When economic conditions initially begin to slow down, businesses continue to order goods like they normally would but those goods don’t sell as quickly as they previously did. As a result, inventory levels begin to rise, and that is precisely what is happening right now. In fact, the U.S. inventory to sales ratio has risen sharply for five months in a row. This is mirroring the pattern that we witnessed just prior to the financial crisis of 2008, and it is exactly what we would expect to see if a new recession was now beginning. In recent weeks, I have been sharing number after number that indicates that a serious economic slowdown is upon us, and many believe that what is coming will eventually be even worse than what we experienced in 2008.
And even though I write about this stuff every day, I was stunned by how rapidly inventory levels have been rising recently. The following numbers come from Peter Schiff’s website…
This comes on the heels of the largest gain in wholesale inventories in more than five years in December.
Inventories rose 7.7% from a year ago in January. Meanwhile, sales only rose by 2.7%. Overall, total inventories were $669.9 billion at the end of January, up 1.2% from the revised December level.
The increase in durable goods inventories at the wholesale level was even starker. These inventories were up 11.7% from January a year ago, and are up 17% from January two years ago, hitting $415 billion, the highest ever.
Businesses don’t like to have excess inventory, because carrying excess inventory is expensive and cuts into profits. So they try very hard to manage their inventories efficiently, but if the economy slows down unexpectedly that can catch them off guard…
There are few indications of economic slowing that are more convincing than an unwanted build in inventories — and that apparently is what’s underway in the wholesale sector.
When inventory levels get too high, businesses often start reducing the amount of stuff they are ordering from manufacturers.
So we would expect the numbers to indicate that manufacturing output is down, and that is precisely what we have witnessed over the last couple of months…
U.S. manufacturing output fell for a second straight month in February and factory activity in New York state hit nearly a two-year low this month, offering further evidence of a sharp slowdown in economic growth early in the first quarter.
If manufacturers are making and sending less stuff to businesses, and if businesses are selling less stuff to their customers, then we would expect to see less stuff moved around the U.S. by truck, rail and air.
And wouldn’t you know it, the numbers also tell us that this has been happening too. The following comes from Wolf Richter…
Now it’s the third month in a row, and the red flag is getting more visible and a little harder to ignore about the goods-based economy: Freight shipment volume in the US across all modes of transportation – truck, rail, air, and barge – in February fell 2.1% from February a year ago, according to the Cass Freight Index, released today. The three months in a row of year-over-year declines are the first such declines since the transportation recession of 2015 and 2016.
So there you have it. Anyone that tries to tell you that the U.S. economy is “booming” is simply not being accurate.
And when you throw in the fact that we just witnessed one of the worst disasters for U.S. agriculture in all of U.S. history, it is easy to understand why the economic outlook for the remainder of 2019 is rather bleak. One agribusiness company just announced that it will have “a negative pretax operating profit impact of $50 million to $60 million for the first quarter” as a result of all the flooding…
Already suffering from low crop prices and the U.S.-China trade war, Mother Nature has delivered yet another blow to the beleaguered American farmer. Growers in the heartland this year have seen arctic cold blasts, been blanketed by snow and just in the last week were inundated by floods. Archer-Daniels-Midland Co., one of the world’s biggest agribusinesses, said Monday that it expects weather disruptions to have a negative pretax operating profit impact of $50 million to $60 million for the first quarter.
Korth said he fears the worst for local farmers, citing a friend who lost 85 cows to flooding and another who sells seeds and has already seen order cancellations.
“It’s going to put a lot of people out of business,” Korth said. “It’s just a terrible deal.”
Unfortunately, the flooding in the middle portion of the country is just getting started. According to the National Weather Service, we are going to see more catastrophic flooding for the next two months.
As you can see, the elements for a “perfect storm” are definitely coming together, and I encourage everyone to get prepared for rough times ahead.
But many people are not that concerned about a new crisis, because they remember that global central banks were able to pull us out of the fire last time around.
Unfortunately, they may not be able to do it this time. Just consider the words of the deputy director of the IMF…
Major financial institutions may be powerless to prevent the next global economic downturn from tuning into a full-blow recession, the International Monetary Fund has warned.
In a speech on the future of the eurozone, the IMF’s deputy director David Lipton, warned of the depleted power of central banks and governments to combat another sharp economic shock.
“The bottom line is this: the tools used to confront the global financial crisis may not be available or may not be as potent next time” he said.
But I am sure that global central banks will try to patch the system back together again, and at certain moments it may even look like they are having some success.
In the end, however, they will not be able to stop the “Bubble To End All Bubbles” from completely bursting.
It has taken decades of exceedingly foolish decisions to get us to this point, and there is simply no way that we can avoid the day of reckoning that is coming.
Wednesday, March 27, 2019
Sunday, March 17, 2019
Thousands pack showroom at Treasure at Tampines’ opening weekend
SINGAPORE — Close to 7,000 visitors thronged the showroom of what is touted to be the largest private condominium launched in Singapore, with over 2,200 units set to go on sale.
Launched on Friday (March 15), Treasure at Tampines sits on top of the former Tampines Court, a Housing and Urban Development Company (HUDC) property which was sold en bloc for S$970 million in August 2017.
Developed jointly by Sim Lian Group and Sim Lian Holdings, the condominium spans 650,000 square feet (sq ft) and has a 99-year lease starting from Nov 29 last year. It is expected to be ready for buyers to move in by 2023.
The condominium comprises one- to five-bedroom units, with sizes ranging from 463 sq ft to 1,722 sq ft. With an indicative price of S$585,000 for a one-bedroom unit and at least S$1.88 million for a five-bedder, its developer said the condominium is priced at about S$1,280 psf on average.
ZACD Group executive director Nicholas Mak said the pricing is “quite reasonable” as it is within the range of a new 99-year leasehold private condominium in that area.
Among some of the interested home buyers TODAY spoke to while visiting the showroom, a few have already set their minds on purchasing a unit.
Mr Triston Tan, 47, said he has already submitted a cheque to indicate his interest in a two-bedroom unit which he intends to acquire as an investment.
The equipment engineer and his wife, Ms Catherine Teo, 47, live in a five-room Housing and Development Board (HDB) flat in Tampines and have no intention to sell it.
This means they would have to pay a 12 per cent Additional Buyer’s Stamp Duty (ABSD), which is imposed on buyers getting a second residential property.
Mr Tan said they will have to bear with it since they made the decision to invest, although they are concerned about servicing the mortgage loan in the future.
“We have to plan properly. We don’t want to keep topping up cash, and (our) commitments (in) other (areas have) to come down,” he added.
The ABSD rate was previously 7 per cent before it was increased to the current rate as part of the cooling measures imposed in July last year.
Married couples who sold off their first property within six months of purchasing a completed property or receiving the Temporary Occupation Permit for uncompleted units are however eligible for a ABSD remission.
Another showroom visitor, Melvin Goh, 37, is also looking to submit his cheque on Monday for a one-bedroom unit he intends to get as a form of investment.
He lives in a five-room HDB unit in Tampines and said that there is “no choice” but to pay the ABSD.
Other visitors adopted a “wait-and-see approach” and said they would look at other launches in the eastern region.
One of them is Mrs Vinita Malekar, 47, who lives with her husband in a five-room HDB flat in Bedok and is looking to upgrade.
Having to come up with the ABSD upfront poses a problem, Mr Chandra Malekar, 54, said, and so the couple is shopping around for a smaller unit than they were aiming for.
“Definitely we want to go for a bigger house, a four-bedroom. But the cost also goes higher right? It definitely puts a strain on us,” said the housewife.
Mdm June Tan, 63, is also looking to buy a second property in the eastern region as an investment. The retiree lives in a three-bedroom freehold condominium in Geylang, which she is looking to move from after her husband died last year.
She is looking to buy the next property under her 21-year-old daughter’s name, as she can then avoid paying the 12 per cent tax. The current condo in Geylang is in Mdm Tan's sole name and her daughter has no property to her name.
ABSD is not refunded for singles even after they have sold off their first property within six months of purchasing a completed property or receiving the Temporary Occupation Permit.
“Isn’t the law very weird? Just because my husband died, I cannot get back my 12 per cent?... I didn’t ask for my husband to pass away,” Mdm Tan said.
Launched on Friday (March 15), Treasure at Tampines sits on top of the former Tampines Court, a Housing and Urban Development Company (HUDC) property which was sold en bloc for S$970 million in August 2017.
Developed jointly by Sim Lian Group and Sim Lian Holdings, the condominium spans 650,000 square feet (sq ft) and has a 99-year lease starting from Nov 29 last year. It is expected to be ready for buyers to move in by 2023.
The condominium comprises one- to five-bedroom units, with sizes ranging from 463 sq ft to 1,722 sq ft. With an indicative price of S$585,000 for a one-bedroom unit and at least S$1.88 million for a five-bedder, its developer said the condominium is priced at about S$1,280 psf on average.
ZACD Group executive director Nicholas Mak said the pricing is “quite reasonable” as it is within the range of a new 99-year leasehold private condominium in that area.
Among some of the interested home buyers TODAY spoke to while visiting the showroom, a few have already set their minds on purchasing a unit.
Mr Triston Tan, 47, said he has already submitted a cheque to indicate his interest in a two-bedroom unit which he intends to acquire as an investment.
The equipment engineer and his wife, Ms Catherine Teo, 47, live in a five-room Housing and Development Board (HDB) flat in Tampines and have no intention to sell it.
This means they would have to pay a 12 per cent Additional Buyer’s Stamp Duty (ABSD), which is imposed on buyers getting a second residential property.
Mr Tan said they will have to bear with it since they made the decision to invest, although they are concerned about servicing the mortgage loan in the future.
“We have to plan properly. We don’t want to keep topping up cash, and (our) commitments (in) other (areas have) to come down,” he added.
The ABSD rate was previously 7 per cent before it was increased to the current rate as part of the cooling measures imposed in July last year.
Married couples who sold off their first property within six months of purchasing a completed property or receiving the Temporary Occupation Permit for uncompleted units are however eligible for a ABSD remission.
Another showroom visitor, Melvin Goh, 37, is also looking to submit his cheque on Monday for a one-bedroom unit he intends to get as a form of investment.
He lives in a five-room HDB unit in Tampines and said that there is “no choice” but to pay the ABSD.
Other visitors adopted a “wait-and-see approach” and said they would look at other launches in the eastern region.
One of them is Mrs Vinita Malekar, 47, who lives with her husband in a five-room HDB flat in Bedok and is looking to upgrade.
Having to come up with the ABSD upfront poses a problem, Mr Chandra Malekar, 54, said, and so the couple is shopping around for a smaller unit than they were aiming for.
“Definitely we want to go for a bigger house, a four-bedroom. But the cost also goes higher right? It definitely puts a strain on us,” said the housewife.
Mdm June Tan, 63, is also looking to buy a second property in the eastern region as an investment. The retiree lives in a three-bedroom freehold condominium in Geylang, which she is looking to move from after her husband died last year.
She is looking to buy the next property under her 21-year-old daughter’s name, as she can then avoid paying the 12 per cent tax. The current condo in Geylang is in Mdm Tan's sole name and her daughter has no property to her name.
ABSD is not refunded for singles even after they have sold off their first property within six months of purchasing a completed property or receiving the Temporary Occupation Permit.
“Isn’t the law very weird? Just because my husband died, I cannot get back my 12 per cent?... I didn’t ask for my husband to pass away,” Mdm Tan said.
Wednesday, March 6, 2019
Creative ZEN Stone 1GB
Rumors had been rife in the online community of a new digital audio player (DAP) from Creative and that this mysterious product will be locking horns with Apple’s iPod shuffle. True enough, what you are looking at now is Creative's response to Apple's effort and what a tiny player it is.
Solid as Stone?
The feather light (18.5g) and compact ZEN Stone is clearly inspired by small smooth pebbles often found in ZEN gardens (how poetic), but despite its name, the ZEN Stone is not built as what its name suggests. Because of its glossy exterior, there is always a concern of scratching the ZEN Stone with sharp items such as keys and coins in your pocket and what not. However, as we found, its glossy surface is tough enough to take on the rigors of everyday use. Size wise, the ZEN Stone is delightfully small and light, so much so it's easy to forget that it's sitting in your pocket – not to forget it can also be quite easily misplaced.
Follow the Path
The ZEN Stone has a simple interface: forward, rewind, play/pause and volume controls are all clustered together right smack in the middle of the player. Along its side profile is a handy switch that scrolls through folders alphabetically, randomizes your songs and sets the player to repeat every music file it supports. Since folders are supported, songs can be sorted in a pseudo genre/playlist fashion, giving you some form of control over the songs you want.
Loading the ZEN Stone up is a simple Plug and Play process (through a Mini USB port), exactly in the same way as you would with a flash drive. In fact, there is not a single trace of driver or software in the box. The only software that Creative thought you might need is the Creative Media Lite CD ripping software, and guess what, it's available as a free download on Creative's website - sweet.
True to its simple styling and interface, the ZEN Stone is a joy to use. If you know how to copy files into a flash drive, you'll know how to operate the ZEN Stone. There is however, a short but noticeable playback lag from the time the player is unplugged till it starts playing, but that's just us nitpicking, really. The ZEN Stone supports MP3 and WMA formats.
Being a Creative product, the ZEN Stone sure did not disappoint where its bread and butter (audio quality) was concerned. Some of you might find the audio output to carry a bit too much bass, although that being said, we could find no distortions or hissing whatsoever. When it came down to battery life, the ZEN Stone easily clocked 10hrs of playback time.
Solid Accessories
Creative has always furnished their new DAPs with accompanying accessories at launch and it isn't any different this time around. To that end, Creative offers no less then three kinds of protective skins, each serving its own purpose. Upon closer inspection of these protective silicon skins (and armbands), we were impressed that they were all very well made with no excess silicon or rough edges in sight.
Our Thoughts
Although nothing revolutionary, the ZEN Stone pretty much satisfies users in ways the iPod shuffle would. Compared to the latter however, it does carry a slight edge by having a universally compatible mini-USB port, unlike the iPod shuffle which requires an external dock running via a propriety jack. Looks and performance aside, the one big point that really allows the ZEN Stone to take the cake is its incredible retail price of just US$45 (~S$69). You could skip a ZEN Stone on water and still afford a replacement all for the price of one Apple iPod shuffle - not bad for a reply wouldn't you say?
Solid as Stone?
The feather light (18.5g) and compact ZEN Stone is clearly inspired by small smooth pebbles often found in ZEN gardens (how poetic), but despite its name, the ZEN Stone is not built as what its name suggests. Because of its glossy exterior, there is always a concern of scratching the ZEN Stone with sharp items such as keys and coins in your pocket and what not. However, as we found, its glossy surface is tough enough to take on the rigors of everyday use. Size wise, the ZEN Stone is delightfully small and light, so much so it's easy to forget that it's sitting in your pocket – not to forget it can also be quite easily misplaced.
Follow the Path
The ZEN Stone has a simple interface: forward, rewind, play/pause and volume controls are all clustered together right smack in the middle of the player. Along its side profile is a handy switch that scrolls through folders alphabetically, randomizes your songs and sets the player to repeat every music file it supports. Since folders are supported, songs can be sorted in a pseudo genre/playlist fashion, giving you some form of control over the songs you want.
Loading the ZEN Stone up is a simple Plug and Play process (through a Mini USB port), exactly in the same way as you would with a flash drive. In fact, there is not a single trace of driver or software in the box. The only software that Creative thought you might need is the Creative Media Lite CD ripping software, and guess what, it's available as a free download on Creative's website - sweet.
True to its simple styling and interface, the ZEN Stone is a joy to use. If you know how to copy files into a flash drive, you'll know how to operate the ZEN Stone. There is however, a short but noticeable playback lag from the time the player is unplugged till it starts playing, but that's just us nitpicking, really. The ZEN Stone supports MP3 and WMA formats.
Being a Creative product, the ZEN Stone sure did not disappoint where its bread and butter (audio quality) was concerned. Some of you might find the audio output to carry a bit too much bass, although that being said, we could find no distortions or hissing whatsoever. When it came down to battery life, the ZEN Stone easily clocked 10hrs of playback time.
Solid Accessories
Creative has always furnished their new DAPs with accompanying accessories at launch and it isn't any different this time around. To that end, Creative offers no less then three kinds of protective skins, each serving its own purpose. Upon closer inspection of these protective silicon skins (and armbands), we were impressed that they were all very well made with no excess silicon or rough edges in sight.
Our Thoughts
Although nothing revolutionary, the ZEN Stone pretty much satisfies users in ways the iPod shuffle would. Compared to the latter however, it does carry a slight edge by having a universally compatible mini-USB port, unlike the iPod shuffle which requires an external dock running via a propriety jack. Looks and performance aside, the one big point that really allows the ZEN Stone to take the cake is its incredible retail price of just US$45 (~S$69). You could skip a ZEN Stone on water and still afford a replacement all for the price of one Apple iPod shuffle - not bad for a reply wouldn't you say?
Sunday, March 3, 2019
Oslo: Charging electric cars no longer free of charge
Electric car drivers in the capital of Norway must now pay for charging. Oslo has started the conversion of about 1,300 public charging points in the city to be able to charge a fee. The aim is not so much to cash in but to keep EVs from parking for free without charging.
Starting immediately, Oslo will charge ten crowns (approx. 1 euro) per hour during the day and five NOK per hour at night. At the same time, there are also plans to increase the number of charging stations to 2,000 by the end of the year.
Christina Bu of Norway’s electric car association, Norsk Elbilforening, has welcomed the step. She told the Norwegian Aftenposten that “we need to ensure rotation and that people only park at charging stations when they’re charging”.
With EV charging infrastructure lacking behind actual sales of electric cars, charging is increasingly becoming a problem, particularly in densely populated urban areas. We hear reports of incidences of electric car drivers using the free parking opportunity at a charge column without charging from people in various markets.
The (luxury) problem may further intensify as more and more electric car clubs go live. 250 Renault Zoe have just been made available in Oslo this winter, and while the new service is supposed to help alleviate public transport and supported by train operator NSB, these EVs will have to charge as well.
In Norway, almost every second vehicle registered is currently an EV. According to this CAM study, the market percentage of electric vehicles in Norway in the first three quarters of 2018 climbed from 37% to 46.7% compared to the previous year. From a European perspective and counting only passenger electric cars, Norway continues to be miles ahead of its neighbouring countries. The country had an EV share of 31,2% in 2018 according to this count.
Starting immediately, Oslo will charge ten crowns (approx. 1 euro) per hour during the day and five NOK per hour at night. At the same time, there are also plans to increase the number of charging stations to 2,000 by the end of the year.
Christina Bu of Norway’s electric car association, Norsk Elbilforening, has welcomed the step. She told the Norwegian Aftenposten that “we need to ensure rotation and that people only park at charging stations when they’re charging”.
With EV charging infrastructure lacking behind actual sales of electric cars, charging is increasingly becoming a problem, particularly in densely populated urban areas. We hear reports of incidences of electric car drivers using the free parking opportunity at a charge column without charging from people in various markets.
The (luxury) problem may further intensify as more and more electric car clubs go live. 250 Renault Zoe have just been made available in Oslo this winter, and while the new service is supposed to help alleviate public transport and supported by train operator NSB, these EVs will have to charge as well.
In Norway, almost every second vehicle registered is currently an EV. According to this CAM study, the market percentage of electric vehicles in Norway in the first three quarters of 2018 climbed from 37% to 46.7% compared to the previous year. From a European perspective and counting only passenger electric cars, Norway continues to be miles ahead of its neighbouring countries. The country had an EV share of 31,2% in 2018 according to this count.
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