Instant Alert: HSBC: The latest Chinese central bank moves won't revive the economy, but will drive house prices higher

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HSBC: The latest Chinese central bank moves won't revive the economy, but will drive house prices higher

by Greg McKenna on Mar 1, 2016, 2:40 AM

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The Chinese central bank has cut the reserve requirement ratio (RRR) by 3% to 16.5% and lowered benchmark lending rates by 1.65% to 4.35% since this latest round of monetary easing began in late 2014.

But, as today’s PMI data showed, China’s economic transition is in trouble. That, according to Steven Sun, HSBC’s head of Hong Kong and China equity research, is because “so far these conventional policy responses have yet to revive the sluggish economy.”

But the rate cuts have supported property prices over other asset classes he said:

For instance, property prices, particularly in tier-one cities, have gone up over 30% on average in China as of January. Property price continues to soar in cities like Shenzhen and Shanghai for the past month, driven by the sharp surge of credit expansion, which appears to be endorsed by the central bank and local governments as a way to reinvigorate sales and digest inventory in third- and fourth-tier cities.

HSBC China Property

One of the reasons Sun is expecting property to be once again the primary beneficiary of this week’s monetary easing is the volatility in Chinese stocks.

Sun highlights that “the domestic A-share market has gone through a boom-bust cycle since Nov 2014, with the big-cap SHCOMP index largely flat and the small-cap ChiNext index up some 20%. But the offshore H-share index has actually dropped around 30% despite aggressive monetary easing – primarily due to concern that earnings and dividends could be cut materially in coming years. For instance, the H-share dividend futures now price in around 18% y-o-y decline of dividends in 2017 and a flattish 2018”

None of which is a compelling reason for the money released by the PBOC to flow into stock markets.

That’s probably a good thing.

But in what sounds very much like a pre-GFC property goes up forever statement, Sun said the reason the latest 50.5% RRR cut will flow into property over A-shares is because “the former offers steady return while the latter exhibits great volatility.”

” A-share investors are still haunted by bad memories – three sharp stock market corrections over the past eight months is a lot to take. Second, the so-called “absolute return” products have seen significant growth, which is essentially “momentum trading”. Thirdly, leverage is still high, i.e., the margin financing balance still stands at over Rmb0.8trn even after Rmb0.3trn decline y-t-d,” Sun said.

It seems the market agrees with Sun.

Shanghai stocks are only marginally higher in trade today after yesterdays almost 3% fall on the composite index before the RRR cut last night.

 


 
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Instant Alert: China's economic transition is in trouble

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China's economic transition is in trouble

by David Scutt on Feb 29, 2016, 10:04 PM

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Activity levels at Chinese manufacturing firms contracted at the fastest pace seen since November 2011 last month, adding to concerns that growth in the world’s second largest economy is continuing to slow.

The government’s manufacturing purchasing manager index (PMI) slid to 49.0, below the 49.4 level of January and expectations for a further decline to 49.3.

Not only was the contraction in activity the steepest seen since late 2011, it was also the seventh month that the gauge came in below the 50 level that separates expansion from contraction, the longest stretch on record.

All firms, regardless of size, saw activity levels contract, revealing that even the largest manufacturers are struggling at present.

China NBS manufacturing PMI Feb 2016

Like the headline index, the internals of the report were equally concerning.

The subindex measuring output slowed to 50.2 from 51.4 while new orders, new export orders and order backlogs, lead indicators for future levels of activity, came in at 48.6, 47.4 and 43.9 respectively.

All are contracting, offering few signs that an imminent rebound is about to get underway.

That point was further reinforced by the separate Caixin-Markit manufacturing PMI survey, a private sector gauge that focuses on small to medium-sized firms, which fell to 48.0 from 48.4 in January.

The figure, lower than the 48.3 expected, marked the steepest contraction seen since September last year.

China Caxin manufacturing PMI Feb 2016

Adding to dire manufacturing reads, the separate non-manufacturing PMI report also disappointed, falling by 0.8 points to 52.7.

The figure, well below 54.4 level seen in December last year, was the lowest in the history of the survey.

China NBS non manufacturing PMI Feb 2016

While the scale of the decline in the manufacturing survey was expected, albeit larger than what markets had anticipated, the sharp deceleration in the non-manufacturing PMI survey is perhaps more alarming, particularly as this sector now accounts for over 50% of Chinese economic growth.

It, along with consumption, has been tasked with helping power the nation’s economic transition away from heavy industry, investment and trade. However, on recent evidence, activity levels in this sector have been slowing fast, creating renewed concerns over the health of the Chinese economy at present.

Yesterday China’s central bank, the PBOC, moved to again buttress the economic growth, cutting the amount of money banks need to hold as reserves by 0.5% to 17.0%.

The move, designed to spur on lending and lower money market interest rates, is the latest attempt by the bank to bolster flagging economic growth.

While its impact will take time to filter through the broader Chinese economy, given the scale of monetary stimulus already delivered over the past 18 months, one has to wonder whether it will be sufficient to address the alarming slowdown in business activity seen of late.


 
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Instant Alert: A group of 30 black students were reportedly removed from a Donald Trump rally before it even started

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A group of 30 black students were reportedly removed from a Donald Trump rally before it even started

by Harrison Jacobs on Feb 29, 2016, 9:35 PM

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Around 30 black students were reportedly asked to leave a rally for Donald Trump at Valdosta State University in Georgia on Monday, The Des Moines Register has reported.

The students told the Register that they were standing quietly in the bleachers, waiting for the rally to begin, when they were asked to leave. Secret Service reportedly escorted them out before the rally began. 

"We didn't plan to do anything ...  They said, 'This is Trump's property; it's a private event.' But I paid my tuition to be here," 19-year-old Tahjila Davis told the Register.

After leaving the complex where the rally was held, the students reportedly argued with police officers outside, who told them that they needed to leave the premises. 

The rally drew 7,500 people. 

 

 

 The incident comes just a day after Trump was asked repeatedly by CNN's Jake Tapper to denounce former KKK grand wizard David Duke's support for his candidacy. 

Donald Trump's campaign was not immediately available to comment.


 
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Instant Alert: Google's self-driving cars learned an important lesson about driving near buses

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Google's self-driving cars learned an important lesson about driving near buses

by Jillian D'Onfro on Feb 29, 2016, 8:57 PM

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Google recently taught its self-driving cars an important lesson about buses: They're less likely to yield.

That's the company's conclusion after one of its autonomous vehicles crashed into the side of public transportation bus in Mountain View, California, prompting it to make "refinements" to its software. 

"From now on, our cars will more deeply understand that buses (and other large vehicles) are less likely to yield to us than other types of vehicles," the company writes in it February autonomous vehicle report, according to Engadget.

This was the first accident where Google admitted that its self-driving car was at fault, rather than the accident being caused by other human drivers.

The incident in question occurred on Valentine's Day after Google's car had followed the "social norm" of pulling to the rightmost side of its lane to prepare for a turn. However, the car discovered sandbags blocking its way in front of a storm drain, so it needed to merge back into the center of the lane. In slowly doing so, it hit the bus, according to the DMV traffic report Google about the crash.

Google says its test driver had allowed Google's car to make the move despite seeing the bus coming, because he or she expected the bus to slow or stop. 

"This type of misunderstanding happens between human drivers on the road every day," Google writes. 

The company says that it hopes that the refinements it made to its software will help it "handle situations like this more gracefully in the future."

SEE ALSO: Learning more about Google's self-driving cars made me terrified to ever drive again


 
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Instant Alert: Snapchat now rivals Facebook with 8 billion video views on its app every day

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Snapchat now rivals Facebook with 8 billion video views on its app every day

by Alexei Oreskovic on Feb 29, 2016, 7:49 PM

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The battle for online video supremacy is no longer a contest between YouTube and Facebook. 

Snapchat has emerged as a new video powerhouse, with the revelation that users of the service now watch 8 billion videos on its app every day. 

The 8 billion videos per day number was shared by CEO Evan Spiegel to an audience of investors at the Morgan Stanley Technology, Media and Telecom conference on Monday, according to a report in Bloomberg and confirmed to Business Insider by a source familiar with the matter. Spiegel said the number of videos viewed on Snapachat is five times larger than at this time a year ago, according to the report. 

With 8 billion video views, Snapchat now claims the same amount of daily video views as Facebook, which said in November that it had reached the 8 billion mark. YouTube only claims that its users "generate billions" of views and hundred of millions of hours.

More videos per user

But Snapchat has more than 100 million daily active users, according to most reports (the company does not officially release any user metrics), whereas Facebook counts 1.04 billion daily active users. 

That means that Snapchat's average users are watching many more videos than Facebook's users. 

What's more, watching a video on Snapchat requires that a user proactively take a step to tap on a video to watch it. Facebook by contrast, fills its news feed with autoplay videos, and it counts any video that plays for three seconds or more as a "view."

Of course since Snapchat isn't publicly discussing these numbers, we still don't know exactly how it's counting its video views, or how many of the views are private messages sent from one user to another versus public "stories" that users and brands publish for their followers to see. 

The battle for video views is not just about bragging rights. At stake are billions of dollars in video advertising budgets, which are increasingly shifting from television to online services.

For Snapchat, which has a $16 billion valuation in the private markets and which is only know starting to rev up its money-making engine, positioning itself as a major video destination is key.  

SEE ALSO: Facebook is now generating 8 billion video views per day from just 500 million people — here's how that's possible


 
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Instant Alert: 8 amazing facts about the great scientific mystery that is left-handedness

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8 amazing facts about the great scientific mystery that is left-handedness

by Jessica Orwig on Feb 29, 2016, 6:18 PM

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There's a minority that not many people think about and has stumped scientists for decades: lefties.

About 10% of the human population is left-handed, yet no one knows for sure why lefties are so rare.

It's probably the result of a mix of factors, including things related to genetics, evolution, and even prenatal hormones. Or, it could be the result of something else entirely.

Here are some of the most interesting facts researchers have reported as they attempt to unlock the keys to left-handedness:

READ MORE: The 12 most compelling scientific findings that suggest aliens are real

SEE ALSO: World-famous chef Anthony Bourdain won't eat restaurant fish on Mondays, and there's a good reason why

Twins are more likely to be left-handed, but no one knows why.

Source: Behavior Genetics, 1996



Two left-handed parents have a 26.1% chance of having a left-handed child whereas two right-handed parents only have a 9.5% chance.

Source: Handbook of Neuropsychology, 1992



Most animals show no preference for handedness, or when one hand is more dominant than the other. Humans and our closest relatives, chimps, are an exception. About 90% of humans and 70% of chimps are right-handed.

Source: Monitor on Psychology, 2009

 



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Instant Alert: 4 traits hiring managers want in every new employee

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4 traits hiring managers want in every new employee

by Vicki Salemi on Feb 29, 2016, 6:11 PM

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Technical skills: Check. Education: Check. Qualifications: Check. Soft skills: Womp womp.

Hiring managers seek a certain "je ne sais quoi," a certain "it" factor, when evaluating candidates. When soft skills are clearly absent, or don't get appropriately emphasized during a job interview, it could be game over for your candidacy.

Yes, some industries and roles put more weight on this than others. But when I worked in financial services corporate recruiting, and candidates had nearly identical resumes, education, and work experience, those who highlighted soft skills were hired.

They emphasized their incredible people skills, work ethic, and overall positive presence.

Here are four things hiring managers look for in a stellar hire.

 

SEE ALSO: The CEO of Whole Foods says he never hires people who display this personality trait

DON'T MISS: The 27 jobs that are most damaging to your health

1. Plays well with others

Lunch interviews were the norm to determine how well someone fit in with the group. Could she effectively make small talk, smile, and get along with a variety of personalities on the team?

More often than not, hiring managers are assessing your interpersonal skills, and one way to effectively do this entails putting you in front of your peers. In fact, hiring managers repeatedly informed me that they can easily teach smart new hires specific technical skills, but people skills are valuable and harder to teach.

Your ability to make small talk, even if that's not your forte, is key to acing the lunch interview and demonstrating that "plays well with others" skill set. One way to improve this skill is to go to social events that you normally wouldn't attend. Venture outside your comfort zone, even for 30 minutes, and force yourself to have pleasant conversations with at least three people. By doing so, you'll sharpen your conversational skills and stay abreast of current events to have topics to discuss at your fingertips. And even though it's an election year, resist the temptation to talk about politics.



2. Gets fired up

Do you have what it takes to succeed and own your career? Run with it.

Instead of dimming your inner light and enthusiasm during a job interview, let your authentic, genuine ambition shine. I once asked the new hiring manager of a group with a unique job description and technology-heavy skill set what he was looking for in a stellar candidate.

"What's the top qualification you want me to focus on?" I asked.

He responded, "I'm looking for fire in their bellies."

As much as job seekers think there's a quantitative analysis or in-depth evaluation experience, it often comes down to basics, like "fire in your belly."

Candidates are able to convey this by explaining how they envision an exciting career full of growth. This isn't one of those fake-it-till-you-make-it conversations. And it isn't something to be glossed over on a cover letter. The people I've seen with a true fire have eyes that illuminate when they talk about their career or industry.

Be careful not to overdo it. Yes, it's important to demonstrate interest and ambition, but if you go too far, it could backfire and come across as overzealous. You can always practice a statement that's succinct and effective while you're conducting mock interviews with a mentor or friend.



3. Works hard

Do your homework and come to the interview with an example of your work ethic. Even if interviewers don't dive into behavioral-based interview questions seeking a specific example from your work history, insert it into the interview anyway. Feel free to rely heavily on this tactic during informational interviews and networking conversations as well. Let people you meet get to know you — the true you, work ethic included — beyond the surface information they can easily find on your social media profiles.

During the question portion at the conclusion of your interview, ask about the corporate culture by giving an example of when you went above and beyond and how you enjoy surrounding yourself with like-minded top performers.

Think of it this way: Hiring managers don't want to micromanage somebody, for the most part, and they certainly don't want to hear a direct report refuse to do specific work because it's "not their job." Instead, they want someone who can roll up their sleeves and dive in, adjust to a potentially changing work environment, learn, grow, and make an impact on the organization.



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