Category: personal_noteS

An underrated growth driver for Spotify

Not sure if it’s been widely seen as a growth driver, but Spotify is actually not blocked in China!

Yes, you can use Spotify w/o VPN in China, including podcasts.

If you are on a short trip to China, you can use Spotify for 14 days (no payment needed, just regular account). This corresponds to the visa-free 15 day stay in China for several countries – that list is expanding.

If you are staying in mainland China longer, you need a premium account. With Spotify Premium in mainland China, you don’t need VPN.

This is rare – for any “foreign” internet service provider to provide service in its original format.

Democratic calculation

With Kamala Harris the potential nominee, here are the calculations.

Harris vs. Trump: Harris will be linked with Biden policies, which won’t have enough “fresh start” effect.

If Harris wins in 2024, she will be nominated in 2028, which means other Democratic candidates will wait until 2032.

Meanwhile, if Trump momentum is unstoppable, should Democratic supporters “save” some energy and wait for 2028?

Even Trump wins, he will only do one term, so in 2028 Republican also needs a new face.

Trump is still very ahead according to betting.

China delaying retirement age

China is about to delay retirement age from 5-10 years to age 65.

Currently, men retired at 60 and women at 55.

It’s a big change, although details are not set yet, and gov vows a “gradual” rollout, it would still be a big change for many in the coming decades.

 

Looking at France, pushing 2 years up drew protest last year. And the previous change was in 2010 and was also 2 years.

So about 2 years change in 12 years for French people.

 

How women in China can adjust to 10 years of delay? How long it’s gonna take? If like France, it should be 60 years..

Sadly, don’t think China will wait until 2084..

And executing drastic measures is where China outperforms.

 

Another thing is the need for longer life expectancy.

China still has lots of room to improve in terms of healthcare and drugs, which should raise life expectancy. However, some may also argue that the work life balance, food safety, and in general environment all need to improve. To some extent, these things may have worsened vs decades ago.

How will Elon Musk do? (Trump trade)

While EV is not popular, Musk did pivot to Republican by moving headquarters of Tesla, and more recently, SpaceX and X.com.

Musk also donates to Trump.

But problem is that his companies are not something Trump likes.

Besides electric vehicles, Optimum, which can replace factory workers in the future, is probably not what Trump wants. Trump wants blue-collar jobs in the US.

Plus, although Musk bought Twitter and lifted the ban on Trump’s account, Trump hasn’t been active on X.com besides a post in Aug 2023.

On top of these, Musk might be too close to China, which would be frowned upon.

Why overcapacity is prevalent in China

Thinking about this question, here are five potential answers.

1/ For the older generations, shortages are deeply rooted in their memory, so they dislike the idea that anything might be in short supply.

2/ The required return is too low. Many experienced poverty in their youth, therefore lots of effort for little money is still attractive.

3/ The local governments want to create local jobs and boast about industrial upgrades, with banks being the main enablers. When every local government invest in a similar direction at the same time, it’s hard to control and estimate the entire capacity.

4/ For top party members, abundance of all sorts of goods is a sign of victory for socialism and communism.

5/ China is preparing for war. Many capacity will shut down if at war.

 

US inflation should go down

Housing

US new home sales down 7.7% yoy in Apr; median prices were flattish and should be flattish going forward. May data will come in this week.

US existing home sales was down 1% yoy in May, although median price rose 5.8% yoy. Sellers love their low mortgage rate.

Rental market looks still warm. Median rental price needs to go down.

Food & beverages

McDonald’s $5 meal shall provide a relief.

Starbucks has the new $5 or $6 combo. For $5, you shall get a tall iced or hot coffee + a croissant. This price is similar to China already (32 rmb, or $4.4).

Gas price

Gas price is lower than or similar to 2023 level.

Looks to me that inflation pressure is very manageable.

Time for $TLT, $IWM, and biotech etc. to shine.

And check Truflation: 2% is not far away.

First yoy drop in US new home sales after 12 month of growth

US Apr new home sales (seasonally adjusted) dropped 7.7% yoy, reported last month.

The drop was long overdue, as interest rate (thus mortgage rate) has been high for quite some time.

The yoy strength from Apr 2023 – Mar 2024 was due to

A) the base effect

As most of 2022 was pretty weak after the war in Ukraine broke out. Fed also started the rate hiking cycle in Mar 2022.

B) the amazing AI-driven tech rally

Nasdaq rose over 60% from end of Sep 2022 to end of Mar 2024.

It reached all-time-high so even if you invested at the peak of 2021, you will still make money.

I bet many people enjoyed the wealth effect from stocks.

The base for the next 6 month (May 2023 – Oct 2023) looks pretty high, so yoy comparison should look weak, which is good if Fed is looking for “weak data”.

Meanwhile, inventory (new home for sale) has reached ATH since Feb 2024.

Previous high was 466k, seen in Oct 2022.

Time to clear the inventory is climbing in recent months. Now (Apr 2024) it’s 9.1 month vs. an average of 9.8 month between Jun 2022 to Oct 2022.

The median price for new homes sold is quite stable since Fed increased interest rate.

 

 

 

Living space in China vs. developed countries

According to the China Population Census Yearbook 2020, China has 462 million households, with average area of 111 sqm per household and 41.76 sqm per person. Average room per household is 3.2 and average room per person is 1.2.

Average space per capital of 41.76 sqm is not a small number. 

To compare, I asked ChatGPT for other countries’ numbers – 40-45 is quite the average. Only US, Canada and Australia are meaningfully above that number.

Just to double check in case ChatGPT is wrong, I looked up for German’s average living space, which was 46 sqm per person in 2018.

This number hasn’t changed much in the last decade or so. It was ~42 sqm per person in 2006 already, after decades of improvements (from 19 sqm per person in 1960).

Some further cross -check

Take a look at average home size in Europe, 100 sqm is already quite good.

Source: https://www.ncbi.nlm.nih.gov/pmc/articles/PMC8073340/pdf/ijerph-18-04278.pdf

Average room per person is 1.6 among EU countries.