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Friday, February 01, 2019

Red China's economy collapses

A funny thing happened on Communist China's way to world domination in 2025. Its economy collapsed.

Bloomberg News reported, "The number of Chinese companies warning on earnings is turning into a flood, with no industry spared from worsening demand.

"Some 440 firms disclosed on Wednesday -- the day before a deadline to do so -- that their 2018 financial results deteriorated, according to data compiled by Bloomberg. Of the more than 2,400 mainland-listed firms that have announced preliminary numbers or issued guidance this season, some 373 said they’ll post a loss, the data show. About 86 percent of those were profitable in 2017."

Demand has fallen and it cannot get up.

Bloomberg reported, "Damage was widespread: Airlines faced soaring fuel costs and a weak yuan, the equity-market slump hurt brokerages, while China’s economic slowdown and a surge in impairment costs slashed earnings for companies as varied as a bus manufacturer, a maker of refrigerators and an ID-card supplier. Conditions continued to get tougher in January for the smaller firms that form the backbone of the nation’s economy, government figures released Thursday showed."

Hahaha.

I love it.

Chairman Xi thought he could do in the American economy by paying off its politicians -- Clinton and Obama in particular -- and stealing our technology. Chairman Xi thought he could pimp out slave labor to foreigners who wanted to ship production overseas. Chairman Xi thought he could cry "free market" and ward off The Donald.

But President Donald John Trump knows right from wrong and is siding with good against evil.

All those experts in Washington who live off government or some corporate donor to their think tank spent most of the past three years bleating "free market" as President Trump wrestled Red China, which has no free market.

None. It is a communist country that fakes capitalism in order to work up a trade surplus to finance its military ambitions.

These experts said nobody ever wins a trade war. President Trump, an actual capitalist, knew better.

The billionaire who has negotiated deals internationally for 30 years is winning because he knows Red China is dependent on the USA to survive. He knew protective tariffs were Republican goal from Lincoln to Reagan. He knew he could get a new deal for Americans by using them.

And he has. Canada, Mexico, and South Korea signed new trade agreements.

Now it is Red China's turn.

Maybe not. I would walk away and let Red China collapse like the Soviet Union did in 1991.

23 comments:

  1. Which is the basis of my portfolio theory also. I keep getting messages from Vanguard saying I need to “increase my exposure” to international investments. Eff that scheise. The rest of the world’s markets skip along to the beat of the U S A. The best, or nothing. Oh wait, that’s Mercedes’ tag. Eff Mercedes.

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    1. I get the same advice from my broker, too. Nuts!

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    2. Only thing Vanguard is good for is its index funds.

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    3. Wells Fargo broker gave me the same advice. What gives??

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    4. Those brokerage houses/investment companies probably own a shit-tonne of Chinese companies' shares and are trying to off-load them on you (main street)--Remember that Wall Street is not your friend and will take every penny you have.

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    5. Plus they have their talking points too and each repeats what they are told, sounds like the main stream press to me.
      Kate

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    6. According to "all their models", based on priors, the int'l market is "undervalued".
      a) these are lousy models for a changing environment,
      b) the prior values were too high, based on int'l profits coming at US expense,
      c) at some point, and we might be there, the US market will be "too high" relative to int'l markets, and will come down/stop rising while they go up. There's little evidence the models know where the bottoms and tops are.

      I claim that as long as the US economy is adding jobs, the US stocks are not yet overvalued. (There will be a time when they are.) Greenspan's "irrational exuberance" was in Dec '97, after years a fast increase -- the top was in Mar 2000.

      US equities for now are likely better than int'l, and almost certainly better than China.

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  2. This is especially disappointing to those who favor bureaucratic "management" of an economy to free enterprise.

    The basic problem with top-down management is that making good economic decisions requires knowledge. The ones with the knowledge don't have the authority to make those decisions, and the ones with the authority don't have the knowledge.

    The invisible hand works; the visible hand fails.

    Michael Oakeshott wrote over sixty years ago that socialists are the true reactionaries. They have never gotten over the closing of the feudal era and the dawning of capitalism. They yearn for the day when ignorant peasants had to obey their noblemen, who were wise and just, and in return be taken care of by them.

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    1. Well, too many of those nobles were no more wise and just than our elites, and with similar results. The divine right of kings is long gone as a theory of government. The divine right of the elite is on its way out, too, God willing.

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    2. I think the Divine Right of Kings was actually an improvement over what it replaces, namely, despots claiming they were gods.

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  3. For all the talk about Russian hacking the past few years, two obvious facts get little or no attention:

    1. Russia isn't very good at cyberwarfare
    2. The Chinese are almost as good as we are.

    When the USSR fell, Russia fell with it. They went from superpower to regional power practically overnight. They were already behind us when it fell apart, and now way back there in terms of technology, wealth, infrastructure, etc.

    Meanwhile we have a generation that can't remember not having computers and internet access. Thoser 15 year old hackers from 20 years ago are now 35 year old cybersecurity experts. My oldest son is one of them. Our NSA is packed with kids who were keyboarding before they were potty trained. Does anyone really think that those "Russian hackers" could beat our best? If the Russians set up a hacking operation we would know about it almost immediately. We hack them, not the other way around.

    As Snowden and Manning have shown, our problem is internal leakers, not hackers.

    China, on the other hand, is right behind us in technological ability, in large part because they steal ours. They have high-tech manufacturing, and a large and well-funded hacking operation.

    If someone hacked the DNC, it was more likely China than Russia.

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  4. Jobs up almost double what "experts" were expecting and wages for workers up, too.

    Trump refused to accept Obama's lousy economy. Said he could fix it and did.

    US has the world's strongest economy and best growth.

    All this while the media is 90% negative about Trump, always wrong and polls & voting rigged.

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  5. Anyone that believes economic data put out by Chi Coms is a fool. Capital has been flowing out of China for a number of years. Orange Man Bad knows this and chose to defend America and not sell her out. That's right Obama/Bush I'm talking about you

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    1. I agree. Even the “worse” numbers don’t reflect how bad it is. I was part Of a group that visited China in 2000. We met with businessmen and government officials to discuss among other things, how to accurately report business financials. We didn’t talk much about that topic on the trip. We saw many fine sights in three regions of the country and ate fantastic food though.

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  6. He's just getting us back to where we were before Clinton sold us out. You know, back when America was great, everyone stood for the flag and recognized each other as Americans.

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  7. Let's keep in mind Sun Tuz. A weakened enemy is most dangerous. Zi will find an outside enemy to rally his country if he thinks he's about to lose power.

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  8. Love this. Your years polishing your skillz makes you a joy to read, Don.
    "Demand has fallen and it cannot get up."

    JimNorCal

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  9. If the Chinese were to help their own middle class, rather than their military, they would get more demand. But missing some 60 mil. women due to sex-selective abortion, means there are far less "families" than the pop. would indicate. Plus they are aging fairly fast.

    The 60 mil. "no-women men" can make a pretty big army -- China needs women! (N. Korean? Burmese? Tibetan? Vietnamese?)

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  10. It's Monday morning and this pivotal moment with the China negotiations is still not being reported by the MSM...

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