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leviathan

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About leviathan

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  1. I fully expect the UK will decide to pay more for its some form of post EU bespoke access the the European economic area than it pays now easing the "so called" funding problem for the EU. However that still has a way to play out yet - we are probably a year away from any serious negotiations. If however the answer for the UK is "no deal is better than a bad deal" then it will be lose/lose for the Uk and the EU and the EU will have to cut its cloth as will the UK. Either way the late summer is likely to be the last chance to get of sterling for something approaching what we now recognise as fair value. I hope/expect a bounce up to circa $1.38 by the end of the Summer as the DXY continues to weaken. After that I think we will get another serious bout of 2008 style deflation and sterling will crash through parity with both US$ and EUR probably never to return. If you look closely a number of lead indicators of a crash are starting to emerge in the US and UK - retail sales down, auto sales down, Uk property sales slowing down, credit creation falling, US Treasuries yield curve flattening if not yet inverting etc. The EU is likely to be the least of the Uk's problems within a few months time although with the pro and anti EU propaganda still in full swing it probably wont feel like that. Interesting times ahead... Lev
  2. http://parkislandhongkong.blogspot.co./2017/06/hot-hot-hot-and-why-property-is-still.html?m=1 This article has a similar target to me for a top in Centaline circa end 2018. I expect to get there a bit later than that possibly 2020 or 2021.
  3. Trainee Investor - share you point abut developers playing catch up with the market. Think this explains why Centaline Index is now making new highs above September 2015 even if HK developer shares are not yet. Better value is most likely with the HK developer shares as their land banks are now becoming more valuable. Dr Bubb - Agree the sentiment is now more neutral a mix of commentators calling for price rises and falls by year end whereas this was overwhelmingly bearish this time last year. However, in the mass market I think there are still more bears than bulls probably due to affordability metrics. Some of these bears will become forced purchasers IMO as they reluctantly chase the market up tapping into Bank of Mum and Dad and other funding routes My tenant has just given notice so I will put on to rent and sell at the same time - I expect this will lead to a new tenant but we'll see. Lev
  4. Posted 04 March 2016 - 09:47 AM Bounce seems to be happening/coming in HK property. I base this on - Sizeable bounce in HK developer stocks such as HK12 Henderson which seems to have retraced around half of its falls since the market started heading down in August 2015 - Signs from China that monetary policy has got considerably looser again - and that has spilled over into property eg Shenzen market reportedly up 50% - Stabilization and modest rises in HK centadata coming in last two weeks after CNY - Overwhelmingly bearish sentiment in commentary pieces etc in the press and on forums such as Asia Expat and Geoexpat To draw a parallel with the London market I know well I think we are at the March 2009 moment for HK property - does the money printing in China put a floor under the market as govt intervention did then in London {see the call made by the Berkeley Homes Chairman in early 2009 at the time where he was a lone voice calling the bottom against almost every other commentator calling for further falls} or does the market continue downwards after a dead cat bounce. The contrarian in me is calling for a sizeable bounce now based on a London 2009 onwards repeat {ie HK is half an 18 year cycle behind London} and the Chinese have plenty of scope still to ease monetary policy probably through interest rate reductions and easy money some of which will find it into HK property market like 2009. Any which way this is either bull trap time on the bubble diagram before a full on crash comes or its a London 2009 redux where authorities propel prices further into the stratosphere to multiples that become harder and harder to reconcile. I'm sticking with my HK property because its easy to manage from afar, in a market with good tenants and tenancy agreements, its a secure jurisdiction to invest in, its in a strong currency and the debt is now paid off. If I did sell then I think I would invest mainly in oil shares given we are getting close to historical inflation adjusted lows in the oil price But equally I may just be about to miss the last chance to get out - we should know within a couple of months _____________________________________________________________________________________________________________ I wrote the above approximately one year ago calling for a sizable bounce in Hong Kong property. I now think we may be about to see prices go vertical as we head into a blow off top phase. Why? - Developers shares are outperforming the physical market this year indicating further strength for HK property - Money is leaking out of China via companies outbidding HK companies for auctioned plots - Latest property cooling measures mean sellers must be really confident that they wont want to buy back in at a later date hence reducing supply in the secondary market - HK is following London about half a cycle behind IMO (2009 in London mirrors 2016 in HK - similar falls turned around then) I now expect prices to rise 30-50% as we head into a blow off top. Prime London has been falling since late 2014 so we may have a further five years (2016-2021?) to go in Hong Kong as valuations get really stretched. I expect this to confound nearly all market participants just as London did post 2009 and the only lever available to slow price rises remains govt cooling measures which until IR's normalise has proved a blunt instrument. Lev
  5. Goldman Sachs alumni lining up to drain the swamp? Bigger swamp coming in 4 years time
  6. Think £ has bounced is bouncing for two reasons the first being the article 50 delays and the second being optimism that Trump's win will put more pressure on the EU and Eurozone. £'s very long term performance is truly woeful - 13.4 DM's to the £ in 1948 barely 2 now so its nothing to get too excited about unless we discover another windfall like North Sea oil along the way. UK 's current account lives far beyond its means and if foreign money runs for the exits en masse (particularly Chinese money) or Banks freeze up again then the currency will get crushed. Having said that the pressure will now be on the Euro for the foreseeable given Italian referendum and French and German elections next year. So I have £ to bounce to £1.30 ish against the $ and hopefully to 1.25 or higher against the Euro before the downturn gets going again. DYOR
  7. Centaline this week hits all time high at 144.09 http://www.tradingeconomics.com/hong-kong/housing-index This is not unexpected to me see earlier posts - it seems like the surplus Chinese money has been avoiding Vancouver and London and heading in HK's direction instead. Main cloud on the horizon is another rise in US IRs in December but assuming this is 0.25% only the market may shrug off this rise as volume of Chinese money exiting the country continues at pace. Given its a new all time high for Centaline I suppose this could reverse quickly here but if this doesn't happen do people have any targets for where the top may come or indeed when? As a sterling investor locking in a profit through selling is quite tempting although I expect sterling to push a bit lower yet perhaps to c £1=$1.05 before bottoming out. Lev
  8. https://iiblack.wordpress.com/2016/08/16/example-title/ I recommend this article for explaining Sterling's plight - quite balanced IMO. Yes its been down before at 1.05 to US$ in 1985 and at 1.02 to the Euro in 2008 but they were at the extremes of pessimism. This time its still early days for the currency to adapt to the Uk's future. If we have now passed peak globalisation then there will be a sucking sound for many years to come as foreign money leaves the UK for good. This will force a major currency realignment similar to that experienced by the UK in the 1960's and 1970's. Most people are still clueless to this in the UK - in short you cant restrict free movement of labour without it knocking on in time to capital as well. Eg Many people buy their children a flat in the UK for use when at uni and afterwards. If you now say the student is not entitled to stay in the UK when they finish then that capital source will dry up for the UK. We are also going to get a nasty dose of imported inflation in the new year to reflect the repricing of imports. When Berlin was in ruins in 1948 and the Deutschemark was born you used to get 13.4 to the £. Now you barely get 2 DM to the £ a pretty spectacular collapse. Uk minus the foreign money will be more on a par to Spain or Italy. Sadly the hubris of the average Brit hasn't adjusted to this reality yet - going to be a very painful decade or probably two for all concerned .... Sadly still crazy amounts of hubris in the UK
  9. http://www.wsj.com/amp/articles/brexit-turns-ugly-for-pound-gilts-1475840667 U.K. going to be the first major country since USSR to enter an inflationary currency collapse. Capital flight next from the property market as foreign money seeks protection from currency falls. I don't see a floor under sterling until it is worth 80-90 cents and we will get there quickly too perhaps by year end - will stabilise there for a while before gals resume. No evidence rates will be raised to protect the currency yet but it will come. Sad to see most Brits still clueless about current account position and implications. Brexit is not cause just the trigger real problem has been masking balance of payments with foreign investment for 30 plus years. Will be blood on streets before this is over given unprepared most Brits are for this. Very sad
  10. I think we agree to differ on this Dr B - there could be contagion from other high RE markets like London/Vancouver as they turn down or paradoxically HK could benefit as capital looks for a safer place to hide. Here is Vancouver opting for property cooling measures a little after the event IMO http://www.knightfrankblog.com/global-briefing/news-headlines/vancouver-announces-15-tax-for-non-resident-buyers/ We saw in London that it was government support that boosted the London market from 2012 onwards - HTB and FLS policies aimed at ensuring re-election in 2015 lifted property prices dramatically upwards. Election coming in 2017 in HK will the current property controls and cooling measures survive or will they be rolled back with insiders frontrunning this - we'll see
  11. Saw this picture on another forum. It looks uncannily like the Hong Kong Property chart until the last two years. I think HK has missed out on the last two years of the mania that you normally get in an 18 year property cycle and Vancouver certainly has had I suspect because of property cooling measures aimed at protecting the banks from a subsequent crisis. I think we can guess what is coming next for Vancouver - less clear what it means for HK? My own FWIW is I there is a significant chance HK property prices will reverse higher shortly given the bounce in developer shares which seem to have broken through the falling trend line to the upside. Will property prices follow or is the downside momentum too strong without the removal of the cooling measures? Will HK follow London's 2009 lead and reverse higher when all experts are calling for further falls. Is the current property policy a vote winner or will it get unpicked in the elections coming in 2017? Lev BUMP - I posted this 4 months ago since when Centadata has ticked up from 120 region to 130 region a 7-8% bounce. In HK I note developer shares continue to rise and some property analysts have turned bullish in the light of delays in US IR rises. Has the bargain phase for HK property passed as per London in 2008 and will property prices now start to take off to the upside again as they did in London from 2009 onwards for 5-6 years? Odds improving by the day methinks... Like This Quote MultiQuote
  12. Saw this picture on another forum. It looks uncannily like the Hong Kong Property chart until the last two years. I think HK has missed out on the last two years of the mania that you normally get in an 18 year property cycle and Vancouver certainly has had I suspect because of property cooling measures aimed at protecting the banks from a subsequent crisis. I think we can guess what is coming next for Vancouver - less clear what it means for HK? My own FWIW is I there is a significant chance HK property prices will reverse higher shortly given the bounce in developer shares which seem to have broken through the falling trend line to the upside. Will property prices follow or is the downside momentum too strong without the removal of the cooling measures? Will HK follow London's 2009 lead and reverse higher when all experts are calling for further falls. Is the current property policy a vote winner or will it get unpicked in the elections coming in 2017? Lev
  13. That's the best thing about market IMO namely that there are no certainties only probabilities, history and mean reversion to guide us. There is one scenario which could happen which would be very bad for HK property - namely a steadily improving US economy where interest rate rises happen steadily and progressively without crashing global stock markets and causing policy responses. In that scenario which the bond market doesn't consider the most likely answer at the moment - I think HK property is done and we will get the full blown crash many commentators are calling for only and the removal of the property cooling measures will be too late to make a difference.
  14. Bounce seems to be happening/coming in HK property. I base this on - Sizeable bounce in HK developer stocks such as HK12 Henderson which seems to have retraced around half of its falls since the market started heading down in August 2015 - Signs from China that monetary policy has got considerably looser again - and that has spilled over into property eg Shenzen market reportedly up 50% - Stabilization and modest rises in HK centadata coming in last two weeks after CNY - Overwhelmingly bearish sentiment in commentary pieces etc in the press and on forums such as Asia Expat and Geoexpat To draw a parallel with the London market I know well I think we are at the March 2009 moment for HK property - does the money printing in China put a floor under the market as govt intervention did then in London {see the call made by the Berkeley Homes Chairman in early 2009 at the time where he was a lone voice calling the bottom against almost every other commentator calling for further falls} or does the market continue downwards after a dead cat bounce. The contrarian in me is calling for a sizeable bounce now based on a London 2009 onwards repeat {ie HK is half an 18 year cycle behind London} and the Chinese have plenty of scope still to ease monetary policy probably through interest rate reductions and easy money some of which will find it into HK property market like 2009. Any which way this is either bull trap time on the bubble diagram before a full on crash comes or its a London 2009 redux where authorities propel prices further into the stratosphere to multiples that become harder and harder to reconcile. I'm sticking with my HK property because its easy to manage from afar, in a market with good tenants and tenancy agreements, its a secure jurisdiction to invest in, its in a strong currency and the debt is now paid off. If I did sell then I think I would invest mainly in oil shares given we are getting close to historical inflation adjusted lows in the oil price But equally I may just be about to miss the last chance to get out - we should know within a couple of months Lev
  15. Kudos to your call on HK property Dr B - I think the developer shares and pressure on HK$ recently imply the property market is in for a bigger correction than we have seen so far. However, I suspect this will be a smaller fall than the 18 year cycle would typically see and what happened post 1997 in HK. The existence of property cooling measures that can be removed have limited the speculation in the market, most people aren't over leveraged and I don't expect IR's to rise sharply. This was the experience in London post 2007 where the market fell 20% before rallying. This is the level at which I would expect cooling measures to be progressively removed from. If this is the case HK property would not represent good value compared to shares but given long run IRs that may be where equilibrium will be re-established? Shares in HK now starting to look good value to me over the long term. Lev
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