Monthly Archives: January 2021

Surrender?

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Recall that the New York Stock Exchange, pursuant to an Executive Order regarding US investors and People’s Republic of China’s PLA-owned or -controlled companies, had begun the process of delisting China Telecom Corp Ltd, China Mobile Ltd, and China Unicom Hong Kong Ltd.

Now the NYSE has walked that back and decided not to proceed with the delisting. Exchange management have chosen to not provide any details or rationale for their, other than that their decision follows “further consultation” with federal regulators. The Exchange’s full statement can be read here; it’s carefully uninformative.

I have to wonder: is this in response to the PRC’s threat to take the necessary countermeasures to resolutely safeguard the legitimate rights and interests of Chinese companies? Or is it an attempt to duck away from those threatened countermeasures rather than fighting a battle that needs to be won?

The foregoing was written Tuesday. Now the NYSE has reversed itself again:

it received “new specific guidance” from the Treasury Department’s Office of Foreign Assets Control on Tuesday, which listed the three companies’ American depositary receipts as being covered by Mr. Trump’s order.

Which raises an additional question: who’s actually in charge at the NYSE, since the new specific guidance should not have been necessary.

Who Has the Power?

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The People’s Republic of China is reaching deep into Hong Kong to arrest—now more than 50—people who had the effrontery of running in opposition parties for the city’s legislative body or otherwise demurring from the city’s Chief Executive policies and those of the central government in Beijing.

Carrie Lam’s rationalization (paraphrased by The Wall Street Journal) of the arrests and of the law passed in order to effect the arrests is dispositive regarding the role of the people and of government in Hong Kong and in the PRC.

[T]he opposition’s goal of objecting to every policy initiative of the government may fall into the category of subverting state power.

Objecting to state policy is subverting state power.

Government’s role, says the PRC government, is to rule, and the people’s role is the subservient one: to obey.

The Stock Market

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Much is made of the market drop last spring pursuant to the government’s decision to close down our economy in response to the apparent (apparent because we were operating on vastly incomplete data, much of which was being deliberately falsified by the People’s Republic of China). Much is made, too, of the market recovery later in the spring as our economy was permitted by government to begin reopening.

Readers of this blog know that I view the market as economically strongly tied to the underlying economy, but only loosely tied to it temporarily.

This graph, via MarketWatch, puts last spring’s market drop and recovery, illustrated by the S&P 500 Index, into some context.

The axes are somewhat hard to read (right click on the image and select View Image from the pulldown to get a larger image), but the X-axis labels run from Jan 80 through Jan 20. The data themselves actually run from 1 Jan 78 through 1 Nov 2020.

Last spring’s government-caused Wuhan Virus drop and recovery (the grey-blue region at the right end) compares in two ways with previous drops. This government-caused drop is no deeper than the two economically-driven drops of the last 32 years: the dot-com bust of Jun 00 to Dec 02 and the Panic of 2008 of Jun 08 to Mar 09. The Wuhan Virus drop and recovery also was much steeper and the recovery must faster than those prior drops: 6 months vs 18 months and 10 months just for the drops, and an additional 4 years to recover from dot-com and from the Panic.

Beyond that, the current Wuhan Virus data suggest that the government-mandated shutdown had very little impact on the virus’ progression. Especially given that key government officials like Anthony Fauci, National Institute of Allergy and Infectious Diseases Director, openly lied about the severity of the virus and what we should do about it.

Miami as Financial Center

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Financial firms are starting to figure it out: in addition to a better climate and (much) friendlier tax regime, Miami is the place to be for them. I have a thought on one bit of that maybe-migration, the opening statement:

This city has long pitched itself as an attractive location for finance and tech firms, with its tax advantages, flight connections to New York and cosmopolitan flair. Its efforts appear to be paying off.

I’m not sure that Miami needs to tout New York as being within easy reach. It should begin noting that it’s within easy reach of New York. There’s no need for Wall Street to remain in a city as anti-business, anti-financial success, as badly run generally as New York City, or as badly run and high-tax as is the State of New York.

Miami should encourage all of them to come on down to Brickell. The water’s better than fine.

An Audit Commission

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A group of Senators are planning to join a (large) group of Representatives to object, tomorrow, to a few States’ Electoral College slates being accepted unless they get agreement to an audit commission, modeled on a 19th century audit commission created for the same purpose that consisted of five each of Representatives, Senators, and Supreme Court Justices, that will conduct a 10-day audit of elections in the objected-to States.

Naturally, Progressive-Democrats in both houses of Congress together with the NLMSM are up in arms, to the point of hysteria about the move.

Senator Amy Klobuchar (D, MN)…said in a statement Saturday that Mr Biden will be inaugurated January 20, “and no publicity stunt will change that.”
For a group of my Republican colleagues to claim that they want an additional federal ‘commission’ to supersede state certifications when the votes have already been counted, recounted, litigated, and state-certified, amounts to nothing more than an attempt to subvert the will of the voters.
It is undemocratic. It is un-American[.]

Progressive-Democrats should leap at the chance of an objective commission doing a serious, detailed audit. Three things would result, two of which would redound to their advantage: the commission would find nothing in sufficient amount to change the claimed outcome, but serious error and outright wrongs would be identified so miscreants could be brought to justice and weaknesses corrected in Congress—restoring faith in our election systems while confirming Biden’s election. Or nothing wrong would be identified, also restoring faith and confirming Biden.

Or, the third item: enough being found to reject enough Electoral College slates to put the election into the House of Representatives for President and the Senate for Vice President.

That Progressive-Democrats are so terrified of a commission audit is instructive.