Political Posts

[Gregmal]

I was watching a documentary the other day and it brought up a period earlier in the 2000s where the US was fighting its Iraq/Afghanistan war. There was great outrage, constant "denouncing", and a general stink made about Pakistan "aiding" some of their allies(whom happened to be fighting the US) through providing weaponry. Interesting perspective now, given todays situation. Of course it was different because whatever we are doing is right and whatever we dont like or are fighting against is evil and wrong. 

[Viking]

Lots of super interesting things going on in China today as they attempt to deleverage and pivot their economy away from a real estate/infrastructure investment model to one driven more by personal consumption. For years Michael Pettis has been one of my sources in trying to understand China. The 30 minute interview below lays out Michael’s thesis. Bottom line he is thinking GDP growth in China will be coming way down to something closer to 3% moving forward and that this could be too optimistic. 
 

 

[Spekulatius]

yeah, I think Xi is in big trouble. He has to deal with

1) real estate slow motion crash (likely takes of several percent off from GDP growth)

2) zero COVID policy failing with  no end game in sight (also impeding GDP growth and causing civil unrest)

3) failed foreign policy (getting aligned with Putin who seems to be losing a war or at best gets into stalemate) and US hardening stance on Taiwan

4) Fallout from tech crackdown( impeding innovation and causing wealth destruction for the elite)

 

I think there is a bigger risk that Xi get's canned somehow than people think.

[maplevalue]

@Spekulatius I am sympathetic to your view about Xi's vulnerability, but the more I read on it the more I am convinced he is not very vulnerable (many China experts believe his next 5 years a done deal). Xi has essentially purged most of his opposition via anti-corruption campaigns. Plus we are at the beginning of China opening up and he will be able to say "yes it was hard, but I saved millions of lives at the expense of a few percentage points of GDP growth". 

 

Good article below (paywall)

 

Rumours that Xi Jinping is losing his grip on power are greatly exaggerated

https://www.ft.com/content/5e14bfb2-f0a9-4259-9d4c-a1b0ff607560

 

 

[Spekulatius]

3 minutes ago, maplevalue said:

@Spekulatius I am sympathetic to your view about Xi's vulnerability, but the more I read on it the more I am convinced he is not very vulnerable (many China experts believe his next 5 years a done deal). Xi has essentially purged most of his opposition via anti-corruption campaigns. Plus we are at the beginning of China opening up and he will be able to say "yes it was hard, but I saved millions of lives at the expense of a few percentage points of GDP growth". 

 

Good article below (paywall)

 

Rumours that Xi Jinping is losing his grip on power are greatly exaggerated

https://www.ft.com/content/5e14bfb2-f0a9-4259-9d4c-a1b0ff607560

 

 

Yes, he possibly has a strong grip on power. Traditionally, China was run by a party committee (post Mao) but that seems to have changed. That said, it is very difficult to access the vulnerability of a regime from the outside and possibly even from the inside.

[backtothebeach]

8 hours ago, Viking said:

Lots of super interesting things going on in China today as they attempt to deleverage and pivot their economy away from a real estate/infrastructure investment model to one driven more by personal consumption. ...

 

 

Sounds bullish for BABA. Incidentally BABA has stealthily marched up ~50% from its lows.

[Gregmal]

1 hour ago, backtothebeach said:

 

Sounds bullish for BABA. Incidentally BABA has stealthily marched up ~50% from its lows.

It’s hard to get a real picture of some of this because the truth gets censured all over the world to fit the political agendas, however the general rule of thumb is that whatever MSM in NA is shouting, something closer to the opposite is true. Remember how following Russia in February, China was next? China was a pariah and uninvestable? Whoops!

[Gregmal]

American centric media outlets

 

[sleepydragon]

China has its human rights problem, but American have people mass shooting kids while having a gun convention next week near by. They don’t think they have a problem, and nor do many American think we have a problem.

 

But China has changed a big way from the past. Of course younger people are still fooled by propaganda etc, but they are largely intelligent and rational. And Chinese people work damn hard and they are mostly damn smart. Most people in CCP leadership is very smart too, so I don’t completely buy the idea that Xi has unlimited power. The trend of the last 30 years is just too powerful and people will not want to come back. They want a good western like life.

 

[Gregmal]

The Americans...go read the BABA thread or the Russia Ukraine thread, are under the illusion that China is all evil and uninvestable. Meanwhile CCP is taking unprecedented measures to boost financial markets, provide not only stability, but also transparency never seen before. Of course, nothing is perfect and there is warranted skepticism. But never IMO have I seen the Chinese markets and ADRs greenlighted by CCP like we've seen recently. Meanwhile you have the US agencies attacking and aggressively pouring cold water on any positive foreign development, continuously moving the goalposts on what they want from Chinese listed companies, and oh yea, labeling anyone they dont like "oligarchs" and using that as an excuse to steal their assets. Quite the dislocation between narrative and reality. Since the greenlight a few months ago, Chinese stocks have done quite well. 

[maplevalue]

There is probably something to be said for the fact that there has been no post in the BABA thread today, on one of its biggest moves in awhile (+15%). Maybe sentiment is just really bad?

[Gregmal]

Ya the scareds got shook out on fake news back in February and March. Charles Munger included. 

[sleepydragon]

I bought a lot of baba, between 85ish to 120, average cost of $106. Still holding.

 

this is a truely “blood on the street” moment for Chinese ADRs — massive layoffs, Covid lock downs, even suicides of tech startup CEO.  all the founding CEOs (PDD, JD, Baba) are pushed out. 

 

But Baba has about $20ish cash per share and $20ish investment in Ants.(seems Ants is still hiring now and people are posting interview experience on Zhihu. this is interesting, could be IPO is not far). Business ROI is north of 15%.   
 

 

[cubsfan]

^^ I'll be quite happy to see BABA come back. Pain seems to be my name.

[Dave86ch]

16 hours ago, Gregmal said:

The Americans...go read the BABA thread or the Russia Ukraine thread, are under the illusion that China is all evil and uninvestable. Meanwhile CCP is taking unprecedented measures to boost financial markets, provide not only stability, but also transparency never seen before. Of course, nothing is perfect and there is warranted skepticism. But never IMO have I seen the Chinese markets and ADRs greenlighted by CCP like we've seen recently. Meanwhile you have the US agencies attacking and aggressively pouring cold water on any positive foreign development, continuously moving the goalposts on what they want from Chinese listed companies, and oh yea, labeling anyone they dont like "oligarchs" and using that as an excuse to steal their assets. Quite the dislocation between narrative and reality. Since the greenlight a few months ago, Chinese stocks have done quite well. 

In the meantime I keep buying baba shares at a marvellous price.

[CGJB]

I'm no military strategist, but I always felt the end game in this would be the Donbas becoming independent, maybe joining Russia at some point, with Russia establishing a land bridge to Crimea. Now I suspect Russia will eventually take Odessa.

 

In the end, what's left of Ukraine will be a landlocked country. Every bit as corrupt as it has been, but much poorer as well.

[no_free_lunch]

56 minutes ago, CGJB said:

I'm no military strategist, but I always felt the end game in this would be the Donbas becoming independent, maybe joining Russia at some point, with Russia establishing a land bridge to Crimea. Now I suspect Russia will eventually take Odessa.

 

In the end, what's left of Ukraine will be a landlocked country. Every bit as corrupt as it has been, but much poorer as well.

I wonder which country Russia will attack next.  It seems the only thing Russia is capable of is to attack smaller neighbor countries and the domestic issues are bound to resurface as this invasion has not resolved the underlying cluster fuck that is the Russian economy. 

Edited June 14, 2022 by no_free_lunch

[Castanza]

https://www.benzinga.com/news/22/06/27713137/xi-jinping-signs-order-directing-chinese-troops-to-take-special-military-operations-abroad?utm_campaign=partner_feed&utm_source=SmartNews&utm_medium=partner_feed&utm_content=site

 

Clickbait but could cause some more waves in the Chinese Equity market

Edited June 15, 2022 by Castanza

[mcliu]

On 6/1/2022 at 10:58 AM, Gregmal said:

I was watching a documentary the other day and it brought up a period earlier in the 2000s where the US was fighting its Iraq/Afghanistan war. There was great outrage, constant "denouncing", and a general stink made about Pakistan "aiding" some of their allies(whom happened to be fighting the US) through providing weaponry. Interesting perspective now, given todays situation. Of course it was different because whatever we are doing is right and whatever we dont like or are fighting against is evil and wrong. 

It seems like most Americans cheer the start of every war/proxy war, ex. Afghanistan, Iraq, now Ukraine, etc. And then a years later that the money & lives could have been better used at home. Also disturbing is that many Americans will rightly denounce right-wing extremism in the US but will happily support neo-nazi/extremist groups abroad as long as they're fighting for the "proper" side.

 

16 hours ago, CGJB said:

I'm no military strategist, but I always felt the end game in this would be the Donbas becoming independent, maybe joining Russia at some point, with Russia establishing a land bridge to Crimea. Now I suspect Russia will eventually take Odessa.

 

In the end, what's left of Ukraine will be a landlocked country. Every bit as corrupt as it has been, but much poorer as well.

I agree, no matter what, it's a sad outcome for Ukrainians either way to be dragged into this proxy war instead of negotiating peace.

 

Seems like the sanctions are backfiring on Europe too. Inflation hitting records. Factories shutting down due to high input costs, furthering reducing supply and increasing costs. Meanwhile, India & China are buying record amounts of Russian energy. Rouble is higher than pre-war.

[Spekulatius]

I don't think the Russian can get Odessa. They have trouble to even get Severodonetsk and they are losing tons of material and troops. bthe west just has to keep supplying more and better weapons and the Russian army will just expend themselves in a meat grinder to gain a few miles here and there.

 

The Russian Ruble is up because the Russians can't buy much with it due to sanctions so the proceeds from energy sales  just pile up. In the mean time the rest of their economy is slowly shutting down.

[shhughes1116]

On 6/14/2022 at 5:56 PM, CGJB said:

I'm no military strategist, but I always felt the end game in this would be the Donbas becoming independent, maybe joining Russia at some point, with Russia establishing a land bridge to Crimea. Now I suspect Russia will eventually take Odessa.

 

In the end, what's left of Ukraine will be a landlocked country. Every bit as corrupt as it has been, but much poorer as well.

Read my earlier post about mobilization.  
 

Ukraine is just now hitting the exponential curve upwards for mobilization, while Russia is struggling to fill frontline units with fresh meat.  Ukraine’s problem isn’t numbers - they have more combat-experienced troops than any country in the world given the 8 year conflict in the Donbas and their 1-year rotation for conscripts.   Ukraine’s problem is that they are struggling to outfit units with all the stuff needed for the front lines - helmets, boots, NVGs, etc.   By the end of the Summer, Ukraine will likely have 750k mobilized troops, most of whom will already have combat experience from the Donbas. 
 

My prediction - 

- Ukraine pushes Russia back to the Feb 2022 borders;

- Ukraine gives up Crimea during negotiations with Russia, and then promptly cuts the water at Nova Kakhovka, turning Crimea into an uninhabitable wasteland.  
- Referendum conducted in the Donbas by UN, and turns out people aren’t so interested in living under Russian rule. 
 

There are two additional facts which I think are helpful to understand -

- Eastern front in WW2 was won on the backs of Ukrainian, Belorussian, and Siberian fighters, not ethnic Russians.  The Ukrainians and Belorussians and Siberians know how to fight.  
- most of the Russian casualties have been among ethnic minorities and PMC soldiers.  In other words, the elites and ethnic Russians don’t give a f**k about the human costs of the “special military operation”.  If Putin starts a general mobilization by calling this a war, he is going to have a political problem with the elites and ethnic Russians, likely resulting in the end of his reign.  
 

 

[Spekulatius]

The difference between Afghanistan and a Ukraine is that the people of Ukraine are willing to fight for their independence, while the Afghans were not. So, if we supply the Ukraine with enough weapons, Ukraine will defend themselves and the Russians will continue to get into a meat drinker until their army is in shreds and the Ukraine can go I into the offensive and win their territory back.

 

Russia is afraid to mobilize because it will risk considerable civil unrest and their conscripts have to will to fight could repeat the 1917, which led to a Revolution.

 

The US and the west has to start ramping production of weapons to supply the Ukraine with everything, Advanced artillery, tanks, armored vehicles,  Anti tank, aircraft, anti aircraft weapons, fins body armor, ammo, basic supplies - everything to keep their army going.

 

It will be expensive but much cheaper than dealing with Putin if he wins.

[Dinar]

You are assuming Putin just sits back and does nothing.  What scares me if he does any of the following: tactical nukes, complete cut-off oil and gas from the world markets, massive cyber attacks that cripple utilities and hospitals in Europe and US.   I think a negotiated solution is needed ASAP that allows Putin to save face.  He needs to claim victory, even if it is really a defeat.

[formthirteen]

4 hours ago, Dinar said:

You are assuming Putin just sits back and does nothing.  What scares me if he does any of the following: tactical nukes, complete cut-off oil and gas from the world markets, massive cyber attacks that cripple utilities and hospitals in Europe and US.   I think a negotiated solution is needed ASAP that allows Putin to save face.  He needs to claim victory, even if it is really a defeat.

 

My first priority wouldn't be to negotiate with someone who I know has no plans on following any agreement I sign. This is a war of ideology, democracy vs authoritarianism, that will continue whatever happens in Ukraine. Showing weakness (being scared, etc.) is an invitation to the next invasion and most of the European countries have once again shown that they have weak leadership. IMO, Ukraine simply needs to be stronger than Russia to solve this problem.

 

Edited June 16, 2022 by formthirteen

[aws]

Putin doesn't need to save face. He doesn't care at all what the west things about him, and his propaganda machine in Russia can spin whatever outcome into some heroic victory. Give Ukraine as much as they can use to defend themselves for as long as they have the will to do so.