Tuesday, November 15, 2016

Wednesday November 16 20916 Housing and Economic stories


The Amazing Collapse of Russia’s Auto Market - (www.wolfstreet.com) We don’t hear much from the global automakers and their analysts about the multi-year sales fiasco in Russia, in part because they don’t like to bring up crummy data unless they have to. And they don’t have to. For them, Russia is just a tiny market, compared to China and the US: through October this year, new light vehicle sales in Russia amounted to about 8% of sales in the US. Since 2010, auto sales in China, the US, and many other countries have boomed. And they grew in Russia too, but only until late 2012, when the market began to stall. They declined in 2013. Then, when the sanctions hit in 2014, the market sagged. When the oil bust hit in 2015, the market crashed. And to this day, it continues to head south. The numbers are stunning.

India’s Largest Bank Gets $7 Billion in Deposits as ATMs Run Dry - (www.bloomberg.com) Indian government’s surprise move to ban high-denomination banknotes on Nov. 8 has seen lenders lure 2 trillion rupees ($29.8 billion), as customers across the nation queue for hours to deposit the old bills. The decision has also put tremendous pressure on the banking system to replenish the funds, as the banned bills accounted for 86 percent of money in circulation. More than 70 million transactions were recorded up to mid-day of Nov. 12, the Ministry of Finance said in a statement late Saturday. There’s adequate money in the currency chests at more than 4,000 locations and re-configuration of dispensing machines to disburse new notes will be completed within two weeks, Finance Minister Arun Jaitley said. Lenders have been caught out by Prime Minister Narendra Modi’s unexpected and widely-praised announcement of the withdrawal of 500-rupee and 1,000-rupee notes, part of a crackdown on tax evasion and the underground economy. The Reserve Bank of India on Sunday urged the public not to be anxious and avoid going to banks repeatedly to draw and hoard cash.

France’s Bonds Feel Election Jitters as Trump Spurs Market Split - (www.bloomberg.com) The rift between core European bonds from France and Germany increased after Donald Trump’s surprise victory in the U.S. presidential elections. The difference in yield between 10-year French securities and similar-maturity German bunds, Europe’s benchmark securities, closed at its widest in 14 months on Friday. That mirrors how the spread moved after Britain’s shock decision to leave the European Union in June. The Republican candidate’s rise to prominence was compared in markets to Brexit in that surging populist sentiment helped carry the vote. This has revived investors’ concerns of a similar outcome in next year’s presidential elections in France. Marine Le Pen, leader of the anti-establishment and anti-Europe National Front party congratulated Trump and said his victory is a harbinger of what could happen in her own country.

The Global “Populist” Doom Tour Swings to Italy - (www.wolfstreet.com) Widespread public disaffection and dissatisfaction are not unique to the UK and US; they’re on the rise all over the developed world. It’s not hard to see why. In the words of Mark Blyth, one of an embarrassingly small number of economists to correctly call both Brexit and the victory of Trump, the last 30 years have seen “a huge amount of economic growth but hardly anyone’s benefited from it.” And now the people are “fed up” and have decided at any opportunity to “give their elites notice that they’ve had enough.” On December 4th, Italy could become the next whistle stop on the global populist doom tour as its people vote in a national referendum on the government’s proposed constitutional reforms, which seek to drastically curb the role of the upper house Senate, a move that Italian premier Matteo Renzi says will simplify decision-making and ensure stable government. Opponents fear it will make the legislative process more complicated and reduce checks and balances.

Donald Trump Win Has Investors Selling in Emerging Markets - (www.wsj.com) Donald Trump’s victory in the US presidential election could jeopardise the recent rally in emerging markets if the US takes an insular, anti-globalisation stance. This week, veteran fund manager Neil Woodford said that Mr Trump’s election could “puncture the love affair that the market has had this year with emerging market shares and bonds”. After years in the doldrums, emerging markets have come back into favour among investors recently.  Over the past year, the average global emerging markets fund has returned 31pc, and most funds’ one-year return eclipses their three-year performance.



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