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Dark Apprentice

 
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  • PBOC Steps In To Speed Up Mortgage Lending, Market Cries For More [View article]
    This is what i call a dilemma. The entire economy and the banking sector are so exposed to real estate, a hard landing would have a devastating consequence. That is why tho politburo is trying to push from the demand end of the equation. But i guess they would need to push further to get the frustrated buyers interested, such as lifting some of the "Hukou" restrictions on home ownership. Lowering of the reserve ratio is also widely anticipated by domestic institutions.
    May 21 10:10 PM | Likes Like |Link to Comment
  • China's Housing Sector: The Check Engine Light Is On [View article]
    Hi Depueman, 70% down is for 2nd home, 30% for the first. Please check back for my latest article.

    Best,

    DA

    May 20 09:59 PM | Likes Like |Link to Comment
  • China's Housing Sector: The Check Engine Light Is On [View article]
    In less desirable regions income levels are way lower as well, so think expensive in terms of affordability it isn't much better then Tier 1 cities.
    May 12 08:35 PM | Likes Like |Link to Comment
  • China's Housing Sector: The Check Engine Light Is On [View article]
    Hi Depueman,I am not making the call of a housing collapse here. I am simply point out that signs of rising risk in RE sector have emerged. Funding is the paramount risk faced by developers.Trust funds, as the banks curb lending, have become the major domestic funding source. By estimate, a total of 633.5 Billion CNY of trust will mature in 2014, 20% of which- 120 Billion will become due in Q2. This puts huge pressure on developers who desperately want to turn their inventory in such a weak market. Then price cut, cash flow issues and so on.
    No doubt, RE is one of the pillar industries in China, powerhouse of GDP growth for the past decade. But this current leadership remains keen on economy reform and have stated in various occasions that they hold high tolerance for GDP to drop below 7.5% So I doubt we are going to see massive stimulus like the one from 2008, but micro stimulus. How well will home buyers respond to those stimulus remains unknown.
    The politburo has limited measures to use for stimulus as well. They could lower reserve ratio to pump more liquidity(despite last 4 trillion stimulus in 2008 and subsequent stimulus , China had its worst liquidity crunch when interbank rate "Shibor" hit 13% last June. Where did the liquidity go? RE.) or increase spending( LG funding depends on land sales). Either or both will only delay the arrival of the tipping point, but neither really solves the issue.
    May 10 02:42 PM | Likes Like |Link to Comment
  • China's Housing Sector: The Check Engine Light Is On [View article]
    Hi Depueman, thank you for your comments. I agree with you that Urbanization will bolster demand for housing market. Maybe the word "Collapse" is not to be used to describe RE markets in Tier 1 and 2 Cities, but Tier 3 and 4 are more vulnerable.
    -The currently stock levels have already factored in incoming migrants from the rural areas. But in real life, migrants aren't so easily settling in major metropolitan regions, due to "Hukou-home registration", employment opportunities and so on.
    -Income/housing price make the affordability in housing a huge issue.
    -Government is investing heavily in Affordable Housing Programs that aims to provide 36 million single family homes in the next 5 years.
    -Property tax is on its way.
    -Anti-corruption measures and crystallization of RE ownership will add additional supplies to the market.
    -If take a long term view, the change in demographic structure will also shift the landscape of Chinese RE market completely. The baby boomers from the 50's and 60's are now in their 60s, from the planned economy era, their homes are acquired for little or no cost. Having implemented one child policy for so many years, it would not be unusual to see a young family to inherit 2 homes from parents from both sides. Think what that will mean to the supply side of RE market in the long run.

    Thanks!

    -DA
    May 10 12:20 AM | Likes Like |Link to Comment
  • Long Silver With A 16% Yield - Silver Shares Covered Call ETN [View article]
    Memshu, I think you are looking at their 1 year return, correct? -15.71% vs-23.39%. SLVO under-performed 7.68%
    What that shows is the price change, you gotta taken into account of the total return, LTM yield on SLVO is 17.54%, nil on SLV.
    So in a total return sense, SLVO outperformed by 9.86%.
    Under-performance of the price change is expected by design of this ETN. It basically cashes out every rally in forms of call premium and distibutes monthly. As to SLV, every rally is reflected in its prices and never gets paid out.
    Hope that helps.
    Apr 18 11:08 PM | 1 Like Like |Link to Comment
  • Long Silver With A 16% Yield - Silver Shares Covered Call ETN [View article]
    Yes, hence the annualized volatility is much lower then SLV as outlined in the end of this article.
    Apr 17 09:49 PM | Likes Like |Link to Comment
  • Long Silver With A 16% Yield - Silver Shares Covered Call ETN [View article]
    True. Options are zero sum games. What you get paid in premium today is the wager your counter-party placed against you position. That this why SLVO is designed for income not capital appreciation, though the latter is also benefiting SLVO. For strong bulls who believes that silver will shoot through the roof, SLV, or even Calls on SLV are recommended.
    Apr 15 05:13 AM | Likes Like |Link to Comment
  • Canadian QFIIs By Feb 2014 [View instapost]
    Yes, underlying securities for QFIIs are secondary market, exchange traded.
    Mar 26 03:32 AM | Likes Like |Link to Comment
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