japan PM visited Trump.
Secondly, Russia will be deploying new missiles near Japan and there is nothing Japan can do about it. http://indianexpress.com/article/world/world-news/japan-protests-russia-missile-deployment-on-disputed-islands-4394955/
Thirdly, Vietnam is trying to appease China by terminating a Japanese nuclear project. http://www.bestchinanews.com/International/3183.html
Will Malaysia award the HSR project to Japan or China? Let's see.
Will SG face the same predicament too? Let's see.
Every country is trying to get distance itself from USA and get cozy with China. Just look at latin America countries! See what Peru and Chile are doing with China!
How did analysts and news media get the stock market so wrong with Trump's win?
http://www.marketwatch.com/story/the-stock-market-could-crash-if-donald-trump-is-elected-2016-10-31
http://fortune.com/2016/11/08/donald-trump-stocks-crash
Many analysts and news media predicted stock market crashes when Trump was elected president. However, there was only a knee jerk reaction and the stock markets became euphoria with Trump being the president.
How did they get it so WRONG?
Well, either they were so biased and wanted to spread fears or they analysed the situation from only 1 single angle (uncertainty with Trump). Nonetheless, they were dead wrong about the outcome.
Let's analyse the economic situation from a more objective perspective so that we can all understand the bullishness of the stock markets.
GDP = G + I + C + Nx (X-M)
Trump is a protectionist and will spend on local infrastructures (G). This will improve employments and increase GDP since G is part of it. The anticipated interest rate increase has caused funds (I) to flow back to USA which can be seen from USD appreciation. Therefore, investments (I) have increased which will boost GDP since I is part of it. Consumer consumption takes up more than 2/3 of USA GDP and consumerism will increase with better employment. Although TPP will be terminated when Trump takes office, he is proposing bilateral trade agreements (Nx) with other countries instead of multi-lateral. This will put USA in good stead as bilateral talks will give USA supreme bargaining power against other countries since it is the world's largest economy. The new bilateral FTAs will have more economic benefits than TPP for USA and boost net exports (Nx).
Thus, stock markets have been trending upwards after Trump's win. Japan stock market also benefitted a lot after Trump's win because of USD appreciation. USD appreciation causes yen devaluation which will boost Japan's exports.
http://fortune.com/2016/11/08/donald-trump-stocks-crash
Many analysts and news media predicted stock market crashes when Trump was elected president. However, there was only a knee jerk reaction and the stock markets became euphoria with Trump being the president.
How did they get it so WRONG?
Well, either they were so biased and wanted to spread fears or they analysed the situation from only 1 single angle (uncertainty with Trump). Nonetheless, they were dead wrong about the outcome.
Let's analyse the economic situation from a more objective perspective so that we can all understand the bullishness of the stock markets.
GDP = G + I + C + Nx (X-M)
Trump is a protectionist and will spend on local infrastructures (G). This will improve employments and increase GDP since G is part of it. The anticipated interest rate increase has caused funds (I) to flow back to USA which can be seen from USD appreciation. Therefore, investments (I) have increased which will boost GDP since I is part of it. Consumer consumption takes up more than 2/3 of USA GDP and consumerism will increase with better employment. Although TPP will be terminated when Trump takes office, he is proposing bilateral trade agreements (Nx) with other countries instead of multi-lateral. This will put USA in good stead as bilateral talks will give USA supreme bargaining power against other countries since it is the world's largest economy. The new bilateral FTAs will have more economic benefits than TPP for USA and boost net exports (Nx).
Thus, stock markets have been trending upwards after Trump's win. Japan stock market also benefitted a lot after Trump's win because of USD appreciation. USD appreciation causes yen devaluation which will boost Japan's exports.
Saturday, November 26, 2016
Why is gold losing its lustre?
Gold prices are falling for 2 fundamental reasons. First is the appreciation of USD. As USD rises, it gets more expensive to buy gold because gold is priced in USD in international market. Investors will get lesser gold for the same amount of USD. The 2nd reason is the rise in interest rate. As gold is a zero interest yielding asset, it will lose its favour once other assets have higher yielding powers. Gold is favoured in negative interest and low USD environment compared to other assets.
Why are asian currencies depreciating?
For RMB devaluation, please read our previous post, http://sg-stock.blogspot.sg/2016/11/high-interest-rate-environment-is-coming.html for more information.
Asian currencies are depreciating because of USD rises. USD is rising because of the expected interest rate increases in December 2016 and also in 2017.
Funds are leaving Asia and flowing to USA because of higher investment yields due to higher interest rates. Therefore, countries with lower foreign reserves will suffer more depreciations. This can be seen from SGD vs MYR. Due to the anticipated interest rate movements, fund managers will be dabbling in interest related derivatives whereby USA has the most liquid market because of arbitrage opportunities. This explains why funds are pulling out of Asia and moving to USA.
Business and investment costs will go up soon in Asia and these will create inflations. Subsequently, the vicious interest rates cycle will begin to form in the world until recession takes place.
Asian currencies are depreciating because of USD rises. USD is rising because of the expected interest rate increases in December 2016 and also in 2017.
Funds are leaving Asia and flowing to USA because of higher investment yields due to higher interest rates. Therefore, countries with lower foreign reserves will suffer more depreciations. This can be seen from SGD vs MYR. Due to the anticipated interest rate movements, fund managers will be dabbling in interest related derivatives whereby USA has the most liquid market because of arbitrage opportunities. This explains why funds are pulling out of Asia and moving to USA.
Business and investment costs will go up soon in Asia and these will create inflations. Subsequently, the vicious interest rates cycle will begin to form in the world until recession takes place.
Baltic dry index - 1181
Today, Friday, November 25 2016, the Baltic Dry Index decreased by 20 points, reaching 1181 points.
Baltic Dry Index is compiled by the London-based Baltic Exchange and covers prices for transported cargo such as coal, grain and iron ore. The index is based on a daily survey of agents all over the world. Baltic Dry hit a temporary peak on May 20, 2008, when the index hit 11,793. The lowest level ever reached was on Wednesday the 10th of February 2016, when the index dropped to 290 points.
US rig count - 593
HOUSTON — The number of rigs exploring for oil and natural gas in the U.S. increased by five this week to 593.
A year ago, 744 rigs were active. Depressed energy prices have curtailed exploration although the rig count has been rising in recent weeks.
Houston oilfield services company Baker Hughes Inc. said 474 rigs sought oil and 118 explored for natural gas this week. One was listed as miscellaneous.
Pennsylvania gained four rigs, Texas three and Colorado two.
Wyoming declined by three, New Mexico two and North Dakota one.
Alaska, Arkansas, California, Kansas, Louisiana, Ohio, Oklahoma, Utah and West Virginia were unchanged.
The U.S. rig count peaked at 4,530 in 1981. It bottomed out in May at 404.
The weekly tally, normally released Friday, was released Wednesday because of Thanksgiving.
Friday, November 25, 2016
Latest update on 9 SG armoured tanks seized in HK port.
http://www.todayonline.com/singapore/9-armoured-vehicles-bound-spore-seized-hk
This was the first time Taiwan was tasked to ship the tanks back to SG and Taiwan screwed it up. Previously, SG was responsible for all the shippings. Taiwan was not supposed to en route to HK for this shipping trip but it entered HK port anyway and offloaded SG tanks. SG tanks were secretly cordoned off in the port with surrounding containers to mask its presence but a whistle blower informed the port authority which resulted in the investigation and seizure. Under HK laws, no military equipment can enter HK without authorization and HK has the right to seize such illegal military equipment.
This was the first time Taiwan was tasked to ship the tanks back to SG and Taiwan screwed it up. Previously, SG was responsible for all the shippings. Taiwan was not supposed to en route to HK for this shipping trip but it entered HK port anyway and offloaded SG tanks. SG tanks were secretly cordoned off in the port with surrounding containers to mask its presence but a whistle blower informed the port authority which resulted in the investigation and seizure. Under HK laws, no military equipment can enter HK without authorization and HK has the right to seize such illegal military equipment.
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