Category Archives: markets

Sanctioning Russia

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Maybe. President Joe Biden (D) is acting like he’s taking action that would seem to respond to Russia’s SolarWinds hack and interference with the 2020 Presidential election. His potential action includes

  • expulsion of 10 Russian diplomats, includ[ing] representatives of Russian intelligence services
  • sanctions against “dozens” of people and companies
  • target[ing] Moscow’s ability to borrow money by prohibiting US financial institutions from buying Russian bonds directly from Russian institutions.

The sanctions will take effect on 14 June.

It turns out, on inspection that this move isn’t all that. Expelling some low-level diplomatic functionaries isn’t a very strong move. Neither is the action against Russian bonds very strong: that “sanction” explicitly allows US institutions to buy Russian bonds from resellers and elsewhere in the secondary markets. Rather than being a strong move, it just adds a trivial layer of bureaucracy.

And there’s the delay of a month-and-a-half before taking effect. It won’t take those diplomats six weeks to pack up and leave. It won’t take six weeks for business entities to adjust their relationships with the “dozens.” It won’t take six weeks for US institutions to adjust their buying procedures to focus on the secondary markets.

None of that even has to begin earlier than those six weeks.

However.

The Biden administration will have six weeks of distractions from the threat posed by the People’s Republic of China and from the Biden administration’s begging of Iran to let the US back into the nuclear weapons development deal.

The Biden administration will have six weeks in which to let its finger-wagging at the Russians die down, followed by quietly dropping the sanction threat.

Income Inequality

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The Left and their Progressive-Democratic Party like to bleat about this and to complain further about how it has only gotten worse.

They know better.

Here’s a little tidbit, from Phil Gramm’s and John Early’s op-ed in Tuesday’s Wall Street Journal:

While the disparity in earned income has become more pronounced in the past 50 years, the actual inflation-adjusted income received by the bottom quintile, counting the value of all transfer payments received net of taxes paid, has risen by 300%. The top quintile has seen its after-tax income rise by only 213%. As government transfer payments to low-income households exploded, their labor-force participation collapsed, and the percentage of income in the bottom quintile coming from government payments rose above 90%.

That bit is disguised, as Gramm and Early point out, by the Census Bureau’s decision to not count taxes paid and Government transfers—welfare payments—paid when it measures income.

Of course the Left and their Party want to ignore actual facts—that’s demonstrated by that last part: [low-income household] labor-force participation collapsed, and the percentage of income in the bottom quintile coming from government payments rose above 90%.

Those are carefully created Government dependents—and votes collected in payment for those handouts.

“Sanctions”

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That’s what US, Canada, Britain, and European Union politicians are claiming they’ll impose on the People’s Republic of China in response to PRC genocide efforts against the Uyghurs in the PRC’s Xinjiang Uygur Autonomous Region.

The sanctions are expected to vary in type, and will include Global Magnitsky economic sanctions on individuals alleged to be involved with the mistreatment of the Muslims in the Xinjiang region of China.

Among those sanctions are these which the US, Canada, the UK, and the EU already imposed last Monday to four (count ’em) PRC officials:

  • Zhu Hailun, former deputy Communist Party head in Xinjiang
  • Wang Junzheng, party secretary of the Xinjiang Production and Construction Corps
  • Wang Mingshan, member of the Xinjiang’s Communist Party standing committee
  • Chen Mingguo, director of the Xinjiang Public Security Bureau (PSB)
  • Xinjiang Public Security Bureau itself

Politico noted, interestingly, that the EU explicitly omitted to sanction the top Communist Party boss in Xinjiang, Chen Quanguo.

That’ll show them. We’re wagging our fingers very firmly at the PRC, and shortly we’ll be wagging our fingers even more vigorously.

Right.

What’s truly needful here is—at the minimum—a ban on import or even purchase of goods manufactured, including constituent parts, or assembled in Xinjiang or any business anywhere in the PRC with any sort of tie back to Xinjiang, and a parallel ban on doing any sort of business with a Xinjiang-associated enterprise.

Better would be to expand that list to include an ever broadening set of imports from or exports to the PRC until that nation provides publicly available and publicly verifiable proof that the PRC has put an end to its assault on the Uyghurs.

Fat chance, though, as the politicians of the four nations have shown themselves too timid to do more

How Fast is Fast?

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Starlink is touting 120Mb/sec on its downlinks from its growing constellation of satellites purpose-built and -orbited to provide Internet connections.

Other satellite Internet providers in the offing are claiming similar speeds.

Put the speeds in context, though.

My Ethernet Internet connection gets link speeds in the gigabit/sec range.

My cable Internet provider gets me downlink speeds in the low hundreds of Mb/sec (faster than Starlink’s present 120Mb/Sec).

Consider another aspect of a satellite constellation network. Surface-based Internet connections (which cable connections are, for all that some of them still use microwave connections rather than underground copper (less obsolete than microwave) or glass to send their signals over much shorter distances than can satellites—which must bring the signal up from its ground-based origin, run it along that longer orbital arc, and then back down to the surface-based destination.

The throughput in any leg of that distance may well be lightning fast—which 120MB/sec is, for all that gigabit/sec is faster. But to all of that must be added the physics-created latencies—because the signal only goes at the speed of light—with further latencies created by each relay required as the signal is pushed from satellite to satellite before being relayed to the ground.

For all that negativity, though, a satellite-based Internet connection is fast, fast enough for consumer needs (so far) and for most business needs (so far), and it’s infinitely faster for those users in locations not reached by any other Internet network.

The follow-on question is whether a satellite-based Internet network can evolve as those “so fars” evolve.

A Treasury Climate Czar

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That’s what new Treasury Secretary Janet Yellen wants to set up. That’s not necessarily a bad idea.

A climate risk office inside Treasury actually could be useful—were its purpose properly targeted.

The risks that are worth assessing and which realizations worth planning for, though, are political and economic, not climatic.

The political risk is from government overreacting with laws and regulations to the overhyping of climate.

The economic risk is from businesses overreacting in anticipation of such political overreactions.

Somehow, though, I doubt that’s Yellen’s intention for her new office.