Trump on GM strike: Nobody is better to auto workers than me


THAT. I THINK WE HAVE A WAYS TO GO YET. REPORTER: DO YOU STAND WITH THE AUTO WORKERS IN THE GM STRIKE?>>I HAVE A GREAT RELATIONSHIP WITH THE AUTO WORKERS. I GOT TREMENDOUS VOTES FROM THE AUTO WORKERS. I DON’T WANT GENERAL MOTORS BUILDING PLANTS OUTSIDE OF THIS COUNTRY. THEY BUILT MANY PLANTS IN CHINA AND MEXICO. I DON’T LIKE THAT AT ALL. MY RELATIONSHIP HAS BEEN VERY POWERFUL WITH THE AUTO WORKERS. NOT NECESSARILY THE TOP PERSON OR TWO, BUT THE PEOPLE THAT WORK, DOING AUTOMOBILES, NOBODY HAS EVER BROUGHT MORE COMPANIES INTO THE UNITED STATES. YOU KNOW I HAVE JAPAN AND GERMANY AND MANY COUNTRIES HAVE BEEN BRINGING CAR COMPANIES IN, OPENING PLANTS, EXPANDING PLANTS AND BIG THINGS ARE HAPPENING IN OHIO, INCLUDING LORDSTOWN, MOVE POSITIVE THINGS ARE HAPPENING. WE HAVE MANY PLANTS THAT ARE BEING RENOVATED EXPANDED OR BUILT NEW RIGHT NOW IN THE UNITED STATES, MANY MORE THAN WE’VE HAD FOR DECADES, DECADES. NOBODY HAS BEEN BETTER TO THE AUTO WORKERS THAN ME. I WOULD LIKE TO SEE IT TO WORK OUT BUT I DON’T WANT GENERAL MOTORS BUILDING PLANTS IN CHINA AND MEXICO. THIS IS BEFORE MY WATCH. I DON’T THINK THEY WILL BE DOING THAT. I THINK I HAD MEETINGS WITH MARY BARRA, HEAD OF GM. AND I DON’T WANT THEM LEAVING OUR COUNTRY. I DON’T WANT THEM BUILDING IN CHINA. I DON’T WANT TO BUILD THEM IN OTHER COUNTRIES. I DON’T WANT THESE BIG, MASSIVE AUTO PLANTS BUILT IN OTHER COUNTRIES AND I DON’T THINK THEY WILL BE DOING THAT ANYMORE. GENERAL MOTORS MAKES MOST OF ITS MONEY IN THE UNITED STATES AND TOO BAD THEY SPENT BILLIONS AND BILLIONS OF DOLLARS OUTSIDE OF THE UNITED STATES BEFORE I GOT HERE. ONE OF THE THINGS VERY IMPORTANT IN THE USMCA WHICH WE HAVE TO HAVE APPROVED FOR, NOT ONLY FOR THE UNIONS BUT FOR THE AUTO WORKERS BUT FOR THE FARMERS AND FOR THE MANUFACTURERS, EVERYBODY, EVERYBODY WANTS USMCA. IT IS VERY IMPORTANT EVEN MORE SO NOW THAN IT WAS TWO WEEKS AGO

Trump quits Iran nuclear deal, undoing years of diplomacy


The Iran deal is defective at its core.
The United States will withdraw from the Iran nuclear deal. Trump has been saying
he wants to exit the Iran nuclear deal for a long time. A deal that has so far
prevented Iran from developing nuclear weapons. The United States no longer
makes empty threats. When I make promises, I keep them. This is a massive reversal
of US foreign policy with far-reaching consequences. So why does Trump hate the
deal? What exactly does he want and how did we get here? This was something that
President Obama, when he took office, said was his priority and when it was signed
in 2015 this was the high mark of his presidency. It’s also interestingly
something that the US had been involved in for decades. When the Shah was in
power in Iran the US had helped him develop a civilian nuclear program. There was concern decades later that the new government of Iran was gonna try to
take that program and develop a nuclear weapon. This deal, the deal that President
Trump just pulled out of, was the world’s attempt to prevent war and to get Iran
to stop that pursuit of a weapon without forcing it to. So that’s ultimately how we got to the Joint Comprehensive Plan Of Action, the formal name for the Iran
deal, signed not just by Iran and the United States, but also the UK, France,
Germany, Russia, China, and the European Union. At its broadest, the deal imposed a
set of restrictions on how Iran developed nuclear capabilities in
exchange for the U.S.. reducing economic sanctions. Now the way the JCPOA was
structured the president recertified it every 90 days or those sanctions would
kick back in. Trump had threatened this outcome for months but is just now
enacting it. He thinks the Iranians can’t be trusted,
he thinks the deal is not strict enough, and he thinks that Iran isn’t abiding by
the spirit of the deal because they’re doing things like develop long-range
missiles. The thing is three of Trump’s own top officials were very much in
favor of the deal but only one still holds their office. If we can determine that this is in our best interest then clearly we should stay with it. Americans agree with the Secretary of Defense — a recent poll shows a majority
of respondents back the agreement including 68 percent of Democrats, 51
percent of Independents, and even a slim plurality of Republicans, 46 percent,
supported the deal while 42 percent opposed it. And America’s allies strongly
urged the US and Trump to stay committed to the deal as well. What do you have as
a better option? I don’t see it. What is the what-if scenario or your
plan B? I don’t have any plan before nuclear are against against Iran. We are of the opinion that the JCPOA is a first step but Trump believes he can negotiate
better terms. They are going to want to make a new and lasting deal, one that
benefits all of Iran and the Iranian people. The original deal imposed strict
limits and monitoring of Iran’s nuclear program. Iran was forced to get rid of
the vast majority of the uranium it had already enriched, as well as get rid of
most of the centrifuges that it used to enrich that uranium. Under the deal Iran
also couldn’t enriched uranium past the threshold for producing nuclear energy,
which is significantly lower than the threshold from medical uranium and
weapons-grade uranium. The UN’s nuclear agency has verified that Iran complied
with the deal which is also what makes the U.S. leaving so significant,
especially right now on the cusp of negotiations with North Korea over its
own nuclear program. In fact at this very moment secretary Pompeo is on his way to
North Korea in preparation for my upcoming meeting with Kim Jong-Un. But here’s the thing: if you’re the North Korean government and especially
if you’re Kim Jong-Un and you’re watching what just happened with the
Iran deal, why would you believe that if you struck a deal with President Trump
that the next president would stick to it? If you’ve just seen literally the
United States tear up the previous deal they’d signed with the country to get
that country to give up its nuclear program and that’s why President Trump’s
decision to plow Iran deal is so dangerous. Europe believes the deal works. European companies are doing business with Iran. So this isn’t just a blow
diplomatically it’s also a blow financially to many of our closest
allies around the world. Mr. President, how does this make America safer? How does this make America safer? Thank you very much. This will make America much safer.

Trump officials visit California to study homelessness crisis


KRISTINA: HELP FOR CALIFORNIA’S HOMELESS. PRESIDENT TRUMP REPORTEDLY SENDING A DOZEN AIDES TO LOOK INTO THE GROWING HOMELESS CRISIS IN CALIFORNIA. A WHITE HOUSE SPOKESPERSON TELLING “NEW YORK TIMES” QUOTE, THE PRESIDENT HAS TAKEN NOTICE OF THE HOMELESSNESS CRISIS, PARTICULARLY IN CITIES AND STATES WHERE THE LIBERAL POLICIES OF OVERREGULATION, EXCESSIVE TAXATION AND POOR PUBLIC SERVICE DELIVERY ARE COMBINING TO DRAMATICALLY INCREASE POVERTY. LIZ, DO YOU FEEL — IT’S NO DOUBT AN ISSUE. DO YOU FEEL THE ADMINISTRATION SHOULD BE PARACHUTING SOME AIDES IN TO COME UP WITH A QUICK FIX?>>I THINK SOMEBODY SHOULD DO SOMETHING. THERE ARE 130,000 PEOPLE IN CALIFORNIA THAT ARE HOMELESS, MOST OF THEM LIVING WITHOUT ANY SHELTER WHATSOEVER. THIS IS A BLIGHT ON THE NEIGHBORHOODS, PARTICULARLY IN L.A. AND SAN FRANCISCO. BY THE WAY, IT’S A HEALTH HAZARD FOR THE ENTIRE COUNTRY. THERE ARE OUTBREAKS OF DISEASES, MEDIEVAL DISEASES LIKE TYPHUS TAKING PLACE BECAUSE OF RATS OVERRUNNING THESE FILTHY ENCAMPMENTS. THIS IS A TRUE STORY. NOT SOUNDING HYSTERICAL ABOUT IT. SOMEONE NEEDS TO DO SOMETHING. I DON’T KNOW IF THE FEDERAL GOVERNMENT WILL HAVE SOME SOLUTIONS, HAVING STUDIED THIS. CERTAINLY THE LOCAL GOVERNMENTS WHICH HAVE RAISED ABOUT $1.5 BILLION TO TRY TO COME UP WITH SOME SOLUTIONS HAVE FAILED MISERABLY. SO I WOULD SAY POLITICALLY, PROBABLY THE PRESIDENT IS HOPING TO SHINE A LIGHT ON WHAT IS ABSOLUTELY A DISGRACEFUL SITUATION AND HUMANITARIAN AID REALLY SHOULD BE CONSIDERED HERE REALLY SHOULD BE CONSIDERED HE E HERE, OR SOME SORT OF FIX IN TERMS OF ADDING TO HOUSING IN THE NEIGHBORHOODS OR WHATEVER. I DON’T THINK THIS IS SOMETHING THAT THE FEDERAL GOVERNMENT SHOULD IGNORE.>>WELL, I THINK IT’S ALSO THE AID OF MENTAL HEALTH HELP BECAUSE I THINK THAT’S ONE THING CALIFORNIA HAS IGNORED. YOU GUYS TALKED ABOUT THE MONEY THAT THEY HAVE RAISED, IT HASN’T MADE IT TO THESE FOLKS, ONE WAY OR ANOTHER. THE SOCIAL SERVICE DELIVERY. ONE OF THE ISSUES, MAYBE CALIFORNIA JUST WANTED TO TURN A BLIND EYE TO IT OR WHATNOT BUT A LOT OF THESE FOLKS OUT THERE NEED MENTAL HEALTH HELP, IF ANYTHING TO GET OFF THE STREETS TO GET SOMEWHERE WHERE THEY COULD GET RECUPERATED. SO IN THE SENSE OF THE FEDERAL GOVERNMENT COMING IN, IF THEY KNOW THAT GOING IN, MAYBE THAT’S THE BETTER SOLUTION THAN WHAT CALIFORNIA HAS BEEN TRYING OR NOT TRYING TO DO SO FAR.>>WELL, CLEARLY THERE’S A MENTAL HEALTH ISSUE BUT ALSO, IT’S A HOUSING ISSUE IN THE SENSE OF ZONING. IT’S MADE IT IMPOSSIBLE IN CALIFORNIA AND ELSEWHERE IN THIS COUNTRY TO PUT UP AFFORDABLE HOUSING. SOME CITIES, SURPRISINGLY CHICAGO, YOU DO HAVE A VARIETY OF HOUSING THERE FOR PEOPLE WITH DIFFERENT INCOMES BUT IN NEW YORK, CALIFORNIA AND ELSEWHERE, THEY MAKE IT ARTIFICIALLY EXPENSIVE. THEN WHY DON’T THE CITIES DO MORE TO MAKE SURE THESE PEOPLE AREN’T SITTING ON THE STREETS? WHY DON’T THEY PROVIDE TEMPORARY SHELTERS? THEY ARE IGNORING IT AND THEN THEY BLAME WASHINGTON. GIVE US MORE MONEY, WE KNOW THE MONEY GOES TO WASTE. KRISTINA: GARY, DO YOU FEEL LIKE IT’S THE RIGHT ANSWER TO BE PUTTING THE HOMELESS POPULATION INTO GOVERNMENT FACILITIES? BECAUSE THAT WAS A PROPOSED SOLUTION AND THEN THE FEAR, THIS IS BASED OFF COMMENTARY I’M READING ONLINE, THE FEAR IS THAT THE ADMINISTRATION IS GOING TO TREAT THE HOMELESS LIKE ASYLUM SEEKERS AND JUST PUT THEM INTO THESE BUILDINGS AND PUSH THE PROBLEM ASIDE.>>I THINK PRIVATE/PUBLIC PARTNERSHIP HERE IN CENTRAL FLORIDA WE HAVE THE COALITION FOR THE HOMELESS THAT DOES A MARVELOUS JOB OF AT LEAST GETTING THEM OFF THE STREET, GETTING THEM INTO HOUSING AND GETTING THEM SOME MEALS. THIS IS AN ABSOLUTE SIN THAT YOU CAN FILL ALMOST ONE AND A HALF ROSE BOWLS WITH HOMELESS PEOPLE IN CALIFORNIA AND IT JUST SEEMS, LOOK, I’M SURE THEY DON’T WANT HOMELESS, BUT IT SEEMS NOTHING’S GETTING DONE. IF I WAS THE PRESIDENT OF THE UNITED STATES, I’M NOT SO SURE I WOULD SEND 12 PEOPLE THERE. I MAY SEND 50 PEOPLE THERE, BECAUSE THIS IS AN ABSOLUTE SIN THAT ONE PERSON IS LIVING ON THE STREET WHEN YOU ARE CALIFORNIA AND YOU ARE SUCH A RICH STATE

Will the Saudi oil attack push China to the negotiating table?


CONNELL: SO COULD THIS BE WHAT BRINGS CHINA TO THE NEGOTIATING TABLE IN A SERIOUS WAY? CHINESE INVESTORS FEELING THE SQUEEZE, AS SPIKING OIL PRICES COULD HIT THE WORLD’S LARGEST CRUDE OIL IMPORTER AS THE TRADE TALKS BETWEEN WASHINGTON AND BEIJING START AGAIN THURSDAY AT THE DEPUTY LEVEL IN D.C. FRANK LABOTT IS HERE, EXPORT NOW CHAIRMAN AND CEO, FORMER UNDERSECRETARY OF COMMERCE, LIVED AND WORKED IN ASIA FOR YEARS AND I BELIEVE JUST CAME IN FROM SHANGHAI, AS A MATTER OF FACT. GOOD TO SEE YOU AGAIN, FRANK. WE HAVE BEEN ASKING ALL THESE QUESTIONS ABOUT POOR ECONOMIC DATA, MAYBE A SPIKE IN OIL PRICES, WHETHER THESE THINGS HURT CHINA ENOUGH TO MAKE THEM WANT TO DEAL. WHAT DO YOU SAY?>>LOOK, IT DOES CONTRIBUTE TO DOWNWARD PRESSURE ON THE CHINESE ECONOMY AND I THINK CHINESE LEADERSHIP IS VERY MINDFUL OF THE SORT OF AGGREGATE COST OF A TRADE WAR AND IT’S A PRICE THEY DON’T NEED TO PAY RIGHT NOW BUT I’LL TELL YOU SOMETHING ELSE. THEY HAVE A MORE IMPORTANT GOAL HERE, WHICH IS TO MAINTAIN THEIR POLITICAL DIGNITY AND MAINTAIN THEIR LEADERSHIP POSITION, MEANING NO CHINESE LEADER CAN BE SEEN AS HAVING CAVED OR GIVEN IN TO OUTSIDE PRESSURE. CONNELL: THAT’S A BIGGER DEAL THAN THE TURN IN THE ECONOMY SUCH AS IT IS. BY THE WAY, WHAT’S IT LIKE NOW, YOU WERE JUST IN SHANGHAI. FOR EXAMPLE, IS IT OBVIOUS THE ECONOMY IS SLOWING DOWN THERE?>>I WOULD SAY SOMEWHAT THE OPPOSITE. IF YOU WERE IN SHANGHAI, THE CITY IS BOOMING. IT’S BUSTLING. IT’S A HUNGRY, DYNAMIC CITY. THE OVERALL GROWTH IN CHINA HAS BEEN UPWARDS OF 6% IN CHINA, IT WILL BE 7%, 8%, 9% ECONOMIC GROWTH. IT’S A VERY DYNAMIC CITY. CONNELL: IN THAT CITY. IN OTHER PLACES, RURAL AREAS –>>YEAH, RURAL AREAS IN CHINA SUFFER FROM A COMBINATION OF BRAIN DRAIN AND THE RURAL AREAS AREN’T GETTING THE INVESTMENT, SO YOU REALLY HAVE A HUGE URBANIZATION OVER THE LAST 10, 20, 30 YEARS IN CHINA WITH YOUNGER FOLKS WANT TO LIVE IN THE CITY, WHO WANTS TO WORK ON THE FARM. WHAT TOOK PLACE IN AMERICA OVER 100 YEARS AGO IS TAKING PLACE IN CHINA IN ONE GENERATION. CONNELL: THAT’S WHY SOME PEOPLE THOUGHT NOW MAYBE OIL PRICES DO GO UP THERE, IT HITS THEIR CONSUMER, YOU KNOW, THEY HAVE BEEN KIND OF HANGING IN THERE, HIT BY OTHER THINGS. AS A FINAL POINT, BIG PICTURE, YOU EXPECT SOME SORT OF DEAL SOON OR ARE YOU IN THE CAMP IT DRAGS ON?>>I THINK, LOOK, I THINK BOTH SIDES KNOW THEY WILL BE BETTER OFF. THEY WILL BE BETTER OFF RESOLVING THIS AND TAKING THAT PRESSURE OFF THE ECONOMY BUT THEY HAVE TO DO SO IN A WAY THAT ALLOWS EACH SIDE SOME MEASURE OF DIGNITY AND TO HAVE SOME SORT OF CONCLUSION ON THEIR OWN TERMS. LITTLE BIT OF QUIET STATECRAFT WILL GET US TO THE FINISH LINE.

Trump Wants Obama Investigated Over Netflix Deal


It’s no secret that Donald Trump is being
investigated for everything under the Sun right now. His hush money payments to a porn stars and
playboy playmates, his emoluments clause violations, his tax returns, his business tax returns,
and pretty much anything else you could imagine. So yeah, the guy’s a little investigation,
uh, you know, tired right now, doesn’t want to deal with it anymore. And he thinks that all of these investigations
are witch hunts. They’re all hoaxes. Just like he claimed the Mueller investigation
was a hoax. Well, yesterday he finally snapped. I guess he kinda hit that point where he just
couldn’t take it anymore and Dang it. He wants the House Judiciary Committee to
look at the real scandals. And the real scandals are Barack Obama’s book
deal and his deal with Amazon to produce some programming for the streaming platform. Those, according to Donald Trump, are the
real crimes that house Democrats better start looking into because yes, no president ever
after leaving office has, you know, cashed in because people want to hear what a president
has to say. Donald Trump’s an idiot. And I can’t say that enough. And I feel like I say it all the time, and
that’s still not quite enough. I mean, obviously this is classic deflection. He’s trying to say, yeah, but look what Obama’s
doing. I’m losing money. He told us on Twitter, he says, I’m losing
billions by being president. But I did it because I wanted the honor of
being your president. Meanwhile, Obama’s out here writing a book
and getting money for it. How? Which one of us is the real crook. Trump wants to know, this is actually what
Donald Trump tweeted. So they say, okay, let’s look at everything
else. And all of the deals that Trump has done over
his lifetime, he’s referring to the fact that Mueller allegedly came up with nothing, but
it doesn’t work that way. I have a better idea. Look at the Obama book deal or the ridiculous
Netflix deal. Then look at all the deals made by the Dems
in Congress, the congressional slush fund, and lastly, the inspector general reports. Okay, let’s look at him. What kind of bad things do they say about
Democrats? Because inspector general reports tend to
be taken pretty seriously. Uh, people do read those. They do make headlines. And as far as I can remember for God, probably
at least the last two years, uh, all the IG reports that have come out have been about
things like, oh, you’re violating the emoluments clause. Oh, members of your cabinet are exceeding
the spending limits and broke the rules. And of course, Kellyanne Conway’s countless
hatch act violations. Those have all come from the inspector general. So if you want us to start looking at those
reports, we have solutely well, because we already have been and we’ve been reporting
on them since you came into office. Obama’s deal with Netflix. I don’t care if you love Obama, you hate Obama,
where you think he’s, whatever. That’s not illegal. The man’s not in office anymore. He’s not funneling money. He’s not laundering money. He’s not getting paid under the table. He’s not committing tax fraud. He’s a former president who was hugely popular
and Netflix wants to capitalize on that by giving him lots of money to go make some programming. There is literally nothing wrong with that. Now, depending on your opinion of Obama, you
may not be happy that it’s happening, but oh well that’s life. Suck it up, buttercup. These things happen. It’s like if George W. Bush got a deal to
start a new sit-com, I wouldn’t sit here and say that it needs to be investigated. I would just say, that’s dumb. I’m not going to watch it, and then I’d move
on with my life and forget all about it, but I guess Republicans aren’t able to do that
are ya, you know, for the group that always likes to whine, that the other side is always
triggered and the other side’s a bunch of snowflakes. You guys sure as hell do seem to dwell on
the most tiny, innocuous little things out there and you let it burrow down into your
skin to where it just becomes this constant irritation that you don’t know how to rid
yourself of. That’s what happened with the Obama Netflix
deal when all those Republicans came out and said, well, I’m canceling Netflix now. bruuuuuuh, I’m not going to do it anymore. Nobody cared, and I’m also willing to bet
nobody actually canceled their Netflix subscriptions. Did you? He just wanted to make a scene because you
hate Obama with everything that you’ve got. The real criminal, the real crook, the real
guy who’s breaking the law. He’s the one still in the White House today,
and I can promise you when he leaves office, nobody’s going to be offering him a buttload
of money to produce some shows for Netflix.

Noam Chomsky – How to Deal with the Trump Presidency


I think it’s extremely dangerous in many ways like the ones I mentioned and others that you’re quite familiar with on the other hand there’s plenty of opportunities that we should bear in mind that the country has become much more civilized in the past 50 or 60 years a meeting like this could not have been conceivable in 1969-70 the kinds of commitment and engagement that you and many others like you are apart committed to is something quite new and there have been many advances and achievement women’s rights civil rights generally rights of gays opposition to aggressions wave of environmental concerns that even exist at that time there’s been tremendous progress that means that struggles today start from a much higher plane than they did not many years ago at the time when Harry was marching in Selma it was a much harsher world than it is today the reason is that plenty of people did commit themselves to constant dedicated struggle and there were plenty of achievements and that goes back in American history no need to review it but the earlier period is one of total horror after all the country was founded on two incredible crimes unbelievable crimes that one ex.. virtual extermination of the indigenous population, its kind of migrant crisis in the kind we don’t think about today and form of slavery which is the most vicious in history and is in fact the basis for a large part of the wealth and economic development of the United States, England, France and others that’s history when Donald Trump talks about making the country great again for many people it wasn’t that great quite the opposite [Applause] But the point is there has been plenty of progress because people facing much harsher conditions than we do didn’t give up that’s an important lesson. Furthermore even the election itself suggests major opportunities. For one thing as you know the Democrats actually had a considerable majority of the vote and if you look at the younger voters, the people who will shape the future they were overwhelmingly anti Trump and even more overwhelmingly pro Sanders [applause] you should also bear in mind what a remarkable phenomenon the Sanders campaign [applause] there’s somebody unknown came from nowhere practically no one in the country knew who he was, he was using words like socialism which used to be a real curse word No corporate support, no media support, no support from the wealthy everything that has always been crucial to winning elections, mostly we have bought elections, had none of it and practically took over one of the two major parties, that could have taken it over if it hadn’t been for shenanigans [applause] It was primarily driven by young people all of these are very hopeful signs, means there are plenty of things that can be done there are opportunities that can be grasped and no time to run through them but there are plenty of them and its really very much in our hands and among the younger of you in your hands to carry us forward in this long long arduous path towards trying to create a civilized society and a decent world. A lot of dicussion in recent weeks about the role of workers, of the working class in this election of Trump’s supposed appeal to white workers and, Harry you know that the civil rights movement, as it was growing and developing needed and was fueled as well by progressive unions like 11 99 and the auto workers and others that give it strength and organization and resources I’m wondering how you’re looking at this issue, cause Noam as you mentioned all the young people the problem is that the young people of the so-called creative classes are increasingly concentrating in the big cities they’re in Seattle and they’re in Chicago and New York and and the issue then is what happens in the rest of the country. You know back in the sixties and seventies we used to say you gotta go back out and organize organize in the communities from which you came from How do you see this whole analysis of quote: “loss of the working class”, to sort of progressive politics that we’re hearing in the commercial when the corporate breast.. Well take a look again at the last few elections. In.. Many of the Trump voters among the white working class voted for Obama. They were deluded by the slogans of the campaign, you may recall that the 2008 campaign was based on the slogan hope and change well many people voted rightly for hope and change. The working class has suffered not disastrously but severely from the neoliberal policies of the past generation pretty much from 1979 so if you look, say, just take the 2007 the peak of what economists were calling the economic miracle right before the crash 2007 American workers had real wages lower considerably lower than in 1979 before these policies were instituted they lost it listen to Alan Greenspan who during the height of the euphoria over the economy he was called St Alan, the greatest economist of all time he testified to Congress explaining the basis for the success of the economy that he was running. He said it was based on growing worker insecurity, growing worker insecurity, meaning if workers are beaten down enough and intimidated enough and if their organizations their unions are sufficiently destroyed that they can’t ask for higher wages and for decent benefits then it’s good for the economy, creates a healthy economy by some measures we know the measure well all of this has happened and the working class has suffered from it they had a real need for hope and change well they didn’t get hope they didn’t get change. I don’t usually agree with sarah palin but I think she she nailed it when she asked at one point that where’s all this hopey changey business number wasn’t it so no hope no change already it shows very quickly in mid term future elections this election a comment came along and offering hope and change and they’re going for it suppose that people like you the people who formed the Sanders movement would present an authentic constructive program for real hope and change it would win these people back I think many of the Trump voters many of the trump voters could have voted for Sanders if there had been the right kind of activism organization and those are possibilities it’s been done in the past under much harsher circumstances organizing white working people in Indiana is a lot easier than what the Freedom Riders tried to do in the South six years ago much is it takes work that can be done my feeling is that a core part of the progressive program is to rebuild the organized structure of the labor movement which all throughout modern history has been in the forefront of progressive change and that’s not possible either been beaten down pretty severely in the first generation has been worse before they go back to the nineteen-twenties a period which is not unlike today in many ways the the guild today’s you know the the labor movement was virtually destroyed Wilson Woodrow Wilson’s Red Scare practically wiped it out there had been a militant activist labor movement there’s nothing left of it in nineteen twenties by the nineteen-thirties it provides the militant labor action organization of the CIO overcame racist conflict laid the basis for the New Deal programs which were highly beneficial to the extent that they remain they remain beneficial that can happen again no reason why it can’t

The Trump sons own a hunting retreat that employed an immigrant with fake papers


-In a town called Wingdale,
New York, there’s a hunting lodge
called Leather Hill Preserve. It’s owned by a group of hunters that includes the presidents
sons Eric and Don Jr and they go there
on the weekends to shoot rifles, use a rifle range,
and hunt deer. For about the last three years, The Washington Post
has now learned, the place has been
maintained by a worker who’s an undocumented Mexican
immigrant named Juan Quintero. -If it was a Monday, if I knew
that they had been there that weekend,
I would go and check the garage to see if the motorcycles
were clean or dirty. If the grass was high,
I would cut it. It was the first time
I was responsible for an estate
or property like this, and it felt like
a new challenge in life. It is an honor. One feels happy to say,
“Oh, wow. I am working for the president’s
son, on his property”. -Quintero first started working,
using fraudulent documents, at a golf club in Hopewell
Junction, New York. That golf club was bought in
2010 by the Trump Organization, which, it turned it into
the Trump National Golf Club Hudson Valley. In 2016, one of his bosses
at the golf club asked if he’d like to make a little
extra money on the side, working for this group
that included Eric Trump. So he took the side job
at Leather Hill Preserve and he signed a contract
that said he “will not disclose to anyone,
and always keep secret,” all details
about his work there. Shortly after he started there, he got to meet Eric Trump
for the first time. -That day to me was shocking. I did not expect to find
the Secret Service or Eric [Trump] when I arrived. It was a surprise for me
to be able to talk to him for 10 or 15 minutes. It was something special. -Eric Trump and Quintero
would go on to exchange a number of text messages
about the property over the course of a few months. You can see here Eric’s name
is misspelled, but we can confirm
that the number being used here is Eric Trump’s
cellphone number. -Here I have some conversations
with Eric [Trump]. There are messages
for Eric [Trump] saying hello,
if everything was okay, asking me how
the fields were doing; and, if I needed anything,
to let him know. Short messages. -Quintero says his legal status
was never an issue at the Leather Hill Preserve, until one day,
when Jeffrey Ferraro, who is another owner
of the place, asked Quintero for his
Social Security Number, so he could get him
a corporate card. -There was an occasion
when they wanted to give me a credit card
under my name and he sent me a text
and he said, “I need your Social Security
number to give you a card,” and I said to myself,
“I don’t have one”. I believe they knew from there
that I did not have any papers. -Quintero says he never
told Ferraro anything directly
about his legal status. But, a few weeks later,
he found a card waiting for him at the property. It has the name Jason Decker
and Leather Hill Preserve. Quintero says he doesn’t know
who obtained it for him and he doesn’t actually know
who Jason Decker is, but he was able to use
the credit card to buy supplies. The Post has asked Jeffrey
Ferraro and Eric Trump why they issued a credit card
to Quintero in somebody else’s name. We’ve also asked them
when they knew or if they knew that Quintero
was working here illegally and neither Eric Trump
nor Ferraro has responded
to those questions. -Around a dozen undocumented
immigrants have been fired from President Trump’s New York
golf course. -Starting in January,
the Trump Organization began
firing undocumented workers at a number of its golf
courses around the country. It describes these firings as the result
of a new internal audit which looked at documents,
immigration documents. Some of them had been provided
years and years before. They looked at those documents
and found them to be fraudulent. Quintero was one of many fired. -I am the backbone of the house.
What am I going to do now? Out of the two jobs that I had,
I have none. I have to start from zero again. The kids ask me,
“What are you doing here, Daddy? You did not go to work”? They start asking questions. It hurts to tell them,
“Well, I don’t have this paper. I don’t have papers”. The oldest one understands
and asks, “Are they going to deport you”? And I say, “Let’s hope not”. -We’re talking about an invasion
of our country, with drugs,
with human traffickers, with all types
of criminals and gangs. -I want the good things
that we [undocumented workers] do to be recognized. We are not the people
that he says we are: bad, rapists, drug dealers,
the worst that they say of us. And also, the president’s
supporters, more than anything, need to see that we are the
complete opposite of this [and] everything that we contribute. We contribute work. We get the work done.

Michael Pillsbury predicts China trade deal will be ‘monumental’


THANK YOU SO MUCH DEIRDRE BOLTON FLOOR OF NEW YORK STOCK EXCHANGE TOP STORY THIS HALF AN HOUR, THE CRISIS IN HODGE HONG, BUSINESS IN CITY REOPENED THIS MORNING AMID NOW PEACEFUL PROTESTERS, THOUSANDS OF ANTIGOVERNMENT PROTESTERS HIT STREETS YESTERDAY THOUGH SOME SET FIRES BLOCKED ROADS, POLICE FIRED WATER CANONS TEAR GAS RUBBER BULLETS PROTESTERS CLACHD WITH PROGOVERNMENT DEMONSTRATORS DIRECTOR FOR CENTER OF CHINESE STRATEGY, MICHAEL PILLSBURY GOOD TO SEE YOU. THANK YOU FOR BEING HERE.>>OUR LEAVING TOMORROW FOR BEIJING IN HONG KONG GOING ON A TRIP?>>YES.>>I WANT TO GET YOUR TAKE WHAT YOU ARE EXPECTING BECAUSE, MY BROTHER-IN-LAW WAS IN HONG KONG SENT ME A PICTURE OF THE TWO MILLION PEOPLE RIGHT OUTSIDE HIS HOTEL ROOM, GET THIS WHEN HE LEFT HIS HOTEL ROOM TO GO SOMEWHERE HE HAD TO WALK THROUGH TO PROTESTERS, HE SAID IT WAS THE MOST POLITE AND QUIET AND CALM SITUATION HE HAD EVER SEEN YES TWO MILLION PEOPLE BUT DOING IN SUCH A CALM WAY, ACCORDING TO HIM. WHAT DO YOU THINK?>>I THINK THAT IS RIGHT. THE — PEOPLE OF HONG KONG HAVE ALREADY DEMONSTRATED SEVERAL TIMES, HAD PAST 20 YEARS. AND HAD SUCCESS, IN GETTING SOME MAJORS WITHDRAWN BEING CONSIDERED PRO BEIJING A TRAJECTION OF PEACEFUL DEMONSTRATION THE GOOD THING BEIJING SAID THAT LAST COUPLE WEEK PEACEFUL DEMONSTRATIONS ARE OKAY BEIJING DOESN’T WANT 70TH ANNIVERSARY OF FOUNDATION TO BE SPOILED, THERE ARE SOME BAD TRENDS COUNTER DEMONSTRATE STRAIGHT SORRY SHOW UP TIMES CALLED MAFIA BY SOME COULD BE TRIADS, PEOPLE TRADITION TODAY BY CHINA NOT GOOD THE PROBLEM IS GETTING NEGOTIATIONS GOING FOR GOOD CONDITIONS DEMONSTRATORS DON’T HAVE A LEADER ROTATE LEADERSHIP, AND SO IT IS HARD TO GET TALKS STARTED ON THAT THEY CALL FIVE DEMANDS NEXT STEP TO LOOK FOR IF THERE COULD BE ENOUGH STABILITY THAT LEADERSHIP WILL MEET WITH CARRIE ALMOST A AND HER TEAM AND THIS CAN BE — TURNED INTO AN ISSUE OF HOW TO ABIDE BY THE 1984 JOINT DECLARATION.>>CHINA ITSELF PROMISED CARRIE LAM HER EQUIVALENT, IN THE PAST IN FUTURE IS NOT A COMMUNIST NOT COMING FROM BEIJING HAS TO BE LOCAL HONG KONG PERSON NOT HAVE A PASSPORT WITH ANY OTHER COUNTRY, SO THERE IS A PROMISE OF HIGHER AUTONOMY WHAT IS CALLED THE — FOR LACK ACH BETTER PHRASE IN GLIRN UNIVERSAL SUFFRAGE.>>THEY WANT TO ELECT THEIR LEADER, IN THAT UNIVERSAL SUIF IFR AGE THAT IS PUT PRESSURE ON XI JINPING TO PERHAPS DO A DEAL WITH PRESIDENT WITH U.S.?>>WELL ONE THING, YOU CAN SAY ABOUT PRESIDENT TRUMP I REALL MALL MIRL MIRE HIM FOR THIS NEGOTIATING SKILLS HE SEES HELPS AS DEAL MAKER I THINK WANTS A MONTHLY TRADE DEAL CALLED IT GRANDDAD OF ALL TRADE DEALS WISELY PUT HONG KONG ISSUE INTO THE TRADE TALKS. BOTH COMMENTS TO THE PRESS AND TWEETS, LINKING — IF USE OF VIOLENCE IN HONG KONG THIS WILL DELAY MAKING IT POSSIBLE THE TRADE TALKS BEING SUCCESSFULLY INCLUDED WITH BAD ECONOMIC DATE OT OUT OF CHINA PUTS XI JINPING IN A BOX IN TERMS OF CHOOSING WHICH WAYING TO I HAVE A HUNCH THINGS QUIET DOWN IN HONG KONG, TRADE TALKS WILL BE SUCCESSFUL AND WHAT THE PRESIDENT CALLS GRANDDADDY OF THEM ALL DEALS.>>YOU DO THINK WE WILL GET A DEAL AT SOME POINT?>>I THINK WE CAME VERY CLOSE. BACK IN EARLY MAY CHINESE RENEGED ON SOME ASPECTS OF IT, DOESN’T MEAN THE WHOLE THING GOES DOWN THE DRAIN, IT MEANS THAT THE CHINESE ARE TESTING THE PRESIDENT FRANKLY, THEY ARE A LITTLE BIT CONFUSED ONE PURPOSE OF MY TRIP I HAVE BEEN TOLD BY A LOT OF CHINESE DELEGATIONS MARIA STEVE BANNON, AND JOHN BOLTON AND FRIENDS OUTSIDE SPEAK FOR THE PRESIDENT. I DON’T THINK THAT IS TRUE. STEVE BANNON’S GROUP COMMITTEE ON PRESENT FROM CHINA WANT TO OVERTHROW CHINESE SXHU. PARTY SAY COEXISTENCE IS IMPOSSIBLE.>>WANT TO DESTROY LOOK AT WITH A BANNON BOLTON SAY IS COUNTERS PRODUCTIVE I THINK THE PRESIDENT DOES NOT DEBRIS WITH BANNON AND BOLTON ON THE FUTURE.>>LOOK WHAT THIS IS DOING TO HONG KONG LONG SEEN AS INTERNATIONAL HUB, FOR GLOBAL BUSINESS, THERE IS A NEW OP-ED IN THE ADJOURN EDITORIAL BORROWED WITH A PIECE WHY LONDON SPURNED HONG KONG BOARD RIGHTS HONG KONG’S GOVERNMENT RUSHED TO BLAME PEOPLE FOR ECONOMIC DAMAGE THE REAL PROBLEM AUTHORITIES NO HONG KONG BY A ARE ERODING THE REPUTATION AS PLACE WHERE PROPERTY RIGHTS ARE PROTECTED COURTS INDEPENDENT AND CORRUPTION IS LOW, RULE OF LAW UNDER PINS HONG KONG STATUS AS GLOBAL FINANCIAL CAPITAL THIS IS BECOMING AN ECONOMIC ONE IN LETTER THAT THE LONDON STOCK EXCHANGE SENT TO HONG KONG STOCK EXCHANGE IN THAT LETTER LONDON BOARD KNOW THIS HONG KONG STOCK SHARES MAKE UP THREE-QUARTERS OF THE 36.6-BILLION-DOLLAR BID AND THEY WRITE WE SEE THE VAM OF YOUR SHARE CONSIDERATION AS INHERENTLY UNCERTAINTY THE ONGOING SITUATION WITH HONG KONG ADDS TO UNCERTAINTY, FURTHERMORE WE QUESTION STATEMENT OF STOCK EXCHANGE POSITION AS STRATEGIC GATEWAY IN LONGER TERM NOT JUST PRESIDENT TRUMP QUESTIONING ALL OF THIS BUT, YOU KNOW, THE WORLD IS LOOKING AT HONG KONG DIFFERENTLY.>>THAT IS RIGHT. THE WITHIN WE SHOULD ALL BE CONCERNED THIS USE OF — VIOLENCE BY THE UNKNOWN PEOPLE WHO ARE ATTACKING THE DEMONSTRATORS PROVOKING THINGS WORSE IF THEY ARE SHOWN UNDER THE CONTROL OF XI JINPING, THAT IS VERY DAMAGING FOR THE TRADE TALKS AND FUTURE OF HONG KONG.>>MICHAEL BEFORE YOU GO.>>VOLUNTEERS THAT IS DIFFERENT.>>I JUST GOT TO GET — DO YOU THINK THE PRESIDENT IS GOING TO SEPARATE TWO THINGS A TRADE DEAL AND NATIONAL SECURITY HE CAN’T DO THAT RIGHT?>>NATIONAL SECURITY –>>THE PRESIDENT IS FOCUSED ON TH MONUMENTAL TRADE DEAL A CAMPAIGN PROMISE SEPARATES HIM FROM DEMOCRATS VERY IMPORTANT IN 2020. THAT IS WHAT HIS FOCUS IS MON YU MEAN YU.>>O MONUMENTAL TRADE DEAL HE HAS ALLOTTED MORE HE IS KALATORY STEPS CHINESE VULNERABLE THE KEY THING WHETHER THE CHINESE VIEW OF PRESIDENT TRUMP IS BOLTSON BANNON SPEAK FOR HIM THEY DON’T WANT TO MAKE DEAL.>>WE HOPE YOU COME BACK AFTER BACK FROM TRIP TO HONG KONG BEIJING GOOD TO SEE YOU –>>I WILL BRING YOU A SOUVENIR FOR YOU –>>I LOOK NORTHWARD TO IT WILL CONTINUE READING YOUR BOOK

Smart Congressman Destroy’s Ocasio Cortezs Green New Deal


Smart Congressman Destroy’s Ocasio Cortezs Green New Deal My name is Matt Gaetz, I represent Florida’s 1st congressional district while it is above water Just yesterday the Secretary of the Air Force the Secretary of the army the Chiefs of Staff of both the Army and the Air Force Testified to the House Armed Services Committee that in real time Climate change is impacting the strategic decisions that our military makes regarding weapons testing basing decisions The global movement of humans and high stakes territorial claims made by our adversaries in the Arctic Our military does not have the luxury of an academic debate about climate change They must respond to the reality that we face today. And so should the United States Congress History will judge harshly my Republican colleagues who deny the science of climate change similarly those Democrats who would use climate change as a Basis to regulate out of existence the American experience will face the harsh reality that their ideas will fail today along with other members of Congress I’ll be filing a green real deal a common-sense rebuttal to the green New Deal the green real deal rejects regulation as the driving force of reform and instead unlocks the unlimited potential of American innovation and ingenuity The question for America is pretty simple either. We want a bunch of bureaucrats in Washington Telling us what we can’t do or we empower American innovators to unlock things that we can do Do we really believe that if we outlaw cars cows planes and buildings that the rest of the world will follow of course They won’t they will laugh at us If we outlawed carbon emissions do we really think that carbon creating jobs? Wouldn’t just move overseas as they have already done for decades. Is there a single piece of evidence? Smart Congressman Destroy’s Ocasio Cortezs Green New Deal that emerging economies will put off their own economic development for a generation to accommodate an environmental concern no matter how legitimate and if we do not reduce global carbon emission if we merely Export pollution and service of our own virtue signaling then we will have not done anything real to protect our beautiful planet Being the world’s fool or Patsy won’t combat climate change Unilaterally disarming the American economy through crushing regulations will empower Washington but few others our rise in global leadership on climate must be fueled by American innovators And I have a plan to support them the green real deal establishes four platforms For American innovators to utilize exploit and deploy for their success the first is an international marketplace that is fair to American innovators our current global trade and Intellectual property policies fail to protect American innovation. Just look at solar when photovoltaic cells were initially developed America led the world in solar and right now our market share is collapsing because China robbed American technology replicated that technology Inexpensively and then replaced American companies in the market place China is now doing the very same thing with electric cars and electric vehicles and so by having better Policies for the platform of trade and intellectual property. It’s a great platform for innovation The second platform that the green real deal establishes is a modernized electric grid for our country the American Society of Civil Engineers rates the American electrical grid ad plus This functions as a wet blanket over American innovation because there is no mechanism by which we can have renewable Technology used given the vast fluctuations and capability and production and utilization of renewables but if we get this Right, if we make the right investments in our grid then we will create an entire class of energy entrepreneurs all over the country where people can put up solar cells access hydropower and then move that power back on to the grid so that Renewable cleaner energy can be democratized over wider swaths of the country The third critical platform to unlock Fed lands Innovators should see our federal lands as an open canvas for renewable energy research development test and evaluation Instead a complex series of regulations and special interest driven contracting processes Limit the ability of our beautiful spaces in our environment to contribute to their continued preservation The fourth platform is an inclusive technology Doctrine that would underlie an American innovation strategy right now the Nuclear Regulatory Commission won’t approve Scalable modular nuclear reactors our agricultural and tax policies don’t even contemplate the best carbon capture technologies in the world and Hydropower some of the cleanest cheapest power that you can access in our country is too often blocked by needless government regulation The green real deal doesn’t tell Americans what they can and cannot do It doesn’t use the apparatus of government to pick winners and losers in a distortion of the private market Smart Congressman Destroy’s Ocasio Cortezs Green New Deal The green real deal is a love letter to the American innovator and it is a real serious plan to address climate change Thank You, mr. Speaker and after a meeting with President Trump yesterday regarding the ongoing crisis in Venezuela, I rise to praise the Trump administration For its mindful and strategic response to conditions in that country All options must be on the table including military force My constituents would likely be among the first in that fight I’m incredibly proud of them and if asked they will successfully execute any mission that they are called to do But policy makers have an obligation not to send any of America’s sons and daughters into any ill-advised conflict the Trump administration clearly Understands the risks associated with military intervention in Venezuela at this time they include a few things first if the United States military were to have Troops on the ground in Venezuela today, it is very likely that the Maduro regime would scapegoat their own the people of Venezuela Voted their way into socialism and now it appears they have to fight their way out of it Well, this should be a lesson to us all military intervention should not be Presented as an opportunity for the Majuro regime to explain away why people in Venezuela? Have no medicine have no food are starving at times see their own countrymen turning tanks and weapons against them those failures belong to the Maduro regime those failures belong to this socialist dictatorship and Were we to intervene in an unwise way? Potentially that would create confusion about the conditions that led to these terrible circumstances Second if the United States military were to intervene at this time It is my concern that it would allow them endure a regime to externalize their conflict It is no surprise to any in this chamber or many in the Trump administration that there remains some latent resentment within pockets of Latin America regarding US intervention and regime change and nation-building and at a time when we are seeing Smart Congressman Destroy’s Ocasio Cortezs Green New Deal Democratic successes and governments stood up that are beginning to provide for their citizens It would be deeply unwise to stoke any anti-american resentment with ill-advised conflict right now Maduro functionally lacks material support from the forward-thinking countries in the Western Hemisphere And we would not want to create any opportunity for there to be a call to the new Bolivarian Alliance That ultimately is what a lot of these transnational criminal organizations want in Venezuela. They want to Road nation-states and borders They want to end Nationalism in our hemisphere so that they have a more permissive environment for their illicit activities third the Trump administration Clearly understands that if the United States were deemed to be too involved in the popular uprising in Venezuela that Maduro would potentially have the opportunity to deny the organic desires of Venezuelans to fight for their own freedom The reason people are up in Venezuela right now is not a consequence of the United States government it’s a consequence of the failures of their own government and their Passionate desire for freedom and one that we should stand with the people of Venezuela to execute Despite these conditions and despite the challenges I remain hopeful that there is a brighter future for Venezuela as we meet and gather now Juan guardo is able to go about the country freely to fight despite not having a military despite not having staff. He’s able to rally Smart Congressman Destroy’s Ocasio Cortezs Green New Deal Thousands of his fellow countrymen in public squares and make the argument for freedom meanwhile The coward Maduro remains huddled up in a military base unable to move around and unsure who will turn on him next But if the last quarter century has taught our country anything About the nature of freedom it is that freedom has to be fought Hardest fought for hardest by those who yearn to live it Freedom cannot be the gift that America gives other countries purchased solely with the currency of the blood of u.s Servicemembers people have to fight for freedom and earn it they have to die for it They have to bury their relatives over it and then they have to love it and care for it so much that they will never let another strong man take it away from them and that they will never fall victim to the passions that led Venezuela down this dark path to socialism and dictatorship and starvation and desperation Smart Congressman Destroy’s Ocasio Cortezs Green New Deal We stand with the people of Venezuela and they must stand now and fight for a better future for their country

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.