Al3SUNDAY DIGEST

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The set of links below is aimed to help you stay on top of global investment trends, separating facts from opinions and real news from noise.  I have designed this to help people investing offshore to find and focus on the information that matters.  Enjoy your weekend!

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US Market, China Peg, Oil production, Hiking U.S. Interest Rates…

us-housing-marketdata_pointU.S. Home prices rise an average of 5.7 percent in third quarter compared to a year ago.  We at Oasis continue to encourage investors in China buying property in U.S. to choose Las Vegas over more popular low return cities like New York or San Francisco.  Source:  FHFA 2015-11-25  and Full PDF Report

  • Nevada again in the top three areas in annual appreciation: 1) District of Columbia – 15.4 percent, 2) Colorado – 12.7 percent, 3) Nevada – 12.4 percent, 4) Oregon – 10.0 percent, and 5) Florida – 10.0 percent.

RMB USD DivorceOpinion_cnDavid Woo of Merrill Lynch thinks China’s RMB peg to the USD is headed for “The Great Divorce”.  They believe the question is not whether the U.S. economy can live with higher interest rates and a higher U.S. dollar. The question is, whether China can live with higher U.S. interest rates and a higher U.S. dollar.   They are skeptical.

  • “USD/RMB peg, a marriage of convenience that has been the anchor for the global growth model for the better part of the last 15 years, is headed for a divorce, and we think the RMB devaluation on Aug. 11 was a first small step in this direction”
  • “We believe the RMB will weaken further because, given the increased openness of China’s capital account, Beijing will not be able to lower interest rates and defend the RMB at the same time,” wrote Woo, reiterating his longstanding call”
  • “We forecast USD/CNY to rise to 7.0, which would represent 9 percent depreciation from the current level, compared with 3 percent depreciation implied by the forwards right now,” wrote Woo.
  • Further monetary easing by China will limit the range that the U.S. federal reserve will lift interest rates.  BLOOMBERG 2015-11-23 (仅限英语) 

Singapore_Harbour_Oil tankers
right_nowOil Ships are piling up all over the world from Singapore to China to the United States.   This is what a traffic jam looks like at sea ports since the industry has run out of temporary storage.

  • 2 Mile long traffic jams at seaports, with a total estimated 100M barrels of oil floating at sea.
  • sky-high supertanker rates have prevented traders from putting more oil into so-called floating storage, shutting off one of the safety valves that could prevent oil prices from falling further.
  • Beijing has bought at least 120m barrels of additional oil in 2015, although analysts believe its SPR is nearing capacity  CNN 2015-11-22  Financial times 2015-11-12  ZeroHedge 2015-11-12

Federal reserve committeeright_nowUS Federal Reserve’s John Williams (San Francisco Fed President) sees a strong case for December rate hike.  The Fed is widely seen increasing its benchmark overnight interest rate at its Dec. 15-16 policy meeting.

  • Williams sought on Saturday to make clear that rate hikes would not only be gradual, but would not follow the stair-step pattern that characterized the Fed’s last policy-tightening cycle, when it raised rates by a quarter of a percentage point at every meeting.
  • Fed quote: “We definitely do not want to, either through our actions or our words, indicate a preference for a very mechanical path of interest rates, whether it’s every other meeting or however you think about it, since economic data can surprise on the upside and the downside, maybe there will be opportunities to show we are data dependent.”   REUTERS: 2015-11-23

Catipillar 1200_500data_pointCatipillar warns that sales in China of construction equipment to fall even further.  Financial Times 2015-11-15

  • Industry-wide excavators will drop from 112,000 units in 2010 to just 23,000 in 2015
  • Stimulus program by the government inflated sales and capital expenditures too much in prior years.

Las Vegas 1940 Apache Casinoeducation170,000 iconic pictures of Depression-era America released by Yale. The pictures date from 1935 to 1945, and are placed on the map of the US in the so-called Photogrammer, which allows users to click on each county nationwide.

  • Above photo is dated March 1940 in Las Vegas.  During this period, unemployment was more than 20% and more than half of the banks in the U.S. failed..
  • Source:  YALE UNIVERSITY and a nice short film: HISTORY.COM GREAT DEPRESSION

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DESTINATION OF THE WEEK

HUMANITY-MSF

OASIS FULLY SUPPORTS MSF.org, more commonly known as “Doctors Without Borders”.  Médecins Sans Frontières was created in 1971, by a small group of French doctors and journalists who believed that all people have the right to medical care regardless of race, religion, creed or political affiliation, and that the needs of these people outweigh respect for national borders.  MSF assisted China on multiple occasions including the historic Sichuan earthquake.  For more information or to donate please click here.

On October 3rd 2015, the worst tragedy ever to happen to strike MSF happened when 14 of its medical and logistic staff were killed in Afghanistan by a U.S. military error.  It must not be forgotten that all of these highly skilled professionals were not just donating their time, but also risking their lives to be compassionate towards people in most need of help.