The Value of Debt

There seems to be little in the People’s Republic of China, at least with respect to government and government-backed debt.

Bond investors who put their faith in Chinese state-owned enterprises are swallowing another bitter pill, just two months after an earlier wake-up call.
This week, the province of Qinghai persuaded a narrow majority of investors holding dollar debt with a face value of $850 million to sell their holdings for as little as 37 cents on the dollar….
The tender came two months after a similar debt purchase and exchange deal involving bonds issued by Tewoo Group, a commodity trader based in the northern port city of Tianjin.

Contradictions

Japan raised its sales tax—consumption tax/value added tax—and promptly saw a 6.3% year-on-year drop in GDP in the last quarter of 2019. Consumer spending (did I mention that the tax was a consumption tax?) fell by 11.5% that quarter.

Color me—and hosts of others much smarter than me—unsrurprised.

Now come the contradictions, from the just US Congress-revived IMF, yet.

The International Monetary Fund thinks the consumption-tax rate will have to rise to 15% over the next decade, and to 20% by 2050. But first the fund’s wizards say Tokyo must expand its Keynesian spending to make the economy “strong” enough to bear the tax hikes to pay for the spending.

A Court Missed

This time, the DC Circuit Court has erred.  The Trump administration—Health and Human Services—had allowed Arkansas, among other States, to set work requirements on its citizens as prerequisites to eligibility for the State’s Medicaid program. Folks and organizations sued over that, and the case wound up in the DC Circuit Court.  That Court held with the suers and has blocked Arkansas from proceeding with the work requirements.

Writing for the Court, Senior Circuit Judge David Sentelle held, in part, that HHS didn’t address the purpose of Medicaid in a way that suited him:

This Loss is No Loss

Recall the fact of the tweet that the NBA’s Houston Rockets General Manager sent in support of the Hong Kong freedom protesters.  Recall further the NBA’s abject cowardice in deeply kowtowing to the People’s Republic of China in response to the latter’s projected upset over the tweet and the NBA’s impudence.  The kowtowing was rationalized from the league on down to individual players that they all had money at risk from the GM’s tweet—as if their personal pocketbooks could compare with the sacrifices of life and limb, in addition to economic loss, of those freedom protesters as they struggled for their basic freedoms.

Stakeholder Capitalism

Vivek Ramaswamy, writing in Wednesday’s Wall Street Journal, offered a brief definition:

“Stakeholder capitalism” is…the fashionable notion that companies should serve not only their shareholders, but also other interests and society at large.

Ramaswamy is right. What the virtue-signaling social justice warriorlettes (of which Ramaswamy is not one) miss, though, is that companies serve “other interests” and society at large by doing well, making money for their owners, and creating jobs for “other interests” and members of society at large—us citizens.

Telecommunications and Backdoors

It turns out that Huawei has been able to use legislatively mandated backdoors into telecommunications software—backdoors ostensibly for the sole benefit of law enforcement, and then only usable within judicially allowed limits, search warrants duly sworn, in the US, for instance—for years.

But we would never do that, says Huawei in its wide-eyed innocence.

“The use of the lawful interception interface is strictly regulated and can only be accessed by certified personnel of the network operators. No Huawei employee is allowed to access the network without an explicit approval from the network operator,” the [senior Huawei] official said.

Markets in Internet Domains

ISOC, which owns the .org Internet domain, wants to sell the address to a company called Ethos, which wants to go into a for-profit business managing Internet domains or Internet addresses. ICANN has to approve the sale before it can go through.

The free market competition that would result from the sale and others like it is supposed to knell the end of the Internet. The Wall Street Journal‘s Editorial Board likes the idea.

They’re both wrong, and they’re both being hysterical about it.

In Which Illinois Got It Right

Back in 2008, Illinois passed a law barring companies from collecting customers’ personal biometric information without their prior permission. Companies in Illinois also were required to develop a policy, and make it readily available, that laid out how those biometric data would be stored and when they would be destroyed.

Facebook was accused of violating that law when it decided to use its facial recognition technology to analyze users’ photos in order to create and store “face templates.” Users’ faces are plainly biometric data in this context, the data were taken by Facebook without the owners’/users’ permission, and in 2015, folks sued Facebook over its misbehavior.

Protections through Cuts

That’s how President Donald Trump’s budget proposal represents support for his campaign commitment to protect programs like Medicare and Medicaid.

[The proposal] targets $2 trillion in savings from mandatory spending programs, including $130 billion from changes to Medicare prescription-drug pricing, $292 billion from safety-net cuts—such as work requirements for Medicaid and food stamps—and $70 billion from tightening eligibility access to federal disability benefits.

Medicare is threatened with bankruptcy nearly as badly as is Social Security, but that doesn’t mean Medicare would disappear—only that benefit payouts would be reduced to what payroll tax revenues could support, rather than what’s currently available from those tax revenues plus earnings and principle from its trust funds.

Government Knows Better Than Owners

That’s what the SEC is claiming with its latest shenanigan.

[T]he Securities and Exchange Commission wants to make it harder for small shareholders to get resolutions onto company ballots, known as proxies.

After all, the SEC says, with some accuracy,

responding to resolutions can pose an undue burden on companies, costing tens of thousands of dollars apiece for research, and printing and mailing of ballots.

However.

Corporate by-laws are set by the owners of the company, and the owners can, via their by-laws, set the parameters surrounding shareholder resolutions and thereby manage their own costs just fine, thank you.