Economics: Don`t Underestimate China

(Drivebycuriosity) -  If we believe the media then China is about to crash. But the reality refutes the gloomy predictions. Last night we learned that China´s retail sales grew 9.2% in September, faster than in August & July (retail).

The numbers show that China`s economy is increasingly driven by domestic demand & retail sales and loosening her dependency from exports. China is transforming into a modern service economy like the US, fostered by the technological progress (E-Commerce, Fintech). The country has a huge natural resource which is fueling the perpetual growth - a gigantic amount of human capital: 1.3 billion people who are intelligent, who work hard and who save money to achieve a better life. According to the World Bank the Chinese save more than 40% of their income, the American just around 20% (worldbank). High savings (capital accumulation) and a good education lay the fundamentals for sustainable economic growth. Wikipedia counted in 2014 already "2,236 colleges and universities, with over 20 million students enrolled in mainland China" (wikipedia). This fast expanding knowledge will drive science & innovations in the future and foster economic growth.

China´s ascent is also driven by the rapid urbanization. People are flooding into the big cites where the productivity is much higher than in rural areas. The huge country now has more than 100 cities of over 1 million residents, a number that is likely to double in the next decade, writes the Guardian (theguardian). The  urbanization creates millions of jobs and is driving income growth for the whole nation. Swift rising incomes are fueling consume and so the economic growth of China.

The numbers also prove that the huge country is continuing her secular catching-up process, which is fueled by extreme income & wealth differences to the US and other Western nation values. In 2017 China had about $16,700 income per capita, the US number was $59,500 (cia.gov).

Don`t underestimate China!

Street Art New York: Meet Club 27

(Drivebycuriosity) - New York`s Street Art is a huge open air museum and admission is free. On Rivington Street on Manhattan´s Lower East Side you can see a huge mural which depicts the infamous Club 27: Musicians who all lost their lives in the age of 27.

Brazilian artist Eduardo Kobra sprayed the faces (or half faces) of  Janis Joplin, Kurt Cobain, Jim Morrison, Jimi Hendrix, and Amy Winehouse onto the wall. Kobra is known for colorful murals which often cover huge walls (eduardokobra).

 

Being an ambitious amateur photographer I took some pictures from the wall and the spraying action

 

To be continued.

Movies: First Man

 

(Drivebycuriosity) - "That's one small step for a man, one giant leap for mankind" - Neil Armstrong (wikiquote).  The US astronaut became a legend for being the first one who stepped onto the moon. The movie "First Man" describes how he prepared as a test pilot, shows his famous moon flight and tells how his family dealt with the risks that the husband & father took on ( imdb).

I watched the film in an IMAX theater which was quite an experience (this is a spoiler free blog. You can find a synopsis here  wikipedia). The huge screen and the massive sound system immersed me deeply into the events. I almost had the impression that I was participating in the the extremely challenging test flights and rocket starts. Intense rattling & shaking on the screen, amplified by vicious sound effects, gave me a sense of how much these astronauts must have suffered. 

The cinematography and special effects also let me feel the claustrophobic situation in the test planes & space crafts. Some scenes were thrilling & dramatic even though the outcome is history. I also could envision the rewards they received when they arrived into zero g and could observe the beauty of planet earth - and then walking on the moon, which I have never before seen as beautiful.

Ryan Gosling performs convincingly as Neil Armstrong. I was fascinated how stoic this man took all these risks & challenges.  I was also impressed by Claire Foy as the wife of someone who was willing to put his life at risk to change history.

"First Man" is a real Oscar contender. Go and watch it!

Contemporary Art: Terra Mystica & More @ Gallery Artifact New York

 

(Drivebycuriosity) - I like contemporary art.  Therefore I am often visiting art galleries in my neighborhood, New York`s Lower East Side. Gallery Artifact  (84 Orchard Street artifact) belongs to my favorite places, because the art trader has frequently changing art shows which are usually amazing.

On my last visit I spotted again paintings by interesting artists. Above you can see drawings by Alexandra Mas (ink on paper).

Above more by her

I also like the abstracts by Geneviève Vionnet.


To be continued.

Contemporary Art: Kyle Staver @ Zürcher Gallery New York

 

(Drivebycuriosity) -  New York`s Bleeker Street is famous for the cluster of pubs & rock venues. But you also can find an ambitious art gallery there: The Zürcher Gallery (33 Bleeker Street New York galeriezurcher). Recently I spotted there works by Kyle Staver. I display here my favorites from this show, a very subjective selection as usual.

This post starts with the painting Calisto (2017, 68 x 54 inches, oil on canvas) and a detail of it.

Above you can see Mermaids (2017, 64 x 36 inches, oil on canvas) followed by Swan Flight (2017, 68 x 54 inches, oil on canvas) & Expulsion (2017, 64 x 55 inches, oil on canvas).

Above Sailors and Sirens (2017, 68 x 58, oil on canvas).


To be continued

Economics: Oil - When Will The Iran Bubble Burst

(Drivebycuriosity) - Oil prices are on a tear. Brent Crude, the gauge for global oil, climbed around 40% year-to-date (brent). I think that the oil market is in a bubble again.

The oil rally is fueled by speculation that the Iran sanctions will reduce the global oil supply significantly. But the data don`t confirm the rumors. The International Energy Agency reported last  week that the world oil production climbed onto around 100 mb/d. That was 2.6 mb/d higher than a year ago and a new record (oilmarket  ). Last week we also learnt that the US crude oil inventories climbed by 6 million bbl for the week ended Oct. 5 (inventories  ). We also heard that active oil rigs increased by 8 to reach 869 last week (oilprice ). So. oil production in the USA and other countries is already overcompensating the reduced Iran oil deliveries.

It is only a matter of time before the Iran bubble will burst.

Stock Market: Some Money From The Table

(Drivebycuriosity) - This week the US stock market had another hiccup. Dow Jones, S&P 500 & Nasdaq lost between 2 and 4%. The dip is not surprising. US stocks - represented by the S&P 500  - had gained about 12% in the recent 12 months, technology stocks much more. Some superstar stocks like Amazon had climbed more than 100%. So some gamblers took some money from the table.

Professional portfolio managers, including administrators of large funds, usually act as a herd. When their bros are selling they are selling too which amplifies the stock market movements. The slide in the middle of the week animated many fund managers - and others - to take profits, apparently this encouraged hedge funds and other short sellers to amplify their bets against the stock market. So the slide accelerated, causing more selling - a typical herd behavior. Falling stock prices also triggered stop-loss-orders. Many professionals set these sell orders to prevent further loses.

I bet that investors like Warren Buffet did not participate.  Investor have a different mind set and a long term horizon. They don´t follow the herd and stick with their investments to give them time to play out.

This week`s turbulence reminds me of similar hiccups in February & March when the gamblers responded to news about interest rates & trade war as they did this week again (madness  ). I assume that this week´s dip will soon be forgotten - like the dips from February & March - and the gamblers will come back thanks to the solid growth of the US economy (about 4% annually frbatlanta ) and swiftly risings company earnings (around 20% annually zacks).

Enjoy!