A modest proposal

June 26th, 2017

Jack Beatty discusses the internet of 1883 in the Atlantic:

“The American boy of 1854 stood closer to the year 1 than to the year 1900.” — Henry Adams. For the last year I have been trying to elongate Adams’s apothegm into a book. Change is my subject. “The historian, by the very nature of his task, must be concerned with change” Alfred D. Chandler Jr., the Pulitzer Prize-winning business historian, has written. “What made for change? Why did it come when it did, and in the way it did?” Business made for both the most palpable and the deepest-running changes in post-Civil War America, or so I will argue. It was the age of incorporation. The corporation, in Pauline Maier’s words, was “the most significant form of collectivism to emerge from the [American] Revolution.” Men turned to it when their dreams outstripped their means, pooling their resources in corporations to achieve collectively what they could not achieve individually. The cardinal achievement of the corporation in the nineteenth century was the conquest of American space. In 1841 to ship textiles from Concord, New Hampshire, to Boston via flat boat on the Merrimack River and the Middlesex Canal took four days. In 1842, with the extension to Concord of the Boston and Lowell railroad, it took four hours. Railroads, to use a phrase that came into vogue in the 1830s, “annihilated space.” As I discovered in my researches, they did something nearly as dramatic to time. In Keeping Watch: A History of Time in America Michael O’Malley tells this story in delicious detail, and using his book and others, augmented by contemporary newspaper accounts in The Chicago Tribune, The New York Times, and The Washington Post, I retell it here.

On November 18, 1883, at noon, U.S. railroad corporations unified American time. Nineteenth century America was a temporal wilderness. In the 1850s Americans set their watches in as many as a hundred local times. Wisconsin alone had thirty-eight, Illinois twenty-seven, Indiana twenty-three. When it was noon in Chicago it was 11:27 in Omaha, 11:50 in St. Louis, 12:09 in Louisville, and 12:31 in Pittsburgh. Nine A.M. arrived thirty seconds earlier in Oakland than it did across the bay in San Francisco. In Kansas City jewelers competed in times, posting their nominees for noon, which varied by as much as twenty minutes. Punctuality was negotiable in Kansas City. An 1883 railway gazetteer included time conversion tables for more than 8000 stations. Fingers plowed the ink off dark columns of type, plotting a route across the temporal Babel. To depart a station under Time A for a station under Time B hoping to connect with another railroad operating under Time C required faith in the providence of algebra. Yet, perhaps because few traveled far, most Americans found this time-quilt tolerable, and many cherished it. They took nature’s word for time, and nature said it was noon when the sun was directly overhead, at times that differed with locations.

Town clocks, to be sure, were set not by sun dials but by almanacs that averaged the sun’s variations over months and years. A scattering of localities rented astronomically precise time from observatories, who wired them through Western Union. These innovations only wedded time the more exactly to place. “[I]t would appear to be as difficult to alter by edict the ideas and habits of the people in regard to local time,” a U.S. Senate report concluded in 1882, “as it would be to introduce among them novel systems of weights [and] measures….” The Senate did not reckon with a self-sovereign power that, having “annihilated space,” sought dominion over time in the name of safety and convenience. The sun told time from Genesis to 12:00 on November 18, 1883, when the railroads imposed standard time as if “ideas” and “habits” held forever were debris on the track to modernity. “The sun is no longer to boss the job,” the Indianapolis Centennial lamented. “People—55 million of them—must eat, sleep, and work as well as travel by railroad time…. The sun will be requested to rise and set by railroad time. The planets must, in the future, make their circuits by such timetables as railroad magnates arrange.” The railroad magnates rode the mystique of progress. With the founding of the Greenwich observatory in 1848, a world-wide movement to standardize time in zones of longitude gained momentum among scientists and other apostles of the future. That Greenwich promoted itself as the “prime meridian” consternated the French, who wanted Paris to hold that title. American time chauvinists likewise objected to “John Bull’s time.” The railroads themselves only slowly came round to the idea. Rate wars got in the way. But as competition yielded to consolidation, resistance weakened.

Standard time’s advantages were made vivid to railroad managers at an 1883 Railway Time Convention when William Allen, the editor of the Traveler’s Official Guide to railways, put two maps on display. One depicted the prevailing fifty different times in a fling of colors. The other showed four bands of color, north to south, 15 degrees of longitude apart. Here, Allen said of the old map, depicted in the clashing hues of competition, is “the barbarism of the past.” The new map, a consolidated rainbow, represented “the enlightenment we hope for in the future.” No more mind-taxing schedules; no more head-on collisions of trains operating in clashing times; no more time chaos. The delegates left persuaded. They made scant effort to persuade the country, however, announcing they were altering the pulse of the universe mere weeks ahead of the event. On November 17 city jewelers, The New York Times reported, “were busy answering questions from the curious, who seemed to think that the change in time would … create a sensation … some sort of disaster, the nature of which could not be exactly ascertained.” When Britain adopted the reformed Gregorian calendar in 1752 a mob gathered outside Parliament demanding, “Give us back our eleven days!” By contrast, standard time was imposed on the United States without immediate protest. At Chicago’s West Side Union Depot on November 18 the master clock was stopped at 12:00 waiting for the railroad-decreed noon, which arrived, via telegraph, nine minutes and thirty-two seconds later. “Have you the new time?” strangers asked each other on the city’s streets.

We’ll add our usual two cents:

Here is the signal fact of our progress in the last century. If you were born in 1900, your life expectancy was in the forties, and GNP per capita was about $4000. If you are born today, your life expectancy in about eighty, and statistically, as an average American, you are ten times richer. In reality you are a hundred or a thousand times richer, if you factor in your ability to be in Paris tomorrow for $500, your ability to watch events from fifty years ago as they actually happened, etc., not to mention that your toddler’s severe pneumonia can be reliably cured in 48 hours or so. Only a little of this has to do with government. Mostly it is because far more than 50% of everything ever invented in the history of humanity was invented in the last 130 years, and perhaps 50% of that was invented by Americans. Milton Hershey invented the candy bar, Carrier invented the air conditioner for a tire plant, Sears invented catalogue distribution, Henry Ford invented cheap cars, some guys from Texas Instruments commercialized the transistor. It is almost impossible to overstate the importance of the invention and wide use of brand names, which communicate the quality and dependability of every product we buy. This alone deserves the Nobel Prize. And it was a large and growing market, the availability of risk capital, the development of standardized accounting principles, and protection of intellectual and personal property by the courts that made this possible.

Probably not feasible, but we think it would be great if there were a requirement that, in order to get a high school diploma, you had to spend two weeks at some facility in the countryside that was outfitted like a farm in 1854, and you had to milk the cows, feed the chickens, get up with the sun, and so forth. No electricity, no phones, etc. The snowflakes think they are oppressed victims in the age of the greatest wealth and longevity in all history; imagine what they’d be thinking by day 3 on the farm.

Spy vs Spy vs Spy, and a brief trip down memory lane

June 25th, 2017

Spy versus Spy versus Spy. It’s not a coincidence that this was a feature of Mad Magazine. Plus: today’s tiny humor moment.

Well, if Mike Myers is going to do the Gong Show, we’ll take a stroll too. At the Newport Jazz Festival in 1969, some famous jazz groups performed. These included Jeff Beck’s version of I ain’t superstitious, and something called Bourrée (Which one’s Jethro?). We understand that Ella Fitzgerald was unavailable for comment. Those times were a little crazy, but nothing compared to now.


June 24th, 2017


“As one of the working class, I’ll devote myself to realize the great idea of Marshal Kim Jong Un and I’ll work hard to achieve this,” said Kim Jong Sil. “Being a girl doesn’t stop me from upholding the leadership Marshal Kim Jong Un and it drives me to be even better,” said Jang Sol Hyang. Pak Sin Hyok spoke of Juche, an ideology created by past President Kim Il Sung. “To give focus to producing Juche-oriented art and bring glory to the Juche idea which is the idea of reliance,” he said. Ri Nam Hae, on the left said: “Spread the country’s propaganda to the world.” Kil Myong Kyong on the right, said “I want to uphold Marshal Kim John Un and North Korea with my rifle.” “I want to win medals in this sport to please our leader, Kim Jong Un,” said Won Dae Chol. “To live a healthy life devoted to supporting my country’s ruling party,” said Ri Chun Im. “To always help others but of course, patriotism towards my country is most important,” said Kil Jin A. “To have many children so that they can serve in the army and defend and uphold our leader and country, for many years into the future,” this couple told Maye-E. Ham Kum Hyok, on the left said: “I want to be a world class publisher one day.” Pak Mi Hyang said: “I want to please my leader Kim Jong Un by studying hard.”

Gee, sounds just like Hollywood, the NYT and the WaPo. Wait, maybe there’s a difference but we can’t put our finger quite on it.

Strange Days

June 23rd, 2017

We’ve entered a strange universe. The Good Kirk / Bad Kirk kind. (Where’s the Riddler, BTW?) To us, the current state of things is surreal, like you put Opposite Day and Firesign Theater in a blender on max speed, but it didn’t come out funny. Here, read Mollie Hemingway. Want more? Watch the very disturbing first five minutes of Tucker Carlson’s broadcast of today. One side has gone insane and apparently doesn’t even know it. How can this end well? Really, how can it?

Tiny funny moment: new travel bans within the ninth circuit.


June 22nd, 2017


The horrific death of Otto Warmbier, a 22-year-old student held in a North Korean prison for 17 months, highlights the brutal nature of the rogue regime and underscores the urgency of stopping its nuclear ambitions. The next step should be to sanction the Chinese financiers and traders who sustain Kim Jong Un. President Trump built up expectations of Chinese help after his April summit with President Xi Jinping. That was a long shot given China’s failure to rein in its ally in the past. But it made sense diplomatically, putting Mr. Xi on notice that tougher U.S. action would follow if he failed to deliver. But on Tuesday Mr. Trump tweeted, “While I greatly appreciate the efforts of President Xi & China to help with North Korea, it has not worked out. At least I know China tried!” As the Journal reported last week, the Administration asked Beijing to crack down on some 10 Chinese companies and individuals that trade with North Korea. If China refuses, the U.S. is prepared to act unilaterally by the end of the summer.

The U.S. stumbled across this North Korean vulnerability in September 2005 when the U.S. Treasury named Macau’s Banco Delta Asia a “primary concern” for North Korean money laundering. The bank was forced to freeze $25 million in North Korean assets, but the knock-on effects were huge. Trade that depended on the bank ground to a halt, and other banks cut their business with North Korea. In a tragic miscalculation, the Bush Administration released the frozen funds two years later in return for North Korea returning to disarmament talks, which went nowhere. North Korea moved most of its trading network to China, and the Obama Administration let the North Korea problem grow as it focused on other priorities. North Korea is now a few years away from fielding an intercontinental missile

Fatboy Kim is a dangerous nut job. The US has economic leverage with China and should use it if necessary for the good of both countries.

From 27% to 27.73% is apparently a big deal

June 21st, 2017


MSCI said it would add 222 A-share large-cap stocks that will account for 0.73 per cent of its flagship index. China-related stocks already make up 27 per cent of MSCI’s emerging markets index but this consists of shares listed offshore in Hong Kong and the US such as Chinese tech giants Tencent and Alibaba. MSCI’s move means mainland equities, known as A-shares, will next year be included in its flagship emerging markets index, obliging the estimated $1.6tn of investment funds that track the index to buy the stocks.

On Wednesday the CSI300, an index comprising the top 300 stocks on both the Shanghai and Shenzhen exchanges, closed up 1.2 per cent at 3,588, its highest level since December 2015.

MSCI’s decision opens a new front in investors’ long-running debate over whether, and how, to introduce domestic Chinese securities into international portfolios. China’s equity and bond markets are the second and third-largest in the world, respectively, yet foreigners hold less than 2 per cent of each. Three previous proposals by MSCI to include mainland stocks were rebuffed by the index provider’s stakeholders — primarily large asset managers.

Helen Wong, head of HSBC’s Greater China operations, called MSCI’s decision a “pivotal moment”. She added: “This is the start of a process through which Chinese equities will achieve a prominence in global investors’ portfolios that reflects the size and significance of China’s domestic stock market and its economy.”

Fund managers’ previous wariness had centred on China’s weak corporate governance, concerns over how it polices its stock markets, and the difficulties money managers face when repatriating funds on demand. Anxiety about the latter was amplified by Beijing’s heavy-handed response to the 2015 market crash, where at one point more than half of all stocks were suspended from trading and officials forced local institutions to contribute to a bailout fund.

MSCI warned that greater inclusion would require further reforms. “Future inclusion will be subject to a greater alignment of China with international accessibility and trading standards,” said Sebastien Lieblich, MSCI’s global head of index management research.

More from Nikkei.com:

the inclusion, which had “broad support from international institutional investors,” was largely the result of greater accessibility to the China A-shares market via the Stock Connect program and the loosening of pre-approval requirements by local stock exchanges that can restrict the creation of index-linked investment vehicles.

Using Hong Kong as a linchpin, the Stock Connect scheme allows investors to trade approximately 1,480 yuan-denominated stocks onshore without needing to apply for a license and quota or being subject to capital mobility restrictions.

The scheme began with Shanghai in November 2014 and later extended to Shenzhen last December. Remy Briand, chairman of the MSCI Index Policy Committee, called the expansion of Stock Connect “a game changer for the market opening of China A shares.”

To start with, approximately $17 billion to $18 billion will flow into the A-share market due to funds tracking the benchmark Emerging Market index based on a 5% inclusion factor, according to Chin-Ping Chia, MSCI’s head of research during a Wednesday teleconference. Chia expects inflows to be 20 times larger if the whole market were eventually included.

The 5% partial inclusion factor means A shares will make up 0.73% of the Emerging Markets Index, and roughly 0.1% of the All Country World Index. They will be counted as part of the Chinese equities universe, now largely made up of offshore shares listed in Hong Kong and the U.S., accounting for 27.7% of the MSCI Emerging Market Index as of May 31.

An Aha! moment courtesy of CNBC: “The index giant will add 222 China A Large Cap stocks — including Bank of China and Tsingtao Brewery — on a gradual basis beginning next year. The review is the fourth straight year MSCI has considered adding the mainland-traded stocks, known as A-shares in China. Corporate governance is a particular bugbear as many of the 222 companies are large state-owned enterprises.” Aha! So that’s what the rather confusing stories above were dancing around.

A view from Japan

June 20th, 2017


The China-is-turning-Japanese debate has returned with a unique ferocity since Moody’s pounced, and it feels eerily familiar. Researchers buzzing about “zombie companies,” bubbles in credit, debt and real estate and chronic overcapacity confront a great wall of true believers arguing ‘don’t panic’. China is unstoppable, bulls say. It is the New Economy, it is run by geniuses, its potential is boundless and anyone who cannot see that is either a cynic or a fool — or both.

Familiar, because the same was said of Japan 28 years ago. Any economist who said in 1989 that Japan had reached its “Minsky moment”, when a debt-fueled speculative bubble collapses, might be out of a job. A year later, the reckoning was unmistakable. Is the Chinese pendulum swinging negative for valid, fundamental reasons? U.S. traders last week increased short positions on Chinese exchange-traded funds to the $6 billion mark, the highest since 2015, back when Shanghai stocks were in freefall. Kyle Bass of Dallas-based Hayman Capital, who shorted Japan in recent years, now has China in his sights. Asia’s biggest economy is “beginning to unravel”, Bass warns.

The list of similar reference points between 1980s Japan and today’s China is growing: the role of runaway stimulus in fueling gross domestic product and assets; the level of corporate debt-to-GDP ratios; surging bad loans; the central role of real estate as collateral across sectors; explosions in local government debt; Chinese tycoon Liu Yiqian spending $170 million on a Modigliani; China`s CC Land Holdings paying $1.4 billion for a London building; and intensifying spin from Communist Party apparatchiks that there’s nothing to worry about here.

the first step towards addressing a problem is admitting you have one. Beijing should have done that in 2014, when corporate debt topped that of the U.S. ($14.2 trillion at the time). It should have accepted reality in mid-2015, when chaos in Shanghai shares was spreading the globe. Instead, it churned out ever more stimulus. It is time China looked in the mirror, because its face-saving public relations push is no longer working. Its excesses are now spilling into the global economy in ways Japan’s never did.

Beijing must do three things on which Tokyo dragged its feet. First, clamp down hard on credit growth and demand that banks make an honest and public accounting of their riskiest liabilities. Second, pounce on a shadow banking system feeding uncompetitive state-owned companies with loans they can never replay. Third, create a mechanism to dispose of distressed assets, perhaps modeled after America’s Resolution Trust Corp. from the 1980s. Only bold action will move China from treating the symptoms of its dysfunction to addressing the underlying causes. Given a debt-to-GDP ratio of 261% and growing, China is not there yet.

WSJ: China accounts for four in every five foreign buyers in Australia, with their interest a prime reason why home prices have surged to unaffordable levels: Prices in Sydney, for example, are up 72% since 2012. nearly 40% of home loans now are interest-only, meaning borrowers don’t need to repay the principal for a certain period, usually five years.

Interesting, at least to us

June 19th, 2017

A company:

China Minsheng Investment Group (CMIG) is a leading international private investment group founded in Shanghai on 21 August 2014 with registered capital of 50 billion yuan. The joint establishment of CMIG by 59 renowned private enterprises was initiated by the All-China Federation of Industry and Commerce (ACFIC) and approved by the State Council.

CMIG has identified its strategic direction of ‘integration of industry and finance’, and is building a sound global industrial financial platform, expanding complementing business in industry and finance. CMIG’s focused areas in industry include new energy, home-based care for the elderly, construction industrialization and general aviation, among others. CMIG will fully utilize its integrated resources and capital strength to prioritize target industries to carry out strategic investments, build a sustainable and strategic business model, transfer traditional excess capacity to advantageous industries and boost China’s economic transition and development. CMIG is also focused on establishing a full-licensed financial holding group with core operations in traditional businesses such as insurance, banking, leasing and asset management coupled with the innovative business of internet finance.

Committed to the ‘Two Pronged Strategy’ synergetic development, with a focus on the ‘Belt and Road Initiative’, CMIG is actively promoting the “integration of industry and finance” and expanding its business at home and overseas. Through expedited development of global investment and asset management capabilities, CMIG will be able to establish a global industrial-financial platform that leads Chinese private investment and boosts China’s economic transition and upgrade. CMIG has set the goal of becoming a premier world-class investment group.

One of the things they’re doing is getting into the mid-life aircraft leasing business, which BTW so are we. And here’s another China leasing initiative. A few years ago, Xi Jinping committed China to becoming number one in the global aircraft leasing business, and now every major Chinese bank is in the business and they’ve recently constructed, via acquisition, the number 3 company in the world after GECAS and AerCap.

Where Left and Right can agree a little

June 18th, 2017


months ago, the governor of Indonesia’s largest city, Jakarta, seemed headed for easy re-election despite the fact that he is a Christian in a mostly Muslim country. Suddenly everything went violently wrong. Using the pretext of an offhand remark the governor made about the Koran, masses of enraged Muslims took to the streets to denounce him. In short order he lost the election, was arrested, charged with blasphemy, and sentenced to two years in prison.

This episode is especially alarming because Indonesia, the world’s largest Muslim country, has long been one of its most tolerant. Indonesian Islam, like most belief systems on that vast archipelago, is syncretic, gentle, and open-minded. The stunning fall of Jakarta’s governor reflects the opposite: intolerance, sectarian hatred, and contempt for democracy. Fundamentalism is surging in Indonesia. This did not happen naturally.

Saudi Arabia has been working for decades to pull Indonesia away from moderate Islam and toward the austere Wahhabi form that is state religion in Saudi Arabia. The Saudis’ campaign has been patient, multi-faceted, and lavishly financed. It mirrors others they have waged in Muslim countries across Asia and Africa.

Successive American presidents have assured us that Saudi Arabia is our friend and wishes us well. Yet we know that Osama bin Laden and most of his 9/11 hijackers were Saudis, and that, as Secretary of State Hillary Clinton wrote in a diplomatic cable eight years ago, “Donors in Saudi Arabia constitute the most significant source of funding to Sunni terrorist groups worldwide.”

Recent events in Indonesia shine a light on a Saudi project that is even more pernicious than financing terrorists. Saudi Arabia has used its wealth, much of which comes from the United States, to turn entire nations into hotbeds of radical Islam. By refusing to protest or even officially acknowledge this far-reaching project, we finance our own assassins — and global terror.

The center of Saudi Arabia’s campaign to convert Indonesians to Wahhabi Islam is a tuition-free university in Jakarta known by the acronym LIPIA. All instruction is in Arabic, given mainly by preachers from Saudi Arabia and nearby countries. Genders are kept apart; strict dress codes are enforced; and music, television, and “loud laughter” are forbidden. Students learn an ultra-conservative form of Islam that favors hand amputation for thieves, stoning for adulterers, and death for gays and blasphemers.

Many of the students come from the more than 100 boarding schools Saudi Arabia supports in Indonesia, or have attended one of the 150 mosques that Saudis have built there. The most promising are given scholarships to study in Saudi Arabia, from which they return fully prepared to wreak social, political, and religious havoc in their homeland. Some promote terror groups like Hamas Indonesia and the Islamic Defenders Front, which did not exist before the Saudis arrived.

Eager to press his advantage, King Salman of Saudi Arabia made a nine-day trip to Indonesia in March, accompanied by an entourage of 1,500. The Saudis agreed to allow more than 200,000 Indonesians to make the hajj pilgrimage to Mecca each year — more than come from any other country — and sought permission to open new branches of their LIPIA university. Some Indonesians are pushing back against the Saudi assault on their traditional values, but it is difficult to deny permission for new religious schools when the state is not able to provide decent secular alternatives. In Indonesia, as in other countries where the Saudis are actively promoting Wahhabism — including Pakistan, Afghanistan, and Bosnia — the weakness and corruption of central governments create pools of rootless unemployed who are easily seduced by the promises of free food and a place in God’s army.

The surging fundamentalism that is transforming Indonesia teaches several lessons. First is one that we should already have learned, about the nature of the Saudi government. It is an absolute monarchy supported by one of the world’s most reactionary religious sects. It gives clerics large sums to promote their anti-Western, anti-Christian, anti-Semitic brand of religious militancy abroad. In exchange, the clerics refrain from criticizing the Saudi monarchy or its thousands of high-living princes. Saudis with close ties to the ruling family give crucial support to groups like Al Qaeda, the Taliban, and ISIS. This fact should be at the front of our minds whenever we consider our policy toward the Middle East — including when we decide whether to side with the Saudis in their new dispute with neighboring Qatar.

Saudi Arabia’s success in reshaping Indonesia shows the importance of the global battle over ideas. Many in Washington consider spending for cultural and other “soft power” projects to be wasteful. The Saudis feel differently. They pour money and resources into promoting their world view. We should do the same.

The third lesson that today’s Indonesia teaches is about the vulnerability of democracy. In 1998 Indonesia’s repressive military dictatorship gave way to a new system, based on free elections, that promised civil and political rights for all. Radical preachers who would previously have been imprisoned for whipping up religious hatred found themselves free spread their poison. Democracy enables them to forge giant mobs that demand death for apostates. Their political parties campaign in democratic elections for the right to come to power and crush democracy. This is a sobering reality for those who believe that one political system is best for all countries under all circumstances.

The Saudi campaign to radicalize global Islam also shows that earth-shaking events often happen slowly and quietly. The press, focused intently on reporting today’s news, often misses deeper and more important stories. Historians of journalism sometimes point to the northward “great migration” of African-Americans after World War II as an epochal story that few journalists noticed because it was a slow process rather than one-day news event.

The same is true of Saudi Arabia’s long campaign to pull the world’s 1.8 billion Muslims back to the 7th century. We barely notice it, but every day, from Mumbai to Manchester, we feel its effects.

The author of the piece was on a pretty far left radio program today. They of course underestimate the current US administration, where the Qatar move is but a first step.. One part of the solution is perfectly obvious and would have other enormous economic benefits around the world, raising the standard of living for pretty much everyone, except for a few in the ME. The US should produce every bit of oil and gas that it can economically, and drive down the price as far as possible, but do this oh so quietly.

Required reading

June 18th, 2017

Mollie Hemingway has a piece showing how Comey made a career out of trying to put rich or famous people in jail when they had not committed a real crime. Disgusting.

Monetary easing again in China

June 17th, 2017


A day after the U.S. Federal Reserve tightened monetary policy, China’s central bank effectively loosened, in a move that suggests Chinese authorities are now more concerned about financial turmoil inside the country than money flowing out of it. The People’s Bank of China on Friday injected a net 250 billion yuan ($36.73 billion) into the financial system — more than it has on any single day since mid-January, when demand for cash was high ahead of the Lunar New Year holiday.

Beijing’s campaign to tame highly leveraged investing began last summer and intensified in February and March when it twice raised a suite of key money-market interest rates. The move to clean up China’s messy and risk-prone financial system has led to a sharp rise in borrowing costs in recent months: Yields on government bonds rose to a 29-month high last month and remain elevated, while a record number of companies have canceled or delayed new bond issuance.

Mr. Tang also pointed to weaker credit data released Wednesday as fresh signs of difficulty: China’s broadest measure of money supply, M2, was up 9.6% at the end of May from a year earlier, lower than the 10.5% increase at the end of April and below economists’ median 10.4% growth forecast. It is the first time the M2 growth figure has fallen below 10% since the central bank first published the data in 1986

the state-run Securities Times attributed the PBOC’s inaction to the better foreign-reserves data and reduced expectations of yuan depreciation.

“All these have reduced the necessity for the PBOC to follow the Fed with a passive rate hike,” the newspaper wrote in the commentary. The yield on the 10-year Chinese government bond is at 3.56%, a 1.4 percentage-point premium above that on the corresponding Treasury, up from just 0.62 percentage point in early August

Also: “China’s banks issued a combined 1.1 trillion yuan ($160 billion) of new loans in the last month, an increase of 126 billion yuan from a year ago. As of the end of May, total outstanding yuan-denominated loans stood at 113 trillion yuan, up 12.9 percent year on year.” Hmmm. That’s pretty hefty loan growth compared to M2 growth. Stay tuned.

Which one is Barzini?

June 17th, 2017


Tom Hagen: When I meet with Tattaglia’s men, should I insist all their drug middlemen have clean records?

Don Corleone: Mention it, don’t insist. But Barzini will know that without being told.

Tom Hagen: You mean Tattaglia…

Don Corleone: Tattaglia is a pimp. He never could have outfought Santino. But I didn’t know until this day that it was Barzini all along.

There are multiple Barzinis, people who are either retired or have otherwise moved on but still have access to all sorts of highly secret information. Fortunately, there is a solution that’s easier than Michael’s.

Expect a lot more of this

June 16th, 2017


China has exported 7,185 tons of products worth nearly USD700 million to Russia since the first Sino-Russia e-commerce freight charter flight took off. This supply line has now become a major channel for cross-border e-commerce between the two countries. Harbin, capital of North China’s Heilongjiang province, was the first to offer a freight flight to Russia in November 2013, thanks to its geographical advantages, with exports reaching USD700 million in just three years, Xinhua News Agency reported. Inaugurated on Nov. 26, 2013, the Harbin-Yekaterinburg cargo flight was China’s first such flight to Russia. It focused on delivering small e-commerce packages weighing less than one kilogram. Its destinations include Yekaterinburg, Novosibirsk and Khabarovsk, but the flight could reach as far as Moscow. Since the flight’s inception, the delivery time for small e-commerce packages from China to Russia has decreased from 33 days on average, to the current 7-10 days

And with the Amazon / Whole Foods deal, your groceries will soon arrive in either 7-10 hours or 7-10 minutes.

Bonus unfun: complete this list, Martha Stewart, Frank Quattrone, Arthur Andersen, Scooter Libby, and with a billion interviews over the next two years, many others. Hey, if you interview 200 people 200 times about everything they have ever said or written, you’ll eventually find something. It’s not a bug, it’s a feature.

Extra bonus for today, a funny just-the-facts ma’am riff.

A serious country, and a question

June 16th, 2017


Xinjiang’s security budget increased 19.3% in 2016 to more than $4.4 billion, and 30,000 new officers were hired. In February Mr. Chen described security as “grim” and urged the People’s Armed Police to “bury the corpses of terrorists and terror gangs in the vast sea of the people’s war.” So much for winning hearts and minds. New “Regulations on Anti-Extremism” that came into effect in April outlawed veils or “abnormal” beards. Parents can’t give children “overly religious” names such as Muhammad or encourage them to follow the Muslim faith. All Xinjiang residents were forced to turn in their passports late last year and must give a DNA sample when they apply for a new one. Other measures include antiterror drills, shows of force by the security services and the installation of satellite tracking devices in cars.

Mandatory activities for students are deliberately scheduled on Fridays to prevent them from attending mosque services, and rewards are offered for reporting men who wear a beard or women who wear a veil. Control over the Uighur population goes far beyond religion. The use of their native language is discouraged in schools, and economic opportunities are limited. The best jobs go to Han Chinese settlers, who are given incentives to move to Xinjiang. Peaceful dissent is not tolerated. The Uighurs’ most articulate spokesman, Minzu University Professor Ilham Tohti, was sentenced to life in prison in 2014 for promoting separatism.

Sporadic attacks by Uighurs on Han Chinese have continued since riots in the capital Urumqi killed almost 200 people in 2009. In the city of Hotan, three men ran amok with knives and killed five people in February after a family was punished for praying at home. Most attacks appear to be spontaneous and poorly planned, despite Beijing’s claims that overseas terrorist groups are directing the violence. Yet China’s fears of a Uighur terrorist movement may become a self-fulfilling prophecy. As Uighurs flee the country and some become radicalized, Islamic State issued a video in February in which a Uighur fighter threatened China with “rivers of blood.” The government’s anti-Islamic policies are also causing anger among Muslim nations such as Indonesia

Beijing is again restricting the peaceful practice of Islam in its western territory of Xinjiang. This year government employees are required to ensure that friends and family aren’t fasting or otherwise observing the Muslim holy month. Under the “Together in Five Things” campaign, cadres are even living in the homes of the Uighur minority, according to the World Uyghur Congress. This escalation may be due to the arrival of Chen Quanguo, who took over as Xinjiang’s Communist Party secretary in August after running Tibet for five years. He has introduced the system of “grid-style social management” he pioneered in Tibet that allows the government to closely monitor households.

The WSJ’s punchline is “Chinese officials continue to respond to every outbreak of violence in Xinjiang with greater repression. By restricting even the peaceful practice of Islam by historically moderate Uighurs, Beijing is traveling a dangerous path” and its article is called “China’s Islamophobia, New repression in Xinjiang risks a Uighur backlash.” Puh-leeze!

As all thinking people know, sharia is a disaster, with the Middle East totally broke except for oil; capacities developed by the Judeo-Christian (or if you like atheist West) are the only source of its flimsy good economic reports. The Islamic world is a disaster economically, and so far refuses to change — and lies about the changes it says it is making.

Serious countries, and no Polish jokes please, know how to make terrorism a non-issue, see map. The WSJ’s pathetic piece is in itself a danger to good order and peace. Islam, by its very nature, is anti the Enlightenment and progress by rational inquiry. Look, this is not complicated: if a religion insists that its primary documents of 1400 years ago are not only necessary, but sufficient to salvation and a good earthly life, that belief system is just plain nuts and needs the kind of reforms that Ayaan Hirsi Ali and others call for. What are we missing?


June 15th, 2017


the impeachment and removal of Donald Trump from the Oval Office are merely the first steps in what must be a long-term policy to redeem the United States in the eyes of the world. They are certainly important steps in restoring the credibility of our government, our standing in the eyes of the world, and our very democracy. But they must not be the only steps, lest we still be left with Mike Pence as the acting president after Trump’s removal. No, to quote our new fuhrer, we must “drain the swamp.” Draining the swamp means not only ejecting Trump from the presidency, but also bringing himself and everyone assisting in his agenda up on charges of treason. They must be convicted (there is little room to doubt their guilt). And then — upon receiving guilty verdicts — they must all be executed under the law. Anything less than capital punishment — or at least life imprisonment without parole in a maximum security detention facility — would send yet another message to the world that America has lost its moral compass. In order for America’s morality and leadership to be restored, it must rebuke Donald Trump, his entire administration, and his legislative agenda in the strongest manner possible. And nothing would do more than to convict them of the highest offense defined by our Constitution, and then to deliver the ultimate punishment. Donald Trump deserves nothing less. Mitch McConnell, Steve Bannon, and Paul Ryan should also share Donald Trump’s fate, for they have done more than practically anyone to protect him and to throw our country under the proverbial bus. In order to survive, we as a nation must deliver the ultimate punishment

CT newspaper:

Last year, Kate Hall wasn’t positive she fully appreciated winning a Class M state championship as a sophomore. That gave Hall, a Stonington High School junior, even higher expectations for Tuesday’s Class M state track and field championship at Willow Brook Park, where she was focused on a repeat in the 100 meters and was also one of the top seeds in the 200, in which she finished in the top 10 in New England last year. Instead, the day belonged to Cromwell’s Andraya Yearwood, a freshman who won both the 100 and the 200.

Bonus fun: Andraya has a moustache. Roger Kimball is optimistic; we’re not. Shut the lights and close the door. Because, as for the insanity of our 21st century Civil War, QED.

Extra bonus: in news from planet earth (which we’re not getting much of lately), China’s growth has been revised slightly upwards.

How do you spell boondoggle?

June 14th, 2017

Yahoo Canada:

Delegates from 189 countries, including Canada, are in Geneva this week as part of a specialized international committee within the World Intellectual Property Organization (WIPO), a United Nations agency. Since it began in 2001, the committee has been working on creating and finishing three pieces of international law that would expand intellectual-property regulations to protect things like Indigenous designs, dances, words and traditional medicines.

James Anaya, dean of law at the University of Colorado, said the UN’s negotiated document should “obligate states to create effective criminal and civil enforcement procedures to recognize and prevent the non-consensual taking and illegitimate possession, sale and export of traditional cultural expressions.” Anaya said the document should also look at products that are falsely advertised as Indigenous-made or endorsed by Indigenous groups. That would mean products like those in U.S.-based retailer Urban Outfitters “Navajo” line, Anaya said, including “Navajo hipster panties,” a “peace treaty feather necklace” and a “Navajo print flask.”

Mead said part of the problem is that Indigenous groups around the world have no idea about the committee’s work. WIPO has what she called “one of the lowest” rates of Indigenous participation. “why are there not more Indigenous representatives here?”

Let’s see, tenured professors at the discussions yes, and the topic of the discussions, mostly no. Geneva is very nice at this time of year.

Obvious things

June 13th, 2017


a strategy of buying shares of companies with no significant risk-factor changes and betting against companies with major changes would have returned more than 22 percentage points more than the overall market annually. The similarity score for data-storage company NetApp, for example, fell sharply when it released its 10-K in June 2011. The company’s shares had more than quadrupled from their financial-crisis low, but that run ended. Over the next year, its stock fell 41% while the S&P 500 rose 4%. Tracking risk-factor changes is something even investors without programming chops can do for themselves. Professionals can use services such as FactSet, which has a function called blackline to highlight differences in filings. Individual investors can accomplish as much by pasting text from two 10-Ks into separate Microsoft Word documents and using the compare function, or by using text comparison sites such as textdiff.com. In the 10-K it released in March 2014, copper and fiber-optic wire maker General Cable added a paragraph to its risk factors stating it was reviewing commission payments to its subsidiary in Angola. That September, it announced it was investigating possible bribe payments in Angola, Thailand and India, and its stock fell sharply.

Well, duh. And, in a matter that should be obvious to all with a working brain, it’s now time to immediately mock any politician who uses any of the words — Russia, obstruct, collude — in a sentence. We recommend using this whistle each time the words are said until the nonsense stops.

That’s Entertainment

June 12th, 2017


The Chinese Communist Party’s powerful disciplinary wing is taking aim at the country’s internet censors for not pushing a party-line agenda, saying they were “irresolute” in implementing the policies of President Xi Jinping and “not trying hard enough to ensure political security.” The rebuke, published on Sunday by the Central Commission for Discipline Inspection, may shed light on censors’ surprise shuttering last week of dozens of Chinese celebrity news and gossip sites—an area previously considered safe from government scrutiny.

The commission’s new report, taken together with last week’s action, is also another sign that the Communist Party under Mr. Xi is moving to reclaim ideological authority it surrendered after Mao Zedong’s death, analysts said. “The old Communist ideology is coming back,” said Qiao Mu, a Beijing-based media scholar and prominent critic of government censorship. “Communism doesn’t like entertainment and gossip; it wants politics and class warfare.”

The discipline inspection commission’s report targeted the Cyberspace Administration of China, which is in charge of regulating internet content, and had been in the works for months. Analysts say the Cyberspace Administration was likely aware of its findings before taking action last week to shut down at least 90 social-media accounts run by celebrity news and gossip sites.

Among the closed sites was the Weibo social-media account of China’s self-proclaimed “No. 1 Paparazzo,” Zhou Wei, who had amassed more than 7 million followers by publishing salacious stories about Chinese celebrities. In meetings last week, authorities told the country’s top web portals, video-streaming sites and social-media platforms that the accounts were being shut down to comply with privacy protections in the country’s new cybersecurity law, the Cyberspace Administration’s Beijing and Guangzhou branches said. The regulators also encouraged the platforms to do more to promote the spread of “core socialist values” online.

Weibo, which hosted several of the closed accounts, is a vivid example. The platform was left for dead by many analysts after a crackdown in 2013 silenced influential users seen as critical of the government, but it revived itself with a focus on entertainment and is now bigger than Twitter with 340 million active users.

Of course Twitter has done more than its fair share in empowering vulgarity; now we see politicians cussing in speeches, apparently because they’ve been told that this will attract millennial voters. What do you think Mr. Xi’s reaction would be if the entertainers at the Tony Awards had said the things about him that they said about the US President?

A funny thing from a city on the edge of nowhere

June 11th, 2017

We flipped channels and came across the Tony awards as Cynthia Nixon (whom we know mostly from L&O) was given a prize. Among the people she credited was Lynne Meadow. We laughed because Lynne, a daughter of someone in our Dean’s or Master’s (Grrrrrrr!!!) office at Saybrook College at Yale, was director of us in a minor role in Marat/Sade in 1970 or so. Why are we noting this? Not sure, but with Batman’s passing as well as others, we’re reminded of how ephemeral our stay on this planet is. May we all have good futures in this world and the next.

Of course many on those Tony Awards had different feelings, at least when it came to a certain someone. This has gotten very weird, since it is de rigeur in mainstream entertainment and media culture today. Imagine if things were reversed.

Smart cookie

June 11th, 2017


China rolled out the red carpet for California Gov. Jerry Brown, a critic of Mr. Trump’s decision who arrived in China last weekend to take part in an international clean-energy forum and meet provincial officials. It was Mr. Brown that President Xi Jinping later welcomed to Beijing’s Great Hall of the People; U.S. Energy Secretary Rick Perry, also in town for the forum, was received by a vice premier. Mr. Perry’s arrival in China early in the week was preceded by the surprise announcement on Monday by the top U.S. diplomat in China, David Rank, that he was quitting to protest against Mr. Trump’s climate position. Mr. Rank, who was chargé d’affairs, had been expected to accompany Mr. Perry in meetings with Chinese officials.

Since Mr. Trump’s decision, a coalition of a dozen U.S. states, including California, have committed to uphold America’s pledge to cut emissions 26% to 28% compared with 2005 levels. For Beijing, working with U.S. states could burnish the image the country has sought to cultivate as an emerging global leader on climate issues. Some states can also share emissions-cutting expertise that leaders here are eager to acquire. Mr. Xi sent perhaps the strongest signal that he hopes to see more local-level cooperation by meeting Gov. Brown. Among the agreements Mr. Brown’s office announced during the week included plans to coordinate emission-reduction programs with China’s Ministry of Science and Technology and to set up a joint climate research institute between California and China’s Tsinghua University.

How aggressively Beijing moves to cut emission levels after they peak by about 2030—as China has pledged to do—may depend on whether the U.S. is also on board. Reaching the global goal of limiting the increase in global temperatures to 2 degrees Celsius above preindustrial levels would require significant cuts by China.

Mr. Xi knows a doofus when he sees one. Meanwhile, re magic CO2 and the last paragraph above, see this and this.