Both energy and industrialization of China related: China to Cut Retail Fuel Prices at WSJ. “Car makers are falling over themselves to get a slice of the action in China, the world’s biggest market.” Telegraph
The structural economic problems are huge, real and weigh heavily on sentiment (Hussman Funds). But a thought process going around suggests auto’s and housing, yes those red-headed step children, might contribute meaningfully in a positive fashion going forward: Econbrowser. Before laughing, continue reading.
Indeed, auto sales are on track to be the best since 2007: “Strong June sales…prompting analysts to revise their consensus forecast of 13.9 million upward, to 14.2 million.” Detroit News
Additionally, for ten consecutive months the construction sector has shown year-over-year job growth: WSJ. I believe residential rents have begun a secular climb with stellar fundamentals. Supply is so tight for decent rental housing that it is almost impossible to find, demand is pent up, and market psychology has shifted: WSJ. Even homeowner equity has improved after collapsing: Mortgage News.
Meanwhile, seems everyone wants easy money. Fed’s Evans Supports More Aggressive Action to Aid Weak Economy at WSJ. China’s Wen says policy fine-tuning needed to spur growth at Reuters. Remember, ever more stimulus is required to keep the party going: Ritholtz.
“He is probably the most successful long-term performer in the hedge-fund industry who has managed to stay out of the spotlight.” A nice little write-up on Seth Klarman: Economist.
“Given that China’s nominal GDP has soared at double digit rates for decades, why is anyone surprised Chinese house prices have risen rapidly?” Money Illusion. India’s is having a tough year, but expectations going forward are strong: India Times.