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deniscollins · 5 years

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Highways on Fire. Semesters Cut Short. A Recession. Can Hong Kong Heal?

Under a 1997 agreement, Hong Kong is part of China but residents have many liberties denied to citizens on the mainland, including free speech, unrestricted internet access and the right to free assembly. University students in Hong Kong have led protests against the city’s leadership for becoming too closely aligned the Bejing’s authoritarian political system, including a ban on face masks hiding student identities. A minority of protesters have turned violent and this has generated violent excessive force by police, including firing tear gas and rubber bullets into the grounds of Hong Kong universities, which breached the perceived inviolability of educational institutions, setting off some of the most violent confrontations. If you were a university president, what would you do: (1) cancel the last weeks of the semester or (2) continue to hold classes? Why? What are the ethics underlying your decision?

Storefronts closed for weekend demonstrations are now shuttered, for weeks or even permanently. Protesters are occupying major roads, rail tracks, bridges and tunnels, cutting off critical thoroughfares for commuters and commerce on a daily basis. Universities are telling students not to come back for the rest of the semester.

Nearly six months into the antigovernment protests, life in Hong Kong has dramatically changed, pushing the economy into recession, fraying faith in the authorities and pitting neighbors against one another. The turmoil has upended a city long known for its world-class transport, gleaming towers of global finance and cosmopolitan aura, with the potential to alter Hong Kong’s character.

Some of the wounds may be lasting.

Violent confrontations with the police and mass arrests of protesters have eroded faith in the government and the legal system. Those have been hallmarks of the city’s distinct status under the “one country, two systems” policy, Beijing’s pledge when it reclaimed the city from Britain in 1997.

Decisions by the city’s leadership, like an extradition bill that set off the protests and a face mask ban, have cemented fears that Beijing’s authoritarian reach stretches to Hong Kong. They are stark reminders that Hong Kong could become just another Chinese city when the pledge expires in 2047.

Other scars are likely to fade over time.

Students and teachers will sit together in classrooms again. Vandalized malls, smashed subway stations and destroyed sidewalks will be repaired. Shoppers from mainland China will eventually return to buy Tiffany rings and Chanel bags, lured by low taxes.

The economy will slowly recover, too. While multinational companies have drawn up exit strategies, few have plans to move. As the bridge to China, Hong Kong is hard to leave and even harder to replace.

The healing process, though, cannot begin until the protests end. And with each escalation, both sides seem further apart and a peaceful outcome less likely.

“Nobody wants blood on his or her hands,” said Regina Ip, a member of Hong Kong’s cabinet. “But because no decisive action is taken, Hong Kong is being destroyed.”

As the distrust deepens, the demonstrations, once largely peaceful and confined to the weekends, are now spilling over into weekdays. Activists speak of the police as a brutal tool of the Hong Kong government rather than blaming the Chinese Communist Party.

The narrative of an out-of-control police force is reinforced by footage and photographs in chat groups of officers beating protesters, and using pepper spray and tear gas on bystanders. A cellphone video of a policeman shooting an unarmed young protester on Monday spread wildly on social media.

In recent days, bankers and lawyers in suits and ties have gathered with black-clad protesters outside their high-rise offices at lunchtime to heckle and yell at the police. One skirmish this week between a man and a group of riot police officers happened just feet from Hong Kong’s stock exchange. In another, a banker from Citigroup was arrested.

“People are just expressing their opinions, and people in the government and the police force are using excessive force to suppress the opinions,” Marcus Lee, 26, a lawyer, said at a lunchtime rally after officers had just fired tear gas. “The police are especially aggressive toward students and teenagers.”

China’s top leader, Xi Jinping, on Thursday made his toughest public comments so far about protests, pointedly giving his backing to the city’s police.

“The continued radical violent criminal actions in Hong Kong have gravely trampled on rule of law and social order, seriously damaging the prosperity and stability of Hong Kong,” Mr. Xi said in Brasília at a summit meeting of developing countries, according to an online report from People’s Daily, the official newspaper of the Chinese Communist Party.

China, Mr. Xi said, “staunchly supports the Hong Kong police in sternly enforcing the law, and the Hong Kong judicial authorities in punishing violent criminals.”

When the police fired tear gas and rubber bullets into the grounds of Hong Kong universities this week, they breached the perceived inviolability of educational institutions, setting off some of the most violent confrontations. Administrators and professors now say they are bracing for a long-term hit.

Universities could struggle to recruit foreign and mainland Chinese students. Many mainland students fled across the border to Shenzhen this week as the police and students activists fought at the borders of some campuses, and foreign universities have been canceling exchange programs. In the coming years, foreign students could be dissuaded by the perception that the government might try to stifle academic and speech freedoms.

This week, hundreds of university scholars worldwide joined local peers in signing a petition calling on the police to halt campus attacks and warning they might reconsider academic partnerships in Hong Kong “if student’s safety is at risk and such blatant violation of academic and intellectual freedom continues.”

William Hayward, dean of social sciences at the University of Hong Kong, said the school’s president, Xiang Zhang, had reassured the faculty and students that “we remain a global university where we engage in a kind of academic discourse wherever it leads, where our colleagues think it should go.”

“So any of my colleagues can feel free to teach what they want, teach a class to pursue questions of scholarship that they want to pursue,” he said. “And nothing about the current environment has changed that in any way.”

The protests have created major gridlock in a city that runs on efficient logistics.

On the campus of Chinese University of Hong Kong, students in recent days fanned out to block the city’s oldest train line and one of its largest highways. The barricades have created a choke point, making it difficult for one million Hong Kong residents to reach the rest of the city. Trucks traverse the road, ferrying goods made in southeastern China like air-conditioners, cellphones, costume jewelry and shirts.

Efforts to turn Hong Kong into an Asian cultural capital have been dented by the protests. Events and shows have been canceled, including an appearance by the “Daily Show” host Trevor Noah and the Hong Kong Tennis Open. People are asking whether the annual Art Basel event will be held in March.

The performing arts venues that make up the ambitious West Kowloon Cultural District are still running. But they have had to cancel, postpone and adjust performances in recent weeks.

“We had nearly 15,000 people come to our inaugural Jazz Fest this past weekend,” said Alison Friedman, the district’s artistic director of performing arts. “While ticket sales are down, attendance is staying strong. We need the arts more than ever.”

It all threatens to make a bad economy even worse. The turmoil has pushed Hong Kong’s economy into a recession — the weakest since the depths of the global financial crisis. Daily headlines about violence have scared off tourists and business travelers.

On a recent Sunday afternoon, protesters and riot police officers faced off outside the Peninsula, one of Hong Kong’s oldest hotels. Employees quickly shut the front door, closed the blinds and rolled down the shutters, but they weren’t fast enough to prevent tear gas from floating into high tea, and while a lone violin played, guests wheezed.

Although the protests have hurt growth, the city’s economic core is also one of its greatest strengths for enduring the tumult. Multinational companies use Hong Kong as a gateway to China, and Beijing uses the city as a gateway to the world. There are few alternatives that also offer the free flow of capital and information.

“As long as Hong Kong maintains these two distinct characteristics, it will have an advantage,” said Weijian Shan, chief executive of the private equity firm PAG.

Hong Kong has its currency pegged to the United States dollar, making it reliable and stable. China, which has a tight hold on its currency, also uses Hong Kong as the first financial stop to transact and trade with the rest of the world.

China can’t afford to risk Hong Kong’s role.

Chinese financial institutions have hundreds of billions of dollars’ worth of assets in the city, while state-owned companies own as much as 30 percent of assets in Hong Kong, according to an analysis by Global Source Partners, a research firm. Chinese companies, top Chinese Communist officials and rich businesspeople have parked their wealth in the city, which would be under threat if Beijing changed its policy.

In a vote of confidence for the city, the Chinese e-commerce giant Alibaba is expected to raise $13 billion this month by selling shares on the Hong Kong Stock Exchange.

Hong Kong is also still an important entry point for multinational companies into China. The city’s laws are based on British legal tradition. In China, the rule of law is weaker.

“I have not heard from one person that they are pulling out of Hong Kong,” said Rick Helfenbein, president of the American Apparel and Footwear Association, which has 335 corporate members with brands like Jimmy Choo, Versace and Gap.

“They may be pulling their hair,” he added. “Safety is a topic of conversation. Leaving is not.”

#Hong Kong

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preciousmetals0 · 5 years

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Powell Stimulates Nonstop; When Voltron Meets Hoth

Powell Stimulates Nonstop; When Voltron Meets Hoth:

The Most Stimulating Man in the World

You want stimulus?

You can’t handle all the stimulus the Federal Reserve is pumping out right now.

In a move that almost lifted the markets into positive territory this morning, Federal Reserve Chairman Jerome Powell announced unlimited stimulus — yes, unlimited.

“Aggressive effort must be taken across the public and private sectors to limit the losses to jobs and income and to promote a swift recovery once the disruptions abate,” the Fed said in a statement.

I think it’s safe to say that Jerome Powell is the most stimulating man in the world right now. I’m glad at least someone in Washington is taking COVID-19 seriously. But what are the details?

As part of its effort to save the U.S. economy, the Fed will purchase an unlimited amount of mortgage-backed securities and Treasurys, offer $300 billion in new lending programs and set up three new emergency lending programs:

The Primary Market Corporate Credit Facility will issue new bonds and loans.

The Secondary Market Corporate Credit Facility will keep liquidity in corporate bonds.

The Term Asset-Backed Securities Loan Facility will allow securities backed by auto loans, credit card loans, student loans and Small Business Administration loans.

The Fed even announced that it would expand its Money Market Mutual Fund Liquidity Facility to aid local governments and municipalities.

That’s a lot to take in, so here’s the short story: Debt and credit, for both the government and businesses, is all a-fluster … and the Fed set up a few groups to handle the $*%# show.

The Takeaway:

It certainly seems like the Federal Reserve covered all its bases. This level of action is unprecedented — even in the midst of the 2008 financial crisis. I mean, unlimited stimulus? It’s unheard of.

So why, then, did stocks go from green to red once the market officially opened?

Because, while the Fed clearly has its head in the game and understands the severity of the problem, lawmakers do not.

The thing is, you can throw money at Wall Street all day long, but that only treats the problem’s symptoms. And investors know one crucial thing that Washington has yet to grasp: Viruses don’t care about money.

Yes, shoring up businesses is important. However, if consumers can’t leave their homes, go to work or take care of themselves in the midst of this crisis … what good is that money?

Perhaps a better way to put it is this: If the stimulus is to help cover missed rents, late mortgage payments, late bills, et cetera, for how long is this money good?

Easing up on the stay-at-home advice from the Centers for Disease Control and Prevention won’t fix this problem. In fact, it may make things much worse.

We need a solid plan to test, quarantine and treat COVID-19 sufferers. We need solid support for regular Americans … the average Joe, if you will … the people who make the U.S. economy turn.

When Washington finally pulls its head out of the partisan sand pit…

When it finally passes legislation that treats the COVID-19 problem and not the symptoms…

When it reassures people that it has their best interests at heart, and not corporate bailouts…

Only then will the markets finally begin to find a bottom. Until that day, we must take matters into our own hands.

Remember this: It’s you, me and the average Joe next to you keeping America ticking forward to a better future.

If Washington won’t look out for the guy on the street, you can bet that Great Stuff does. We won’t leave you out on your own.

As we speak, the groundwork for America’s future is being laid — petty partisan politics aside. In fact, Banyan Hill expert Paul Mampilly has been screaming about a “rebuilt America” for weeks now, even in the midst of this volatility.

Paul believes America will emerge from the coronavirus stronger than ever … no matter how long it takes. And the mega trends that he follows (such as 5G and precision medicine) won’t die to market panic.

Click here to learn about Paul Mampilly’s vision for a new, rebuilt United States — America 2.0.

The Good: Testing … 1, 2, 3?

In order to treat COVID-19, you have to know who has it. And that means testing. Lots and lots of testing. But tests can take hours or even days at overworked labs, exacerbating the problem.

Over the weekend, we heard that the Food and Drug Administration (FDA) approved a 45-minute test for the coronavirus. But Aytu BioScience Inc. (Nasdaq: AYTU) has a test that’s even faster.

The biotechnology company announced this morning that the FDA approved its COVID-19 IgG/IgM Rapid Test. How rapid is this rapid test? Professional care providers can get results in between two and 10 minutes!

That’s faster than the drive-thru at McDonald’s Corp. (NYSE: MCD)!

Aytu said that it expects to deliver its first 100,000-test shipment this week. With the demand for COVID-19 testing skyrocketing as the U.S. deals with continued virus spread, Aytu could be sitting on a gold mine.

The Bad: As Cold as Ice

When I ran across news about Hoth Therapeutics Inc. (Nasdaq: HOTH) and its deal with Voltron Therapeutics Inc., my ’80s pop culture meter went through the roof. I mean, we’re leveraging Star Wars and Voltron here … what ’80s pop geek wouldn’t love this combo?

After reading through the news, however, I’m considerably less jazzed. Hoth entered a joint deal with Voltron to develop a self-assembling vaccine (SAV) to prevent COVID-19. That sounds impressive … most impressive. SAVs sound just as futuristic as Hoth and Voltron.

But … SAV technology is still in the “proof of concept data” phase, according to the report. In other words, if this technology proves viable, it’ll be great … someday. But not today.

As I’ve warned before, it’s all too easy to fool investors with vaccine promises these days. Despite the companies’ longer-term outlook, HOTH shares surged on the news today.

Don’t buy into this hype. Your portfolio will freeze before you reach the first profit.

The Ugly: Unlimited iPhones?

Last week, Apple Inc. (Nasdaq: AAPL) announced that it would limit the number of iPhones consumers could purchase via its online stores. The company was concerned it wouldn’t be able to meet demand due to a slow ramp-up at its Chinese production facilities.

However, those concerns appear to have fallen by the wayside. Today, Apple dropped the two-device limit across the board on iPhones. (Some devices remain limited, however, such as certain MacBook models and iPads.)

The question is this: Are Apple’s Chinese supply lines really near full strength? Or did demand fall off a cliff to where limits don’t matter anymore?

As in all things, its probably a combination of both factors. Supply probably ramped up enough to cover the weak demand that Apple sees for iPhones right now.

Apple has yet to comment on the lifted limit. But let’s be real here: U.S. consumers are far more worried about finding toilet paper and hand sanitizer right now than buying iPhones.

I can’t jump in front of the microphone and push him down. OK, he said it. Let’s try and get it corrected for the next time.

— Dr. Anthony Fauci

If you’re not familiar with Dr. Fauci yet … what rock have you been living under?

(Seriously, what rock? Because that sounds like a really safe place to ride out the coronavirus … I’ll bring the drinks if you have toilet paper.)

For those who haven’t come out of their safe place, Fauci is the director of the National Institute of Allergy and Infectious Diseases. He’s also a member of the White House Coronavirus Task Force.

Fauci recently interviewed with Science Magazine, where he addressed questions ranging from “How are you managing to not get fired?” to “We’ve had all this pandemic preparedness. Why did this fail? What went wrong?”

If you’d like a better insight into the COVID-19 situation and President Trump’s reaction — as told by the No. 1 virus expert in the country right now — this interview is an excellent read.

Great Stuff: Catchin’ up With Y’all

Last week, I asked you your thoughts on bailouts, buybacks and stimulus — oh my!

I’ll say this: If the Feds can’t deliver in this trying time, you sure do, dear reader. With how many emails flooded the Great Stuff inbox over the weekend, you’d think millions of Americans were stuck at home looking at their screens or something. Wait…

(I know, I know … not all of our readers are stateside — I see you writing in from the great white North, Ashley H.!)

I just wanted to take a second today to thank all of you for writing in to share your thoughts on the U.S. viral reaction. Keep writing in! Great Stuff appreciates every email we read … and yes, we do read every last one of them. That said, our overflowing inbox is sure to make for rip-roaring Reader Feedback later this week. Just you wait!

In the meantime, write in to [email protected] if you haven’t already. We’d love to hear your thoughts on the market volatility, the Fed fun house and the quarantine in your neck of the woods.

And if you need some reassurance or an extra bit of positive oomph, remember to check out Paul Mampilly’s vision for a new, rebuilt America 2.0 — viral markets be damned! (Click here.)

Otherwise, you can always check Great Stuff out on social media: Facebook and Twitter.

Until next time, good trading!

Regards,

Joseph Hargett

Editor, Great Stuff

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goldira01 · 5 years

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