Category Archives: Politics

The Chinese economy shrank 6,8 percent YoY in the first quarter of 2020 which is the first GDP contraction since records began in 1992

We are all in it toghether and the times we are living in right now is historic. Just take a look at China and the Chinese economy that shrank 6,8 percent YoY in the first quarter of 2020. What a drop! This is the first GDP contraction since records began in 1992. Wow.

The reason for the drop is well known; COVID-19. No doubt. Xi and the CCP took action after the virus outbreak and enforced a two-month-long shutdown of all non-essential business activity. Nor did they celebrate a new year, and a shutdown like this is of course very expensive.

Car production in China recorded the sharpest decline which dropped -44 percent. That is a big shock. Last year, approximately 21,36 million passenger cars and 4,36 million commercial vehicles had been produced in China.

The growth for passenger cars has jumped from 7 million in 2008 (financial crisis) to 25 million in 2017. In 2018, every fourth passenger vehicle in the world had been produced in China, and China is ranked first among countries with the largest production of passenger cars in 2018.

As you can see, the growth of the production and sale of vehicles in China have increased rapidly. Its interesting to see that almost all of the leading bestselling cars in China are the product of joint ventres with foreign manufacturers.

Shanghai Automotive Industry Corporation (SAIC) has an ongoing cooperation with General Motors (GM). SAIC-GM manufactures and sells Chevrolet, Buick and Cadillac brand automobiles in Mainland China. When the sales drop in China, so it does in the U.S.

Export from China also dropped 6,6 percent YoY to $185 billion in March 2020, compared with marked estimates of a 14 percent fall and after a 17 percent plunge in January-February combined amid the COVID-19 pandemic.

Among the the biggest trade partners, exports fell to the U.S by -20,8 percent. Considering the first quarter of 2020, exports declined 13,3 percent from a year earlier.

However, China`s long term growth potential will not be affected by the short term fallout of the coronavirus pandemic, as the country`s economic fundamentals remain unchanged, the authorities said.

To contact the author of this story: Ket Garden at post@shinybull.com

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Filed under Politics, Stock market

Is this the end of the bull market?

The bull market is 11 years old on Monday, and it is the longest stretch of non stop gains ever. The sell off over the past 12 trading days means that the US stocks are on the edge of a bear market. Therefore; Tuesday will be a test.

If the market goes below 20%, the bull market will officially be over, and we are entering a bear market. After the Great Recession, the bull market started in March 2009. The S&P 500 has gone straight up since then.

The S&P 500 is up 339% and it has been a slow recovery. It`s similar to the recovery from the Great Depression in June 1932 were the S&P 500 skyrocketed 325%. At that time, it was the deepest recession in modern American history.

President Franklin Roosevelt supported the bull market with massive government spending. Later on, Roosevelt pulled back from the program and the Fed tightened its reserve ratios for banks. The economy didn`t recover as much as it should, and tighter monetary and fiscal policy led to a double-dip recession.

This is why the Fed is important now. So are the Trump administration. The Fed cut the rates 50 points only days ago and they will probably come up with more news about the market even this week.

The Fed offers Repo Market $50 Billion more to ease rate pressure. New York Fed Repo Totals $112,93 Billion and Fed`s move to tap liquidity operations will buy time on more rate cuts.

What they do now is great leadership on the world stage. They can`t stop the virus but they can make liquidity.

To contact the author of this story: Ket Garden at post@shinybull.com

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Filed under Politics, Stock market, Stocks

OPEC leaders agree to cut oil production

The Oilprice has declined along with the stock market but Opec leaders agreed to cut production of 1,5 bpd with Russia support as Coronavirus hits demand. At the same time we have 2 and 10 year treasury yield below 1 percent. Investors are not shure how to react to the Coronavirus. A virus that usually has mild or no symptoms at all, according to experts.

Opec members will cut 1,0 mil bpd and its non-Opec allies (led by Russia) will cut by 0,5 mil bpd instead. This is interesting as we look towards OPEC talks on Friday. OPEC will hold a press conference on Friday after the OPEC meeting.

To contact the author of this story: Ket Garden at post@shinybull.com

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Filed under Politics

Trump made a $3 billion defence deal with Modi and India

President Trump is very popular in the World`s largest democracy India. Yesterday, he visited India and made a speech at the Motera cricket stadium in Ahmedabad city in Gujarat. More than 100,000 came to see Trump and hear him say that the U.S made a deal with India.

The U.S firm Exxon Mobil and Indian Oil signed a deal to help import more Liquefied Natural Gas. Trump said he made a defence deal with India. Not a trade deal, and the deal was a $3 billion military deal. A defence deal.

PM Modi`s nationalist government made tariffs of up to 120% two years ago. Trump and Modi didn`t sign a trade deal, but Modi said that negotiations would continue.

Mr Trump ended the day in the iconic Taj Mahal.

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Former Reagan economist Art Laffer said it is the longest recovery in the U.S history, and it is all because of Trump

The Hate Trump Media Mob said Trump will never be a president. The day he was inaugurated, they said he was stupid becuase he wanted to cut taxes. They also said he can`t run the White House like a corporation.

But millions of people voted for Trump and it seems like the majority of the people did the right thing. 61% of the Americans say they are better off today than three years ago (Gallup). Trump made it easier for for ordinary people and corporations by cutting the taxes, and this is why the American economy is booming.

Barak Obama want some credit for it. «Eleven years ago today, near the bottom of the worst recession in generations, I signed the Recovery Act, paving the way for more than a decade of economic growth and the longest streak of job creation in American history,» he wrote in a tweet yesterday.

Former Reagan economist Art Laffer said it is the longest recovery in the U.S history, and it is all because of Trump.

Obama printed money but the recovery was very slow. When Trump entered the White House, things changed very fast. The difference between Obama and Trump is that Obama is a politician while Trump is an economist.

Trump is a businessman and he know how it works. In addition, he have support from economists like Steven Terner Mnuchin and Larry Kudlow. Mnuchin is an American investment banker and civil servant. He is also a former hedge fund manager and investor.

As Secretary of the Treasury, Mnuchin supported the tax reform of 2017 and advocated reducing corporate tax rates. He also supports a partial repeal of Dodd-Frank, citing the complexxity of the legislation.

Kudlow has also been in the game for a very long time. He is an American financial analyst and former TV host. He began his career as a junior financial analyst at the New York Federal Reserve. Later on, he jumped ove to Wall Street.

Kudlow joined the administration of Ronald Reagan as associate director for economics and planning in the Office of Management and Budget.

The U.S has strongest most durable economy in the world, Obama said during his 2016 State of the Union address. The job growth was strong under Obama. At that time, America has put more people to work than Europe, Japan, and all advanced economies combined, so Obama was correct.

I don`t care about left and right. For me they all on the same team. Let`s call it Team America.

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