Happy New Year everyone, today is the first episode of “Finance Extraordinary Way” in 2025. Let’s first focus on the economy in mainland China.
Today’s focus: The Federal Reserve has cut interest rates three times, so why is the US dollar still surging? The bad loan situation in Chinese state-owned banks is severe! Natural gas prices in the US have soared this winter, and Europe is facing tough times! Bezos supports Trump’s new movement: Melania documentary in progress! Buffett sold 130 million shares last year, but he never sold two stocks!
In recent years, various levels of the Chinese Communist government have eagerly issued announcements to stimulate the economy, promoting seemingly stimulating measures and often claiming to provide funding support for bank capital restructuring. At the end of last year, the Chinese Communist regime launched small projects to stimulate consumption and help local governments restart investment. However, the largest funding project was used to support the operation of the banking system. It is strange because the Chinese Communist regime has always claimed that the level of non-performing loans in state-owned banks is very low and not a concern. So why invest such a large amount of money to support the operation of the banking system? How severe is the bad loan situation in China’s state-owned banks?
According to all official data, Chinese state-owned banks claimed to be operating well. In the past year, the capital levels of most major banks in China have improved. Since the outbreak of the coronavirus (Chinese virus), the official non-performing loan level reported by the Chinese Communist regime has decreased from 1.73% in January 2022 to 1.56% in September 2024. These data look bright and shiny, seemingly indicating that the Chinese banking system is operating well and everything is normal.
However, the recent financing behavior of the Chinese Communist government raises doubts. Last October, the Chinese government provided 1 trillion yuan in funds for bank capital restructuring by issuing government bonds. Additionally, the Chinese government announced that it will provide 3 trillion yuan in sovereign debt funds in 2025, of which approximately 1 to 2 trillion yuan is designated for bank capital restructuring. In other words, in the past three months, the Chinese Communist regime has announced a total amount of up to 2 to 3 trillion yuan for bank capital restructuring. This is strange. If banks are developing so healthily, why such a large-scale government bailout? Is it because the Chinese financial system hides deeper problems?
For example, in 2016, a financially struggling Chinese steel company reported that one of its major subsidiaries had not paid interest on bank loans since 2011. Another example is the real estate development giant, Evergrande, whose bad loans alone account for over 50% of official statistics on non-performing loans in China. Therefore, we have every reason to be skeptical of official financial statements.
At the end of last year, the Chinese regime announced that it would raise the limit on local government debt levels in 2025 and increase stimulus policy expectations. However, at the same time, bank lending in China has plummeted, and financial activities have been unusually sluggish. Although this may also be in preparation for the economic stimulus policy in 2025, it seems more likely to be due to the poor operation of the banks. Given China’s poor credit and often disappointing investors’ expectations of so-called stimulus policies, the wiser choice for investors is not to invest their money in Chinese state-owned banks.
At the beginning of 2025, Apple suddenly started a price reduction action, but not in the US, but in mainland China.
On January 2nd, Apple China’s official website announced a promotion called “Roaring Welfare.” From January 4th to 7th, users who meet the conditions can save up to 800 yuan. Each user is limited to purchasing 2 items in each product category, and there is a discount for buying a new iPhone.
This promotion covers almost all categories of products including iPhone, iMac, iPad, Apple Watch, and AirPods. While Apple officially emphasized that the quantity of discounted products is limited and it’s on a first-come-first-serve basis. However, Apple had no choice but to start reducing prices. Last October, according to promotions on Apple’s Tmall official flagship store, various products including the iPhone series enjoyed different degrees of discounts. The newly released iPhone 16 series was also among the discounted items. It seems that the business environment in mainland China is becoming increasingly difficult!
Currently, Apple faces strong competition from local brands such as Huawei, Xiaomi, OPPO, and vivo, which not only have low prices but also continuously introduce new models, resulting in Apple’s market share being eroded in China. With Apple’s upcoming Apple Intelligence service in China, its competition with domestic brands in the AI phone market will further intensify.
The end of the three-year Russo-Ukrainian war has brought a bunch of consequences, one of which is that Europe has shifted from relying entirely on cheap Russian natural gas to expensive US liquefied natural gas. However, the recent “Polar Vortex” sweeping across the US is undoubtedly a huge blow to Europe because gas prices in the US have risen by 4% in the past week. Previous warnings have stated that Europe will face higher and more sustained natural gas prices in the future.
On January 3rd, according to the Financial Times, due to the impending extreme cold weather, northern parts of the US are facing the coldest January in over a decade. As a result, natural gas prices in the US have risen by 4% in the past week and by 14% in a month.
In recent years, winter storms have been the most severe cause of natural gas supply interruptions. Prior to this, the deadly winter storms “Uri” in 2021 and “Elliott” in 2022 led to a significant decrease in natural gas production. This time, the US National Weather Service warned of a polar vortex in the eastern and central regions, bringing the coldest air and dangerous cold winds of the season so far. This will inevitably lead to rising energy prices.
According to US Census Bureau data, about 47% of US households use natural gas for heating, and 40% use electricity. The US Energy Information Administration predicts that natural gas prices in the Midwest will rise by 11% this year, while electricity prices will increase by 6%.
At the same time, Russia officially stopped natural gas transit to Europe through Ukraine on New Year’s Day, marking the end of Moscow’s dominance in the European energy market era. Ukrainian natural gas accounts for 5% of the EU’s total natural gas imports, which means Ukraine will lose up to $1 billion annually in transit fees, and Gazprom, the Russian state-owned natural gas company, will lose nearly $5 billion in sales revenue. However, with Europe successfully finding alternative suppliers, natural gas prices have not been significantly affected. However, with the extreme cold weather hitting the US and the inevitable shortage of natural gas reserves, coupled with Europe’s heating demand, the upward trend in gas prices may further intensify in the coming weeks.
In this energy game, the US is becoming the biggest winner, as Norway and the US have replaced Russia as the largest natural gas suppliers in Europe. In 2023, the US provided Europe with 56.2 billion cubic meters of natural gas, accounting for 19.4% of Europe’s total imports. It is worth noting that the US has become Europe’s largest supplier of liquefied natural gas for the third consecutive year.
In the first nine months of 2024, Warren Buffett’s Berkshire Hathaway company sold stocks worth $133 billion. The most divested stock was Apple, followed by US Bank stock. In 2024, one of the best stock market years since 2000, while the stock market saw a surge, Buffett held a substantial amount of cash, causing widespread speculation.
But there is also one thing that has made people very curious – which stocks did the stock god not sell?
According to the well-known American investment website The Motley Fool, Buffett has two favorite stocks that have a special place in his heart – one is Coca-Cola and the other is American Express. This to a large extent shows his view of the competitive advantages and growth prospects of these two companies.
Coca-Cola’s stock price plummeted in the stock market crash on Black Monday in 1987. The company’s earnings were growing at a double-digit rate at the time, and it was then that Buffett took a one-fifth stake in Coca-Cola stocks on behalf of Berkshire Hathaway. Since then, Buffett has never sold a share of Coca-Cola stock. Over the past 30 years, the stock has undergone several splits, and as of the third quarter of 2024, Buffett held 400 million shares of Coca-Cola stock. At the current stock price, the total value is $25 billion.
Although Coca-Cola is no longer the high-growth company it was when Buffett first invested, its expanding market share ensures that its earnings will continue to grow. The stock trades at 21 times the expected earnings for 2025, with a dividend yield of 3.14%. For those looking to increase passive income, Coca-Cola’s strong brand and stable sales performance make it a worthwhile stock to hold.
Next up is the credit card company, “American Express.” Buffett has held American Express stock for 30 years, and as of the third quarter of 2024, he held 151 million shares.
American Express stands out in an industry dominated by a few credit card companies. It has built a strong brand reputation with its customer service and business model for credit card members. The card fee total in the third quarter of last year was close to $2.2 billion, an 18% increase over the same period last year. This has brought American Express sustained revenue growth, enabling it to reinvest in benefits to retain and attract new members.
American Express’s stock is not cheap, trading at 20 times the expected earnings for 2025, higher than the average P/E ratio of 18 times. However, analysts predict long-term earnings will grow at a rate of about 14% per year. It is also a stock worth investing in.
Please note that the above information is excerpted from media reports, and our channel does not offer any stock recommendations or investment advice. All investment losses are unrelated to this program! Here we make a special statement, thank you!
After three years, Trump (Donald Trump) is about to return to the White House once again. However, this time Trump’s return as president is vastly different from his election eight years ago, with one of the most obvious changes being that the tech giants who vehemently opposed him last time are now all smiling and welcoming, including Amazon’s founder, Jeff Bezos. Just this Sunday, Amazon announced with great fanfare that it will produce an exclusive documentary for Melania Trump, who is soon to become the First Lady again.
A global e-commerce giant Amazon spokesperson announced on Sunday that Amazon’s Prime Video has been granted exclusive authorization to shoot and screen a documentary that allows viewers to learn about the contemporary wonder woman Melania Trump in a way they have never seen before. The filming of the documentary began in December last year and is scheduled to premiere in theaters and on streaming platforms in the second half of 2025. The spokesperson said: “We are delighted to share this very unique story with millions of customers worldwide.”
Before the last US presidential election, like other tech giants, Amazon’s founder, the world’s second-ranked super-rich Jeff Bezos, changed his attitude towards Trump from the past and occasionally extended olive branches to Trump.
First, his flagship newspaper, The Washington Post, announced that it would no longer endorse Democratic presidential candidates. After Trump was elected, Bezos joined the ranks of Facebook’s Mark Zuckerberg and Apple’s Tim Cook, generously donating $1 million for Trump’s inauguration. He then requested to visit Trump at Mar-a-Lago himself. With a smooth combination of factors, he successfully completed a 180-degree transformation towards Trump, if not a prostrate transformation. This naturally made many left-wing writers quite unhappy.
Ann Telnaes, a Pulitzer Prize-winning left-wing columnist for The Washington Post, created a satirical cartoon in response to this. In the illustration, Bezos, Zuckerberg, OpenAI CEO Altman, and the owner of the Los Angeles Times, Chang Xianghuang, kneel on the ground and hand over large amounts of money to Trump high above. There is even a Mickey Mouse bowing at Trump’s feet, symbolizing Disney, which previously vigorously supported the left-wing “awakening” trend, now fully submits to Trump.
Of course, this cartoon, which even dared to satirize its own boss, was decisively rejected by The Washington Post, so much so that the cartoonist Telnaes said that it was the first time her expression of opinion had been rejected, prompting her to resign. As a result, just two days after she resigned, Amazon announced the plan to produce a documentary for former First Lady Melania Trump, completing the “right turn” cleanly and neatly.
Lastly, a few words about this documentary. It is said that this documentary will explore Melania’s life from an unprecedented perspective, allowing people to understand this contemporary wonder woman born in Slovenia. The film has also enlisted Hollywood’s renowned director, Brett Ratner, to direct.
It must be said that Amazon has made another correct business decision this time, preempting the heat around Melania Trump. In October of this year, Melania just published her new memoir, “Melania,” sharing many precious personal and family photos, many of which are previously unreleased details. Since its publication, the book has consistently topped the bestseller list, illustrating the popularity and influence of the Trump couple in the United States.
Starting this week, American children are returning to school, and the winter vacation officially ends. Data shows that in the 2024 holiday season, US consumers showed a stronger purchasing power compared to 2023, and they are more optimistic about the economic outlook for 2025.
For retailers, the most wonderful time of the year has just ended. Although the 2024 winter holiday season was shorter, retail sales continued to grow strongly.
According to MasterCard data, retail sales in the US during the 2024 winter holiday season increased by 3.8% year-on-year, with in-store sales increasing by 2.9% and online sales skyrocketing by 6.7%.
Global economic analyst Rana Foroohar: “I would like to salute American consumers. We thought that consumption would stagnate, but the reality is quite the opposite.”
Global economic analyst Rana Foroohar: “In my opinion, these numbers indicate that consumers are satisfied with their jobs, and they feel positive about the economic outlook for 2025.”
However, economists are concerned because historically, Americans’ purchasing power should have entered a downturn. Therefore, the current behavior of consumer spending may be at the peak of the market cycle. As we begin 2025, analysts are offering new financial advice for consumers.
Global economic analyst Rana Foroohar: “If it were me, I would consider paying off debts, then seek lower interest rates, and lock them in as much as possible because I believe interest rates will be higher in the coming years.”
In the past two years, the US inflation rate has been steadily declining, although it was slightly stagnant in the fourth quarter, the overall trend remains stable. New car, used car, and energy prices have fallen, but the price of food has risen above the inflation rate, rising by as much as 28% since 2019.
According to marketing and communication company R.R. Donnelley’s survey conducted at the end of 2024, over 85% of consumers are frustrated with rising food prices; over one-third of consumers have reduced the amount of food purchases to save money.
However, experts believe that in 2025, high food prices will continue. Claudia Sahm, chief economist at New Century Advisors, says that once food prices rise, they tend to stay on the rise. Even if overall inflation has fallen, food prices will continue to rise, albeit at a smaller rate, unless there is a major economic downturn, food prices are unlikely to see a comprehensive decline.
Although American consumers are increasingly tired of persistently high food prices, Jason Miller, an economics professor at the University of Michigan, confesses that government policymakers are genuinely helpless in this regard. Unfortunately, this is not a unique phenomenon to the US; the impact and aftermath are being felt across the world.
With Trump about to reclaim the White House, people generally feel positively optimistic about the US’s economic direction. However, the trajectory of food prices remains unpredictable. Raising tariffs and deporting illegal immigrants could potentially cause fluctuations in food prices, and both the market and consumers can only wait to see what will happen.
Just this last weekend, many families with children chose to go to the movies before the start of the school year and watched the latest animated film “Legend of Mulan” (木法沙傳奇), pushing it to the top of the North American box office after three weeks.
“She has a secret.”
This past weekend, the musical fantasy film “Bad Witch” dropped from the previous week’s fourth place to fifth place, with box office earnings of $10.2 million.
Meanwhile, “The Ocean’s Call 2” moved up from fifth to fourth place, with box office earnings of $12.4 million.
In third place was the horror film “Vampire Nocturne,” which earned $13.2 million at the box office.
“Twice the villains, twice the fun.”
The science fiction animation film “Sonic 3” that premiered over the Christmas period showed a good performance during the holiday season, earning $21.2 million at the box office last weekend. Although it dropped from the top spot to second place, the total US domestic box office revenue for three weeks has reached $187.5 million.
“Rafi?”
“What’s up?”
“Why are they hurting everyone?”
After three weeks of screening, “Lion King: Legend of Mulan” finally ascended to the throne it rightfully deserves. This “Lion King” prequel film raked in $23.8 million at the box office last weekend, finally reaching the top of the box office rankings. The total North American box office revenue for this movie has reached $168.6 million.
Now it’s time to wrap up today’s program. Thank you very much for watching. “Finance Extraordinary Way” has established an exclusive channel in the clean world. Please remember to subscribe, and feel free to come listen to me talk about stories related to finance and business.
Once again, thank you for watching, and see you next time on “Finance Extraordinary Way.”