China’s got a lot of wood to chop before it can take over the world. From Raúl Ilargi Meijer at theautomaticearth.com:
In the New Year, after a close to the old one that was sort of terrible for our zombie markets, do prepare for a whole lot of stories about China (on top of Brexit and Yellow Vests and many more windmills fighting the Donald). And don’t count on too many positive ones that don’t originate in the country itself. Beijing will especially be full of feel-good tales about a month from now, around Chinese New Year 2019, which is February 5.
And we won’t get an easy and coherent true story, it’ll be bits and pieces stitched together. What will remain is that China did the same we did, just on steroids. It took us 100 years to build our manufacturing capacity, they did it in under 20 (and made ours obsolete). It took us 100 years to borrow enough to get a debt-to-GDP ratio of 300%, they did it in 10.
In the process they also accumulated 10 times more non-productive assets than us, idle factories, bridges to nowhere and empty cities, but they thought that would be alright, that demand would catch up with supply. And if you look at how much unproductive stuff we ourselves have gathered around us, who can blame them for thinking that? Perhaps their biggest mistake has been misreading our actual wealth situation; they didn’t see how poorly off we really are.
Xiang Songzuo, “a relatively obscure economics professor at Renmin University in Beijing”, expressed some dire warnings about the Chinese economy in a December 15 speech. He didn’t get much attention, not even in the West. Not overly surprising, since both Beijing and Wall Street have a vested interest in the continuing China growth story.
Posted in Business, Currencies, Debt, Economy, Eurasian Axis, Geopolitics, Governments, History
Tagged Africa, Apple, Belt and Road Initiative, China, Smartphones
Nothing goes up forever, and when stock markets stop going up, it often means the economy will go down, too. From Michael Snyder at theeconomiccollapseblog.com:
Stock markets are crashing all over the world, we are seeing extremely violent “flash crashes” in the forex marketplace, economic conditions are slowing down all over the globe, and fear is causing many investors to become extremely trigger happy. The stock market crash of 2018 wiped out approximately 12 trillion dollars in global stock market wealth, but things were supposed to calm down once we got into 2019. But clearly that is not happening. After Apple announced that their sales during the first quarter are going to be much, much lower than previously anticipated, Apple’s stock price started shooting down like a rocket and by the end of the session on Wednesday the company had lost 75 billion dollars in market capitalization. Meanwhile, “flash crashes” caused some of the most violent swings that we have ever seen in the foreign exchange markets…
It took seven minutes for the yen to surge through levels that have held through almost a decade.
In those wild minutes from about 9:30 a.m. Sydney, the yen jumped almost 8 percent against the Australian dollar to its strongest since 2009, and surged 10 percent versus the Turkish lira. The Japanese currency rose at least 1 percent versus all its Group-of-10 peers, bursting through the 72 per Aussie level that has held through a trade war, a stock rout, Italy’s budget dispute and Federal Reserve rate hikes.
This is the kind of chaos that we only see during a financial crisis.
Apple is running into trouble in China, and the US stock market bellwether is now down over 35 percent from its recent all-time high. From Wolf Richter at wolfstreet.com:
“We did not foresee the magnitude of the economic deceleration.” Oh dude, starting the year out on the right foot.
On Wednesday after the market closed, Apple released a letter to shareholders in which it said that revenues are going to be a lot worse in the quarter ended December 29 than its guidance two months ago, that iPhone revenues have dropped year-over-year, that China’s economic problems are deeper than expected, and that iPhone revenues are hurting elsewhere too. This confirms a series of revenue warnings from Apple suppliers.
Shares plunged 7.5% after hours to $146. If shares close at this level on Thursday, it would be the lowest close since November 7, 2017. Shares have plunged 38% in three months. Wow, this was quick:
In its “Letter from Tim Cook,” Apple slashed its revenue guidance by 6% to 10% from its prior guidance two months ago, to about $84 billion in the quarter, down from its previous guidance of $89 billion to $93 billion.
The so-called FANGMAN stocks are having a rough go of it recently. From Wolf Richter at wolfstreet.com:
It gets costly when the entire market depends on a handful of over-hyped mega-caps.
For the beginning of Thanksgiving week, it was a little messy today in the stock market, with the Nasdaq dropping 3% to 7,028. It’s down 13.6% from its peak at the end of August. But it’s still up 1.8% year-to-date, so nothing serious has happened yet, just some of the gains this year have turned out to be head-fakes.
Folks who went through the wholesale Nasdaq destruction of 2000-2002 will just smile mildly because that’s when the Nasdaq, as the dotcom bubble imploded, lost 78%. Given our Everything Bubble is even bigger and crazier, the Nasdaq’s current sell-off barely registers on my own Richter scale, so to speak.
The Dow fell 1.6%, is down just 7.2% from its peak, and for the year is clinging to a 1.2% gain.
And the S&P 500 dropped 1.7% today and is down 8.5% from the peak. It too remains, if by the thinnest margin, in the green for the year.
Mark Zuckerberg and Sheryl Sandberg have no discernible principles. From Tyler Durden at zerohedge.com:
The New York Times has painted a 5,300 word picture of an out-of-control Facebook’s desperate and incompetent damage control measures in the wake of multiple scandals.
Based on interviews with over 50 current and former company executives, lawmakers, government officials, lobbyists and congressional staff members – most of whom spoke on the condition of anonymity – the Times illustrates how Facebook resorted to mercenary tactics when it came to combatting criticism over everything from Russian ad-spending during the 2016 US election, to the Cambridge Analytica scandal, to the platform’s blind eye towards corrupt governments using the social network to commit atrocities around the world.
as evidence accumulated that Facebook’s power could also be exploited to disrupt elections, broadcast viral propaganda and inspire deadly campaigns of hate around the globe, Mr. Zuckerberg and Ms. Sandberg stumbled. Bent on growth, the pair ignored warning signs and then sought to conceal them from public view. –NYT
Posted in Business, Cronyism, Government, Intelligence, Law, Media, Morality, Privacy, Surveillance, Technology
Tagged Apple, Facebook, Google, Mark Zuckerberg, Sheryl Sandberg