NEW$ TO U(SE)

On January 25, I published CHINESE CONSUMPTION NEAR TAKE-OFF:

In all, the stage appears set for the next major leg in China’s economic expansion as domestic consumption will greatly benefit from the forthcoming inevitable decline in savings rates. This will provide Chinese authorities with another powerful tool to manage the economy if, as and when infrastructure spending  and, more importantly, export revenues slow down. China will thus further insulate itself from the vagaries of its trading partners.

CLSA’s Andy Rothman recently made the case for China’s coming consumption boom.

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Read Warren Buffett’s Letter to the Shareholders of Berkshire Hathaway Inc. Here is part of the WSJ account of yesterday’s speech.

(…) In its annual shareholder letter, the conglomerate, which sells everything from ice cream to machine tools to house paint, reported that its book value gained 19.8% to $84,487 per share in 2009 from the prior year, based on a metric the company uses to track performance. In dollar terms, book value shot up $21.8 billion last year, a record.

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Chinese banks lent 1.52T yuan per month, on average, during Q1 2009. The first 2 months of 2010 average 1.05T yuan. The Lunar New Year Holidays were in January in 2009.

Chinese banks may have issued some 700 billion yuan ($102.54 billion) in new loans in February, a major slowdown from January, due to repeated government calls to rein in lending to cool down the booming economy, analysts said.

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When company executive Zhang Lan read the property news on Friday in Jiangsu province, he could not believe what was reported.

Property prices in 70 major cities nationwide climbed 1.5 percent year-on-year, with the price of new apartments rising by 1.3 percent and those of resale ones increasing 2.4 percent, latest figures from the National Bureau of Statistics (NBS) showed.

"Only a 1.5 percent increase? Shouldn’t it be 15 percent?" Zhang asked in disbelief.

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Click on “Read the rest of this entry” to view the table.

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(…) With high-deficit countries in investors’ sights, the pound fell to a nine-month low against the dollar this week and, perhaps more surprisingly, to a six-week low against the euro– even as Greece descended into national strikes. A crisis can be avoided, but the pound faces both internal and external vulnerabilities that will continue to make investors jittery.

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Recent data shows that speculative flows have been a major driver of the bounce in the dollar, especially versus the euro. "Hot money" positions have now reached levels where marginal dollar buyers will be increasingly scarce. For the dollar’s recovery to persist and to be a genuine cyclical advance, it needs the tailwind of long term capital inflows.

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Economic conditions are much improved for both companies and countries, executives say—but hopes for continued recovery are a little less bright than they were in December.

Three-quarters of respondents to our latest survey expect their companies to enjoy a profit increase in the next year, and fewer than half expect to cut costs during the same period—both firsts since October 2008, when we began asking. On the whole, this survey shows that executives see economies on the mend, with positive prospects for their countries—84 percent expect national GDP to rise in 2010—as well as for their companies.

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Chicago ISM rose again, reaching 62.6 in February, up from 61.5 in January. This is the highest level since April 2005.

Sharper month-to-month slowing in deliveries leads a very strong Chicago purchasers’ report for February. Deliveries jumped to 62.6 from January’s 55.3, both readings over 50 to indicate month-to-month slowing with February’s plus-60 level to indicate a significant degree of month-to-month slowing. This is good news as the slowing indicates strains on shipping and warehousing, strains signaling strong economic activity.

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A clear form of price manipulation.

David Rosenberg:

In March 2008, I published a report titled “Capitalism Takes a Sabbatical.” If only that were the case. I really can’t believe what I just read on Bloomberg News (Obama May Prohibit Home Loan Foreclosures Without HAMP Review). In a nutshell, the White House is considering a tactic that would prevent banks from foreclosing on defaulted homeowners unless they have been screened and rejected by the government’s Home Affordable Modification Program (HAMP). George Orwell must be rolling over in his grave.

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