The US Housing Market
Good morning, readers. As the DOW passed 16,000 yesterday, I didn't write anything at that moment. Regular readers of my column/blog will surely know that I was one of the few to suggest the DOW would go past 14,000 - then past 15,000 (the magic of 15,000) - and only recently 16,000. I was of the view that the DOW could even do 17,000 this year, in the next five weeks or so. A thousand points in say 25 working days, is it possible? I shall wait to assess the markets further before I would commit to such a suggestion.
In the meantime, I imagine a lot of punters will take some money off the table, and put into alternative markets. India SENSEX has seen more inflows in last few days.
If not this year, then certainly I believe the DOW will hit 17,000 in next few months, on the proviso that the feel-good is assisted by the candy distribution, on which the panel will decide in the US this week.
That's all for now.
I wish joy and success to all my readers, in Netherlands, Fuzhou, California, India, Kenya, Tokyo, etc, etc.
Caveat : Everyone trades entirely at their own risk, I am merely sharing my views.
(c) Copyright 19th November 2013, Durudarshan H. Dadlani.
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My blogs being read overnight are as follows :
- The ECB's 25 basispoint cut
- Stephanie Ruhle, CNBC interviewer
(She's actually an anchor for Bloomberg, working in New York)
- This is time for buyers to support Bangladesh factories
(American companies have done so, may blessings be unto them)
- Thomas Sugrue's review of The Last Great Prophet
- The Bank of America share price.
Yesterday I heard the news that China has experienced good growth and far from a hard-landing which people feared it is experiencing very sound growth, with PMI figures up and increasing.
One commentator has stated that China has several trillion dollars of reserves for investment, so I imagine the worldwide boom can continue. Today I heard that 80 percent of visas being taken for visits to Portugal are for Chinese property investors. This way, all economies with an open-door policy to encouraging property ownership and immigration would benefit from the Chinese wherewithal to sustain growth and Recovery.
If the Chinese sources are suggesting U.S. is looking for $561 Billion for next six months, it augers well for the U.S. that the jobs numbers were pretty good and growth potential is inherent in America, and it would be very probable that China would support such borrowings and support, as they have done in the recent past.
The luxury sector may start to rebound in China, who continue to buy Rolls Royce cars and jets as never before, and with the refocus on domestic consumption and increasing exports from China, it is apparent that the Honourable Xi Jinping is inspiring policies that will help the Chinese people achieve higher standards of living.
For stability and optimism into the near future, what more could the world wish for?
It appears the Obamacare rollout has had teething problems, especially with the website interfacing.
Perhaps they should have stuck with their initial design, just to guage peoples interest without putting them off by asking comprehensive personal details. It's like me asking you for your personal details before allowing you to read my blog.
Good news comes from Professor Gruber's analysis of the figures that would need or benefit from Obamacare, and provided provisions have been pencilled in for the expenditure, the launch should be quite successful, after the rationale is accepted by Joe Public.
It seems that about 14 percent of the U.S. population would need Obamacare, the other 86 percent are adequately catered for.
Of the 14 percent, Obamacare seeks to enlist the young working people, who don't have any kind of health care provision. Once these people start to sign up in numbers, I presume the premium costs would start to come down. It has to be attractive for people to sign up, not a cumbersome figure that people would be unwilling to pay and indeed may not see the immediate necessity to pay if they are currently in good health. Everything being equal, most people would expect to continue to enjoy good health, and it seems a foolish waste of money to buy an insurance policy for health to most young people. However, good health carries no guarantees into the future, and it is against this that people need to have cover, seeing how people's lives are sometimes marred by ill-health and their careers written off. It is against this realistic look that young people need to consider taking up a policy to safeguard their future.
(In Britain it is straightforward enough. Everyone is levied what is termed National Insurance, which is a fixed percentrage of one's income, and universally everyone gets medical cover under the National Health Service. Some out of personal preference for quicker or better service decide to take out additional policies with private health insurance companies. Side by side, the NHS and organisations such as the not-for-profit BUPA and Simply Health serve the population very well, in practical terms.)
If lot more people show an interest in what Obamacare offers, presumably the insurance premiums would start to come down and encourage more and more people to sign on, so it would actually deliver what would become affordable health care.
As the issue is debated and considered, I guess it will gather acceptance, if not straight away then over a number of years. Good health brings great benefits in enjoyment of life and work, creating a happy atmosphere and bringing prosperity to all, a welcome place.
The news from the Federal Reserve that it expects of maintain the Stimulus at $85 billion a month in bond purchases should have been great news for the markets, yet they headed slightly lower. The fact that there was no mention of the sequester was a bonus. The damper was I believe the news that Senator Paul is prepared to veto the appointment of Ms Janet Yellen to head the Fed. It seems the tea-party Republicans have been having a crack at bringing down the government for the last three and a half years, and they are trying to give it another go. Ultimately, it seems that good common sense will prevail in the good of the nation, and Ms Yellen may yet take control of the spigot and give everyone some punch for the New Year. At least the majority of analysts at CNBC hold that view, and people are expecting the markets to strengthen further : will the DOW test 16,000 before the year-end?
The housing figures were disappointing, but you cannot blame the individual homebuyers. The air of uncertainity created by the previously on-going sequesteration cuts, then the partial government shutdown, then the delay in agreement on the debt ceiling raise, must have compounded to weigh down sentiment. Yet it seems the hedge funds have purchased lot of housing stock, and put it into the rental sector, and house prices have been buoyed up. This may be good for the hedge funds, but for the individual homebuyers it means having to begrudgingly pay rent instead of a mortgage, but a roof is a roof anyhow, and thank God for investors who have the wherewithal to buy and rent them out.
Once the air is clear, and assuming the punchbowl is replenished, hopefully until the end of 2014, then housing Recovery should gain some stability. For the individual homebuyers, it will be a great point to join in in the party.
Under Mr Obama and the Fed's accommodative policies, Wall Street has done well, now reaching for a record high. Money has been invested in equities, turned to working capital for the corporations, income for investors, and built up a substantial cushion for the pension pots and investments. So far, it has been a good reservoir of capital, and providing confidence is maintained, will continue to be so.
What maintains the house should be good for everybody. Of course one or two senators may not care much. I hope they will not inflict a lot of pain on the system as a whole by sticking to their guns too rigidly. The climate is one for accommodative policies of co-operation, so that the world may avoid another recession soon after the longest one in recent history is hardly over. Just for the sake of humanity, they have to rethink the consequences of their stance.
Obamacare is a great idea if it were like the National Health Service in Britain; but it seems the way Medicaid is being expanded to cater for the people who were previously without cover is placing substantial burdens on the system. Quite a lot of people are having to pay much more then they did previously in order for additional people to get cover. This just does not seem fair. Perhaps a parallel stand-alone system of walk-in centres could be sponsored by the government to cover people who did not previously have cover, so that those who were happy with Medicaid could possibly be happy with them once again. As I have remarked previously in my column, the NHS in Britain evolved for 40 years from the Poor Laws of 1907 to Royal Charter in 1947. Such a grandoise system cannot evolve in a short few years, and the teething troubles with the glitch in the computers may be the least of the problems.
All things being equal, 30th November is not far away, for people to see how Obamacare is rolled out.
I would have suggested even more patience so that a balanced, truly Affordable Health Care may evolve for the United States.
It seems a frequent occurrence, the coming of typhoons and cyclones that seem to hit the Eastern board of India every year, often hitting Odisha the hardest, together with Andhra Pradesh as well as Bengal.
This October, cyclone Phailin landed at Gopalpur in Odisha with a core speed of 200 Kilometres per hour, reducing to matchsticks the flimsy dwellings in the low-lying areas, flooding vast majority of farmland and dwellings. Fallen trees and power lines added to the problems in travelling. Thanfully early warming of the oncoming SuperCyclone enabled the local municipal authorities put into action evacuation plans, together with assistance from the Army and Navy, which were on standby, and so only a tiny number of people lost their lives this time, compared to the 10,000 last time.
Nearly a million people had been evacuated, with a timely and well-ordinated effort by the authorities. Social media must have helped, emphasising the dangers of flooding and the ferocity of the winds, and, most important, how much time they had to get out of harm's way. Villagers became convinced of the seriousness and left for the safety of higher areas and strong public dwellings, travelling at the last minute by buses laid on by the local councils. Thankfully, so many people saved their lives by not ignoring the messages.
About 100,000 people were similarly affected in Andhra Pradesh also.
Odisha Chief Minister has requested the government in Delhi to provide approximately a billion pounds over and above the 572 million pounds which would be available in the state disaster response fund, such has been the devastation left by Cyclone Phailin.
The government and local authorities are stretched trying to provide food, shelter and rehabilitation for the million plus people affected in the last fortnight.
As if that was not bad enough, another cyclone has hit the same region today, killing 29 and leaving another 85,000 marooned. The government and the local communities have a huge task of rebuilding and rehabilitating nearly 1.3 million people in Eastern states, some of the poorest and least developed in India. It would be a great blessing for the people if this encourages the construction of alternative housing in such areas.
In the meantime, again I pray for the safety and well-being of the people of Odisha and Andhra Pradesh and Bengal.
Respectfully Invoking our Saviour's prayer I intone :"Winds, be thee still".
May God's love and care be with the people there.
(written by Duru-darshan
Melchizedek priest at Church of Jesus Christ of Latter-Day Saints, Ilford)
Good news heard today, 9th November 2013.
Indian Prime Minister has announced allocation of funds of 1,000 Crores each for Odisha and Andhra Pradesh. (approx. 1 Billion Pounds each).