Spekulatius

OT -Interesting discussion here - you can get even a book about their history for free (I ordered one): Stock looks too expensive for me though.

The cold war turning hot may not mean direct confrontation between China and the US, it could be by means of a proxy war. Most likely the cause would be around Taiwan, I think, but there could be other point of contact. In any case, i think if you are western investor in China, and the cold war turns hot for whatever reason, you are looking at a zero here. If you invested in Apple, I think you are looking at a 2/3 loss here unless they diversified their supply chain when that unhappy day should come (likely takes a decade from here). As investors, we can have an opinion on how things should be, but it doesn't matter. It is more important to observe. XJP has hardened his stance in foreign politics. Both Republicans and Democrats now regard China as an adversary. XJP has a stated goal to bring Taiwan back into the fold by 2027. US stated that they would defend Taiwan. This is what matters, not what you and I think. China for me is "uninvestible" but that does not mean you can't speculate with Chinese stocks. I would personally keep the timeframe short and be aware of the wipeout risk. Others may have a different view.

The lab leak hypothesis does not imply the release was deliberate. If COVID-19 indeed was from a lab, it was most likely an accidental release as a consequence of lack of safety measures and perhaps reckless research to begin with. China is not weak either, they have strengths and weaknesses. China is an industrial powerhouse for once. On the other hand, they have a personality cult around a neo Maoist leader who tries to run the country by himself now., which I don’t think goes into the strength bucket. My simple view, like it or not, is that we are in a Cold War with China, first economically, now politically and in the future perhaps militarily which will be ongoing for decades. If you invest in China and this war gets hot, you will lose all your money, at least as an US or Western European person.

Looks like the top is in for ChatGPT. In any case, some of the initial excitement seems to wear off:

Happy belated 4th of July to all those who check in here:

These elements are commodities that are relatively easy to produce. it just wasn't worth it because the market is fairly small and the Chinese supply was cheap and plentiful. The West controls many materials and consumables critical for semiconductor manufacturing - think high purity etching, polishing agents and photolithography polymers/ agents. The Chinese produce some of those but for leading edge special materials and sometime high purities are needed that they have to source from the west. I do think it's likely that a retaliatory move along the lines of putting some of the material on an export control list as well, which means that the Chinese can't source them. Other than just the elements that China restricts, the material I am thinking about are high tech materials that are not easy to reverse engineer and it will take the Chinese a long time to get equivalent sources produced domestically. This is not a game that the Chinese can win, imo.

Upthread it was stated that Wagner are more like pirates, but I think they are more like Privateers. Same job than pirates, but commissioned by the state/crown (British empire mostly). Difference is that pirates work for their own, Mercenaries work for whoever pays most, but Privateers were private ventures who worked for the crown but used monetary incentives to wage war on the sea on enemy vessels. I am not sure that plausible deniability term existed back then, but I am sure the crown could not be reached for comments back then regarding this business either.

I do not think Canada is the blueprint for the US. For once, Canada has way more immigration than the US /~500k in Canada vs ~1.5M in the US while Canada population is ~1/10 of the USA‘s. I also think that USA has far more places to accommodate new housing (like in the South where ist’s still fairly easy to build) while Canada is restraint in their urban areas like Toronto and Vancouver. I always thought about Canada as a huge country with enormous open spaces , but I think the vast majority of Canadians lives within a 100mile strip of the US border and even in that strip there are huge open spaces in the prairies or New Brunswick for example. So on other words, the population density in the locations where people want to live (or can make a living) is very high compared to the US.

They may have to let go of the Yuan to USD peg if they go down that route. The Yuan had been weak anyways.

Bought some Canadian ice wine (and ice cider) on my trip to Toronto recently, before climate change … Stopped at a winery on a hunch when it was pouring and was the only customer in the store and spent more than I like but the woman there was pretty good at selling. Had to leave before my wife starts to roll here eyes and the downpour was over anyways.

SF real estate is definitely down , but not 35%. If I were to make a guess it’s probably more 10% (more in very swanky areas). I still have friends living in the Bay Area and nobody talks about RE down 35% so far. I do think a 35% crash in RE in the SF area is possible even with RE in the US overall not taking much of a hit. I think we want a diversity of opinions here . Maybe it’s just me, but I want both the @Gregmal and the @Gmthebeau to post.

The problem with Syria of course is that while Wagner lost a few men (which are expendable for them) they remain firmly entrenched there and used their Syrian playbook to repeat their business model in several countries on Africa. The US won a battle and lost the war.

Just remember, the stock market is not the economy. Even in 2008, when the economy was already a dead man walking, the stock market bounced back from Bear Stearns disaster in March 2008 and wasn’t really looking bad until July 2008 when the selling started to accelerate. Just because the stock market does well, doesn’t mean that there are no issues that could derail the economy. I am not stating that we are going to see a repeat of 2008, but the above is an example where the stock market clearly got it wrong. There are other instances and it works both ways. At the end of 2015 for example we had an energy and a shallow manufacturing recession and many expected worse to come but that never happened. Looks like we will have a manufacturing recession in the near future at least. I also see this at work and in a a circle of friends, it seems widespread. https://finance.yahoo.com/news/us-manufacturing-activity-shrinks-most-142737300.html

I highly recommend this for those of us who are older and have back issues. 5-7 min every morning: @cubsfan recommendation above looks solid too. I have a small home gym and generally find free weights to be better than machines.

Racing through 40 years of pop music:

The Wagner have a pretty spotty track record according to this article: https://www.geopoliticalmonitor.com/russian-mercenaries-a-string-of-failures-in-africa/ If they meet a well equipped and motivated opponent, they don’t tend to do all that well.

My guess is that everybody buys these books and nobody reads them. It’s just something you need to show on your bookshelf at home or at work to show that you are a good party member. XJP is a neo Maoist which is a derivative of Leninism basically. Leninism means that the communist party should have the monopoly on power and their nightmare is a repeat of the student protests in the late 80‘s that culminated in the Tiananmen massacre. Note that Russia had similar issues at the same time where the Russian communist party lost their Monopol and power (eventually leading to the Putin autocracy). XJP will do everything to avoid a similar situation because once the CCP loses their grip, it’s likely irreversible.

Lots to unpack here, besides the $8 wiener . The voluptuous gal on the left looks like Monica Levinski and then there is the secret service guy in the back sitting by himself and trying to look suspiciously unsuspicious.

@John Hjorth The YouTube Clip Form the WSJ is an excellent piece of journalism. It’s funny when people here complain about MSM because as far as I am concerned, if you care to look, you find excellent articles from MSM and other sources. It’s not difficult either. As far as the Wagner group is concerned, I was surprised how they operate as a commercial company with their impressive headquarter and that they operate mines themselves (I thought they operate as security in exchange for a cut before I saw this), drill for oil on their own concessions. Now Wagner probably will be disbanded but you hear already that Russian companies like Gazprom are building their own “ security forces”. It will be interesting to see if the Wagner co will continue to operate in Africa under their old flag or just change superficially. I am sure they won’t just leave and give up gold mines or oil concessions.

Inside Prighozin Wagner Tells the story about how Wagner group evolved in the Ukraine conflict in 2014, their success in Syria, which they are now duplicating in Central African Republic and other states like Mali, Mozambique, Venezuela . I Syria they get 25% of the revenues from any oil field they captures from rebels. It’s industrialized

Pretty good podcast on XJP and Putins motivation , similarities and differences: https://www.foreignaffairs.com/podcasts/what-drives-putin-xi-mao-stalin-kotkin-schell some of the recent podcasts also seem interesting (I only listed to the one above).

Asking for your money and getting it are two different things. Why would the tool makers oblige to this request? They are done in China anyways.

Well, for once, Gazprom has been "investing" in it's own mercenary forces amongst other things. https://time.com/6254708/gazprom-private-military-wagner-group-russia/ I guess Wagner is dead, long live Wagner two. I am sure some Wagner old timers find they way there - after all they are mercenaries.

I don’t know, in my own circle , I didn’t see a sudden shift last year in spring . Maybe it’s a NY or financial sector thing. My circle is mostly in manufacturing industries and we have seen more of a slowdown in business this year than last year, with layoffs in most companies. I guess the stock market is not the economy.

SVB bank was never subjected to these stress tests. I think even if, they probably would have passed, since these stress tests test for a severe economic decline (deflationary scenario) and not an increase in interest rates. In fact they mostly assuming the opposite (declining interest rates). As far as I know, no stress test ever tested for a stagflationary scenario that would have showed the weakness around AOCI in SVB and other banks. This goes to show that the things no one expects are the ones to worry about.