#AskStarling: Banking for business


You can do absolutely
everything on your mobile as you go about your day-to-day business, and we are such good value. Euro accounts for business
are coming very, very soon. A spending summary based on pay dates rather than the end of the month, is something quite a few
people have asked for, but it’s not gonna be
delivered until 2020. We are working on this. It is one of the important
things for larger businesses. We should get it by the end of the year. Yes, there are plans. We should be getting it early next year, probably in the first quarter. Every week I get a new list of all these various integrations and Marketplace partners waiting to go into the Marketplace. Look out on our blog for
the latest additions. We are currently working with a number of smaller accounting
software package providers, but the larger ones such as QuickBooks, we’re working with them
to develop their APIs, and this should be ready in 2020. Brexit. Oh dear! What a distraction, what a pain. But nothing’s going to
stop us, here at Starling. Not a Windows app, but internet banking. Look out, it’s coming soon.

How Chinese Debt & Business in China Have Evolved (w/ Fraser Howie)


FRASER HOWIE: My name’s Fraser Howie. I’m an independent analyst on China. And author of a number of books on the Chinese
financial system, in particular, Red Capitalism, and then before that, Privatizing China. So I’ve been in Asia for about 25 years, primarily
working in the financial sector– Hong Kong, Beijing, Hong Kong, again, and now I’m based
in Singapore. But always with a big focus on China, in terms
of my day job, but also my writing and commentary. It was actually myself, and a co-author, and
a colleague at a company called CITIC, which was the first Sino jointventure securities
company set up in China. About 15 years ago, we started writing about
the Chinese financial system, simply because we saw what was being written by China back
then, and this was in the late ’90s, 2000 or so. And frankly, we thought it was nonsense. We were on the ground in China. We saw what the securities markets were like. We saw what the stock market was like. And it was clear that the pundits in Hong
Kong were just far too optimistic about what China was. And then we thought, there’s a story to tell. That got us writing. It was actually on the back of a report we
wrote for the CICC at the time. And we wrote Privatizing China, which was
based on a look at what was then about 15 years of the stock markets in China. And really, just going right back to basics–
really in the late 70s, when reform started in China, fair share issuance in ’79, and
then the development of 4trading through the ’80s, listings– And they say that was privatizing
China. But then as the knot progressed, we realized
that we had more to say, and in particular, in the banking sector because if you remember–
go back to that time when we were writing Privatizing China and riding on the stock
markets. The Chinese banking system was basically bankrupt. In 1999 Zhu Rongji, the Premier at the time,
started a big bailout program where they set up bad banks, asset management companies in
China, and we saw that happening real time. It was a very long process. And so by ’05-’06 you started seeing these,
what were just previously, bankrupt banks being listed, raising multi-billions of dollars. And we thought, this is nonsense. These are Chinese banks. These aren’t Western banks. And they aren’t banks in the way we understand
them in the west. And we thought there’s a story there. So that was the genesis of Red Capitalism. And in Red Capitalism, which was eventually
published in late 2010, beginning of 2011, we went through that history of how banks
were reformed in China, how you took a bank or banking system and you made it into what
was, at the time, basically, the world’s most expensive banks. Valuation– I think it was something like
a quarter of a trillion dollars, $250 billion with all the Chinese banks. That’s an incredible figure remembering that
day declaring the system was bankrupt. So that was the genesis of Red Capitalism. Interestingly, the bulls thought it supported
their case, the bears thought it supported their case. We didn’t write it with any case in mind. We wanted to tell a story because we felt
that, again, so much of the hype, so much of the headline in China is superficial. In understanding China, you’ve got to get
away from the facade, the face of China. China is great at telling a story about how
it sees itself. And a lot of people buy into that because
China can be a very opaque and difficult place. But especially in the stock markets and then
in the capital markets in general, that almost certainly what it says on the tin isn’t what’s
in the tin. And so therefore, it’s important to understand
the background to these things, to understand the accountancy behind it, and this chicanery,
quite frankly, in a lot of the financial system. I think it’s really important if you want
to understand where we are in China now. It’s what I call the Olympic cycles. If you look back to the ’08 Beijing Olympics,
I would still maintain, although the economy was probably less than half the size it notionally
is now, I would say that’s the modern high point of China, frankly. That If you look before– the Beijing Olympics,
they put on this incredible show. They built so many subway lines. They did so many things which no other country
allegedly could do. It was a great catalyst for building across
the country. The economy was booming. Everything seemed to be going. Everyone was pandering to China. And I think that really was a high point. Of course, that was August in ’08. And then, of course, global financial crisis
and we all remember– or maybe we don’t remember now, but that last quarter of ’08 really was
dreadful. Things, literally, just fell off a cliff in
that last quarter. And that was very important in China’s case
as well because China was hugely affected by that. I think that everyone, of course, remembers
the output or the response to ’08, by the Chinese government, this huge stimulus program,
which started off a whole series of events, which we’ll come to. But I think, remember, before that, and the
real reason for that was not simply to keep global growth going, but China had, was it,
the headlines, 20, 30 million people unemployed, these migrant workers. This was the mainstay of the Chinese economy
that this migrant population was working in factories along the coast, and that just the
downturn in exports, the downturn in the global economy really impacted China. And so what you saw there– and this again
was absolutely central to why we wanted to tell the bank story– was because the response
of this stimulus was basically you turn on the credit taps. That after spending the better part of a decade
trying to reform the banking system, trying to make it into something that was something
at least approaching a market-based system where there was some degree of risk control,
some oversight, you basically had the rulers in Beijing reverting to their old practice
of using the banks as a piggy bank to basically fund growth. And so you turn on these credit taps, and
literally any warm body could get money in ’09. And so you had this huge expansion of credit. And of course you saw, guess what, a big rebound
in growth, which should not surprise anybody. Growth’s an output, not an input into these
models. And so you had this huge expansion of credit. But I think that was the start of something
that has taken China, as I say, before those Olympics, before that last quarter of ’08,
China was a growth story. There’s no question about it. It had been 20 years by then of double digit
growth. China could continue to grow for another two
decades, three decades, whatever it may be. And yet, that was a real turning point because
China’s gone from a debt story– or from a growth story to a debt story, which is just
staggering. And I think we forget about this because the
growth numbers have still remained high. And people say, yes, they’ve fallen from their
highs, but hey, they’re still doing 6 and 1/2% or 7% if you believe in those numbers. They say, it’s still much better than what
the West’s doing. But that’s incidental, because the real story
in China now is that the reason you’re still getting that growth is because credit is growing
at double the rate of GDP growth. And so that ’08, that response, that ’09 stimulus,
the early stimulus to keep growth going really set in motion an addiction to debt, and took
China– and let’s remember, well, there was clearly an impact from the global economy. It wasn’t necessarily a crisis per se. And so it’s interesting now that you look
and you compare Chinese growth numbers and the growth, particularly the build up of gross
debt in the economy, it gets compared to what the US is or what the UK is or Japan is or
Greece or whatever. You can take any of these countries. But these are all countries that have clearly
gone through crises. In China’s case, I don’t see there’s a crisis. Yes, there’s slowing growth. There’s lots of problems with their economy. There’s many areas in China you can look at
and say there’s real problems. But in terms of actual real fundamental financial
crisis, there isn’t one. There’s no real panic there. There’s still a lot of faith in the government. There’s still a lot of resources and capacity
of the government they can put to work. And so, you’ve had that huge credit build
up in spite of a real problem, which really makes me wonder when I think about future
issues, when you think, if a crisis does come in China, and given what’s happening in the
States with the new president, you can certainly see scenarios where you are going to get crises
coming, then will China have the wherewithal and resources? But coming back to that stimulus. So you had a positive response from China
in ’09. That obviously was lauded at the time that
this would support global growth, support global demand. At the same time, you also had a government
who started to acknowledge that there was fundamental imbalances in their economy, and
that this needed to be reformed. And of course there was lots of nice words
and nice talk about this, how we’re going to restructure, we’re going to move away from
this dependence on fixed asset investment. and we’re going to move more towards a consumer-driven
economy. And here we’re eight years on, an Olympic
cycle– two Olympic cycles later, and you think, this really is quite horrible. You’ve effectively had the growth rate halved
and the debt double, which hardly is really a successful formula in many ways. I think whether China becomes the world’s
largest economy is almost frankly irrelevant, because that’s just– that’s like just weighing
the health or measuring the health of your kids based on their weight. There are many other factors that are far
more important to think about than simply, are they simply getting bigger? Are they growing? And I think China has continually failed over
this past eight years or so to really grasp that reform process. And again, this isn’t just something from
the new leadership. This is something if you go back to about
five or six years, there was a big report from the World Bank, done in conjunction with
the Chinese government, called– I think it was China 2030, but need to restructure their
economy, move away from fixed asset investment. And it laid out a whole series of reforms
and steps to try and remove this dependency. But guess what? As the global economy has failed to recover,
as China’s own economy has started to stutter in many ways, there has been a continual dependency
on debt. And so what you’ve seen in China, you’ve seen
incredible innovation, but in the worst possible way. That instead of, whereas at the start of this
crisis in ’08 you still had 60% of debt in their economy- – or probably higher, certainly
a decade more or so ago, you had 80% of debt in China basically being from bank loans,
very simple. You can look at the amount of deposits they
had, and you looked at their bank loans, and you control that through a loan to deposit
ratio. So it was very easy to literally turn the
tap on and off. But what you’ve seen is a proliferation, over
the past eight years or so, of broadly called shadow banking. And I think that doesn’t even come close to
describing it, because it’s such a murky term by definition. But you have had incredible innovation, as
it were, of bankers and entrepreneurs and businessmen figuring out ways to get around
systems which are put in place by bureaucrats to try and limit credit. And the difficulty is that returns for much
of China’s business is low, and therefore they’re desperately trying to look for new
inventive ways. At the same time, as rates have fallen in
China, you’ve also got depositors who are saying, I want better returns. And so you’ve had this springing up of– and
we talked about this when we wrote Privatizing China. This was really just the start of this process,
of these wealth management products, short term products, guaranteeing better rates which
got immediate deposits, which weren’t necessarily carrying it under the loan to deposit ratio. But again, got around that, that lending restriction. We got depositors’ funds into the hands of
those who wanted it. And in some ways, it’s a good sign. It’s a liberalization of the currency or of
the interest rate market, which is always a very important thing in China. But effectively what’s happened is that much
of that control over the banking system has been lost. And where we had highlighted this at the end
of Red Capitalism, the system now has become so much more complex. Whereas you really could think previously
of a dozen banks or so controlling the bulk of the loans, you knew exactly where they
were going, and it was very manageable, you now have a highly opaque system of banks,
of shadow banks, of wealth management products, of trust funds, of corporate lending of what’s
called entrusted loans– it’s just loans being siphoned through banks– wealth management
products created by securities companies. And then mix into that guarantee companies,
which have sprouted up to try and guarantee these loans. You have then also things being sold on the
internet. You have pawn shops where– it’s almost endless. And I keep thinking, I should write down and
try and map this whole system out. And then I though, it’s like trying to map
the brain, that there’s almost so many connections and nodes that have appeared. And the difficulty is you don’t actually know
the connections from one to the other. And you’re so, am I double counting this debt? Is this a chain of debt that’s growing? Is this new debt? And so you can actually– and I read some
reports about estimating the size of debt in China. And I think, I have absolutely no idea if
that’s true or not. These are huge numbers. And again, argued that there must be some
double counting there. Clearly what you see when you actually speak
to our entrepreneurs, when you speak to businessmen on the ground, when you speak to banks, there
is, without question, an A lending to B lending to C lending to D, and this chain and this
node of connections. And then you think, this is clearly worrying. And it is worrying. But what no one seems to have any idea about,
including myself is, when is too much too much? And this is the real problem. We can talk about this problem. We can talk about this growing problem in
China. But frankly, I have no idea when the party
stops. And again, you can look back in history. A lot of cases, you know, the Ottomans probably
peaked in the 17th century and they were still going up until the end of the Second World
War. Things can go on– bad things can go on for
a long time. I think also that the greatest comfort that
China should take in its current debt situation is that Japan still exists. For my 25 years in finance, I started following,
like many, the Japanese warrant market. And you know, Japan had problems. Japan was falling. And then people thought, there was even people
in the early ’90s who thought the Nikkei was going back to 40,000. But it was actually on the way to 7,000. And Japan has largely been in recession for
the best part of 20 years or more. And you think, well, why can’t China pull
off a similar trick- – a different sort of trick. It’s clearly not as rich, clearly not as developed,
but you are ultimately still underpinning so much of this in China, even if you can
map this highly complicated system, which you can’t. Because into that you’ve got, is it local
government financing? Is it, like I said, the wealth management
products? Is it the regular bank business? Is it rich individuals? Is it overseas funding? OK, so let’s see you map it all. But who’s actually going to be the person
to pull their fingers out of the dyke and let the water fall through? Because in China, there is this continued
belief still that the government will underpin everything. And to some extent as a working model, I think
that probably makes sense. And again, anyone who is predicting the collapse
of China– first of all, I have no idea what that means. If your debt’s doubled and your growth’s halved,
that looks pretty much like a collapse in some ways already. The bullish case in China has now become it’s
not collapsing, which is a big turnaround from where we were five or six years ago. So, even if you can map all that, I still
think, yeah, you’ve got to look at the politics here as well. You’ve got to look at the mindset, the control
of information. So someone goes bankrupt? Why should I care about someone else’s bankruptcy? My wealth management paid back. Wealth management product is very difficult
to get someone out in the street protesting or really causing a stink for someone else’s
misfortune. And so therefore I think, how does this really
become a systemic crisis? And it’s not clear to me that it does. Telling me the numbers are getting bigger
still doesn’t tell me how you get a systemic crisis. What staggers me is that there are so many
people– and again, clever people, lots of smart people. And whether it be economists, hedge fund managers,
whatever, lots of smart people who will go on TV and talk about the economics of the
debt issues, et cetera. And I think, can’t really argue with any of
that. I’m not a trained economist. I may be right, may be wrong. But what does stagger me is that there is
often a willingness or a willful blindness on the politics of it. And I think nothing in China– you simply
cannot divorce economics from politics in China. And certainly if you’re worried about debt
situations, and from big picture– so if you’re looking at the stability of the banking system,
if you’re talking about the currency, if you’re talking about government debt, if you’re talking
about local government financing vehicles, bank bailouts, however you want to propose
it, the politics is absolutely essential. And to think that it’s somehow China– I would
say the law of economics works just as well– if they work at all, they work just as well
in China as they do outside of China. They don’t stop at the border. So in that sense, economics, yes, does work
in China. But at times people think, oh, somehow the
Chinese have got their own economics or it works differently. I say, well that’s because you’re not accounting
for it probably, because much of that other accounting is effectively the politics, and
you’ve got basically the government is standing there. And without question, I think that the right
view to take, certainly for the moment, is that the government will stand by. It’s certainly going to stand by the banks. You’re not going to get a Lehman Brothers
moment. One of the big banks, one of the big– I think
they technically have four and then seven what they call systemically important banks
in China. So none of those big banks are going under. Smaller rural banks, yeah, that’s possible,
but they will be merged in something else. But politics and political support is absolutely
essential. And to ignore that, you do so at your peril. I think the trouble there is though, I think
it was Churchill who said about Chinese politics, “It’s like two dogs fighting under a carpet.” You frankly got no idea what’s going on at
any given time. And I think the very rise of Xi Jinping, where
you may take the positive stance that this is a strong, powerful leader consolidating
power, and so can push through reform– you say, well frankly, that means we had everything
wrong about Chinese politics before. Because before he came into power, the consensus
across the board– there was just no.. China was now a consensus driven leadership
by committee type of model. There was not going to be a strongman again. That was not going to be a strong political
leader. So basically we have either completely misunderstood
things previously to allow Xi Jinping to come into place, or we just were just simply ignorant
of the fact in the first place. I think the mistake is that, to almost give
too much credibility to Chinese political institutions, that we have seen certain things
happen over and over since Tiananmen Square, so over the past 20 years. And we have assumed that these are institutionalized
processes of smooth transfer of power. And frankly they weren’t. There was a lot more fighting behind the scenes. Bo Xilai is an obvious example like that you
know. 2011, people were talking about Bo Xilai,
as of 2010, as a possible next leader. Very few people saw the Bo Xilai issue coming. Those that did were roundly abused to be certain. No, no, this could never happen in China. There is no sort of coup coming. There’s nothing like this. And clearly the behind the scenes machinations
were very active. So while I may say, the politics is important,
I’m also going to admit somewhat contradictory as well, I have no idea what’s going on in
politics half the time. And as I say, I think Xi Jinping, by the analysis
of five years ago, should never have come to power. His consolidation of so many titles– how
much power he’s got, there’s probably some debate. But certainly of titles, again, should never
have happened either. That was not supposed to be able to happen
in this consensus model. And so, you think, but even with that power,
what does he really want? I come back to even why we started writing. Even that phrase reformer in China– he’s
a reformist. He’s a reformer. I have no idea what that means in the Chinese–
I do have a– but what I tell you, it doesn’t mean what we think it means in a Western sense. And again, it’s not just like the Chinese
have their own way of doing things. But these names, just these labels have such
different meanings. And so when Xi Jinping wants reform in the
sense that he wants things to run better, he wants the Communist Party to run better,
he wants state-owned enterprises to be more efficient, he wants less dependency certainly
on the US dollar, certainly on the States. He wants less dependency on foreigners. He doesn’t want Western ideas seeping into
Chinese education, and so things like that. So if that’s reform, it’s reform. It’s a self-sufficiency that he wants. But the idea that he wants to embrace free
markets in any way, or even embrace the market as a decisive factor– which his own documents
have said– I think is highly misleading. This is a person who wants it– Reform so
often in the West is understood to be economic reform with the government pulling back, of
the markets taking a bigger hold and market forces taking a bigger hold, of bankruptcy
coming to the fore. Hey, your business is bankrupt. We’re going to bankrupt your business. We’re going to close this. We’re going to sell these assets. That’s not what the Chinese mean by reform. They’re talking about administrative reform. They don’t necessarily want to face all those
arbitrary things. And so when you look at what happens in the
markets, I think this is a classic. It’s, let’s go back. So we’re at the end of 2016. Let’s go back 10, 11 months and we saw the
renminbi collapsing. It moved a few percent, if that. It’s hardly a collapse. The renminbi in the past 18 months have moved
10%. I think the yen did it in about six weeks
recently, and sterling did it in about six hours. So this is hardly major market moves. But of course for China, these are are major
market moves. And I think if you go back to the beginning
of the year, January, February, when the currency started to get very weak, the panic in Beijing
simply wasn’t lower currency levels. It wasn’t that the moves had been so significant. They’re all well within any bands they themselves
have set. They’re well within historic ranges. But what they didn’t like was they didn’t
like the market pulling them. And this, I think, is the real fear. Because if you start having a market fall,
as the stock market did in 2015, as the currency started to do then later in the year and beginning
this year, as anyone who’s spent any time in a market knows, that takes on a dynamic
of its own and so on that forces people to come out and do something. They have to act because it will be even worse
tomorrow. And that’s of unexpected or that unknown reaction,
that being forced by the market to do something is what really worries the Chinese. Now we’re nearly touching seven. We’ve already had a PBOC fixing of 6.95 in
the past few weeks. And so in that sense, it’s not simply the
lower level which is the worry, but it’s the unexpected and the volatile nature of markets
that forces people to do things. Chinese leaders don’t like to be forced to
do anything. They certainly like to give the impression
they’re very much in control. And they themselves– This idea, I think one
of the things that sticks– there’s a number of things from, let’s say, the past 20 or
30 years in China that stick– or in Asia that stick with the Chinese leaders. 1997, the Asian financial crash really stuck
with them. I think they looked at Hong Kong. They looked at Thailand. And these sort of headlines, whether they
were true or not that a New York hedge fund manager presses a button and a billion dollars
leaves Thailand, and Thailand is decimated and people are unemployed and factories are
closing– very simple, very tabloid type of headline, but that’s exactly the type of thing
the Chinese government are desperate to avoid. And so that volatility of markets, the unexpected
nature of markets is something that they recoil against. So, where does that leave the currency? It’s going to get weaker. I don’t think that’s really any surprise. But do I see a great devaluation? No I don’t, because I don’t see how that plays
into the government’s favor. This idea of taking sort of tough medicine
early, getting the worst over with, I think sadly that’s passed. I think that’s the difficulty, that that time
has now passed for them. I think if they were to do that– And again,
we know markets overshoot. And again, if you were to say if the currency
is overvalued– and I don’t really care if it is overvalued or undervalued, I just know
it’s not market-driven. And I’m pretty big on market-driven forces. So, in that sense, I don’t know what the right
level is. But should you devalue 5%? Is 5% enough? Well, why 5.0%, 4.9%– well, 5.1%? Be a numbers snob, go for 9.9%. You know, is it 10%, 11%, 12%, 13%? I don’t know, is it 15%? Maybe it should go to 20%. Maybe it should go to 8.5%. I don’t know, what’s enough? What’s enough and what are you guys trying
to signal there? Because certainly if you were to go back to
8.3, where we were for best part of 15 years or so, then that sends a very bad signal of
course. That basically almost wipes out the past 11
years of currency movements and currency strength. And then you think, oh my God, China is like,
it’s really going back to some almost prehistoric economic environment as it were. So I don’t see them doing that because I think
it sends such a destabilizing signal. I think instead they’re going to waste more
reserves, waste a lot of time, a lot of effort by this slow depreciation. And it’ll come in fits and starts. It’s not going to be a straight line. But there’s going to be some fits and starts
on the way down. The argument that somehow they’re wasting
reserves, the Communist party has never been efficient. They’ve been– it’s efficacy, not efficiency. They achieve what their goal is. They’ve got lots of people. Their entire history is about wasting resources
to achieve some arbitrary goal they set on one day that the next day was no longer important. My God, this was a country that sent out schoolchildren
to clap all day to ensure that sparrows couldn’t land so they would die, thinking that that
would improve public health in Beijing. So in that sense, I get that somehow they’re
wasting resources. I don’t think that matters to them, because
what they’re focused on is maintaining control, and not necessarily being exposed to that
market volatility and that whiplash. Because goodness knows where that could take
you. Because if you lose confidence in the government–
and again, this is what underpins so much of what goes on in China. You can talk that, oh yes, they’re rebalancing. The growth rate’s coming down. You could argue their debt’s not too high. But everyone basically falls back on, but
the government’s in control. They’re still in control of all those levers,
whether it’s fiscally, whether it’s socially, whether it’s the internet, information flow,
whatever. And if you have that sort of shock to the
system, then I think that becomes highly destabilizing. When you’re talking about politics and risks
of China in the coming years, I think the risks are ultimately political, not actually
economic. Because the politics– and again, how can
anyone be sitting here at the end of 2016, while thinking ahead to next year, without
thinking about Donald Trump, because the rhetoric there, that relationship– which has always
been a bit of a love and hate relationship, going back for centuries– clearly will change. It’s already started to change. For better or for worse, we’ll find out. I think though what’s very clear is that Trump
is clearly going to take a much tougher stand on China. He’s certainly talking tougher on China. What his stand is on China when he’s in power
and we’ve been through six months, a year, then I’ll tell you what it is, because frankly
I have no idea what it’s going to be now. But you know he’s going to certainly try and
be tougher on China. I think there are a number of things that
are worrying about that though. Not that being tougher on China is a bad thing,
because I think if my complaint– and I’ve often been called about, I’ve been bearish
on China. And I think that’s a dreadful term. I think bulls and bears exist in the stock
market. I think they’re dreadful terms with trying
to talk about countries or bigger picture things. I’ve always seen myself as a realist in China
because I’ve spent a long time there. I’ve worked with Chinese companies. And I’m very realistic about the real limitations
of China, often that China, because of its sheer size of population, of financial reserves,
or whatever it may be, seems to be this behemoth which seems unstoppable. And yet the reality of dealing with Chinese
companies and often individual Chinese, or even the Chinese government, is much more
fractious and nowhere near as successful as the big picture would be. And so when I’ve been sort of negative and
critical in China, it’s because I think one of the first things is to start talking truthfully
to China about China and about your relationship with it. So in that sense, tough talking does no harm. I think because much of what China– I think
the frustration that people have often with China is that China doesn’t even live up to
its own promises, of whether it be reform, of market opening, market access, and things
like that. So in that sense, there’s lots of reasons
to be tougher with China. And that’s the good side, if you like, of
Trump. Although, is that what he’s going to do? I don’t know. What worries me more with Trump is that there
seems to be– he’s fighting the wrong battle. He’s fighting a battle from a decade ago or
from two decades ago, that somehow that the very basic model of American jobs moves somehow
direct from America straight to China, and that if only we are tough on China, put tariffs
on Chinese goods, that those jobs will come back. Well, if that simplistic picture was ever
true, it’s certainly not true now. And simply putting tariffs on Chinese goods
doesn’t solve that problem. So I’m worried that the– and certainly his
economic adviser Navarro, whether his economics even holds up, many economists would argue. But certainly his China policy doesn’t necessarily
seem to hold up. He seems to paint China as the great evil
in the world that’s responsible for all ills. And certainly China has a role to play in
many of those ills. And certainly Chinese policy has certainly
contributed to many of those apparent ills. And there’s things we should be tough on China
about. But simply this rather belligerent attitude
I don’t think is very conducive. Not that I’m annoyed or worried about upsetting
the Chinese. That’s almost an argument for saying those
things if you’re just upsetting the Chinese Communist Party. I have no problems with that at all. But you’re not necessarily going to achieve
the goals you want. I think that’s what you’re– Trump’s wanting–
needs wins, and he needs wins against China. The approach he’s taken, I’m not convinced
he’s going to be able to do that. What you have seen as well of course– and
this plays into Trump’s worldview, and others– is it China of course themselves have become
more and more belligerent over the past five years or so. And this has certainly increased under Xi
Jinping. It’s partly been to support their own economy. And this has come across a wide range of issues. One of course is of economic and the greater
focus on domestic production of certain goods, of restricting fair competition from foreign
companies or forcing foreign companies to onsource certain activities into China, particularly
in the technology space, which is obviously very worrying given the tight control that
China has over technology, et cetera. So there’s those sorts of aspects. But you’ve also seen them being nationalistically
much more belligerent. Obviously we’ve seen that in the East China
Sea. You’ve seen that in the South China Sea. And it’s China as the bully, China as the
big country and you’re the small country, get used to it type of model. Which, ultimately I think will backfire on
China. yes, we all know China’s a big country. We all know that all the countries in Asia
are very dependent on it. Economically they’re very linked with it. But China is– I’m not quite sure what it
thinks it’s setting itself up for, because it has no friends. I was once giving a talk in Europe and I said
that China has no friends. And a lady from the Chinese embassy came up
afterwards and say, “But that’s not true. We do have friends.” I said, “Well name one.” “We have a friendship treaty with Pakistan.” I went, “Ah, anyone else?” And she said, “Singapore.” I said, “Sorry, is that a question or a statement?” And so China doesn’t have friends. It goes out almost out of its way to alienate
countries in the region, certainly countries it should be cooperating with, countries that
have large Chinese diaspora as well. So they have natural affinities with them,
but they seem to be unable to build an inclusive type of model. And it becomes a very Han chauvinistic model. And this, I think, is ultimately an underlying
weakness in the politics in China. So, you look at those domestic sort of political
issues, that domestic inability to build friendships and alliances, even within Asia, its natural
community. You then bring into this Trump, who has almost
alienated everybody he meets. And then you think, this is clearly going
to be volatile for the coming years. Being tougher on China, not a problem. Is Trump the person to do it? I really have to doubt, because I can’t see–
he’s a man who revels in his own ignorance, and seems to have surrounded himself with
people who, again, are not necessarily think that simple solution to complex problems are
the way forward. I don’t think that’s necessarily is going
to be– it may be good for markets. There certainly will be volatility, as many
of my friends would say. But it’s not necessarily going to be good
outcomes I think. What is interesting– and obviously I work
in finance and I write about the Chinese financial system, but I don’t manage money. I thankfully don’t need to give people advice
to what to invest in China, although my default answer is, I’m sure there’s lots of good of
good business to invest in China. But I think what’s interesting or when I think
about China or how I think about it differently from others, or many of the people who would
be my peers or the readers of Red Capitalism, that I came to China because I was interested
in China. I didn’t come to China for the market because
it was a big market or there was a big stock market or there was business opportunities. And so I’ve often thought that’s given me
some advantage, perhaps, of trying to understand China or trying to just, maybe, just accept
some of the frustrations there. And I think of this particularly over the
past– since that Asian– or since the global financial crisis. So you look at over that long eight years,
those two Olympic cycles as I talk about, and you think about, lots of people have done
lots of work on debts and whatever, and this growing network of debt and all these notes
and look at these empty apartment buildings and whatever. And I said yes, that’s true, that’s very nice. And then they automatically then sort of jump
through on to, well this must stop, that this must come to an end, that default beckons
or whatever. And I think, that’s sort of true. Of course it’s true, and ultimately there
is a price to be paid. But I think in China, two of the things that
I always think about China– this is because I’ve been interested in China long before
the economics of it as it were– is that China is the land of the absurd and the arbitrary. And I think unless you understand or appreciate
that China is this absurd country in some ways that’s struggling to become modern, then
you come too quickly to these conclusions. Oh the bank’s accounting’s all hocus pocus. The bank must therefore go bust and I’m shorting
the banks. Well why would you do that? There’s no evidence banks are going to go
to zero. There’s no short sell report that’s going
to show– expose all. And so you’re almost looking for the wrong
sort of outcome. And I think it’s understanding this, of the
absurdity and the arbitrariness of it, that you simply, when you do your China analysis,
you are left with a lot of unanswered questions. You are left almost in dead ends. You think, but surely the next step means–
I say, well it does. I’m not saying it doesn’t. But who’s going to take that next step? Who’s going to force the bankruptcy? Who’s going to ask the difficult question? In Chinese, when you raise these types of
points, Chinese will say to you, semi-apologetically, but also in earnestness about just apologizing,
In China it’s like this. And you think, not again. And you know it’s true. But this, sadly, is– and I think if you’re
an investor, at all sorts of levels, not just whether you’re picking stocks or whether you’re
doing real business– and clearly people have made a lot of money in China. So it’s not as if it’s just a complete fiction
or fraud. But you simply end up with a lot of these,
like I say, loose ends and unfinished stories, that often sort of fizzle out in some way,
and it doesn’t come to a clean bankruptcy or something. But what you find is that the loss has been
socialized in some ways, that someone else bailed somebody else our or they borrowed
from here, and the story morphs into something else. And that’s very difficult, I think, to explain
a lot of the time. It’s a bit like the politics we talked about,
the politics and economics being tied up. But it’s often very difficult. If you focus just on the numbers, yes, the
numbers can expose a lot of sort of malfeasance or wrongdoing. But that’s only part of the story, because
there’s also then another parallel track of almost like back as it were or state support
or local support that carries on in the background that allows things to continue. And everyone sort of plays along with the
game. It’s in nobody’s interest to pull the rug
away in that sense. So I think once you understand that about
China, I think, does it make you a better investor? Maybe– maybe you get a bit less frustrated. Because again, people– even though I’m in
sort of financial markets, I was authorized. So I consult with various people on all sorts
of China topics. And I remember somebody came here doing a
big project, a big property deal, with a big blue chip Chinese name. And I was advising him over a glass of wine
as you do. And he said something like, “So, what did
you think of my Chinese partner?” And I said, “Well the first thing you need
to understand is that all Chinese partners are bad partners.” And he said, “Well what did you mean?” I said, “Well it’s not necessarily they’re
out to defraud you, but they’re almost certainly not what you think they are. And so even though this is a blue chip name
and they’re saying they’re going to invest X hundreds of millions of dollars with your
property project, do they have approval to bring the money out of the country?” “Well they’re a big Chinese name.” I said, “Do they have approval to bring–”
“We’ve not asked, but surely they’ll be able to get it.” “Why would they be able to get it? Aren’t you watching the news? Don’t you know how difficult it’s getting
money out of the country? Have they got approval to do the project in
the first place?” “Oh? You mean they may not?” “Well why would there? You cannot assume that.” So it’s not that they’re necessarily lying
to you. They may be very honest about doing this project. They may have the money in China. But you don’t need the money in China. You need it somewhere else. And so I think understanding the framework
in which China operates, partly you could argue is a good deal due diligence. But it’s also understanding how China operates,
how entities, how individuals operate, that will often speak well beyond their capabilities
because they’ll think something will turn up, that oh, we’ll figure out a way to do
it. And often, of course, they won’t figure out
a way to do it, which makes it very frustrating because you think, I’m dealing with a blue
chip Chinese name here. And then actually they are just as beholden
to the arbitrary regulations of the government as anyone else.

Accommodating Visual Impairment at Work


I’m Patricia Elgersma. I’m
an Accessibility Analyst here at HSBC. I was brought in as a specialist
to look at accessibility, specifically
for people with disabilities. I’m currently looking
at visual-impairment accessibility, but, in the coming months, it will
encompass other disabilities, as well. Something that I’m also looking into would be maybe putting in
a little tactile strip. Having tactile strips to indicate when to turn left
to come into the entrance. Another thing that I’m looking at
for the entrance is to have a mat, so that a cane user is easily able
to tell when the door is coming up. This all came about
with a real simple thing – the organisation
put braille on my name cards and I made a connection
with an individual in the sight-impaired community
who referred me to Patricia. We got Patricia interviewed
by the organisation. She joined
and she has made an amazing impact on our organisation in Canada. She was able to come into this beautiful
new building in Vancouver, identify things that we were doing wrong
from an accessibility perspective, make suggestions and ultimately
affect change in this building. One of the challenges I also face
with the physical environment is when I’m trying to find
a meeting room and finding the braille to figure out which meeting room I’m at. Currently, the braille is at eye level, but it would be better
if it was at waist level, because then you just reach out
along the wall to figure out where the braille is
to determine what room you’re in. One of the things
that Patricia was able to do for us was stress-test all the systems and
procedures and processes that we have to ensure that our clients could
effectively interface with our company. Likewise, when Patricia
was hired into the organisation, she was able to go through
the induction process and was able to identify the areas
where there were weaknesses. I’ve been looking
at software accessibility, particularly the training modules,
which are not accessible to me. Because of the way
that the modules are currently coded, I can’t access them at all. I find not being able to do the training
extremely frustrating, not only because this is something
that I have to do to fulfil my work here at HSBC, but also because I want to have
the right to say to my colleagues that it’s boring or that it’s fun – to express my thoughts on the training,
as anyone else would do. I think the overall goal is really
to get more visually impaired people working within HSBC, particularly totally blind people, those of us who use braille
and screen readers. My life is going to be an uphill battle
educating everybody and it feels like it is a drop
in the bucket everywhere you go, but I’ve had a great reception
from colleagues. They’re really willing to learn
and to know how to help. HSBC is very, very willing
and working very, very hard to make this happen.

The Banking Royal Commission and Small Business (Part One)


Hello I’m Kate Carnell, the Australian
Small Business and Family Enterprise Ombudsman. Well it’s been a big couple of
days with the release of the Commissioner Hayne report into the banking
and financial sector. Now there are lots of small businesses out there that have
been badly affected by the big banks and other financial institutions so this has
been an important piece of work for many small businesses and consumers of course
in Australia. Now unfortunately Commissioner Hayne
didn’t focus all that heavily on the small business sector. There’s really not a
lot in it for small businesses but there are some good bits. One of the
recommendations of Hayne is for the Banking Code of Practice to be extended
to make the definition of small business for all loans up to $5 million
and small businesses to be businesses with less than 100 employees. Now
at the moment the Banking Code only covers small businesses where the
aggregate loan is less than $3 million. So this extension will mean that
the Banking Code of Conduct covers another 10 to 20,000 small
businesses. Hayne has also recommended that the Banking Code should be legally
enforceable. Now although the current Code is approved by ASIC, ASIC can’t
actually legally enforce it. Now one of the things that he doesn’t focus on, and
we’re bit disappointed with that, is the sort of changes that need to happen in
the Banking Code of Conduct to really give the Code real teeth. Because
Commissioner Hayne has said that the Banking Code of Conduct is the basic
document that small businesses need to rely on for justice, for fairness. So
the Banking Code has to be good, has to have teeth, has to support small
businesses, and at the moment even the new Code – which is better than the old
Code and does have a chapter for small business – has a whole lot of get-out-of-jail clauses for the banks. So it says things like small businesses will be
given 30 days to pay back a loan if they are in default and then the next
paragraph says but if on our reasonable opinion, eg the bank’s reasonable opinion,
a shorter period of time is more appropriate, then there will be a shorter
period of time or no period of time at all. We don’t think that’s reasonable.
We’ve gone back to the ABA with line and verse of all of the changes we believe
need to happen to ensure that small businesses are appropriately protected.
We will be pushing the ABA heavily to ensure that the new Code, which comes
into effect on 30th June, it reflects exactly what Commissioner Hayne
said and that was it was a document that gave small businesses a capacity to
access real justice and fairness. It’s worth having a read of the
recommendations if you haven’t already but there are some good things for
small business but I have to say the small business chapter is very brief.

What a Labour government would mean for business in the UK | FT


Britain may be just weeks
away from yet another general election, and business leaders
around the world are nervously trying to find out what a
potential Labour government would mean for them. This shadow chancellor
is different. I want you to know,
the greater the mess we inherit the more
radical we have to be. Behind deep divisions over
Brexit and the crisis over anti-Semitism in its ranks,
there’s been less attention on Labour’s radical
economic agenda. Lobbyist Ian Anderson
says his clients, blue-chip international
companies, are hungry to know more, and
in particular about shadow chancellor John
McDonnell and his promise to rewrite the rules
of the British economy. When I’m abroad,
when I’m in New York, or when I’m in Asia there’s
a huge amount of interest in Labour’s policies. What does higher corporate
tax actually mean? What would the change in the
approach to regulation mean? And on the wider
economic agenda, is there a partnership between
business and inward investors to help build Labour’s
infrastructure plans? And would you say that
it’s a positive sense among the business world about
what a Corbyn government would mean? Most businesses are
uncomfortable about prospect of John McDonnell as chancellor. There’s not a lot
of common ground. And whilst John
McDonnell will say that he’s talking to
business, a lot of the time he’s talking at business. Corbyn and McDonnell have
taken much of the limelight. But behind them there’s a large
policy network of leftwing MPs, activists, advisers,
Trotskyists, Greens, pressure groups,
think-tanks, academics… the list goes on. In this film, we meet some
of the faces behind the most radical leftwing policies seen
in Britain since the Labour government in 1945: large-scale
redistribution with taxes on the rich and business,
borrowing for infrastructure, the renationalisation
of water, the railways, and other privatised companies,
with shareholders paid back below the market price, the
gradual transfer of 10 per cent of the shares of every big
company to their workers, strengthening the rights
of consumers, workers, and tenants against
shareholders, landlords, and bosses. And these are only the
current existing policy. There are also ideas
being knocked around for a three-day weekend,
a universal basic income, and the land value tax. And on it goes. In the network of policymakers,
Ann Pettifor, a leading critic of neoliberal
economics, stands out as a longtime adviser to shadow
chancellor John McDonnell. What would you say
to business people? Are they right to
be watching this with some measure of alarm? Yes, if I think if you’re
a rent-seeker, you know, if you’re one of today’s
rentier capitalists, there will be a
lot to worry about. It’s not going to be so easy
to drain valuable public assets of wonderful rent easily. In the future, that
may be the case. But I think most of your
readers will actually look forward to this. Because what they want more than
anything else, I would think, is economic stability
and economic prosperity. As long as we have the
low levels of income that we have now, where we have
the kind of insurrection that is represented by
Brexit and that is very destabilising
in the economy. And what business
people often ask… they kind of see
two John McDonnells. They see a shadow chancellor
who has a very amiable bank-manager manner. There’s also the
John McDonnell who’s suddenly very angry about
bringing down capitalism. Which is the real
John McDonnell? There’s no doubt that
he’s on the left. But when it comes
down to it, John is really pragmatic and
sensible, and sometimes, in my view, a little too
conventional, really. When it comes to
Labour’s ambitious plans for renationalisation one
campaigning group has been very influential among the
Corbynistas, We Own It, founded by Cat Hobbs, who wants
to reverse the privatisations of the 1980s Thatcher era, a
policy that was largely left untouched by Labour
under Tony Blair. Some critics of Labour’s
nationalisation policy suggest that it is very
labour-intensive, time-intensive. Do you think it is the best use
of the time of a radical Labour government? Absolutely. Because what this is
about is taking assets that will make a profit
for the public purse back into public hands. So it means ending the rip-off
that we’ve got right now. It means giving
everybody a fairer deal in terms of our
bills and the money that we’re paying out
for these services. But it also gives us
a really vital tool that we can use in
delivering a Green New Deal, in tackling the climate crisis. Are there other
private-sector industries which you would like
to see nationalised which, at the moment,
are not being discussed? So We Own It is calling
for all public services to be run in public hands. And so what that means is
it means energy, water, the railways, buses, the NHS,
schools, council services, libraries, care work, parks,
all of those things… But what about… …should be… …the defence industry? …in public hands. What about airports? Yeah, I think wherever
there’s a public service. So defence industry,
yes, airports, yes. All of these things
are public services that we don’t have a choice
about relying on, really. We’re not talking about
the whole economy here. So we want to see
a mixed economy. Public services should be run
for people rather than profit. Private companies
and private investors can invest in the
rest of the economy. The chance of these radical
policies becoming reality is being taken seriously
in some quarters. Former head of the Civil
Service, Bob Kerslake has been charged with
advising McDonnell and team on the potential
transition into government. I’m not a member of
the Labour party, nor am I developing
their policies. What I’m doing is
helping them think about the task of
moving into government. And it’s worth saying they
face some real challenges. We have huge social
divisions that are matched by economic divisions. And in my view,
the important thing is that we have a government
that has the courage to see through the
radical responses that are going to be needed. We’re talking about a very
ambitious programme of radical change. But most of the people around
Jeremy Corbyn have not been ministers or running the
government under previous Labour administrations. Does that make it
harder for them? Yes, it is a radical programme. And indeed they have some
who have got experience of government, but not many. And in a way, that’s
not surprising if you’ve been out of
power for nearly a decade. But I think if you look at
the policies, many of them are policies, if
you went to Europe, would not be hugely surprising
– national ownership of the railways, for example. So they’re radical
for the direction that this country has gone
in for the last 50 years. But they’re not so
radical when you look at some other
countries in Europe. But Labour is deeply divided,
and the radical Corbyn agenda has alarmed many
more moderate MPs. In February 2019, it was
enough for Chris Leslie, a former shadow chancellor, to
resign as a Labour MP against what he said was Labour’s
shambolic Brexit policy, anti-Semitism in the party,
and its hard-left economics. Ultimately, it is
anti-capitalist. It’s not about
regulating markets, it’s about overthrowing markets. From my point of view, looking
at a choice of finite amounts of money, are you going to spend
£90bn to nationalise the water industry, or should that £90bn
be used for something more socially productive? But they’ll make the point that
that is covered by the profits that you then get by
owning the water industry. And they would suggest the £90bn
is far too high an estimate. Yeah, but only in an
environment where the market is going to say, oh, yeah,
we’re absolutely fine with you taking assets
below market value. I mean, the idea that a Labour
chancellor is going to go to the market and say, we’d
like to borrow £500bn pounds. Oh, but the person
in front of you, we just sequestered their
assets below market value. Those behind are
going to say, well, we might lend you some money,
but at a much, much higher risk premium. And of course, when the
interest rates increase, who pays the price for those? Ultimately the poorest in
society, or the public services that will suffer as a result. Laura Parker, the national
co-ordinator of Momentum, the grassroots movement founded
four years ago to support Jeremy Corbyn, believes
that Labour can move beyond the current rows over Brexit and
anti-Semitism and its election defeat in 2017 to win the next
general election on a radical platform. Do you think the movements
around Jeremy Corbyn, Corbynomics, will have a life
beyond the current leader? Yes, absolutely. And I think that now
we have mainstreamed this thinking about
economics in particular, throughout the party. We’ve got a new generation
of people in parliament. I mean, I don’t think
it’s that, you know, when Jeremy takes
off to his allotment, suddenly there’s nobody left. You know, we’re not
stuck for people. I mean, you know FT readers
are probably pretty smart folk. And smart folk will
have understood that we can’t continue as we are. Whenever that general
election comes, we’re ready. We’re ready to
campaign for victory. We’re ready for government. We’re ready to build the future. We’ll be proud to call that
future socialism, solidarity. Some pundits believe Labour
has little chance of winning a general election, not least
because of Mr Corbyn’s low opinion poll ratings. But elections are unpredictable. In 2017, Labour started
out 24 points behind the Conservatives, but ended
up winning 30 seats and almost gaining power. Business leaders in the UK and
around the world are looking very carefully to see what a
Labour government could mean.

Fox Business – Melissa Francis – Time To Buy The Market


IT IS ALWAYS ABOUT MONEY MELISSA: OUR TOP STORY TONIGHT, THERE IS NO STOPPING THE WALL STREET RALLY. THE DOW CLOSEDED AT A RECORD HIGH FOR THE 7th DAY IN A ROW AT 14,455. SO WHAT ARE YOU DOING ABOUT IT? WHERE IS YOUR MONEY RIGHT NOW? TODAY’S POWER PANEL IS HERE WITH WHAT THE AVERAGE INVESTOR SHOULD BE MAKING OF ALL THIS LANCE ROBERTS, CHIEF ECONOMISTND CEO OF STREET TALK ADVISORS. SPENCER PATTON, CHIEF INVESTMENT OFFICER AT STEEL VINE INVESTMENTS. YOU RECOGNINIZE JONATHAN HOENIG, HE IS PORTFOLIO MANAGER MANAGER AT CAPITALIST PIG.COM AND FOX NEWS CONTRIBUTOR. THANKS TO ALL THREE OF YOU FOR JOINING US. LANCE, LET ME START WITH YOU. THE AVERAGE PERSON IS WATCHING THIS AND HEARING RECORD, RECORD, RECORD. SAYING WHAT AM I MISSING? WHAT ARE THEY MISSING?>>WELL OBVIOUSLY THEY’RE MISSING THE MARKET GOING UP BUT THERE IS KIND OF THIS ASSUMPTION THAT THE AVERAGE INVESTOR HAS BEEN OUT OF THE MARKET THREE YEARS, FOUR YEARS NOW AND NOW THEY’RE JUST KIND OF WAKING UP. THAT IS NOT THE CASE. MOST PEOPLE THAT ARE INVESTED –. MELISSA: YOU DON’T THINK SO?>>NO, IT IS NOT. IF YOU LOOK AT LOT OF DATA, ONLY 20% OF THE AMERICANS ARE ACTIVELY INVOLVED IN THE MARKET ANYWAY. THE BULK OF THOSE ARE INVEED FOR THE MOST PART. THEY’RE IN THE MARKETS. THEY’RE PARTICIPATING AND, YOU KNOW THE ISSUE REALLY BECOMES THOUGH WE HAVE TO LOOK AT RISK HERE. WE’VE OBVIOUSLY GOT THE FED INDUCING MARKETS. 85 BILLION A MONTH. MELISSA: RIGHT.>>DRIVING THESE MARKET PRICES HIGHER. THAT’S FINE. NO PROBLEM WITH THAT. MARGIN DEBT IS BACK AT LEVELS WE HAVEN’T SEEN SINCE 2007. MELISSA: YEAH.>>YOU HAVE HIGH YIELD CREDIT, HIGH YIELD CREDIT YIELDS ARE ATHE LOWEST LEVEL ON RECORD. WHICH BASICALLY MEANS THE YIELD CHASE AND RISK IS DEFINITELY THERE. SO YOU JUST WANT TO BE MORE CAUTIOUS WHERE YOU GO TOO FROM HERE. MELISSA: J JONATHAN, I’M THINKING ONE IN FOUR AMERICANS WHO TAPPED INTO THEIR 401(k) TO TRY TO PAY THEIR BILLS OVER THIS PERIOD OF TIME. I’M ALSO THINKING ABOUT THE PEOPLE WHO STOPPED CONTRIBUTING TO THE 401(k) WHEN THEY SAW THE MARKET TANK BECSE THEY GOT NERVOUS ABOUT IT. THEY’RE WAKING BACK UP TO WHAT IS GOING ON AND SEEING THEY MISSED TH RIDE UP. WHAT WOULD YOU TELL THE PEOPLE DO NOW?>>GET OUT OF THE HABIT MAKING INVESTING ALL OR NONE DECISION. YOUR POINT SPEAKS TO THAT EXACTLY. GO BACK TO 2009, 2010. INVESTORS OBOUSLY BECAME VERY SCARED AND A LOT OF THOSE INDIVIDUAL VESTORS UNFORTUNATELY PULLED ALL THEIR MONEY OUT OF THE MARKET. WE’RE AT ALL-TIME HIGHS ON THE DOW. WE’RE STARTING TO SEE THAT TRICKLE IN. I DISAGREE SLIGHTLY WITH OUR GUEST. WE HAVEE SEEN ESPECIALLY FOUR OR FIVE YEARS, COME OUT STOCKS GO INTO BOND AND INTO GOLD. MELISSA: I AGREE.>>MARKET HAS BEEN UP NINE DAYS IN A ROW. I THINK THE TREND STILL CONTINUES. I SEE HIGHER PRICES FOR STOCKS DESPITE THE RUN WE’VE HAD. MELISSA: SPENCER DO YOU THINK THE RETAIL INVESTOR IS ON THE SIDELINE AND WHAT SHOULD THEY BE DOING?>>I THINK WE SEE MORE RETAIL INVESTORS IN BONDS SIGNIFICANTLY. AND THERE IS CHU ON THE SIDELINES. WHAT PEOPLE NEED TO DO IS WAKE UP THE FACT THEY HAVE LOST A LOT O OF PURCHASING POWER LAST FIVEEARS. GASOLINE IS $4 A GALLON WHERE IT WAS AT TWO. GOLD WAS $750 AN OUNCE. NOW IT IS AT 1500. THEY NEED TO GET INTO REAL ASSETS. BUY THINGS LIKE REAL ESTATE. GET INVESTED INTO AGRICULTURE. GET INTO THINGS THAT WILL ESERVE THE PURCHASING POWER. DO NOT BUY THE MARKET ONCE IT IS UP NINE CONSECUTIVE DAYS THE LONGEST IN 16 YES. YOU WILL WAKE UP AND REGRET IT IN THE MORNING. PLEASE RUN AND DON’T MAKE THAT MISTAKE AGAIN HERE. MELISSA: LANCE, IS THAT GOOD ADVICE? THAT IS A GOOD POINT. YOU’VE LOST A LOT OF PURCHASINGNG P POWER. THE FED IS JUST GOING TO KEEPEP DOING WHAT THEY’RE DOING. SO ITEMS IS A LIKE THAT TREND COULD CONTINUE. DO YOU AGREE WITH THAT? WHAT ADVICE WOULD YOU GIVE IN LIGHT OF THAT?>>I THINK IT IS GREAT. ACTUALLY I AGREE WITH BOTH OF YOUR GUESTS OVER THE LAST TWO POINTS. I CALL THIS THE TAYLOR SWIFT MARKET BECAUSE THEY TREAT THIS LIKE A BAD RELATIONSHIP. WHEN IT DOESN’T WORK OUT BAIL O AT WORST TIME AND TRY TO GET BACK IN AT THE TOP. MELISSA: YES.>>BUT THE REALITY I AGREE WITH BOTHINGS LOOK THE MARKETS ARE VERY EXTENDED HERE. THERE IS RISK. YOU WANT TO BUY O ON CORRECTIONS. AGAIN, AGREE WITH JONATHAN, YOU DON’T WANT TO GO ALL OUT OF THE MARKET OR ALL-IN. IT IS NEVER GOOD. YOU CAN NOT TIME THE MARKETS. IN RESPECT TO YOUR SECOND GUEST, STEVE IS ABSOLUTELY RIGHT, IT IS ABOUT ASSET ALLOCATION. STOCKS ARE A FINE PLACE TO BE WHEN ALL THE FUNDAMENTALS ARE IN PLACE BUT EARNINGS ARE DETERIORATING. RISK IS HIGH. AND PEOPLE ARE CHASING STOCKS BECAUSE THEY’RE GOING UP. BUT LOOK, THERE IS SOME GREAT PLACES TO PUT MONEY. BOND PRICES HAVE ACTUALLY DECLINED OVER LAST COUPLE MONTHS WHICH HAVE GIVEN GOOD OPPORTUNITIES IN THE BBB RATED SPACE. THERE IS GREAT OPPORTUNITY, GOLD HAD A GREAT DECLINE OVER LAST FEW MONTHS. VERY, VERY OVERSOLD. THIS IS THE MOST OVERSOLD GOLD HAS BEEN IN LAST THREE YEARS. THIS IS GOOD OPPORTUNITY. MELISSA: I WANT TO ASK EACH OF YOU IN REALLY PLAIN LANGUAGE. IF PEOPLE HAVE MONEY SITTING ON THE SIDINES RIGHT NOW AND THEY’RE TCHING THIS RECORD DAY AFTER DAY AFTER DAY, WOULD YOU ADD MONEY TO STOCKS RIGHT HERE? I’M GOING THROUGH EVERYONE. JOJONATHAN, WOULD YOU START FIRST. WOULD YOADD MONEY TO START HERE?>>ABSOLUTELY, MELISSA. THE BEST INDICATOR OF THE MARKET IS THE MARKET. SO I DON’T BELIEVE AS THE OTHER GUESTAS SAID, I DON’T BELIEVE YOYOU BUYUY ON DIPS, BUY ON CORRECTIONS. YOU NEVER KNOW IF THE CORRECTION IS BEGINNING OF SOMETHING MORE SUBSTANTIAL, SOMETHING MORE SERIOUS. I BELIEVE IN BUYING STRENGTH. RIGHT NOW, LOOK AT STOCKS, BOND AND GOLD UNQUESTIONABLY, STOCKS IS THE BEST ASSET CLASS TO HAVE YOUR MONEY?>>DON’T BUY NOW. YOU WILL REGRET IT IF YOU BUY AT PEAKS, YOU BUYY ON CORRECTIONS. THAT IS WHAT DATA IN THE PAST SHOWN. BUY WHEN THINGS ARE CHEAP. DON’T BUY AT THE VERY TOP. MELISSA: I’M THOROUGHLY CONFUSED. LANCE YOU WILL BE THE DEAL BREAKER, THE TIEBAKER. WHAT DO YOU THINK?>>LOOK THE BOTTOM LNE IS, THAT MARKETS ARE VERY OVERBOUGHT. THEY ARE GOING TO PULL BACK AT SOME POINT. MAYBE THIS SUMMER. BUY ON CORRECTIONS. BUY ON WEAKNESS. THAT IS WHEN YOU MAKE THE BEST OPPORTUNITY. BUYING NOW, YOU’RE GUARANTEED IN THE NEXT THREE TO FOU MONTHS VALUES WILL BE LOWER THAN THEY ARE TODAY. MELISSA: JONATHAN, YOU’RE ODD MAN OUT NOW. I’LL LET YOU HAVE THE LAST WORD TO MAKE YOUR CASE.>>I MEAN, IDEA OF BUYING ON CORRECTIONS, MELISSA, YOU GO BACK TO 2007. YOU WOULD HAVE BOUGHT ALL THE WAY DOWN TO A 50% CORRECTION IN THE DOW. I IN FACT DON’T SEE THAT NOW. THE MARKET MOVES IN TRENDS. THAT IS THE BEST INDICATOR WE HAVE. RIGHT NOW YES, OF COURSE THE MARKET WILL GO DOWN ONE DAY IN THE FUTURE. IT WILL NOT GO UP FOREVER. I THINK IT IS BEST ASSET CLASS YOU CAN HAVE. STOCKS ARE LIKE SUSHI. YOU DON’T WANT A BARGAIN. DON’T WANT THEM ON SALE. BUY QUALITY, BUY STRENGTH. TREND TEND TO PERSIST. MELISSA: WHAT YOU LEARN IS SOMETHING WE LEARN EVERY TIME THERE IS BIG STOCK MARKET CRASH LIKE WHAT HAPPENED IN ’08. THAT IF YOU GET OUT AT HUGE CRASH YOU’RE ALWAYS SORRY LATER SO IT COMES BACK.

Chatting with a 23-year-old Stock Trading Millionaire


Hey, I made her Hales welcome to another edition of chatting with I’m here with Umar. Hey, how you doing guys My name is omar ashraf and i’m a stock trader. Thank you so much for being here. Thank you for having me man Let’s see stock trader. Is that different from stock broker? Yeah, it’s a lot of people get that idea very confused. They Confuse me with the stock broker But there’s a huge difference between them a stock broker somebody that allows that kind of purchases shares for you You give them a call they purchase itself for you and stock traders somebody who does it themselves, you know for him or herself Yeah, you’re like buying and selling stocks like the same day, right? Ah, not not always I’m sometimes buying it and holding for two three weeks. Sometimes I’m buying it and Buying the same day selling it the same day. It’s just different strategy some days. I’m day trading some days I’m swing trading it just it all depends. How old are you? I’m 23. Oh Wow So this could be 23 year old. Are you a millionaire? Yeah Yeah, this would be the title then. So basically I started trading when I was 18 That’s when I first got into the market and when I first started I literally had no idea What I was doing was just like hey, I want to dabble into stocks I want to make money and I know so many people make money off stocks. Hmm So I was like, let me jump into it I had about 20 grand saved up at the time and the money I had saved up What I did was I put all of it into the market without having any knowledge. So I took all my monies rusty Yeah, but at the time, you know, you’re young you kind of wanna you think you know it all mmm So I’m like, oh, I know everything I know what I’m doing Let me just take all my money and dump it into the market Okay I dumped in too much was that how much is what how much did you have that you 2010? That was all the money. I had to put one every day exactly everything Wow. So now once I put everything into the market Next thing, you know is I made a few trades. I remember the first stock I bought was JCPenney So the first trade I made was around It was it was a January because that’s when my birthday is and I turned 18 I opened up a brokerage account and I bought JCPenney and I made 25 hundred on that trade so now After that, I kept taking all my money and dumping it into one stock. No risk management not okay. Hold on Why did you choose JCPenney? Absolutely, no reason I just saw the stock and I was like, oh, I think it’s a good buy and I bought you spam Why did you think it was a good buy? I I just looked at the charts and I had no idea what he was telling me but I just felt like it was a good Buy and I and I put money into it anyone else. Yeah, like with me not knowing anything I see like what it’s normally and if it’s low then I’m like, alright, it will probably go back up It was something like that because I know retail at that at the time was having a huge problem Retail was falling. So I was like aha JC Penney. They’re never gonna go down. Let me buy them So I bought them and next thing, you know They went up two days later and I made about twenty five hundred bucks and you sold it Yeah, and I sold that made twenty five hundred bucks now Oh you put 20k into one stock Wow and it went up I think interesting new percentage and As they went up it might might before you when I’m twenty-five hundred bucks is the the fee what were you doing etrade? what I Scottrade Scottrade Okay, that’s like one of the many yeah Scottrade They got bought out by teaching now, but at the time, you know, it’s like $15 per traders It was seven seven dollars of trades 7 2 by 7 to sell. Okay, no percentages or anything. No, no, no. No, okay There’s no just seven seven seven four. Yeah, that’s about us when you’re 18 Yeah, so I’m in high school right now. Cuz I like I said, I have a early birthday So I just made 2500 off one trade. Yeah, so now I’m like, wow, I’m in high school. I made 2500 Oh man. This is it This is what I’m gonna do for the rest of my life and it kept going well for me. It was all beginner’s luck So my account went from the 20 grand to 35. Okay a matter of two months Then you put 35 into one thing everything into one thing. I knew no risk management. I’d had no idea what I was doing So it was working for me right like every book I’ve read on it says don’t do that don’t Exactly, but I didn’t read anything. I just dumped my money into into that one stock over and over again The sun’s like too good to be true. Yeah, and then I mean obviously everything that’s too good to be true goes downhill Okay, so now once I built my count to thirty five thousand in two months What do you think happened? Next you the loss at all? I lost it. All everything went down everything everything went downhill in a matter of six months bad trade here bad trade there bad trade here bad trade there and Everything just went down and my account finally hit about 2000 bucks. Okay in a matter of four or five months Mm-hmm and now once that happened I took a step back and everyone around me was like stocks or risky stocks at gambling and don’t touch stock. Stay away from stocks So I’ve started you know, it kind of got to me. I’m like, ah man maybe stocks isn’t the right way to go It’s something I should stay away from. Mm-hmm. But uh, I was like, you know what? I know so many people that actually make money off stocks So let me actually keep focusing on this. I didn’t know what I was doing So now let me take a step back and actually try to learn the right way Because in the stock market, there’s always a winner and there’s a loser. So if I lose 2,000 you made two thousand So it’s like you’re kind of taking my two thousand from me and the broker just makes his or her Commission. Mm-hmm So I was like, okay. I lost it. Somebody beat me they beat me at the game. So I just need to get better Yeah, so now long story short. I for the next six seven months All I did was I was focused price Li just on the market. Okay, I just focus Directly in the stock market how it’s moving. I was watching youtube videos, whatever. I was watching. I would apply it with real money So yeah, you got down to two thousand. You’re like 19 or still 18 still 18. Okay. Um, did you ever have a job? Uh, yeah, I was doing delivery at the time. Okay, so starting from 2000 you worked way back Oh, yeah, so starting from 2000. I worked my way back up, but I Started my account in the next January when I was 19. Hmm. But now when I restarted my account I started with started with 5,000 okay, so I saved the money I had 5,000 and now when I had 5,000 I kept trading and he put it all into what Now I was a little little bit smarter. Okay. Now I knew what I was doing, huh? So instead of me putting all 5,000 into a trade, whatever what I was doing was I was taking smaller positions Hmm, the purpose of that was for me to learn I was like, okay You know instead of me putting 5,000 and losing five six percent Let me only put a thousand now if every five six percent on a thousand fifty sixty bucks But I’m getting the learning learning experience, okay? so now once I started doing that I gave that about two three months and I would learn so many new things on my own like, oh, wow when this line crosses that line the stock moves up Yeah, when this goes here the stock goes down So I started picking up all these things as I was reading books because I was reading and then I would apply it Wow Now as that started going more and more I was like I need more money Hmm. So the best one of the best things I ever did was I open up a credit card when I was 18, so When I opened up the credit card, they allowed you to have balance transfers. Mm-hmm So what I did was I took a cash advance check which it’s only a 3% fee. It’s not like 25% fee There’s a three percent fee. You don’t pay for 18 months. So I took that and I had a twenty thousand limit So I took fifteen thousand out of that and put it up my bumhole To put it into the market Okay, because I was like I was like I need more money. I five thousand is enough I need to diversify our map my account and things like that So once I took all of that amount, I just started training my first year wasn’t the greatest I made money But I think it was maybe I made around 20-some thousand. It wasn’t this is all short-term stuff all short-term Yeah, all short-term and now you’re a millionaire. Yeah, it took me Three years by twenty twelve million. Was there any big break like where like Yeah, I have you a good I had big breaks with gold last year gold Yeah in 2017. Ah gold this ETF for gold. Mmm. They were spiking up like crazy I remember it went from like 18 bucks to 80 dollars in a matter of a month So every day I would be trading it Wow It would go up and I was margining the whole trade margin is when you borrowed the brokers money Why was it going up? You thing? I it was going up at the time. I don’t remember I know the US dollar was taking a hit I don’t remember the exact reason it was I was going it was going up But I know the US dollar was taking a hit There’s a lot of stuff going on with the feds and and yelling and interest rates, which was so many factors There’s a lot of factors. Yeah, but it was just on a solid uptrend So I was like just buy buy buy buy it is always a gamble at the end of the day. Not really It’s not a gamble. That’s where a lot of people are wrong They think stocks are gambling but the way you have to look at it is you have to look at it from An aspect where how much you’re looking to lose and how much you’re looking to make? Right. So now think of it like this, let’s say you make 10 trades, right? You make the total 10 trades each trade. You have a ratio of three to one Meaning you make 3,000 you’re right and you lose $1 when you’re wrong Okay. So now then out of those 10 trades, even if you’re right only three times you make nine And usual if you’re wrong, I mean you lose seven you see what Wall Street. Yeah. Yeah. Yeah, that’s broken, right? Wolf of Wall Street is yeah. They’re brokers. And oh, yeah. Yeah, they just They don’t care whether it goes up or down there. They just get the Commission exactly like that That was how they made McConaughey part. Yeah. Yeah Yeah, but yeah, he so but he you know, he claims no one can knows whether it’s up or down It’s relatively impossible for you. Don’t know if it stocks when we go up or down Yeah, so the whole concept of it is to manage your trade. Yeah What do you think of Bitcoin I? Think personally, I think it has it has long-term potential. Mmm. I just think right now Crypto is being used more. So as a way to make money Yeah, and as a form of currency, of course, you know, so with that being said there’s too much fluctuation is going on but I do think crypto itself will be big and I think one of the biggest reasons is blotching. Blockchain is is enormous. Yeah. Yeah. Well Do you think Bitcoin will eventually replace the dollar? I don’t know if there will be Bitcoin cuz I don’t see anything special about Bitcoin, but I do believe Long run crypto will have a place in the market. I don’t know if it’s gonna replace it I think it should because the dollar just value just keeps going down So it’s it’s relatively that’s where the dollar keeps going dollars value keeps going down inflation If you look at what what the relic could have got gotten you a hundred years ago poster now again, it’s insane. Yeah, interesting Do you think the banks will regulate Bitcoin banks That’s the biggest problem banks don’t want Bitcoin or crypto to be a big thing. Right? But I Personally feel like it just eliminates so much stuff like paying fees it’s like you have to pay fees to take your own money out and Banks don’t have control which is the biggest thing that they’re facing which is why they will try to regulate Yeah, but it’s just tough to see how they’re gonna regulate it. Yeah. Yeah because it’s blocked chance. It’s like that’s the weight of the other way exactly the way they did I know change try to Regulated was they weren’t allowing any transactions to Cohen base go through them. Mm-hmm. So they have they have contact So if coinbase is one of the brokers to you know, buy bitcoin and stuff So if you made a transaction to put money into coinbase, they would block it. Hmm I don’t know if they’re doing that now, but I know they did that a few months ago. Hmm Do you own a Bitcoin? No, I have like coin I have ripple and I have you doing Bitcoin I don’t have any Bitcoin one week. I’m not a big fan of Bitcoin bitcoins the rock star, isn’t it? It is the rock star but a long term, I don’t see anything special in it. Hmm. I Feel like the biggest ones probably gonna make it. It’s like, oh not in the long run it’s it’s probably I personally feel like it’s probably gonna keep going up and then You know eventually once it does come become a form of quantity, I don’t see anything special in Bitcoin Well, what difference does it make it’s all electronic, right? Yeah, but some of them is some of them are quicker Some of them have more features more benefits things along along the lines of that. Mm-hmm. What’s the best book? For someone just getting in for them to start one of the dead folks I read was Trading for a living. I don’t remember the author’s name. Okay Trading for a living. Yeah, I think that’s that’s actually a very good book I’ll link that in the description is actually my very good book with my Amazon link Yeah, that’s that’s actually a very good book train : you have a million dollars in cash or assets or now stocks right now my brokerage account I have 600 in my brokerage account from building that up and I I constantly keep taking it out now I have other cash that I’m sitting on. Mm-hmm where I’m looking to invest but now this is my dilemma with investing right now I personally feel like the markets going to crash well within the next year or two Doing all right, and I feel like it’s very extended So what I want to do is I’m trying to accumulate a lot of cash. Yeah, and Save it purchased, you know a lot of stuff at that time How why do you think is gonna crash? I just feel like it’s very extended it’s it’s for extending yourself out like it’s it’s kind of like a Extent, what’s I mean? so we we we’ve went through we went through cycles in the market where You know when the market runs for a very long time it needs to pull back or come into recovery mode recession But not a session, but it needs it needs to come into mode for recovery mode that hasn’t happened but now the factors I think that’s going to drive us into hitting recession or – one is Student loans. Yeah student loans are it’s a very high and they’re not. Yeah, I don’t see them getting paid back There’s no jobs out there for them to get paid back Yeah, and second auto loans auto you can literally anyone can go buy any car without having any proof It’s the same thing that happened with the housing market in Oh seven, you know you don’t need to provide proof of income and proof of employment anything. So people are You know putting on more depth on them and they’re they’re purchasing these vehicles which is kind of out of their reach So I feel like that market is kind of Oversaturated so then we’re gonna need another bailout from the government. Uh, We got to see what’s gonna happen, I just feel like it’s everything is building up And as soon as one thing is pulled out anything’s gonna fall anything. That’s like I Ivan We’re so a year two years and this is a crazy part. I think the only reason it hasn’t happened sooner it’s because of Trump Wow, I think Trump has been doing a great job with the Like Peter car. Yeah. No, I don’t know agree with a lot of stuff he does but with the economy I think he has been bringing it up You know, if you look if you know this with the market and housing market, everything’s been going up. That’s a great office. Yeah Hmm. What are some I guess techniques So some techniques that I feel like a lot of people mess up on. Mm-hmm is people go right into indicators Such as the RSI MACD and they look at that to buy or sell stock I think you should gather as much as information as you can from the chart. Mm-hm and see the trend Stop see what direction the stock is going yet, like did a feeling so it’s kind of like this It’s kind of like this. Right and this is like the easiest to explain it So think about it as in you’re driving from here to New York Right, so if you’re driving from here to New York You’re gonna take breaks, right? You’re gonna you’re gonna because it takes for three days, I think Mm-hmm, right, so you’re gonna take gas stops. You’re gonna start to sleep and things of that nature. I Stock is very similar You have to understand where it’s headed. You have to know. Hey the stocks headed from here to Miami here to California I mean here to New York here to Philadelphia. Whatever. What is the trend? What is the direction the stocks going yet? How do you know where it’s hurting? All right, when you look at the chart it shows you if it’s going up or down so there’s really three directions There’s an uptrend meaning starts going up There’s a downtrend meaning the stock is on its way down and there’s a sideways trend and use trading between a range Okay. So once you understand the overall Trend of the stock. Mm-hmm. Now your job is to focus on when it’s gonna take a break. Yeah When is it gonna pull over for a gas stop when is again? Uh, but when is the person gonna sleep when is when it’s stopping to sleep for quite some time? Mmm That’s the next step. You have to look at What people do is they look at look at the RSI or MACD or technical indicators, but they don’t know the trend They don’t know where the car is going Yeah, if you know where the car is going It makes the whole process that much easier you think Tesla will keep going up Tesla’s very tricky Yeah, very tricky very tricky because um Elon was very tricky. Yeah. He just started some shit like a week ago Yeah, he made that he made the tweet. Yeah, the tweet is uh, He’s gonna get in trouble for that. I feel like he shouldn’t he can’t really make that tweet. He couldn’t put that tweet out I didn’t even see the tweet. I just saw like an article He just wants to go private private But you can’t announce it because now what if they really are going private let you say hmm It’s gonna boost up the stock price to four or fifteen or whatever. He’s taking in private at so now Anyone can literally buy the stock and make money off it if they go private Wow, which is why he shouldn’t have made that tweet Yeah, it goes against SEC rules for him to do so SCC SEC there, they’re like the cops of the stock market Wow What are some no nose for SEC like insider trading? I had biggest one insider trading, uh People get two people to do it people get away with it. Well, that’s a big no-no Yeah, you can go to like prison. Yeah, a lot of people have you done any shady shit. I Don’t know Yeah, great. Great place to ask that. Yeah a lot of ah No, I’ve gotten there’s actually a funny story about that There’s actually a funny story about about that thing with the company. I’ll talk about it right now. Mmm-hmm So, yeah, actually I didn’t do anything shady, but I did get into trouble for something. So this was two years ago and There’s a company called Sun works right there. They they work with solar solar panels and snoring so what I did was I was invested into a stock and the company was getting a project from Fresno a ten million dollar project Mm-hmm, but nobody knew about the project. How did you know, so now I knew that they’re bidding with the city They’re bidding with the state. So if you’re bidding with the state or city, it’s available to the residents Right, so I figured that out that it has to be somewhere out there So I kept digging digging digging I made accounts in this and that to you know Get access to the bidding portal and I finally got access Right and I saw that they actually benefit ten million and they had the job Where I messed up was I actually posted it on StockTwits so StockTwits is a Twitter for stocks, stock trade Yeah, so I posted it on StockTwits. Now what happened the people on StockTwits started calling him Fresno They started saying hey when we’re not there gonna win the job When are they gonna get the project bla bla bla and now they got fed up with it Because they’re dealing with the public company so they cancelled the contract Now as they cancel the contract the stock plummeted. Yeah, and now I get a call one day from this CEO of the company Right his name was Jim. He… and I remember I was driving and I get a call from like a California number and I’m like California and I pick up he’s like hey This is Jim. Is this Umar speaking? This is Jim from Sunworks Yeah. Hey Jim. He’s lke yeah how you doing? How’s everything? I just wanted to update you about Fresno You know, we’re still working with them, but you know, please stop posting stuff It’s like it’s really getting to them and they’re there. They’re probably not gonna give us the project if they keep getting bothered So, please stop putting information out there and please don’t tell anyone I even called you so That was really it but that that wasn’t anything with SEC but uh that that turned out to be a huge thing How did you first hear about some words? I was just trading it just popped up you scanned So you do something called scanning when you scan you’re looking for certain indicators certain stocks? So when I was scanning some Brooks popped up. Yeah as it popped up was it kind of like a penny stock? No it was This is thing with penny stocks lot. Uh The the actual term of penny stocks or any stocks under $5, right, right I look at penny stocks anything under a dollar. So it just depends on where you’re going And with the stop is priced around 250 280 at the time So technically yes, it was a penny stock. But in my book it wasn’t couldn’t you like post like, oh, I think So and so is going down on stock twits and be like not a better sell like people do that Try to get people people do that. That’s why if you’re somebody that gets influenced by others easily Yeah, stay away from stock – it’s okay. Because now if you’re going to stop – it’s you’re gonna see crazy comments Hey, the stocks can go to 10. The stock can go – ah, yeah, so anyone can say sure Yeah, so what’s the point of stock twists? There or there is that 10% Of stuff that that is valuable out of the hundred Yeah, there’s very few stuff that is value like somebody does research and they find something so they post it But it’s very little little stuff. So it sometimes what did you go through it with your knowledge. You can come. Yeah Yeah filter out all the bad stuff. You have any other investments? Uh I have stock market lab I am working on an app I do have money, you know into tech stuff that I don’t make no I really can’t speak about right now Okay, they are like I’m trying to get into tech industry. It’s related to investing know It’s it’s it’s yeah, it’s a game. Yeah I want to make it like it just a simple like yeah Yeah blowing up insane I have like a like eight youtuber friends that have their own like a little game app Yeah, there’s this that app call. What’s that? What’s that company called? Twitch. Twitch is blowing off Yeah, but just blown up. I’d still need to get into that which is it’s insane for unit. Twitch man. That’s that’s something else Hmm, you have some stalking twitch note Which is owned by I believe Twitter know Amazon Amazon owns him Amazon owns twitch, okay They the Amazon bought at twitch. So Amazon owns. And so if you own twitch you own Amazon. Yeah Amazon I heard took him like 10 years to be profitable No, they were profitable all the time. Only thing is they would take the profits and reinvest it right all in a research and development You have some stock in Amazon. I traded it, but I’m not really I don’t long-term I’m not I’m not even anything long time right now. How did you find me through just three? I actually yeah III was watching YouTube and and you came up and I saw you into because I remember I saw you and YouTube Three years ago. Yeah, ah, are you doing something completely different new pranks? Yeah pranks and stuff and then I I saw you on YouTube for you were doing interviews and then I saw with real estate and this and that and I was like, oh Let me reach out to you cool, right? That’s how I can cause you yeah, I appreciate it. No, I appreciate you man Thank you. Um, I need any last words anything you want. Shout out your Instagram uh, yeah if you guys have any questions about stocks or you know, I want to ask me anything you guys can my Instagram is Omar uh sure if you ma are a sh RAF or almost Yeah so you guys can DM me ask me any questions you guys have about stocks and I’ll To help you guys out as much as I can sweet Well, yeah, that was totally wraps it up. Yeah. Thank you so much Thanks for watching. Thanks for subscribing. Let us know what you think of everything we talked about here and I will see you next week

How to Convert Google Sheet into Skype Call Center


Hey guys. I’m Vasiliy Smetanin and today
I’m going to demonstrate you how to convert Google spreadsheet into their
call center. So like we are using Skype as call service and that’s what you need
to do. So basically you can use direct number or you can use a link to some
cell in a shape. So in our case it’s a tune. I will add this link into
description so you can edit and organize. If I want to move the the number I just
need to specify where it’s located So in this case it’s going to be 5. Let’s try it So let’s check It works awesome,.So guys I hope it was
helpful and you are going to use this trick to organize your calls and Vasiliy
Smetanin thumbs up subscribe to this channel and I hope you will find the
link and you find this video positive for you and get more organized

The Business Deception That Cost $60 Billion


An American worker named George had his sights
set on a comfortable retirement, perhaps some holidays in the sun, relaxing in the garden
with good novels and a gin and tonic by his side. And then when the company he worked
for, the energy giant called the Enron Corporation, collapsed in front of his eyes those plans
went up in smoke. Years later he was mowing pastures when he should have been living on
his retirement savings, which had been mostly tied up in Enron company stock. No one ever
thought such a behemoth of a company could just go belly-up. It was a story that shocked
the world, one involving mismanagement, corruption and greed. This is what happened. In its heyday Enron was one of the largest
companies in the USA. At its peak its shares reached $90.75, and when it declared bankruptcy
in 2001 they were worth $0.26. Few saw it coming, and to this day the downfall is a
reminder to us all that indeed giants can fall, and on top of that, giants aren’t
always what they seem. The story starts in 1985 when two companies
merged. They were Texas-based Houston Natural Gas Company and Omaha-based InterNorth Incorporated.
At the beginning the new Enron was simply a very big natural gas supplier, but then
in 1989 it turned a leaf in its book and began trading natural gas commodities. In 1994 it
also began trading electricity. These changes took place under its new CEO Kenneth Lay,
who had formerly been in the big chair at Houston Natural Gas. At the time Enron was
said to be one of the most innovative companies in the USA, but at the time of the downfall
the New York Times wrote, “Enron is a new-economy company, a thinking-outside-the-box, paradigm-shifting,
market-making company.” It added to the end of that paragraph, “It is also, at this
point in time, a bankrupt company.” As the story goes, before Enron got started
gas and electricity were produced and sold by state-regulated monopolies. But then there
was deregulation, and as the Times writes, “Enron used Wall Street magic to transform
energy supplies into financial instruments that could be traded online like stocks and
bonds.” Prior to this, those energy monopolies were always under government scrutiny, but
after deregulation Enron had more freedom and so started trading energy online, such
as stocks and bonds, and also placing bets on future energy prices. Enron started selling
contracts, called energy derivatives, to investors. Soon Enron was called “America’s Most Innovative
Company”, and it won that accolade for a number of years. At the time this looked good for
the consumer, because with supply and demand taking over fixed prices by monopiles, the
prices for customers seemed fair. It seemed like a dream story for capitalism. There was a problem, though, and something
didn’t quite add up. You see Enron thought that if it could trade
energy, then why not trade all kinds of other things, such as insurance or advertising and
then turn these into contracts and sell them as derivatives, too. The company poured billions
into these new trading ventures, but not everything turned into gold. It later turned out that
while Enron was winning on some levels, it was losing on others, but the problem was
it wasn’t always coming clean about where it was losing. It was kind of fixing its accounts
and reporting false trading revenues. As one person pointed out, “Some of the schemes
traders used included serving as a middleman on a contract trade, linking up a buyer and
a seller for a future contract, and then booking the entire sale as Enron revenue. Enron was
also using its partnerships to sell contracts back and forth to itself and booking revenue
each time.” It was in fact creating imaginary revenues. If that is confusing to you, The Wall Street
Journal gave an example of one such piece of Enron subterfuge. Enron got into a deal
with Blockbuster, those guys whose stores you’d go to in the past and rent out a movie.
The new deal with Blockbuster was to do this online. But it didn’t work out, and in eight
months the business was a total flop. While this was going on Enron had made a deal with
a Canadian bank. If the bank loaned Enron $115 million, Enron would then hand over its
video deal profits for the first ten years to the bank. As you know, Enron made no cash
from this online video renting business with Blockbuster, but it still wrote the $115 million
down as part of its revenue, not a massive loss. The Canadian bank was owed money, but
on paper things didn’t look bad for Enron. According to the New York Times, Enron did
a fair bit of shady accounting and still Wall Street bankers at J. P. Morgan, and others,
were gung-ho about the company and its stock. Some people, however, began to smell a rat. The thing was, Enron was also seen as a fairytale
winner in the years when deregulation and online trading, embodied by a get rich quick
culture, were admired by everyone. Leave the innovators alone, this is the future. But
things got out of hand, as they tend to do when in Hobbesian terms the “Leviathan”
goes missing and no one is watching over the people to ensure nothing terrible is happening.
Enron also invested heavily in high-speed broadband telecom networks, but the company
saw no profits from that, either. The most innovative company in America was on a losing
streak, but still those losses were not reported. It was hiding all its financial losses, using
something called mark-to-market accounting. Investopedia explains that like this, “This
technique measures the value of a security based on its current market value instead
of its book value. This can work well when trading securities, but it can be disastrous
for actual businesses.” Another example given of the Enron way of
hiding losses is this. If the company bought a power plant it would first put the projected
profit on its books. That’s a projected profit, meaning nothing has actually been
made. If then Enron actually didn’t make a profit but a loss, it would transfer the
loss to an off-the-books corporation somewhere no one would find it. This way Enron’s bottom
line didn’t look affected and everyone still thought the company was booming, when in fact
heavy losses were being incurred and then hidden like soiled underwear at the bottom
of a laundry basket. Enron used something called off-balance-sheet special purpose vehicles
(SPVs) to hide these failures, but all you need to know is that this is a technique that
can be used to fool investors and creditors. The experts tell us this is not illegal, but
it can be dangerous. At the same time, not everyone understands how they work, so it
could be said to be slightly unethical if companies are not completely transparent about
it. And then the bubble burst, as bubbles tend
to do. By April 2001 analysts were on to Enron, they saw what was happening, realizing that
accounting wizardry had been creating a company not unlike the fantasy city of Oz. Behind
the screen Enron was crumbling, and by summer 2001 the company was in freefall. Its stock
was downgraded, sinking like a stone into the abyss. By 2000 it was revealed that Enron
had losses of $591 million and $628 million in debt. In 2001 the company filed for bankruptcy,
and a lot of poor folks whose pensions were tied up in company stock were going to have
to cancel their dream vacation in the Caribbean. From 2004 to 2011 the company paid $21.7 billion
to its creditors. It’s said shareholders lost in total around $74 billion and employees
lost billions in pension benefits, with one such person being the guy we mentioned at
the beginning of this story. There were many, many more like him. Some of the executives were charged with conspiracy,
insider trading, and securities fraud. The CEO we mentioned died of a heart attack before
he could face any prison time. Others did time for facilitating corrupt business practices.
Another CEO, Jeffrey Skilling, was only just released from prison. Do you think government regulation of markets
is good or bad after watching this video? Let us know in the comments! Also, check out
our other video How Jeff Bezos Gets His Money From Amazon. Thanks for watching, and, as
always, don’t forget to like, share and subscribe. See you next time.

A Day in the Life: NYU Stern School of Business Student


– My name is Jennifer. I’m at NYU Stern Class of 2020. I’m concentrating in Finance
with a minor in Studio Art. Outside of school I really
love exploring New York. There’s always really exciting things on from cool bands to restaurants
and bars to explore, so I really never get bored. (jazz music) So this is my room, there’s
not a whole lot to see because no one has particularly big or
cool rooms in New York. But, pretty standard, I’ve
got a bed, some plants. There’s a lot of art around
because I really love art, and I’m doing a studio art minor. You can see a couple of pieces that I’ve been working on this semester, so I’m currently taking
a oil painting class, and we’re focusing on portraiture. So those are two girls in
my class that I painted. (bright music) So, a typical Monday for me,
I wake up around 7:30 a.m. I walk to the deli. I usually grab a double
bacon egg sandwich, and then I head to my art class where we do oil painting
for about three hours, maybe grab lunch with a couple of friends, or at 3:30 I have a finance class and then probably for
the rest of the evening I would just be either
working or studying. And I usually get to bed, it’s pretty bad, past one a.m. to be honest. (light music) This is one of my
favorite spots on campus. Not many people know about it, but once you go inside and walk through this
little restaurant area, there’s actually this
beautiful green house with a fountain and these
gigantic colorful lamps that you can sit under. So sometimes I’ll just come here and study by myself or with my friends and eat the pizza which
is all cooked in house. (light music) Cool, so we’re currently
in Washington Square Park. This is really NYU student’s
equivalent of a quad, so people really just come out here to hang out with their friends
and enjoy some of the music. There’s a lot of jazz band
pop-ups and artist pop-ups. You get really famous artists. You get incredibly talented, like Julliard trained musicians. It’s kind of incredible, I
really love spending time here. – This is so neat though. It’s like an amusement park. – Yeah, it really is, it’s
like endless entertainment. Here we are at the Sterns
School of Business. I’m about to walk into my favorite class, called the International Studies Program. What’s really cool about this
particular program at Stern is this really very
generous alumni family, actually every single year they sponsor all the juniors to fly
to a different country. So this year, I got to choose between Hong Kong, Lima, and Copenhagen,
and I chose Copenhagen. And yeah, so basically
the alumni are paying for my flights, for
nice hotels for a week, and, yeah, I’m really excited. I’m really looking forward to it, so (points toward building). (light music) – Broadly speaking, what is
the curriculum like at Stern? Like, what does everyone need to do and then what is more specialized, like you might choose to do? – So, at Stern is a really large core, and the idea of this is, as I mentioned, just to provide a really strong foundation for being able to go out
and either start a business or thrive in a business space and understand finance and economics and statistics and how everything works. – [Interviewer] Right – So there is a really
large core curriculum, but I think what’s really interesting, and maybe people don’t always understand, is there’s also this sustainable
business slant on it. – Cool, are there specific
tracts within finance for somebody who wants to
go work in the hedge funds, somebody who wants to
work in private equity or in, I guess, asset management or some other finance-related career? – Yeah, so we have a
lot of specific classes geared towards those different areas. So actually one of the
most famous classes here is with a professor who’s kind
of well-known on Wall Street as the King of Beta or basically it’s just this kind of technical
concept for valuation. So, everyone wants to take his class. He’s like kind of a superstar, known all over Wall Street
and finance circles. So, you really have access to world-leading, industry-leading
talent and research. – [Interviewer] So where are we now? – We are currently in the
NYU Steinhardt Building. NYU Steinhardt is the
School of Arts and Culture, so there’s a really wide range of things that people do here, and
one of them is studio art. So, there’s a really
broad range of things that that encompasses, so you can do anything from what I’m doing, which is oil painting to sculpture, photography,
even like pottery. – [Interviewer] So, is it
common for students at Stern to take classes outside of
Stern and to get minors, or even I guess majors,
outside of the program? – Yeah, it’s really common, and I think Stern does its
niche subjects really well, but because people want to explore things beyond business and finance and a little bit of math and things. People do get really excited about doing things like art minors. – [Interviewer] So you really have access to all the NYU schools basically? – Yeah, yeah, I think you still need to apply and everything
individually and be accepted, but yeah a lot of people are also doing computer science or math at Courant. – So what draws you to visual art? – I think just the feeling of
when I’m creating something that hasn’t been created before, and I know I can just
take it anywhere I want, and also the feeling that I get when I’m looking at something
that someone else has created that’s really amazing and awe-inspiring or technically beautiful. You know the technical skill
involved is really amazing. Just really that feeling
brings me so much happiness, and I’ve loved art since I was a kid, so I feel like I’m kind
of living the dream. (jazz music) – So, what has the transition been like from NYU’s College of Arts
and Sciences to NYU’s Stern? – Yeah, I think there’s two
really large differences, well actually there’s a number
of really large differences, but I would say the two largest ones are probably the type of people. So at the College of Arts and Sciences, there’s a really wide range of people, so you have people from all sorts of different
ethnic backgrounds and who plan to pursue a
lot of different interests, but I think at Stern there’s a little bit less ethnic diversity and people are generally quite
focused on one of two tracks. So there’s a lot of
people going into finance. – [Interviewer] Okay – About 75% of people
at Stern study finance, and I wouldn’t say tunnel vision, but there’s just a really large focus, the entire school’s really
geared towards finance. – [Interviewer] I see. – And, in the College
of Arts and Sciences, I think people just think
a lot more holistically about what they’re interested in, about what careers they want to pursue. – [Interviewer] Mmhm, gotcha. What would you say surprised
you the most about Stern? – Honestly, I was a little
worried about going into Stern because people like to portray
it as this hyper-competitive, I don’t want to say unfriendly atmosphere, but yeah I hear a lot of
people describing Stern with these negative terms. And so going into it from
the outside I was like, is this really a place I wanna be? – Right – But going in, it was
actually the opposite. Yes there is a small minority of people who are too competitive
and a little cutthroat, but, as with any school, you just avoid those people and you just hang out with the nice ones. – Yeah – I’m originally from
Auckland, New Zealand, and I love it there, but
it’s very kind of small versus coming to a
global hub like New York. – [Interviewer] Right. – Endless culture and endless fun. Yeah absolutely, I would say do it. (jazz music) If you like this video, and you want to see more
videos about top colleges, don’t forget to like and subscribe. And, if you want to
see more about my life, then follow me on Instagram
it’s just thats wright which is thats underscore,
underscore, underscore w-r-I-g-h-t. (jazz music)