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Chinese Defense Ministry Says Taiwan Independence Means “War” | |||
Read More >>And: Beijing Tells Biden Administration to Play by the CCP’s RulesChina’s top diplomat Yang Jiechi warned the Biden administration not to cross Beijing’s “red line” in a half-hour speech on the evening of Feb. 1. “The United States should stop interference in the affairs of Hong Kong, Tibet, and Xinjiang,” Yang said, calling the issues regarding the three regions China’s “internal affairs.” He made the remarks while speaking at a virtual event hosted by New York-based nonprofit the National Committee on U.S.-China Relations. Yang added: “They constitute a red line that must not be crossed. Any trespassing would end up undermining China-U.S. relations and the United States’ own interests.” He also told the United States that it should “strictly abide by the One China principle” with regards to Taiwan, a self-ruled island that Beijing claims is part of its territory. The Trump administration confronted China on its human rights violations against Falun Gong adherents, Hongkongers, Muslim minorities, Tibetans, and Uyghurs, by imposing visa restrictions and sanctions against Chinese Communist Party (CCP) officials responsible for the abuse. Additionally, former U.S. Secretary of State Mike Pompeo designated CCP’s persecution of Uyghurs and other majority-Muslim ethnic minorities as genocide and “crimes against humanity” last month. The Chinese regime has often deflected international criticism against its own policies by claiming that certain issues, including its militarization efforts in the South China Sea and coercion tactics against Taiwan, are “internal affairs.” Yang called on the Biden administration to “restore” the China-U.S. relationship to a “predictable and constructive track of development.” He named areas in which he said the two countries could cooperate, including drug control and cybersecurity. China is the largest source of illicit fentanyl and fentanyl-like substances in the United States, according to a 2018 report by the U.S.-China Economic and Security Review Commission. According to data from the U.S. National Institute on Drug Abuse, there were 70,630 drug overdose deaths in the United States in 2019; the majority of the deaths related to the use of fentanyl. Fentanyl is 100 times more potent than morphine and 50 times more powerful than heroin. As little as two milligrams is considered a lethal dosage for most people. In 2020, the United States sanctioned several Chinese nationals and a Chinese company for fentanyl trafficking. Under the Trump administration, the Justice Department brought more indictments related to China’s trade secrets theft and related crimes in 2019 than during the eight years of the Obama administration. Yang also criticized the Trump administration, saying that its “misguided policies” had led the bilateral relationship to “its most difficult period” since the two countries established diplomatic ties. Washington ended its diplomatic ties with Taipei in favor of Beijing in 1979 but has maintained a robust relationship with the island based on the Taiwan Relations Act (TRA). Under the Trump administration, the Taiwan-U.S. relationship warmed considerably, most evident by Pompeo’s decision to lift restrictions on how U.S. officials should interact with their Taiwanese counterparts. Jacob Gunter, senior policy and communications manager at the European Union Chamber of Commerce in China took to Twitter to give his summary of Yang’s speech. “Trump bad, it’s all his/your fault, and let’s just go back to the 2015 status quo,” he wrote. “The lack of even feigned introspection isn’t even surprising anymore.” Scott Kennedy, senior adviser and Trustee Chair in Chinese Business and Economics at the Washington-based think tank Center for Strategic and International Studies (CSIS), also commented on Yang’s speech. “Bottom line: Beijing is ready [to] cooperate only on China’s terms,” he wrote. U.S.-based China affairs commentator Tang Jingyuan said in a phone interview that the Chinese regime was using both soft and hard tactics to pressure the administration, in the hopes of restarting official talks with the United States. Yang’s speech was an example of a soft approach, while recent incursions into Taiwan’s airspace and sanctions on former U.S. officials were hawkish tactics. His speech could be read as an indication that the Chinese regime would be willing to make concessions if the United States would promise not to cross the “red lines.” Ultimately, Tang believes the Chinese regime wants to “revert back to a time when human rights and commerce were decoupled from each other” during negotiations, so that the regime could continue to do business with the United States, while ignoring human rights issues. Nicole Hao contributed to this report. +++++++ Ross concludes investors are coming to be turned off by Biden and unions:
My sense is a lot of investors are now beginning to realize how terrible the Biden policies really will be for the economy and jobs. There is also the uncertainty being created by the Game Stop trading that has been a black swan event upsetting the hedge funds and other traders who had no expectation of such a trading strategy killing shorts. However, they are staying mostly invested for now, as am I, assuming the economy will improve materially by June as the vaccine is substantially distributed, and most things are reopened.
Killing the pipeline was just the start. It is complete BS to say they will replace those jobs with green energy jobs. What jobs? When? At what comparable pay? Where? Millions of jobs rely on oil and gas, and they pay well, so now we are suddenly going to have them all making solar panels? Oil workers earn around $30 to $40 per hour, while solar workers generally earn less, and the Labor Dept forecasts a need for only a few thousand added solar panel jobs over the next few years. If you like your medical plan you can keep your plan. Remember that line. It is just a talking point with no reality. They are blatantly lying. Real jobs are created by the private sector, not the government.
There has to be Congressional budgetary allocations for these make believe green jobs, but in the meantime oil workers and pipeline workers are unemployed. These so called Green Jobs programs do not yet exist, nor will some material portion of it. This is the same uninformed thinking by politicians as we heard from Obama and his $800 billion of shovel ready jobs which never existed. These people never learned anything from that bad experience and waste of money. Remember Solyndra. They keep talking about union jobs, but the fact is less than 10% of the private sector is unionized.
Since I have previously outlined the long list of job killing policies he is issuing, and you all now know many of them, there is no need to reiterate it again. What we all need to focus on is, will investors fully understand what is happening, and will the market crack sooner than we thought as people realize the bad consequences of all these executive orders, and of the focus on environment issues instead of on economic and job creation through supporting the private sector. The people who are really running the government are doing the exact opposite, and Joe is mentally incapable of grasping the ramifications of what he is doing. There are so many executive orders, there is no way Biden himself had time to really review all of them, and their consequences, nor do I think he has the mental capacity to do that. He has issued more exec orders than all of the last four presidents combined, and it is just a little over one week.
This is his idea of bipartisan and coming together. He just sits there in front of a TV camera signing one after the other, and reading some statement prepared by others. None of the people creating these policies has ever really worked in a real job. They never had to meet a payroll. Each day it just gets worse as more orders are issued destroying jobs and the economy, and opening the border to a flood of illegals, drugs and MS13. And the head of EPA says there is no sacrifice needed, they can make solar panels. I guess workers who lose their jobs are not making any sacrifice being unemployed.
Biden said in PA there would be no stopping of fracking. Tuesday he shut down new fracking on federal land, and they have not yet released the new regs that will shut down existing rigs. His claims on Tuesday that there will be millions of new jobs to install infrastructure is pure BS. However there is no infrastructure program even introduced yet, and passing it with the funding may or may not ever happen. In addition, the approval process for a major infrastructure project will take years now that they are going to put in a whole set of new EPA rules on such projects, many of which Trump had eliminated. It could go back to taking ten years to even start on these projects with all the new regs. You should expect a reg coming soon that requires all new homes to have solar panels, just as they now require in CA. That adds to cost and design issues.
Just as bad as the loss of good paying middle class jobs, is the end of energy independence which has been a huge benefit in geopolitics and national security. Hopefully some of those Trump appointed judges will be able to put a stop to some of this terrible policy. Kerry admitted that even if the US was carbon neutral it would make almost no difference to the planet. We have been the best in the world in cutting carbon, but the rest of the world is not doing all that has been done in the US under Trump outside of the Paris agreement.
Biden says there will be no new taxes on those under $400,000 income. If you raise corporate taxes you suppress wages, reduce spending on capital expansion, R&D, and hiring, and cause costs to increase on all products manufactured or serviced. That has been proven in research to suppress wages, and the added costs of the products which consumers buy is higher, so you can say there is no tax increase for the middle and working classes, but there is instead a real cost to them in terms of lower employment , lower aggregate wages than if there was a free market for labor, and we all pay higher product prices.
So we lose jobs to have a $15 minimum wage, and higher corporate taxes, and we have higher prices, but look at us, we taxed those nasty corporations, and got the companies that survived the higher wage costs to pay more wages to those lucky enough to keep their jobs. Just so you know where $15 came from, it had zero to do with any economic or labor department research. It was dreamed up one day by SEIU when they were thinking of what to demand and could not decide between $12 or $20, so a couple of union leaders said, let’s compromise and make it $15. It had zero basis in anything. Several research studies by academics proved that $15 causes real job losses in markets where the real wage base should be much less based on cost of living.
Game Stop and AMC are a dangerous game being played by kids who get their investment ideas from other kids on the internet. They learned how to play with calls, and those have hit all-time record volumes. Then they used margin at ultra-low cost to juice things further in some cases. The short squeeze on Game Stop worked better than they ever imagined, and so they made a lot of profit, got addicted, and will keep doing it until they lose a lot of money. This is possibly market manipulation, or not.
A guy named Keith Gill in MA started this by posting on U Tube about his profits in GME. He is a licensed stock analyst. Others followed him. So it began. This will not end well. However, they are just trading, and that is not illegal. He may not have done anything illegal. Reality is, major hedge funds are big buyers of GME. Giant hedge funds like Citadel-not my Citadel- may have been the ones actually doing the short squeeze. Possibly Citadel did a squeeze to set up Melvin Capital for the opportunity to get control. We don’t know, but that is the inside story some are talking about. That much volume was not likely just from little investors.
There is no lack of transparency at all about GME or AMC or the others, and that is what the SEC always requires. These are large public companies with full disclosure. The people playing this game right now know what they are doing, and they know the full truth about these companies they are investing in, and the risks, so on that basis there is nothing illegal or wrong. This is not the old penny stock game where shady brokers pushed make believe companies. It is legally unclear if the chat rooms online are guilty of collusion to manipulate these stocks. On the other hand, is this any different than old fashioned investment clubs, or a group of guys who meet in YPO forums, or other types of groups, having a meeting with a famous investor to get his ideas.
Is it any different from traders getting together on the phone, or over drinks, and deciding to short a stock, or from a street analyst putting out a report to his big fund clients and pushing a stock to buy. Or Wall Street salesmen in 2007 taking buy side clients to strip clubs and getting them laid so they would buy lots of CMBS bonds the next morning. It is a very grey line. Is this really any different than the Dotcom bubble, tulip mania, or other similar things. People will always chase get rich quick schemes, and in the end they always lose unless they get out early.
The exchanges for years use trading stops, and try to slow things down when overwhelmed with orders, and Robinhood and the other platforms are doing the exact same thing, and they did nothing wrong, but in today’s social media world that is not going to stop what is happening. All the screaming about the stopping of taking orders for a few hours is just based on ignorance of how the smooth flow of the system really works. The press needs to find out how markets work before they put out false information. The difference now is there are no brokers, and no floor specialists to moderate this activity, and information is spread instantly to the world, as opposed to very slowly when we had to get a call from a broker suggesting we buy a certain stock, and then the order had to go through a specialist.
Since everything now is computer driven trades, and execution is instantaneous, with zero commissions, there is no way to limit this activity other than to just do what Robin Hood, Merrill and Interactive Brokers were forced to do -just temporarily stop taking orders for these shares, which is exactly what specialists used to do in similar situations. Stopping new orders is not a free market, but their systems were overwhelmed by historic levels of volume, and the systems were crashing, or not able to process efficiently, or the firm’s capital was not sufficient to handle it. They did the right thing to prevent a much bigger problem. Overnight Thursday, Robinhood raised over $1 billion to strengthen its capital to prevent a crisis. The real solution is bring back the uptick rule for shorts.
This whole thing is unprecedented only to the extent of online trading creates massive instant volumes, and will have to be figured out by the SEC and exchanges very quickly. Congress needs to stay away from this, but they are rushing in where they know nothing, and already the Dem committee chairs are putting out inflammatory, idiotic statements and demanding new regulations without knowing what they are talking about. Watch out for Sherrod Brown and Maxine Waters to hold hearings and make stupid statements. Congress is more dangerous than the market on this. As I constantly say- perspective is required.
In 1969, 120 major brokerage firms collapsed due to the shift to computers instead of hard copies of share certificates which had been physically run from one brokerage house to another each day to deliver the certificates. That was called clearing the trade. That really was how it had been done. I was there to see it. The computers back then were new, and could not handle it, and there were tens of millions of dollars of unmatched shares or “fails” to deliver. This caused the collapse of so many firms all at once because they did not have the capital to cover the fails. We have a similar situation today, but instead of collapsing, the brokers simply shut off new orders to protect their firms from collapse, and to try to bring some sense to the market. They did the exact right thing.
The risk is, some hedge funds were short and got killed. It will be a terrible signal to the market if one of the big ones crashes and burns. That nearly happened this week, but other firms stepped in to support their capital base. If one of the big ones collapsed, it might have triggered another Dotcom crash for the whole market. The markets need new rules to continue to have orderly markets since trading online at zero cost is now the way it is done, and these kids in chat rooms can move stocks all over the place at the click of a mouse causing very disorderly and dangerous markets. This is a whole new world overnight. If this is not better controlled by the SEC and exchanges it could trigger the whole market to have a real problem. The last thing we need is Congress getting involved. It is a black swan situation. Nobody saw this coming.
If the press and Congress had any clue at all about capital markets they would talk about SPACs, and how they are the real rip off of investors. I form a SPAC and get 20% of the shares for almost free. In addition I get fees. You get to invest in a shell with zero information what the shell will become, and you pay a relatively healthy price for diluted shares since I got 20% for free up front. Talk about gambling and lack of transparency-SPACs are it. To me they are a complete legalized scam. Bitcoin is another total scam. Nobody has any idea who really controls it, or what its value is, if any. It is tulips in the form of a magic coin. At least GME and AMC are real companies with complete transparency and some real intrinsic value. The hoopla around GME and AMC, and the trading stops, is really based on ignorance of the press and Congress, and not on facts or reality.
I have never been a player in speculative investments, but now I am with a very tiny piece of my portfolio. I got into AMC early at a decent price. Why not take a little cash and gamble on AMC, or one of the other stocks they are running with. Maybe it will make another 1000% run like Game Stop. If not, these companies are real, and will have some value when this wild ride ends. I figured it was worth risking a very few dollars just to play and see what happens. What is interesting, unlike the old pump and dump penny stock days of 30-40 years ago, these companies are real businesses, and have some potential upside on fundamentals. Just nothing remotely like what the stock runup suggests. At some point these stocks will crash back down, and some investors will lose a lot, but they have been adequately warned in the news. In the meantime why not play the game with a little bit of risk money you can afford to lose.
If you see what incredible numbers Apple and Microsoft put up, you realize that these companies, and others in the big tech world, can withstand massive economic dislocation should that happen again. They have massive cash on their balance sheets, and they make billions more each month. They sell diversified products and services so they are not going to crash one day if someone comes with a new gadget or service. It is why I own a lot of both, plus a lot of QQQ, which is the ETF that closely tracks tech. Even if there is another move to rotation out of tech, longer term, these companies will continue to pump out great cash flows, and their stocks will continue to rise over time. I make big solid companies that are very well run, the mainstay of my portfolio, with a relatively small number of stocks, but it lets me take a little cash ( less than 1% of my portfolio), and play with stocks like AMC.
I continue to believe that sometime later this year, or next year, the stock market will suffer a serious setback for all the reasons I have previously outlined. There will be some setbacks and volatility along the way as we see this week, but as the vaccines get into arms over the next four months, and things move back to more normal, the market will continue up with all the hype that is being pumped in. It is likely to be a good run for good stocks for the next several months, and maybe for the year. But at some point the Fed removes the heroin and rates rise, and the market tanks.
New polls suggest around 80% of people get news from social media. That is really scary since we know that what is on these sites is heavily censored and biased. While the majority even of college kids think there needs to be more regulation of them, there was a flood of these Silicon Valley people into jobs in the new administration, and the amount of money contributed by them was massive. There is, therefore, little chance there will be the sort of regulation of Silicon Valley that is required. With most of the MSM also presenting heavily biased news, there is a massive misinformation going to the public. When combined with the censoring and cancel culture that is now happening, we are living in a country where truth and reality is in scarce supply. Extremely dangerous. I believe DOJ should explore suing the tech giants for killing Parler, but this will not happen.
While the attack on the capitol was horrible, it was not unique. There were bombings of the capitol in 1915,1971, and 1983. In 1954 the Puerto Ricans shot up the House and wounded several members. None of this makes Jan 6 any better, but we need to not believe it was the only time the capitol was attacked by radicals. As it now has been admitted that the capitol police knew two days before, that a violent attack was likely, but due to political correctness they did nothing to bring in National Guard or other forces to prevent what happened. So whatever Trump did, the incompetence of the sergeant at arms and police needs to be also recognized as a major contributor to what occurred. It could have been prevented.
Trump made some good progress against China, but it was just a beginning, and there is major concern Biden will set that back and allow China to move ahead of us. Under Trump, 30 nations ended using Huawei equipment, and 12 ended the belt and road program that was a debt trap. The threat to Taiwan is now very real, and depending on how Biden deals with geopolitical threats, China will likely try to invade if they are led to believe Biden will not defend the island. If Biden folds on Iran you can expect China to make a major move.
Then watch for Putin to possibly try something in the Baltics, or further action in Ukraine, or Moldovia or Belarus. We need to wait to see what Biden does to retaliate for the Cyberattack. That will set the tone for relations with Russia. Blinken and Biden both need to clearly state that there will be no deal on sanctions with Iran up front, and that we stand for the current status of Taiwan. The suspension of arms sales to the Arabs who did the peace deals with Israel is a bad sign. It sends a very wrong signal to Iran. Those arms were an integral part of the agreements reached, and now we are proving we are not willing to stand by the agreements, and not help the region defend against Iran.
Here in FL people are traveling all over to get shots. One went to Miami, one went to Pensacola-a 7 hour trip. Others have gone to Orlando, Palm Beach and other counties. Meantime they are rolling through thousands of shots a week here in Sarasota very efficiently. Shows how desperate some people are to get a shot.
One of the ramifications of the anti-cop policies, and the racial politically correct policies now in place in many cities regarding police, is the senior black cops in the NYPD are getting very good offers to become chief of police in various other cities. The problem is the NYPD is being stripped of a very competent core of black senior cops, and it is creating serious experienced leadership issues in the department. It will also lead Biden’s people to claim the racial balance in the NYPD senior ranks is wrong, even though they caused it.
Finally the Dem mayors are disgusted with the teachers unions for shutting schools. Maybe there will finally be a reckoning and the unions will be reigned in. I doubt it with Biden, but parents are furious and they are the voters who are being angered. Maybe now tens of millions are fed up with the unions.
I understand sometimes some people do not receive the Rant as usual. If that happens, check the junk folder. I release it when I feel like, on no schedule, and that is usually about once a week, so if you receive nothing for10 days look in junk, and if not there let me know. The last issue was Jan 25. +++ Possibly only a matter of time before Americans won't be able to pack heat but Democrats will be able to pack SCOTU:
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