Political Posts

[Luke]

 

Highly efficient markets from 150 USD to 90 USD to 135 USD in 1 month, PDD

Edited September 27, 2024 by Luke

[mattee2264]

Annoying that the major China indices have bounced 50% off the bottom. But there was a similar bounce after the COVID intervention and a lot of people were expecting another leg down but the stimulus kept flowing and it never happened. 

 

And you are still paying only about 12x earnings which is over half the valuation of the US stock market. And with the US stock market you're already pricing in a resilient US economy and Big Tech dominance and a favourable low tax and low interest rate environment and many other positives which may not be sustainable. 

And even after the bounce the index is still trading at levels that were seen over a decade ago. Short term outlook isn't great but there are reasons to be optimistic about the long term prospects of the Chinese economy as they've made significant technological and scientific advances and are moving into higher-margin businesses. 

 

 

[moneyball]

3 hours ago, mattee2264 said:

Annoying that the major China indices have bounced 50% off the bottom. But there was a similar bounce after the COVID intervention and a lot of people were expecting another leg down but the stimulus kept flowing and it never happened. 

 

And you are still paying only about 12x earnings which is over half the valuation of the US stock market. And with the US stock market you're already pricing in a resilient US economy and Big Tech dominance and a favourable low tax and low interest rate environment and many other positives which may not be sustainable. 

And even after the bounce the index is still trading at levels that were seen over a decade ago. Short term outlook isn't great but there are reasons to be optimistic about the long term prospects of the Chinese economy as they've made significant technological and scientific advances and are moving into higher-margin businesses. 

 

 

My personal view is that overall economy in China is bad. 

 

But some of the tech companies are world class companies and are growing despite the overall economic picture. 

 

Two major risks in China are government not caring about economy and war/sanctions. I think we have more clarity now on risk one and positive reflexivity in the stocks. If government is willing to actually address economic issues then who cares that the market is up 20-50% from the lows because the stocks are de-risked and prospect for growth over next 5-10 years is higher which is what we are really playing for.

 

Even better given the actual/perceived mismanagement of the economy there are a lot of levers that can be pulled to increase the attractiveness of the stock market/market for investment.

 

I know there can be disagreement but I agree with Mr. Tepper. Also believe that given the prevailing view that China is un-investable there is a long way for fund flows to go if people get FOMO. 

 

I say all of this as someone who would never have invested in Chinese equities 3 years ago. 

[boilermaker75]

14 hours ago, John Hjorth said:

Wikipedia : List of military aid to Ukraine during the Russo-Ukrainian War.

 

Total commitment USD 380 B, of which USD 118 B in direct military aid. Add to that [by deducting it] the self-determined 'collateral' of USD 280 B in frozen [seized] Russian central bank assets and you get a total different overall picture. [X is what it is : X].

 

But yeah, freedom isen't always free, and should never be considered a given. Here in tiny Denmark, the military spending is also under a material ramp-up, but with no consequences in the form tax raises in the state budget because of healthy public finances, but I would accept even material tax raises with a shrug, if this was needed, as a citizen to contribute to make this situation come to an end.

 

“Those who expect to reap the blessings of freedom must undergo the fatigue of supporting it,” Thomas Paine.

[Dalal.Holdings]

Right now a lot of their actions seem geared toward helping the property sector including even buying unsold units... The problem is that there are just way too many property units in China and the people of China view real estate as their main investment vehicle over their own local stock market…China’s population cannot support so many real estate units and they are not a country with significant immigration.

 

The losses in real estate will not be easy to reverse. Boosting the stock market and corporate sector is certainly not what the CCP has prioritized lately and allowing their tech/corporate sector to flourish would be a 180 from since they purged Jack Ma.

 

Then there are other questions. Are they going to put their desire for Taiwan and all the other aggressive actions in the South China Sea on the back-burner to save their economy?

 

Tepper did well in the wake of the GFC, but China is not the U.S.A. The Chinese stock market has not historically served as the primary investment vehicle of its people and because the people lack a vested interest in it, it has been allowed to flounder. There has also been very limited progress in turning the economy into one driven by consumption.

Edited September 27, 2024 by Dalal.Holdings

[hasilp89]

4 minutes ago, Dalal.Holdings said:

Right now a lot of their actions seem geared toward helping the property sector including even buying unsold units... The problem is that there are just way too many property units in China and the people of China view real estate as their main investment vehicle over their own local stock market…China’s population cannot support so many real estate units and they are not a country with significant immigration.

 

The losses in real estate will not be easy to reverse. Boosting the stock market and corporate sector is certainly not what the CCP has prioritized lately and allowing their tech/corporate sector to flourish would be a 180 from since they purged Jack Ma.

 

Then there are other questions. Are they going to put their desire for Taiwan and all the other aggressive actions in the South China Sea on the back-burner to save their economy?

 

Tepper did well in the wake of the GFC, but China is not the U.S.A. The Chinese stock market has not historically served as the primary investment vehicle of its people and because the people lack a vested interest in it, it has been allowed to flounder. There has also been very limited progress in turning the economy into one driven by consumption.

i think tepper answered all your points pretty well in his interview. It doesn't matter. hard for us fundamental value investors to get our heads around it but he's just using the common sense he has - Xi created buyers and no one is going to sell into that. 

[John Hjorth]

Today, I've spent some time on trying to educate myself on what what was going on in Ukraine in 2014. Simply because my own memory about it is pretty much 'blank' - just not just say totally empty. To the best of my recollection it was as close to a 'non-event' as it could be, here. [Here understood as : 'This is about an Ukrainian pensinsula, - is that important?']

 

Later all the political counter measures with economic sanctions started, based what was going on in UN, related to it.

 

Alone reading : Wikipedia : Annexation of Crimea by the Russian Federation one get the feeling of a period saturated with locally violent [strong] oppositely directed and conflicting currents in a chaotic situation by all means already in  place. Now add to that a historic backdrop that has been exactly the same stuff.

 

Absolute frustrating to read about.

 

I'm in no way sure I would have sensed Putin true intentions, if I had followed how the situation evolved over time back then in 2014 , which I diden't.

[John Hjorth]

14 minutes ago, boilermaker75 said:

 

“Those who expect to reap the blessings of freedom must undergo the fatigue of supporting it,” Thomas Paine.

 

Thank you, Mike [ @boilermaker75 ] 

[moneyball]

And this is ultimately what make a market^^^

 

I ultimately believe that governments act based on the constraints that they are under. Bailouts weren't popular in the US during the GFC and ultimately didn't get passed until the market made the politicians pass the bailout measures. 

 

Looking back it's funny to think about how much talk there was about moral hazard back then. Fast forward to covid and we basically told everyone who managed a business prudently that they were an idiot and it is better to run your business in an incredibly fragile manner because you will get an automatic bailout. I digress.

 

Over time we've seen governments take actions they would have never taken before when faced with a terrible economic environment whether that is going off the gold standard, breaking a currency peg, creating new lending programs or sending folks cash in the mail. In many of these situations the governments fought against taking action but ultimately acquiesced.

 

I'm young and can stomach the risk I have if this doesn't pan out. My belief based on bottoms up and top down investment analysis is that the outlook for US stocks seems just okay from a real returns basis. Chinese stocks are absurdly cheap. 

 

To me it seems easy to have a visceral reaction to all of the risks presented by Chinese investment. Not as easy to have the same reaction to a future world where those risks don't materialize. That to me is what creates this opportunity. Agree with you that there is no guarantee Tepper is right, but this type of investing is where the guy excels and his track record shows it. My sense is he has an ego around being known as an all time great for investing in situations like this and isn't just pumping his book - his track record shows that isn't his MO (again just my belief). He called to get on CNBC and talk about it. Not something he really does. Now if this was General Ackman I'd be scared lol.

[nsx5200]

19 hours ago, Spekulatius said:

The more I think about it the more I believe that the CCP putting money in banks is more of a salvage operation than stimulus.

For stimulus the CCP needs to give money to consumers who hopefully spend it, but that’s not what we are seeing here 

 

This seem tells us that the CCP is afraid of their financial system falls apart, just like when Congress decided on TARP in 2008.

 

Not exactly bullish.

https://www.newsweek.com/china-news-hands-out-poverty-payments-1960190

"China is rolling out a subsidy for impoverished citizens[...]"

https://www.reuters.com/markets/asia/china-issue-284-bln-sovereign-debt-this-year-help-revive-economy-sources-say-2024-09-26/

"China to issue 1 trillion yuan of special bonds mainly to stimulate consumption-sources"

"In addition to the special sovereign debt issuance to support consumption, Chinese authorities also plan to ramp up financial support for small and medium-sized enterprises in phases, such as employment subsidies and tax and fee relief, to reduce their operating costs, the second source said."

 

The effort looks more broad than the one reported by Bloomberg.

 

Edited September 27, 2024 by nsx5200
reflect additional article from Reuter

[nsx5200]

https://www.scmp.com/news/china/politics/article/3280295/china-tries-rally-risk-averse-officials-ignite-economy-promising-tolerate-mistakes

"China’s leaders are again seeking to rally risk-averse cadres to the cause of decisive economic action by stressing the need to “get things done” and its tolerance of mistakes in a policy known as the “three exempts”."

"The three exempts policy differentiates between “mistakes” made during reforms, suggesting leniency for those stemming from inexperience rather than deliberate violations of discipline; those made in exploration; and those made unintentionally to promote development rather than for personal gain."

 

From the CCP mouth piece newspaper, so calibrate accordingly.  It seems like they realize they've gone top-down too much and are trying to swing it back.  Hopefully they can place more clear policies for the business in China to operate as well.

[Xerxes]

12 hours ago, Parsad said:

 

+But it also set the floor for everyone else (China, Iran, North Korea) that any aggression is going to cost you financially and in terms of lives lost.  

You have rightly tabulated a list of the bad actors. Right out of the media. But what about Western bad actors and Western sponsored bad actors ? How do you dissuaded and set the floor for the idiots and dummies in Washington and London etc. 
 

Saudi Arabia launched a war against Yemen in 2015, not too dissimilar all than the circumstances of Russia’ war in Ukraine. 
 

The Arabian peninsula is considered its backyard. House of Saud sets the discount rate in the Arabian peninsula. Not Qatar, Yemen, Oman and/or UAE.  And it didn’t like a “loose” Qatar and Yemen. It couldn’t bomb Qatar, given the “hedge” that Doha built with Turkey and U.S. but no such luck with Yemen. They got sent to oblivion. 

 

The U.S. Government seemed to be ok with it in 2015. Supported it, helped Saudi planes refuels to bomb school, weddings, the occasional Houthi etc. and whatever else House of Saud felt like doing.

 

If bombing a school is an act of terrorism, what that makes the Western government supporting it ? No need to guess => it is called state sponsoring terrorism. 
 

What is Yemen today: a broken state with vultures taking a piece of it. And a reliable low-cost proxy (acquired at no cost) for Iranian malign influence. 
 

What about the American Caesar wannabe:  Warlord Hilary Clinton. 
 

She said: “we came, we saw, we conquered … “. talking about Libya. 
 

10 years later after the War Lord Clinton plagiarized Julius Caesar, everyone forget they left a mess and a civil war in Libya. Oh well. At least she got to act like Caesar. 
 

Today, even as we are discussing this, there is a civil war in Sudan. With UAE largely behind it. And of course who are main Western state backing UAE.  
 

https://youtu.be/mlz3-OzcExI?feature=shared

 

In summary, if a psychopath gets elected to office and/is part of liberal democracy, their foreign adventures seem like all forgotten. 
 

Is anybody counting the cost of Libya in the past 10 years ? How about Sudan

 

———////———-

General comment:  I really think Western commentators in the two geopolitical threads should really get off their high horses. 
 

Stick to the economics, politics and cost-benefit analysis. Leave the good guy bad guy stuff for Bill Ackman to talk to on Twitter. 

Edited September 27, 2024 by Xerxes

[crs223]

3 hours ago, Dalal.Holdings said:

Are they going to put their desire for Taiwan and all the other aggressive actions in the South China Sea on the back-burner to save their economy?

 

China is not going to destroy their economy attempting to conquer Taiwan.

[moneyball]

2 minutes ago, crs223 said:

 

China is not going to destroy their economy attempting to conquer Taiwan.

Even in a world where China did such a thing, The US would have to make the decision to nuke the US economy. I’m reminded of Syria and Obama’s hard line in the sand…

[Dalal.Holdings]

2 hours ago, nsx5200 said:

https://www.newsweek.com/china-news-hands-out-poverty-payments-1960190

"China is rolling out a subsidy for impoverished citizens[...]"

https://www.reuters.com/markets/asia/china-issue-284-bln-sovereign-debt-this-year-help-revive-economy-sources-say-2024-09-26/

"China to issue 1 trillion yuan of special bonds mainly to stimulate consumption-sources"

"In addition to the special sovereign debt issuance to support consumption, Chinese authorities also plan to ramp up financial support for small and medium-sized enterprises in phases, such as employment subsidies and tax and fee relief, to reduce their operating costs, the second source said."

 

The effort looks more broad than the one reported by Bloomberg.

 

 

2 Trillion Yuan is $300B. Comes out to about $200 per citizen. It's going to take a lot more to boost consumption and get China out of its funk.

 

CCP and Xi are still in charge. It's like betting on a management team that got you into a big mess to get you out of it.

 

3 hours ago, moneyball said:

I'm young and can stomach the risk I have if this doesn't pan out. My belief based on bottoms up and top down investment analysis is that the outlook for US stocks seems just okay from a real returns basis. Chinese stocks are absurdly cheap. 

 

Fortunately I am finding pretty cheap stocks outside of the United States that are not in China. China is not the only option

[John Hjorth]

3 hours ago, Xerxes said:

You have rightly tabulated a list of the bad actors. Right out of the media. But what about Western bad actors and Western sponsored bad actors ? How do you dissuaded and set the floor for the idiots and dummies in Washington and London etc. 
 

Saudi Arabia launched a war against Yemen in 2015, not too dissimilar all than the circumstances of Russia’ war in Ukraine. 
 

The Arabian peninsula is considered its backyard. House of Saud sets the discount rate in the Arabian peninsula. Not Qatar, Yemen, Oman and/or UAE.  And it didn’t like a “loose” Qatar and Yemen. It couldn’t bomb Qatar, given the “hedge” that Doha built with Turkey and U.S. but no such luck with Yemen. They got sent to oblivion. 

 

The U.S. Government seemed to be ok with it in 2015. Supported it, helped Saudi planes refuels to bomb school, weddings, the occasional Houthi etc. and whatever else House of Saud felt like doing.

 

If bombing a school is an act of terrorism, what that makes the Western government supporting it ? No need to guess => it is called state sponsoring terrorism. 
 

What is Yemen today: a broken state with vultures taking a piece of it. And a reliable low-cost proxy (acquired at no cost) for Iranian malign influence. 
 

What about the American Caesar wannabe:  Warlord Hilary Clinton. 
 

She said: “we came, we saw, we conquered … “. talking about Libya. 
 

10 years later after the War Lord Clinton plagiarized Julius Caesar, everyone forget they left a mess and a civil war in Libya. Oh well. At least she got to act like Caesar. 
 

Today, even as we are discussing this, there is a civil war in Sudan. With UAE largely behind it. And of course who are main Western state backing UAE.  
 

https://youtu.be/mlz3-OzcExI?feature=shared

 

In summary, if a psychopath gets elected to office and/is part of liberal democracy, their foreign adventures seem like all forgotten. 
 

Is anybody counting the cost of Libya in the past 10 years ? How about Sudan

 

———////———-

General comment:  I really think Western commentators in the two geopolitical threads should really get off their high horses. 
 

Stick to the economics, politics and cost-benefit analysis. Leave the good guy bad guy stuff for Bill Ackman to talk to on Twitter. 

 

 

How is it, that I - some place in my mind - knew, that exactly this - a post something similar to the above quoted - would appear - in this topic - by exactly now by @Xerxes ?  

 

[And that is actually here meant as a compliment!]

 

To me, the above is Pasghetti argumentation. Let me just say, that Pasghetty argumentation was defined many years ago, when my daugther found out, she coulden't always respond to my questions about my questions and proposals about what to eat for diner today with : 'Beef, Sauce Bearnaise and potatoes!'.

 

So @Xerxes, where to start to read to get some kind of understanding of what's going on? - Everything seems intertwined historically, to a point that is beyond the point of no return, historically?

Edited September 27, 2024 by John Hjorth

[cubsfan]

3 hours ago, Xerxes said:

 How do you dissuaded and set the floor for the idiots and dummies in Washington and London etc. 

 

———////———-

General comment:  I really think Western commentators in the two geopolitical threads should really get off their high horses. 
 

 

 

@Xerxes  The list of idiots & dummies in D.C. is long and growing.

 

As for the Israel thread...well... looks like Hezballoh is close to done... so not much more to say.

[Spekulatius]

Sudan is an interesting case, a war that has been going on for a decade (lost count) and probably killed hundred of thousand. however, what is the what is the west supposed  to do here? What about the African neighbors Egypt, South Africa ( a bit away but still closer than we are). I think it’s their job to do something here and maybe the west can help? Is the US supposed to go with an army there while neighbors do nothing?

 

I don’t even think we know whom to back here? None of the parties in this civil war are aligned with the US really.

 

On Jemen, I agree. Backing the Saudis should be so over.

 

Its less of a high spheres thing, it’s more that you got to pick your fight.

[Xerxes]

1 hour ago, cubsfan said:

 

@Xerxes  The list of idiots & dummies in D.C. is long and growing.

 

As for the Israel thread...well... looks like Hezballoh is close to done... so not much more to say.

 

unfortunately a parasite entity like Nasarllah’ shop doesn’t get “trimmed” and just go away just like that.
 

It will outlive its leader, compound its anger. “Trimming” doesn’t do anything. 

[Xerxes]

1 hour ago, Spekulatius said:

Sudan is an interesting case, a war that has been going on for a decade (lost count) and probably killed hundred of thousand. however, what is the what is the west supposed  to do here? What about the African neighbors Egypt, South Africa ( a bit away but still closer than we are). I think it’s their job to do something here and maybe the west can help? Is the US supposed to go with an army there while neighbors do nothing?

 

I don’t even think we know whom to back here? None of the parties in this civil war are aligned with the US really.

 

On Jemen, I agree. Backing the Saudis should be so over.

 

Its less of a high spheres thing, it’s more that you got to pick your fight.

I don’t expect West to do anything for Sudan. I wouldn’t want Canada to be involved in a civil war.
 

But we as citizens ought not to be ignorant about it. And what our allies are up to. And not to be brainwashed on what mainstream media tells us who are our “bad guys” for this year. World is a bit more complicated than just “these are you bad guys for 2024”
 

Ps: I still cannot believe that we got 10 year civil war in Libya, just because Hilary Clinton wanted to have a line on her CV :

 

- Warlord                              20xx-yy

[Xerxes]

1 hour ago, John Hjorth said:

 

 

How is it, that I - some place in my mind - knew, that exactly this - a post something similar to the above quoted - would appear - in this topic - by exactly now by @Xerxes ?  

 

[And that is actually here meant as a compliment!]

 

To me, the above is Pasghetti argumentation. Let me just say, that Pasghetty argumentation was defined many years ago, when my daugther found out, she coulden't always respond to my questions about my questions and proposals about what to eat for diner today with : 'Beef, Sauce Bearnaise and potatoes!'.

 

So @Xerxes, where to start to read to get some kind of understanding of what's going on? - Everything seems intertwined historically, to a point that is beyond the point of no return, historically?

I really think folks ought to read history books. The 1,000 page type books.

[John Hjorth]

7 minutes ago, Xerxes said:

I really think folks ought to read history books. The 1,000 page type books.

 

Naturally you do, @Xerxes.

 

But from which brickwork actually is the question. 

[cubsfan]

47 minutes ago, Xerxes said:

 

unfortunately a parasite entity like Nasarllah’ shop doesn’t get “trimmed” and just go away just like that.
 

It will outlive its leader, compound its anger. “Trimming” doesn’t do anything. 

 

Trimming?

 

All the Hezbollah leadership has been killed in 10 days. Only the "grunts" that did not warrant a "free pager" from Nasarallah are left.  The wounds to Hezbollah are very big. On to the ground invasion.

 

I think the "killed leader" score is now 50-0, Israel ahead.  The hole is deep.

 

 

[Xerxes]

27 minutes ago, John Hjorth said:

 

Naturally you do, @Xerxes.

 

But from which brickwork actually is the question. 

unrelated this this thread. 
 

Robert Lacey two books on House of Saud are phenomenal. 
 

I have been critical of Saudis, you know that whole Persian vs Arab thing. But after reading those two books, I came to respect the Saudis. Let’s just say that I got educated. But it doesn’t mean that I don’t criticize their foreign policy when it needs be.  
 

Coincidentally Robert Lacey is also a consultant/consaisseur on House of Windsor. 

[John Hjorth]

16 minutes ago, Xerxes said:

unrelated this this thread. 
 

Robert Lacey two books on House of Saud are phenomenal. 
 

I have been critical of Saudis, you know that whole Persian vs Arab thing. But after reading those two books, I came to respect the Saudis. Let’s just say that I got educated. But it doesn’t mean that I don’t criticize their foreign policy when it needs be.  
 

Coincidentally Robert Lacey is also a consultant/consaisseur on House of Windsor. 

 

Thank you, @Xerxes !