Blog: Blogs

Friday, May 29, 2020

There is just a ton of news today.

In markets, after the Memorial Day Weekend two days of across-the-board rises in stocks. Thursday they went down, and after an afternoon announcement by Trump that he would talk about China and Hong Kong Friday. Friday stocks went down again.

But there is a little battle going on between US politicians and social media. Twitter, which is Trump's favorite platform and the one he used famously during his 2016 campaign and ever since, put a 'fact-checking' warning on one of his posts earlier this week and today hid his wild-west tweet about the riots that erupted in Minneapolis, where the police station is currently on fire and the staff has left.


When you click the hidden tweet:


Senator and previous presidential hopeful Ted Cruz called for an investigation of Twitter for allegations the company is violating U.S. sanctions against Iran.

After Trump said he was going to go after social media companies, and there was talk of removing their 'protections' laws that protect them against culpability if people on their site post illegal speech, Zuckerberg commented that he didn't think social media platforms should try to fact-check, and today there's a ton of people reposting Facebook-like images citing him as a child abuser etc. This is law on top of bad law. The underlying issue is that people don't have free speech and companies are at risk when people say things outside of the range of legal speech on them. Both of those things are wrong and the issue at heart is that free speech and expression should be guaranteed. Instead, they made a law limiting types of speech, and held companies responsible for it, and then put another law on top of that to 'protect' those companies when that happens.

There are riots in Minneapolis' Twin Cities, with hundreds of shops looted and lots of fires. Headlines included the arrest of a CNN reporter even after he identified himself. I don't know the details. There is outrage because of video footage by a nearby store security cam of a black man named George Floyd dying under the knee of a white police officer, after he told the officer he couldn't breathe and not to kill him. Trump is cracking down, while today he has to comment on China cracking down on China passing a new law to crack down on protesters in Hong Kong.


Many people are still saying it's a black issue, as if white people weren't unfair victims of police and other brutality, myself included. There have been several large protests against police on black violence. The LA Riots in 1992, fires, looting, killings, spurred by Rodney King being bang-beaten by a group of cops outside his car one night. A lot of records were sold rapping about this afterwards, and a lot of violent mentality incited in blacks and others against whites and police. Then in 2012-13 the Black Lives Matter protests became popular across US cities, in response to events of George Zimmerman and police killing three black criminals, Trayvon Martin, Michael Brown, and Eric Garner. These protests haven't been helped by the victims of the killings. We saw a lot of Rodney King and black rappers, politicians and activists, and white ones taking the cause and making it their own, but not much of Rodney King, perhaps because it wouldn't serve the cause to have more information about him enter the public face of the dialogue. With the 2012 events it was similar. I saw the video footage that came out later of the huge Michael Brown physically bullying the Asian clerk and robbing him. I still have yet to watch the footage of George Floyd but I suspect it might be a similar situation. Abuse of power or of people is always wrong, whether a cop or otherwise, and the responsibility has to be higher in terms of consequences for people who are given elevated power over others and allowed to use discretionary force, like cops. The good the riots do is threaten police and politicians into enforcing on cops their responsibility, the same things cops are supposed to do for criminals, although laws are some good, many bad, and actually harm people as well. It's a bit of a mess.


The World in 2020, Q2

It's May 29 and the Coronavirus event seems to have started to blend in with world events of the regular sort, and it's now more our environment than new things coming up, and some world events are coming to the fore in importance. I'm going to leave off the log about talk of a recession and Coronavirus (Part 1, 2, 3, 4) which I started February 25 until now, and write under the broad subject of things emerging in global events, and how those might impact economies and also anywhere they seriously affect human rights.

The biggest story of the days this week are with China. Most of my news is US Economics and Markets news, so naturally everything there is from a US business standpoint. Partly this continues from what I wrote in 2019 about what I thought was the biggest story of the year then, the Hong Kong protests.

China is facing opposition from the US and other countries because it has been a shitty country for so long, and has been growing and becoming an internationally important country that is active in other countries for the past decade or two. It hasn't let up with it's shitty actions like what it's been doing in Tibet, which is currently not among the issues people are talking about, with the Uighurs in Northwestern Muslim China, Hong Kong, Taiwan, it's tech spying and stealing, ongoing attempts to steal islands and sea property by building new islands with military muscle, huge numbers of death sentences, laws against protests and other laws against human rights, treatment of religious groups like Falun Gong. Also, while tons of Chinese have for the past 10 or 20 years of economic success been traveling, this has hurt people's perception of Chinese because they are rude and inconsiderate, famous for doing messy personal care in public, cutting lines, cramming, yelling or talking very loudly, rushing buffets and taking all the food, trying on clothes and messing up stores. They're one of the only types of travelers that I would guess has globally people have a strong negative impression of.

On the other hand China has shown the world that it's population, it's culture, is hardworking and serious. It has become the factory of the world not just because it's people wanted the money. It's hard to find people who are capable of being serious and working, but Chinese are just that. For this reason, they've made good business partners and good, successful companies. On top of that they're very obedient and unobtrusive, so it's easier to deal with them than more individualistic peoples, which is also probably why Canada seems to have like them for selling their cities to. Like the West, China has become rich because it has a population serious about being workers. China is more industrious than the West though, it seems, because more Chinese people think about starting and running businesses, it seems, and becoming wealthy, while in the West most people seem to be workers or employees in their minds. Perhaps this has something to do with the strict and idiotic laws in the West that make starting or running businesses extremely difficult. Canada, for example, is widely considered a bad place to try to do a business because the laws make it very difficult to enter, navigate, and succeed. The US reduced it's corporate tax rate from about 30% to about 20% to be more globally competitive, since many countries have rates in the teens, although right now there is talk of restoring the higher rate for companies that make over $400,000k per year. There's also talk, and has been for years, about somehow making pay taxes the giant companies that are displacing smaller companies, notably Amazon but we might also mention Google, Walmart, Target. Amazon, which is being talked about now, has been portrayed as a sort of hero, delivering goods while stores have not been open, employing large numbers of people with good wages, but as everyone knows it does this by economies of scale and it's scale is one where it eclipses smaller companies which would otherwise be part of the community and economy, and also perhaps the tax situation with 100 small stores would be different from one large one per town.

That was sort of a preamble but it seemed more of a ramble since most of that stuff is well-discussed and understood. I'll draw a line and start with news and developments.

Trump faces a reelection challenge in so-far Joe Biden, who it seems impresses no one in any way. The economy is down but might recover. I'm not sure how much credit Trump can take for the US government's moves to prop up the economy, or how it will appear in retrospect when people are measuring how the emergent US compares with other countries, although right now basically everyone says what they did was the correct thing and the only thing they could have done. I don't know how much of it was layed out by internal policy planning as part of what they learned from the 2008 09 financial crisis.

Some say the only issue Trump really has is being tough on China. Biden is viewed as friendly toward China, and they're trying to put the name Beijing Biden on him, although I suspect Trump will come up with much more creative and potent characterizations in the world wrestling style he's master at.

Issues Trump is focussing on include Beijing's alleged cover-up of early Coronavirus. Trump and some people in probably every country around the world blame China for the virus and for the things the virus is doing in their countries. Most countries are having it very difficult right now, and that probably breeds a lot of resentment at whatever they can target. It doesn't help that there was a bio research plant that does just this kind of work about half a mile from the seafood market where the outbreak is thought to have started, as I mentioned in the talk of recession and Coronavirus log. This is being investigated by the US and UK governments it seems. China for it's part is trying to focus blame and resentment on other nations and nationalities, suggesting the virus originated in US service members, saying new cases come from people flying in from overseas, and that cutting off flights from China was racist, while doing it themselves inside their country, cutting off Wuhan to stem contagion.

China formally approved yesterday a new stricter security law for Hong Kong which criminalizes most types of political protest, using a blanket concept of 'sedition' and 'subversion.' We've seen this in Tibet and Xinjiang for decades.

US politicians are taking the position that Hong Kong is now under the power of China and doesn't have a high degree of autonomy any more. This shift also may change Hong Kong's trade relations. It has enjoyed an absence of the trade tariffs that Trump put on China in the trade war. This change, if it is what's going to happen, as will be announced today by Trump, will have an affect on markets, particularly Hong Kong companies and ones that do business with HK. This would be a bit of a new development in that since the economic issues that started in March, Trump has been signing a ton of things to help the economy and probably doesn't want to sign anything that would hurt it.

People talk about the negative consequences of problems with China. The US doesn't make it's own PPE or medicine, and it might take time to rearrange things, but maybe not. It seems the Trump government can be pretty quick to move and has displayed determination in doing things.

Congress this week approved a bill for the government to make reports identifying Chinese government individuals responsible for the forced detention of 2m Uighurs. The State Department is going to conduct an investigation of the human rights violations in Xinjiang. It seems to me this all might be from a political motivation though, as China has been shitty in Tibet for decades and Xinjiang for years and the governments of the US, Canada, and other countries have been purposefully silent on this, as well as the human rights abuses in the Mainland. They've consistently avoided having the issues brought up in front of them, so they don't have to take a stand when the only stand possible for them would be against the Chinese government. Now there seems to be a lot of action, but I wouldn't say it's likely to contribute to better human rights because the governments involved don't care about human rights. There is also rising anti-China sentiment in the US, although there has been significant anti-China sentiment before. I'm not sure in Canada. From what I've seen, Canada avoids this information becoming public since Canadian politicians probably depend on heavy investments based on Chinese house buying, etc in the cities it has sold to China and India. I wouldn't join the camp that says Well, whatever it's for, it's a good move, a step in the right direction,' because we've seen how Western government involving themselves in this way never create real good outcomes. Sometimes it leads to them doing other harmful things themselves.

India is also going to be an interesting issue. India already hates China, and they have border disputes and things, blocked rivers. India houses Tibet's government in exile by the way. India has been passing really terrible laws over the past years. Right now it's overcrowded and unsanitary population is facing a health challenge. How will it's leader want to appear?

Friday morning, the morning Trump is scheduled to talk about China and Hong Kong, after the announcement of his talk before the close yesterday, which sent markets down, the markets opened all in red. Only a very few on my watchlists were green, and none of the ones I'm holding. Yesterday also they almost all went down, although OLP went up probably because news that house sales were up for single family dwellings, etc. I didn't read or watch much on it but it seems property sales aren't really down that much or are up, just less houses were for sale, and this meant little bidding wars for those available.

Yesterday's market downs followed the Tuesday and Wednesday after Memorial Day and all stocks were green for two days. I got caught up in and increased and invested in a few new stocks.

Late Friday, when people were worried about the US-China trade deal and the value of stocks, which were largely down, the relief of not having Trump say anything brutal about Chinese trade caused a sharp last-hour rise in stocks, maybe most in Alibaba and similar. This may mean that Trump might not be ever going to jeopardize US money when it comes to Chinese companies.


Social Media is an issue this month, as Twitter put little advisory notes on some of Trump's tweets 'fact-checking' them. Zuckerburg actually commented on this, the headlines saying that he said that social networks should not be fact-checking political speech, 'Political speech is one of the most sensitive parts in a democracy, and people should be able to see what politicians say.' Facebook has fact-checkers too, but he said it was to 'really catch the worst of the worst stuff.' 'In terms of political speech, again, I think you want to give broad deference to the political process and political speech' and not 'try to parse words on is something slightly true or false.' The company has decided to continue to allow political campaign ads even when they include misinformation. Zuckerberg said there were 'clear lines' for what content should be allowed, framed in terms of causing violence or harming people's selves, and misinformation that could lead to voter suppression. Facebook, Google and others continue to use the concepts of 'hate speech' and 'racism' and other concepts to censor content. This has been most prevalent over the past year or two on YouTube where many content creators have had videos demonetized, removed, etc., although they contain nothing really of that sort, because the content caused a flag for the algorithms that check content. This week people are talking about YouTube finally facing a challenger in Slack, although Slack doesn't have any better privacy protections that YouTube.

Markets are trading at a 21 stock market multiple. It might be that the Fed has pulled forward years of returns in the last few months, taking it away from future results. In 1999 the multiple in the Nasdaq was in the 40s.

During the trade deal, China showed how it could do lots of unofficial action, like slowing down shipments and gumming up the works.

Headlines included a $850,000 bill for a 2-week intensive care stay in a hospital for Coronavirus. And lots of comments mentioning similar incredible rates for stays for various things, and the US fear of hospitalization.

In April in the US, personal income went up 10% partially due to government stimulus checks, and spending went down 15%. Personal savings jumped a record-high 33%.

Trump said the US would terminate it's relationship with the corrupt WHO.

SpaceX launched two astronauts to the ISS for the first time, all live on YouTube, although they 'had technical difficulties' and lost signal, black screen, when the rocket stage landed again on it's drone platform in the ocean, and just cut the feed back to show an already landed rocket. You can't invest in SpaceX. You can invest in Alphabet which is an investor in SpaceX but that's pretty far removed.

Some businesses that are reopening seem to be raising prices, which may or may not be inflationary. However many businesses aren't raising prices, so maybe dis-inflationary, although on the other side the smaller supply for demand might lead to companies then raising prices.


George Floyd Protests, May 2020

Video of a black suspected criminal dying as police officers kneed on him, after he told them he couldn't breathe and to not kill him, has turned into a pretext for massive riots all over the US. Trump's position is wild west, force against any rioters, including threats of bullets, etc, in his tweets.

Lots of buildings were burned and there was looting and violence. It's been a few days already of it and it continues. The attacks by the citizens were not targeted at the police department exclusively, so they can't overall be taken seriously as a counterattack. The police station was burned, but so was city hall and a bunch of other buildings.

Protest of course can't be exclusively peaceful, otherwise it will have no force. There has to be threat of serious consequences for the authorized minority who have the roles of making laws and enforcing them. Violence has to be there. The effects of the riots will scare authorities into taking measures to seriously try to prevent violence and killing of this type. However, the main officer was charged with manslaughter, the appropriate charge for the action, and the three others we don't know yet, so you can't say the authority response wasn't appropriate. The people probably fear that the response would be just localized to the officer and wider problems would continue, so aren't satisfied.

One mistake is trying to frame it as a black issue, which is to be expected from people who have never left or assimilated or really even read about other countries and cultures, so think their understanding of racism is right when it's actually ignorant. It also diverts from the real issue which is detachment of the vestment with powers over others from responsibility in terms of consequences appropriate to the higher prerogatives.

China is loving it apparently, talking through it's newspapers that the US government should stand with the protesters like they want China to accommodate HKers. This is partly true, although it's a very complicated issue when you have tons of individuals acting and several differentiable groups, doing all kinds of different actions, some not in keeping with protest. Sorting it out has to be individual by individual. We saw reporters being arrested even after identifying themselves. We saw blacks crowding a police car until it looked pretty scary for whoever was inside and the car made a move, with some trying to jump in front or on the hood as it sped off. We saw a group of blacks surrounding a lone police officer to protect him from harm. We saw police cars on fire. We saw a sheriff taking off his accoutrements in front of a press conference-like group and joining the protests, perhaps as a prelim to running for office in the near future. We saw cities putting in place curfews. We saw a mayor stating in defense of the officers involved that 'if you can say you can't breathe, you can still breathe.'

However, I think it's fair to say that if the US government tried to take away the ability of a city or region to elect it's own leaders and wanted to pick the government themselves, as China is doing in HK, the protests would be a lot more serious. The US government does though not have much it can say in it's defense for allowing legal, police, and incarceration injustice, and should have more fear. While violence is necessary, the best control people have over government is funding and defunding them through paying or not paying taxes. This is difficult to do though for individuals, and could probably only be done effectively as a broad movement, so violence is realistically the alternative.


A Country Offers

  • Schools that place kids by ability, like the grammar schools in Britain in the 80s, which are currently viewed as noninclusive.
  • Absence of idiotic laws whereby a business is liable for accidents that happen inside their store and also on the sidewalk outside, an example of local government, whose responsibility is roads, passing on their responsibility to others while not addressing the real issue, which is that businesses and cities aren't responsible for people having accidents unless they actually make something dangerous.
  • Thai-style free trade for individual small and family/friends businesses, so people can produce goods and offer services in the common market