Utterly weird religiosity and projection

June 10th, 2017

In 2003, Comey went after Martha Stewart for lying; William Safire was fit to be tied: Instead of focusing on what the case is about, Comey told a rapt press conference: “‘This case is about lying’ – to investigators and to investors. “Lying” is a harsh word; I used it myself about Mrs. Clinton’s congenital falsification. But “perjury” is a much harsher word, meaning “lying under oath.” Martha Stewart has not been accused of perjury.”

In 2004, Comey opposed George Bush’s warrantless surveillance program, and had this to say to the President: “‘Here I stand; I can do no other’.” In 2017, Comey had a meeting with another President, and said this about its alleged objective: “‘Will no one rid me of this meddlesome priest?'” Huh? Martin Luther and Thomas à Becket? (If your college senior thesis is on Reinhold Niebuhr and Jerry Falwell, your brain is already somewhat scrambled.)

Now let’s compare accounts of the 2004 and 2017 meetings (somebody call Jack Cashill):

(a) Bush stood as the meeting ended, crossing behind Cheney’s chair. Comey moved in the opposite direction, on his way out. He had nearly reached the grandfather clock at the door when the president said, “Jim, can I talk to you for a minute?” This time the vice president was not invited.

(b) The President signaled the end of the briefing by thanking the group and telling them all that he wanted to speak to me alone. I stayed in my chair. As the participants started to leave the Oval Office, the Attorney General lingered by my chair, but the President said he wanted to speak only with me. When the door by the grandfather clock closed, the President began

John Hinderaker (great research BTW) makes the point that Comey was lying in his Senate testimony when he said he only kept detailed records of his meetings with the Trumpster, which is obviously false as the eerily similar and 13 years apart (a) and (b) above illustrate. Also we note that unlike Martha Stewart, Comey apparently made his statements under oath. Final comment: we agree with Mark Steyn that this fellow is incredibly weird.

Update: This piece by Thomas Lifson shows pervasive bipartisan creepiness.

Crime against humanity, or merely an act of war?

June 9th, 2017

The person who wrote this is a law school professor. Maybe this is too. Hard to say in today’s world. Then there’s our former colleague at MS&Co, who made a lot of money in risk arb in the Milken era of hostile and other takeovers. BTW, the earth is no longer round and we’ve just slipped off the edge and are hurtling into space, if the above are indicators.

All this nonsense, in part, for one pound of CO2 in 2000 pounds, a ton, or air. Sigh.

Today’s numbers

June 8th, 2017


China is now the world’s largest e-commerce and mobile-payment market. Of China’s roughly 700 million mobile-internet users last year, half paid with their smartphones in stores and restaurants, 28% ordered meal delivery and 44% read online fiction, according to a government report. China’s mobile-payment volume rose by almost fourfold in 2016 to 58.5 trillion yuan ($8.6 trillion), according to iResearch. Some $800 billion of that went to ride services, games and shopping. By comparison, mobile payments in the U.S. rose 39% to $112 billion in 2016, according to Forrester Research. Oppo and Vivo, the No. 1 and No. 3 smartphone brands by market share in 2016, appeal to young people and residents in smaller, less-wealthy cities. Their phones look like iPhones and pack many of the same features, but with China’s lower cost base for manufacturing, they cost less than half the price of an iPhone.

No comment on today’s foolish hysteria.

Singing the blues

June 7th, 2017


Short sellers don’t often achieve rock-star status. But in markets-obsessed Hong Kong, Muddy Waters’ Carson Block comes close. Certainly, Mr. Block’s visit to Asia’s leading financial center has caused a stir in its stock market this week. Investors and companies were on tenterhooks after Mr. Block said on Tuesday he would announce his latest target at the Sohn Hong Kong investor conference Wednesday. Even after Mr. Block revealed his next target— Man Wah Holdings Ltd., a Hong Kong-listed furniture maker—the whirlwind continued. Man Wah’s shares slumped by as much as 15.4%, leading to a halt in its trading.

Whaaaa? Oh, muddy waters make it easy to catch fish. We confused Mr. Block with McKinley Morganfield since they produce the same output.

New news source

June 6th, 2017


Some Beijing-based banks have hiked the minimum mortgage rate to 10 percent more than the benchmark rate for first-time homebuyers, and 20 percent for second-time buyers, The Beijing News Reported, citing data from local real estate agencies. The new rates will come into effect today. Not all banks have announced rate hikes, the report added, saying that as banks had dished out most of their available credit, they had stronger bargaining power for remaining loans. Second-hand property prices fell in eight of the 12 active local markets in Beijing, with only four marketing positive growth, according to data from 525j.com, a market research institute. The largest falls were in Tongzhou and Yizhuang, with property prices plunging more than 20 percent in both areas. Total property sales have also fallen in the city due to the price slump. Some real estate agencies said sales had fallen as much as 60 percent.

Also: the average transaction price of resold apartment in Beijing dropped 2.4 percent as against the same period in April. Average transaction prices dropped in 8 out of 12 districts, and increased in only four. Tongzhou district and Yizhuang Development Zone logged the steepest drops at over 20 percent.

We’re not sure how reliable this info is, but we’ll monitor it now frequently to see.

Two maps

June 6th, 2017

If you use this map of North Korea, you will see a complete absence of commercial aviation. If you use this map of Poland, you will see something else entirely. The first map illustrates the absence of capitalism. The second map shows the presence of sanity.

A shares

June 5th, 2017


investors are awaiting a decision on June 20 by index provider MSCI Inc on whether it will add domestic Chinese shares, known as A shares, to its MSCI Emerging Markets Index. Such a move would be a blockbuster that could draw billions of dollars into China, because asset managers who track the index would then allocate money to the included China shares. At about $7.3 trillion, China’s domestic stock market trails only that of the U.S.

Answer from the other day: about a pound.

Trust loans (but verify?)

June 4th, 2017


New loans from so-called trusts, firms that raise money from individuals and corporations to plow into riskier areas of the economy, reached 882.3 billion yuan ($129.5 billion) in the first four months of this year, according to data from the People’s Bank of China, nearly five times as much as the same period in 2016. Trust firms, which often charge borrowers higher rates than banks, occupy a middle ground between banking and asset management. They are licensed and loosely regulated by China’s banking watchdog, but they lack some of banks’ protections, such as government deposit insurance, and they have more flexibility to invest in risky areas than banks do.

Daye Trust Co. is helping Qingzhou City Construction raise 200 million yuan through a two-year product that offers investors returns of 6.5% a year. The firm would pay Daye a rate of about 8%, which is still less than it was expecting to pay for bonds, these people say. Qingzhou City Construction intends to use the proceeds to finance a water-treatment project. One area of concern for authorities as they tackle soaring Chinese debt—a factor in Moody’s Investors Service’s downgrade of China’s sovereign debt last month—is loans that banks disguise as investments. A shift to trust lending would make it even harder to gauge the true extent of credit in the system.

At the end of 2016, trust loans made up 10% of China’s total so-called shadow-banking system, or lending outside regular bank loans and bond markets, according to Moody’s. Trust loans accounted for 15% of total shadow banking as of the end of 2013. Moody’s says the decline in share was mainly because high-yielding investment products from banks, another kind of shadow lending, grew faster. Shimao Property Holdings Ltd plans to issue bonds and expects to pay yields of up to 4.5% on the later bond sale, said Ms. Lau. By comparison, borrowing from nonbank financial institutions, including trusts, came at 5.7% interest rates in 2016, compared with 5.3% from banks issuing yuan loans

How about the collateral? These fellows are using every trick in the book. It’s hard to keep up.

A little history reading

June 3rd, 2017


Roman Emperor Claudius, who reigned from 41 to 54 AD, was never supposed to be emperor. He came to office at age 50, an old man in Roman times. Claudius succeeded the charismatic, youthful heartthrob Caligula—son of the beloved Germanicus and the “little boot” who turned out to be a narcissist monster before being assassinated in office. Claudius was an unusual emperor, the first to be born outside Italy, in Roman Gaul. Under the Augustan Principate, new Caesars—who claimed direct lineage from the “divine” Augustus—were usually rubber-stamped by the toadyish Senate. However, the outsider Claudius (who had no political training and was prevented by his uncle Tiberius from entering the cursus honorum), was brought into power by the Roman Praetorian Guard, who wanted a change from the status quo apparat of the Augustan dynasty.

The Roman aristocracy—most claiming some sort of descent from Julius Caesar and his grandnephew Octavian (Caesar Augustus)—had long written Claudius off as a hopeless dolt. Claudius limped, the result of a childhood disease or genetic impairment. His mother Antonia, ashamed of his habits and appearance, called the youthful Claudius “a monster of man.” He was likely almost deaf and purportedly stuttered. That lifelong disparagement of his appearance and mannerisms probably saved Claudius’s life in the dynastic struggles during the last years of the Emperor Augustus and the subsequent reigns of the emperors Tiberius and Caligula.

The stereotyped impression of Claudius was that of a simpleton not to be taken seriously—and so no one did. Claudius himself claimed that he feigned acting differently in part so that he would not be targeted by enemies before he assumed power, and to unnerve them afterwards. Contemporary critics laughed at his apparent lack of eloquence and rhetorical mastery, leading some scholars to conjecture that he may have suffered from Tourette syndrome or a form of autism. The court biographer Suetonius wrote that Claudius “was now careful and shrewd, sometimes hasty and inconsiderate, occasionally silly and like a crazy man.”

Roman intellectuals hated Claudius, who hit back blow-for-blow at them for their slights and snark, and showed no mercy to plotters and conspiracists. After Claudius’s death, the court toady and philosopher Seneca—pal of Claudius’s successor, the sinister and murderous Nero—wrote a cruel satire on Claudius’s supposed crudity and buffoonery. Seneca’s Apocolyncotosis (The “Gourdification” of the Divine Claudius) mocks Claudius’s halting speech and off-putting mannerisms. He also poked fun at Claudius’s lowbrow friends, and his penchant for crass popular entertainment.

Later Roman historians, drawing on now lost contemporary accounts of Claudius, reflect the same prejudices. In the biography of Suetonius and throughout the Annals of the historian Tacitus, the accidental emperor Claudius comes off as little more than an impulsive bumbler, an accidental emperor who came to power on a fluke and whose lack of Julian elegance made him more a buffoon than the head of the global Roman Empire of some 60 million citizens. Claudius’s 50 years of private life before becoming emperor were also the stuff of court gossip and ridicule. He would marry four times and was often flattered and manipulated by younger women. Modern historians, however, have corrected that largely negative view and ancient bias.

Claudius’s rule of some 13 years as emperor was marked by financial reforms and restoration after the disastrous reign of the spendthrift Caligula. Claudius-haters like Seneca, Suetonius, and Tacitus focused mostly on Claudius as the uncouth outsider—and overlooked what he had done for Rome after the disasters of the Caligula regime. The empire under Claudius grew and was largely at peace. Rome annexed Britain, and added a variety of border provinces in the east. While court insiders and gossipers ridiculed Claudius’s supposed ineptness, he nonetheless assembled one of the most gifted staffs of advisers and operatives—many of them freed slaves—in the history of the Julio-Claudian and Flavian dynasties. Claudius was foremost a builder and a pragmatist. Some of the Roman Empire’s most impressive archaeological remains (such as the Aqua Claudia and Aqua Anio Novus aqueducts and the reconstituted port at Ostia) date from his reign, as he focused on constructing new infrastructure and improving Roman roads, bridges, ports, and aqueducts.

As we used to say in Latin class, semper ubi sub ubi.

Bonuses: a piece on China of the kind we did a decade ago. Also, the cartoons are particularly funny today: cultural appropriation indeed. More fun.

Not fun, just sad

June 2nd, 2017

WaPo editorial:

On Monday, the journal Nature Climate Change published a study finding that global warming’s effects on major world cities could be far more devastating than previously understood. Some cities, it found, could be a staggering 14.4 degrees warmer on average by the end of the century, causing a 10.9% decline in gross domestic product as people work less, air and water quality declined, and more energy was needed to cool buildings. The agreement was the world’s best hope to ensure that big developing nations such as China and India did their share

Check out that study BTW. Stuff and nonsense. Catastrophic! Oh, the silliness. (How about Mr. Bezos making deliveries to your house five times a day?) We have a question for the worthies who believe this AGW or GCC nonsense: if you put a ton of air in a box, how much would the CO2 weigh? Answer tomorrow.

BTW, China and India will clean up after they’ve made some money and the people in the big cities complain enough: cf. Pittsburgh, LA.

Number versus Number

June 1st, 2017


At the highwater mark, there were about 5,000 malls in the United States, and there are now 1,100. 8,000 stores are expected to close this year. The migration of retail out of shops and onto the Internet has been significant — last year saw online retail pass a symbolically important milestone, accounting for 51% of all purchases


Hiring at small businesses surged in May, according to the monthly National Federation of Independent Business survey due out later today. Owners of small companies report an adjusted average employment increase of 0.34 workers per firm over the past few months. “Few readings in the past 43 years have been higher,” says NFIB Chief Economist William Dunkelberg. This is the strongest report since February of 2006. Owners of small businesses are planning to continue the surge. “A seasonally adjusted net 18% plan to create new jobs, up 2 points and the best since November 2006,” adds Mr. Dunkelberg. And he has more good news for workers: “Reports of compensation increases gained 2 points to a net 28%, historically very strong.”

Fewer cashiers, perhaps more trade school graduates. What’s so bad about that?

More numbers

May 31st, 2017


A gauge of manufacturing activity in China held steady in May as the property market remained buoyant, signaling stronger-than-expected economic momentum in the second quarter. China’s official manufacturing purchasing managers index was 51.2 in May, unchanged from April, according to the China Federation of Logistics and Purchasing, which releases the data with the National Bureau of Statistics. The May reading released Wednesday beat a median of 51.0 forecast by economists polled by The Wall Street Journal. The index, closely watched as a gauge of business sentiment, has remained above the 50 mark that separates expansion from contraction for 10 consecutive months. China’s official nonmanufacturing PMI, which includes services and other activity away from the factory floor, ticked up to 54.5 in May from 54.0 in April as consumption remained strong.

Reuters notes that the 19th Party Congress is in November, so expect numbers to reflect stability.

BTW, we’re waiting for an actual announcement to comment on this; the volume of the Gaia worshipping dopes won’t be 11, but rather 22 at a minimum. What fun!

From e-commerce to eat-commerce

May 30th, 2017


For office workers in China, the noontime meal was once a relaxed, civilized break. A short nap afterward wasn’t uncommon. Now, the tradition has come under pressure in an ever faster-paced workday and the rise of smartphone apps offering cheap delivery for around 70 U.S. cents. In China’s biggest cities, squads of helmeted, scooter-riding delivery people barrel through business districts ferrying bowls of beef noodles and plates of spicy chicken rice to hungry office workers.

China’s food-delivery transactions doubled in 2016 from a year earlier, according to industry researcher Analysys, which predicts a 67% increase this year.

Food delivery made up 10% of China’s restaurant business in 2016, iResearch estimates, up from 5% in 2013. Lily Sun, a 43-year-old civil servant working in Beijing, misses the days when she could dine with her colleagues at the office cafeteria. Now, she often eats alone while her younger colleagues opt to order food from apps, drawn by discounts and more meal options. Before, they could chat along the way to cafeteria and back. These days, they usually talk through online messaging

With the SF/UPS joint venture, you might be able to order on your phone and get your noodles delivered to NYC. Hmmm, they might be cold by then.

Bonus: you may not want to read this VDH piece during lunch.

Back in the day

May 29th, 2017

You probably figured that the Christmas perennial It’s a Wonderful Life won a few Oscars. It didn’t, though it was nominated for several (the RKO technical team did win an award for a new technique for making fake snow). All the awards in the major categories for which the film was nominated went to another film, The Best Years of Our Lives. It seems to get better with each viewing. Scott Johnson has an interesting piece on the movie and the remarkable team that put it together. That’s it for now. Have a good Memorial Day.

Yip Yawp

May 28th, 2017

We choose not to write extensively about most of the issues where the 180 degree differences are so stark, but this is getting really funny. The other guys really believe the Russia nonsense. Questions: who wants energy independence, which will ruin Russia, and what about all that uranium?

Fun from the US State Department

May 27th, 2017

From the US State Department:

Many areas of life in Saudi Arabia are segregated by sex to ensure that unrelated men and women have no possibility of mingling (a punishable crime). Some Mutawwa try to enforce this by asking for proof that a couple is married or related. Women who are arrested for socializing with a man who is not a relative may be charged with prostitution. Some restaurants, particularly fast-food outlets, refuse to serve women who are not accompanied by a close male relative.

Norms for public behavior in Saudi Arabia are extremely conservative, and the religious police, referred to colloquially as the Mutawwa or Al-Hay’a, are charged with enforcing these standards.

Faith-Based Travelers: Islam is the official religion of the country and pervades all aspects of life in Saudi Arabia.
– Saudi authorities do not permit criticism of Islam, religious figures, or the royal family.
– The government prohibits the public practice of religions other than Islam. Non-Muslims suspected of violating these restrictions have been jailed. Church services in private homes have been raided, and participants have been jailed.

In most areas of Saudi Arabia, women wear a full-length black covering known as an abaya, and cover their heads. Women who choose not to conform to this dress code face a risk of confrontation by Mutawwa and possible detention/arrest.

LGBTI Travelers: Same-sex sexual relations, even when they are consensual, are criminalized in Saudi Arabia. Violations of Saudi laws governing perceived expressions of, or support for, same sex sexual relations may be subject to severe punishment. Potential penalties include fines, jail time, or death.

Women Residents and Travelers: Women must be met by their sponsor upon arrival according to Saudi Arabia’s regulations. Married women, including non-Saudis, require their husband’s permission to depart the country, while unmarried women and children require the permission of their father or male guardian. A mother’s consent will not suffice

Employment: The Arabic text of a contract governs employment and business arrangements under Saudi law. Verbal assurances or side letters are not binding under Saudi law. In the event of any contract dispute, Saudi authorities refer to the written contract. It is common practice for sponsors to demand that residents working in Saudi Arabia surrender their passports while in the Kingdom. Although this practice is technically illegal, sponsors are rarely, if ever, punished by the Saudi authorities for doing so. Since the Saudi sponsor generally holds the employee’s passport and controls the issuance of exit permits, U.S. citizens cannot leave Saudi Arabia in the event of a labor or business dispute, which could take months or years to resolve.

Today’s tip: don’t try to order the McRib. HT to AMcC who proposes a sensible shariah test, but thanks to taqiya it can’t work.

Another number — 154%

May 26th, 2017


Moody’s lowered China’s government debt rating one notch to A1 from Aa3. Carlyle Group co-founder David Rubenstein said the company, which has invested $1 billion a year in China on average over the past four years, is increasing its investment. “The U.S. was downgraded a few years ago as well, and that hasn’t stopped us from investing in the U.S.,” he said. China’s Finance Ministry called the methodology behind Wednesday’s downgrade “inappropriate” and said Moody’s overestimated China’s economic difficulties. In its credit analysis, Moody’s wrote that debt held by local Chinese governments and some state-owned enterprises represents an indirect sovereign liability because the government would likely backstop those loans. This debt accounts for 114% of China’s gross domestic product.

Very interesting. China’s sovereign debt is around 40% of GDP, but if you toss in the 114% SOE loans etc you apparently get to 154%. BTW, there’s a new synonym for the number $4,100,000,000,000: cruel.

Questions and comments

May 25th, 2017

Some guy who wrote a song about a bulldog a long long time ago:

At words poetic, I’m so pathetic
That I always have found it best,
Instead of getting ’em off my chest,
To let ’em rest unexpressed,
I hate parading my serenading
As I’ll probably miss a bar,
But if this ditty is not so pretty
At least it’ll tell you
How great you are.

You’re the top!
You’re the Coliseum.
You’re the top!
You’re the Louvre Museum.
You’re a melody from a symphony by Strauss
You’re a Bendel bonnet,
A Shakespeare sonnet,
You’re Mickey Mouse.

You’re the Nile,
You’re the Tower of Pisa,
You’re the smile on the Mona Lisa
I’m a worthless check, a total wreck, a flop,
But if, baby, I’m the bottom you’re the top!

You’re the top!
You’re Mahatma Gandhi.
You’re the top!
You’re Napoleon Brandy.
You’re the purple light
Of a summer night in Spain,
You’re the National Gallery
You’re Garbo’s salary,
You’re cellophane.
You’re sublime,
You’re a turkey dinner,
You’re the time of a Derby winner
I’m a toy balloon that’s fated soon to pop
But if, baby, I’m the bottom,
You’re the top!

You’re the top!
You’re an arrow collar
You’re the top!
You’re a Coolidge dollar,
You’re the nimble tread
Of the feet of Fred Astaire,
You’re an O’Neill drama,
You’re Whistler’s mama!
You’re camembert.

You’re a rose,
You’re Inferno’s Dante,
You’re the nose
On the great Durante.
I’m just in a way,
As the French would say, “de trop”.
But if, baby, I’m the bottom,
You’re the top!

You’re the top!
You’re a dance in Bali.
You’re the top!
You’re a hot tamale.
You’re an angel, you,
Simply too, too, too diveen,
You’re a Boticcelli,
You’re Keats,
You’re Shelly!
You’re Ovaltine!
You’re a boom,
You’re the dam at Boulder,
You’re the moon,
Over Mae West’s shoulder,
I’m the nominee of the G.O.P. Or GOP!
But if, baby, I’m the bottom,
You’re the top!

You’re the top!
You’re a Waldorf salad.
You’re the top!
You’re a Berlin ballad.
You’re the boats that glide
On the sleepy Zuider Zee,
You’re an old Dutch master,
You’re Lady Astor,
You’re broccoli!
You’re romance,
You’re the steppes of Russia,
You’re the pants, on a Roxy usher,
I’m a broken doll, a fol-de-rol, a blop,
But if, baby, I’m the bottom,
You’re the top!

Check out the magnificent Ella version if you don’t know it. Question 1: how many people under 40 get 20% of the references in this tune? Answer: almost zero. Question 2: what do you call a lot of the foreign references in the song, as well as much of the collections in the Met and the Louvre? Answer: cultural appropriation. Comment: this country will shortly be run by ignorant and supercilious idiots. Help!

Bonus: HMD takes on the fools who run the composer’s alma mater, as well as the snowbullies who are indulged, not kicked out.


May 24th, 2017


Government-led stimulus has been a major driver of China’s growth over recent years, but has also been accompanied by runaway credit growth that has created a mountain of debt – now standing at nearly 300 percent of gross domestic product (GDP). Julian Evans-Pritchard, China economist at Capital Economics in Singapore, said steps to resolve the debt overhang, such as debt-for-equity swaps at state companies, were insufficient to deal with problem. “It’s reached the point where the bad debt problem is just so large the government will have to step in to resolve it at some point, and that obviously means at some point a sizeable increase in government debt,” he said.

Moody’s said it expects the government’s direct debt burden to rise gradually toward 40 percent of GDP by 2018 “and closer to 45 percent by the end of the decade”.

A growing number of economists believe that a massive bank bailout may be inevitable in China as bad loans mount. Last September, the Bank for International Settlements (BIS) warned that excessive credit growth in China signaled an increasing risk of a banking crisis within three years. Moody’s lowered Agricultural Bank of China’s (601288.SS) long-term deposit and senior unsecured debt ratings to A2 from A1, on par with Bank of Communications’ (601328.SS), which the agency put on review for possible downgrade. Ratings for state-owned Bank of China (601988.SS), China Construction Bank (601939.SS) and Industrial and Commercial Bank of China (601398.SS) were affirmed at A1, with Moody’s citing their very high level of government support.

China is using every trick in the book to sustain growth, and time will tell if they’ve been successful. We had to laugh, however when we saw the middle paragraph above. What is US debt to GDP?

Bonus fun from 1967 — booking social security tax as income to reduce the Vietnam deficits.

plus ça change

May 23rd, 2017

Mark Steyn catalogues western Europe on its death march. If this is what you teach the little kiddies in school — oh, wait, that was a decade ago and they said they stopped that. Oops, they didn’t.

Way back in the 1983 marine killings in Lebanon we learned why the Soviets did not have many such events. The reason was, as we recall, that when the Russians identified the killers, they proceeded to systematically murder the families of the attackers. Hence, very few attacks on them.