17# Signal 2 Noise

In today’s issue:

• Australia weak GDP

• Can you believe China?

• NYCB gets funding

• SOL is a LOL

S2N Updates

I am like a kid in the proverbial candy store. I managed to subscribe to a bunch of cool data that is certainly not widespread in the circles that I follow.  I believe this will add significantly to the creativity of my work.

Performance Review

Economic News Today

New Signals

So much to say here but simply not ready yet.

S2N Insights

Australia weak GDP

I am embarrassed that I cannot produce a GDP chart of the Australian economy in time for today’s newsletter. I have just changed my data vendor and I am not going to bother. 

The Bureau of Statistics numbers put economic growth at 0.2 per cent for the final three months of calendar 2023, and a lacklustre 1.5 per cent for the year. I think the weak outlook for world economy’s, especially China’s, who Australia is heavily dependent on, will place further strain on the economy and we will see an increase in unemployment.  Until now the residential property market has completely gone against conventional wisdom and continued its unabated growth. This was aided by record immigration.

However, going forward, I think the higher interest rate environment, the slowing economic growth, and the increase in unemployment are going to start to take its toll on highly indebted property owners.

Can you believe China?

The WSJ had an excellent article on the “quality” of China’s economic data. China is known for publishing results very soon after the period being reported on, and it very seldom revises numbers. To achieve their 5.2% GDP number for 2023, they did some very fancy footwork. 

I have been mentioning for some time that one should be very weary of the Chinese economy. My recommendation is to follow the market data and leave the economic data to the big boys.

NYCB gets funding

There has been quite a lot of discussion in the media about New York Community Bancorp raising $1 billion of capital from a group of investors that includes former US Treasury Secretary Steven Mnuchin. This is a bank that has been a worry for the Fed and others, about its solvency. The share price of the bank dropped 20% on the announcement. I raise this because we should always be on the lookout for cracks in the financial sector.

SOL is a LOL

I say this tongue-in-cheek. SOL was the poster child of the crypto mania, with Sam Bankman-Fried being one of the main cheerleaders. Its sex appeal came from its transaction processing speed. It was or still is touted as the fastest. However, with speed often comes unreliability. I read somewhere that Binance was struggling to process some payments on SOL yesterday. When this became a common occurrence some 18 months ago, I dumped my SOL and they do not seem to have solved these issues. I must add that they were one of the star performers last year, so the market still loves them. 

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