Business

IPO mania is gripping Hong Kong and if you’ve been looking for a warning sign that equity markets are close to a peak, just maybe this is it. It was a feature of the Hong Kong market in 2006-07, before the Great Financial Crisis, and in 2000, prior to the bursting of the Dot.com bubble. No surprises, the current mania is also focused on the technology sector. The focal point today is the China Literature Ltd IPO which began trading this morning. The stock price rose as high as HK$110 per share compared with the HK$55 IPO price. No wonder the company’s executives were looking smug.

Over the past year we have provided extensive coverage of what will likely be the biggest, most politically charged, and most significant financial crisis facing the aging U.S. population: a multi-trillion pension storm, which was recently dubbed "one of the most heated battles of a lifetime" by John Mauldin.

While everyone likes to point the finger at Amazon, the growing retail apocalypse in America can't be tied to just one catalyst.  Certainly, there is no doubt that Amazon is taking a toll on brick-and-mortar retailers but massive excess capacity, perpetually over-levered capital structures and a constant lack of capital investment have undoubtedly helped accelerate the decline. 

China’s factory prices (PP) jumped last month despite authorities' continued attempts to curb industrial production to combat pollution. China's PPI rose 6.9% in October Y/Y, higher than the projected 6.6% while consumer prices climbed 1.9%, also higher than the median forecast of 1.8%, and above last month's 1.6% Y/Y increase.

A little over a year ago, specialized satellite imaging company Orbital Insight which uses its proprietary imaging and algorithms to track above-ground oil storage, confirmed something we had alleged earlier in the year: that China was vastly under-representing the amount of oil it had stored in its Strategic Petroleum Reserve (with significant implications for prices).