Sunday, December 16, 2018

Recession in the U.S/World forecasted for Q1-Q2 2020

Here's my prediction...

There will be a recession in the U.S/World forecasted for Q1-Q2 2020.

The yield curve reversal has been the most reliable predictor of recessions in the past 40 years. According to it, we should see reversal in the next few months, and a recession in 12 to 18 months. Stock-market buy opportunities should follow in 18 to 24 months from now.

Saturday, December 01, 2018

Dealing with the rise of populism

Caracas Chronicles. January 20, 2017

How to Culture Jam a Populist in Four Easy Steps
By Andrés Miguel Rondón

"Because in one way, Trump and Chávez are identical: they are masters of Populism.
The recipe is universal. Find a wound common to many, someone to blame for it and a good story to tell. Mix it all together. Tell the wounded you know how they feel. That you found the bad guys. Label them: the minorities, the politicians, the businessmen. Cartoon them. As vermin, evil masterminds, flavourless hipsters, you name it. Then paint yourself as the saviour. Capture their imagination. Forget about policies and plans, just enrapture them with a good story. One that starts in anger and ends in vengeance. A vengeance they can participate in.
That’s how it becomes a movement. There’s something soothing in all that anger. Though full of hatred, it promises redemption. Populism can’t cure your suffering, but it can do something almost as good — better in some ways: it can build a satisfying narrative around it. A fictionalized account of your misery. A promise to make sense of your hurt. It is them. It’s been them all along."

Monday, November 26, 2018

Monday, November 19, 2018

The political divide in the U.S.

"Among other results, this year's midterm elections affirmed this much: in Washington, the two parties now speak for dramatically different segments of the American economy.

Republicans represent the smaller, fading segment, with less-educated, more-homogenous work forces reliant on traditional manufacturing, agriculture and resource extraction. Democrats represent the larger, growing one, fueled by finance, professional services and digital innovation in diverse urban areas."

Have a read at the full article:

Tuesday, November 06, 2018

Hong Kong High Speed Rail; a far too expensive train to nowhere

With great fanfare and self-patting-on-the-back, the West Kowloon Station opened and the first trains left for mainland China (well, in fact, most of the traffic was south-bound, into Hong Kong). What is baffling to me is that the mere fact that the trains ran and that there were people on them seemed to be enough for the politicians to claim that they were right and protesters were wrong and should just shut-up.

There are many reasons why that position is untenable.

1.  The high-speed rail remains a sorry example of cost overruns and mismanagement.

  • The 26km high-speed line is HK $19.5 billion overbudget, a full 30% over-expenditure
  • 3 years late (60% time overrun)
  • Incorrect assessment of use:
    As of today, it would seem that southbound trips vastly outweigh northbound ones and overall, vastly under the forecasts (already revised down) which were said to be conservative (forecasts below).

    “With the nine trains procured by the MTRCL and current train path allocation of the MTRCL and the Mainland operator, the daily maximum carrying capacities of the XRL trains are around 136 000 for 2018 and 2021 and 225 300 for 2031 respectively. In other words, there is ample capacity for the XRL to accommodate more passengers. Having regard to the fast-growing economic and tourist developments around the short-haul destinations, we are optimistic that the actual patronage of the XRL would exceed the above current patronage forecast.”
    Yet, the West Kowloon Station has only reached that “conservative” 80,000 daily patronage once since it opened, on October 5th, 2018. The average day is about half of that.

  • Has yet to yield a net increase in cross-border traffic; the daily averages cross-border traffic before the West Kowloon Station opened, then after, is essentially the same. There is simply a shift from usage of the slow train service to the faster train service.

2. Convenience could have been fully achieved without illegally leasing Hong Kong land to China.

The immigration facilities arrangement at the West Kowloon Train Station actually has floors that are under mainland China’s complete and total jurisdiction and is treated as Chinese land. Many pundits have erroneously said that similar arrangements exist at the Canadian/U.S. border and in the U.K.
Firstly, the comparison is weak as in both of these examples, the laws applicable in the pre-clearance areas are the laws of the host land, except for immigration laws. For this lame West Kowloon Station arrangement, I blame weak Hong Kong politicians, too eager to please Beijing and get their prized choo-choo train project going, rather than negotiating for a better borders law-enforcement deal. Secondly, there is legitimate concerns in having mainland laws applied in Hong Kong as history has shown us that China has very little regard for the rule-of-law. In that sense, there is most likely less risk for an individual in getting justice for any incident at a U.S or U.K border, than at a Chinese one.
There is very little point arguing about this with CCP sycophants as their faith and/or fear in the system clouds any kind of logical thinking.
Secondly, it is mostly uncontroversial that the joint checkpoint was unconstitutional as per the Hong Kong Basic Law. It is outrageous that Beijing’s take on this would be considered as they are a biased party in this and, again, one not known for promoting or enforcing rule-of-law.

3. The line to nowhere.
For Hong-Kongers, the highspeed line makes little sense.  As a commuter line to nearby cities, it just doesn’t work. Not much time savings to Shenzhen over existing means of transportation, and not practical at all to get to Guangzhou as the station is way out of the business district. All the while being a lot more expensive ride.

Taking all these points into account, it is very clear that this high-speed rail is not meant primarily to serve Hong Kong people but rather, for Beijing to complete its Belt & Roads train network and serve Xinping’s over-dimensioned ego. Does it mean we should reject it? No. A more fundamental question is: why would Hong Kong pay any of this? We shouldn’t! If Hong Kong politicians had any guts or competence, they would have realized that they could have gotten Beijing to pay for most of it.

As a Hong Konger, should you boycott this new high-speed rail? Why would you? You paid dearly for it, use it as much as you can! But at the next elections, vote for a politician that did not rubber-stamp the project. These pro-Beijing apparatchiks are the ones that must be punished.

P.S. It is comical to read the sorry prose of Beijing cheerleader Yonden Lhatoo on the subject:  

Tuesday, September 04, 2018

Plastic bottle pollution comes from mainland China

"Two-thirds of the plastic bottles that green groups found on beaches in Hong Kong and Taiwan had simplified Chinese labels instead of ones in traditional Chinese characters.
The bottles, believed to be manufactured in the mainland, are believed to have floated to the beaches.
The Green Earth conducted 10 surveys in August on beaches in Hong Kong, including Lap Sap Wan in Shek O, Lamma Island, Sai Kung and Sha Tau Kok. It undertook the polls with several green groups in Taiwan, which conducted four similar surveys on beaches across the strait, including Penghu, Wanli and Keelung.
A total of 5,254 plastic bottles were found, according to the surveys. But of the 4,441 bottles that were identified, 66 percent had simplified Chinese labels, while 28 percent had traditional Chinese characters.

Thirty-three percent of the bottles in simplified Chinese bore the Master Kong's label, followed by Wahaha, Nongfu Spring and C'est Bon at 16, 14 and 13 percent, respectively. More than 30 other brands were also identified.

In Taiwan, 85 percent of the bottles that were found contained simplified Chinese labels. Of the 1,776 plastic bottles that were found on beaches in Hong Kong, 38 percent had simplified Chinese labels, while 55 percent displayed labels in traditional Chinese. Other bottles that were found had different languages on the labels.
An Environmental Protection Department study in 2015 showed that only five percent of marine waste was from the mainland, while 95 percent was produced locally. However, Hahn Chu Hon-keung, Green Earth's director of environmental advocacy, disputed the ratio, saying the EPD should review its study methods as the surveys found that 38 percent of the bottles came with simplified Chinese labels."

Tuesday, July 24, 2018

Hong Kong's timeline to dictatorship

Hong Kong has seen two pivotal moments that sealed its fate on the path to dictatorship; the nomination of Xi Xinping as the ultimate ruler of the CCP, and C.Y. Leung’s nomination.
Xi marked an era of return to the worst of what communism can be in terms of suppression of freedoms and the implementation of and authoritarian regime. C.Y. Leung, in his desire to ensure the best potential outcome for himself, also turned-out to put in place changes, and question democratic institutions.

"The SAR as a local government does not have complete executive power and legislative power ... [It] is not in the broad sense a government that consists of executive, legislative and judicial powers.
The Basic Law that we often talk about is a law passed by ... the National People's Congress. Thus, can we superimpose a concept of separation of powers as found in other countries?”
This was widely echoed by the pro-Bejing apparachicks:
“Fan, a member of the National People's Congress Standing Committee, also said there was no ‘separation of powers’ in Hong Kong. She said the phrase is only used by pan-democrats”
“The Deputy Director of the Basic Law Committee, Elsie Leung, says there's no ‘absolute separation of powers’ in Hong Kong. (…) In an exclusive interview with RTHK, she said while there is no stipulation in the Basic Law that a separation of powers exists here, the fact is the executive, legislative and judiciary do have their own jurisdictions with sufficient checks and balances between them.”

“Leung has shown little hesitation in threatening – or resorting to – abusive litigation against his perceived opponents. In 2013 he threatened to sue the Hong Kong Economic Journal after it ran an op-ed by Joseph Lian Yi-zheng that purported to highlight Leung’s connections with triads and raised the possibility that he, or connected individuals, could be subjected to shuanggui (Party disciplinary investigations). Earlier this year, Leung again threatened to sue a newspaper – this time the pro-democracy tabloid Apple Daily – for discussing a secret payment of HK$50 million from Australian company UGL. Jose Carlos Ugaz, chairman of Transparency International, panned the libel threat against Apple Daily as “ridiculous.”
More significantly, there are signs that Leung’s administration has invoked litigation in order to shift blame for politically unpopular decisions to the Judiciary. The occupation of part of Mongkok district during the Umbrella Movement ended not through the invocation of the police’s public order powers, but after an ostensibly independent group of taxi and minibus drivers obtained an injunction – a cynical move to disguise a public law issue as a civil dispute. More recently, the government’s last-minute application to bar two localist politicians elected to the legislature from retaking their oaths of office is a clear abuse of a process that runs counter to established constitutional principles and precedent.
A hallmark of Hong Kong politics under CY Leung has been the proliferation of pro-government protesters. Prior to the Leung administration, such groups and demonstrations were ‘extremely rare;’ they now form an entrenched part of Hong Kong’s political landscape. With them has come an upsurge in violence against pro-democracy protesters, as well as members of the press. As with violent Trump supporters, there are no signs of official connections between the government and its supporters’ conduct. Yet, the police have been accused of selective enforcement – for example by allowing anti-Occupy mobs to operate with impunity.
Leung and others in his camp have also been adept at exploiting xenophobic sentiment. Some of their vitriol has been directed at “foreign” (i.e. not ethnically Chinese) judges on the Court of Final Appeal – judges whose status on the Court is protected by Article 82 of the Basic Law. However, much more invective has been directed at individuals who seek protection under the Convention Against Torture. Pro-government politicians have stumbled over each other to smear asylum seekers as “fake” refugees or advocate internment in offshore camps. Leung outdid them all. Speaking after his 2016 Policy Address, the Chief Executive suggested that Hong Kong might withdraw from the Convention Against Torture over the ‘problem’ of ‘fake’ refugees.
Allegations surrounding Leung’s receipt of a payment of HK$50 million from UGL have proven to be an albatross around Leung’s neck since 2014 when The Age first exposed the payment. Leung has repeatedly stonewalled on the issue – and, as mentioned above, even threatened to sue the Apple Daily over its discussion of the UGL scandal.
Yet, even this may pale into insignificance compared to strange goings-on at the Independent Commission Against Corruption, the city’s corruption watchdog. In July 2016 Rebecca Li, the acting head of the ICAC’s investigative unit, was abruptly removed without explanation; senior investigator Dale Ko resigned days later. ICAC Commissioner Simon Peh attempted to quell speculation by declaring that he, and not Leung, made the decision to fire Li. Yet suspicions persist that Peh – who is accountable to the Chief Executive – removed her because of her investigation of the UGL payments. Peh subsequently panned the allegations as “slander” in a letter to democratic legislators, but declined to meet with them to explain the circumstances behind the abrupt personnel changes.”

Leung is also the instigator of the oath-taking legal reviews, and the demand for Bejing to re-interpret the Basic Law (although these were done behind closed doors).

C.Y. Leung left a poisonous climate of thinly-veiled authoritarianism which Carrie Lam does not seem willing to change. Unless the Hong Kong population demand change and takes the street to do so, nothing seem to indicate that this slow-progression towards CCP-styled dictatorship is going to abate.

I thought it would be relevant to try to forecast what kind of incremental changes we can expect from now to 2047 and beyond. Then, what I believe would be the proper way to counter-act, or at least to diminish their impacts.

  • C.E. forces the passing of Article 23 in its strictest form. (1)
  • Political parties advocating Hong Kong independence are banned. So is the promotion of independence in any form. It becomes punishable with 6 months jail-term. (1)
  • National education curriculum is part of the school curriculum, does not include anything negative about the Communist party (2)
  • Hong Kong resident jailed for kneeling during the anthem at Seven's game. Carrie Lam says that the law is clear and that Hong Kong must apply the rule of law
  • Beijing interprets the Basic-Law and state that separation of powers is not guaranteed by it and therefore, the mainland’s model applies. (3)
  • HK executive frequently intervenes and influence court cases. (3)
  • National education curriculum increasingly include reference to the great achievements of China (2)
  • Hong Kong legco passes law forbidding debate on Hong Kong independence throughout the school system, all the way to universities (1)
  • Bejing states that, according to Article 23, it must prevent the spread of seditious ideas on the Internet, and propose to extend the great Chinese wall to Hong Kong. (1)
  • Foreign judges are not allowed to practice in Hong Kong
  • Increased political influence into the workings of ICAC.
  • ICAC regularly used as a tool to suppress political dissent.
  • Protesters are denied right of assembly based on Article 23. Protest leaders are routinely jailed as a result. (1)
  • PLA soldiers in uniform in the streets of Hong Kong

Post 2047:
  • Legco is fully appointed by Beijing
  • Corruption is rampant in the ranks of government officials
  • Yuan is fully convertible across China
  • Hong Kong lawyers frequently get arrested for ‘promoting’ interpretation of the law that are in opposition with Bejing’s
  • Hong Kong uses Yuan as currency
  • Mandarin is the primary language of education in Hong Kong
  • Capital punishment is re-introduced in Hong Kong
  • Socialism with Chinese characteristics is the official economic model for Hong Kong
  • Hong Kong is a second-tier mainland city

Bejing’s useful idiots response is:
“Hong Kong is the only place in the world without a national security legislation,” Wang said. “It’s a major weakness in the nation’s overall security, and it has a direct impact on residents.”
Filter out the noise, and the message from the mainland is simple. There can be no political progress or improvement in governance without enacting the national security legislation as outlined in Article 23 of the Basic Law, Hong Kong’s mini-constitution.
You may or may not have electoral reform – a version of which was vetoed by the opposition in 2015 – with Article 23 legislation. But you will never have electoral reform without it.
Criticise all you want but the central government is not a liberal democracy, so you are barking up the wrong tree demanding that it behave like one.”
Or the opposition can drop its opposition to Article 23. In exchange, demand Beijing relaxes its restricted framework on electoral reform and accelerate the pace of reform for both the chief executive and Legislative Council elections.”

We see here Lo’s naivety; why would Beijing relax its framework on electoral reform? It has been quite happy to re-interpret the basic-law whichever way gives it more power. Actually, quite the opposite, Bejing has quite clearly shown signs of how it will pressure Hong Kong to use the law:

“An adviser to Hong Kong’s leader has defended a former Beijing official who urged city residents not to cross a legal line by challenging China’s socialist system, saying it was not a hardline stance.
Qiao Xiaoyang, in the city for a week-long tour, appealed to Hongkongers on Saturday to back the Communist Party.”
“And some say advocacy of Hong Kong independence is protected by freedom of speech. Conspiracy and incitement to split up the country is just freedom of expression? No such reasoning would be acceptable in any part of the world.” (False)
“Since Hong Kong’s return to Chinese sovereignty, some people in the city have openly opposed the socialist system in China. This contravenes the Basic Law, and is unconstitutional. In accordance with the Basic Law, which draws its power from the constitution, no person has the right to oppose the country’s fundamental system.
The leadership of the Communist Party of China is the defining feature of socialism with Chinese characteristics. Therefore, the leadership of the party is also part of the constitutional system. When one respects the constitution, upholds the constitution, and abides by the constitution, one should also respect, support and follow the leadership of the party.”

The only way to deal with the bully, is to blunt its instrument of torture. Therefore, the only way for Hong Kong to escape the ever-closer clasping grip of the Chinese dictatorship, is for us to make into law an Article 23 that proscribes its abuse. Something akin to the Canadian sedition law would be desirable in my opinion. It would also give the courts a clear interpretation of the basic-law which protects freedom-of-expression.

Sedition laws were passed during time of war (1918). Furthermore, Brandenburg v. Ohio affirmed in 1969 that seditious speech in itself, even the advocacy of violence, was not sufficient for condemnation unless it constitutes an imminent threat.

In Canada, sedition is covered by article 59 of the Canadian criminal code.

Seditious words
59 (1) Seditious words are words that express a seditious intention.

Marginal note:Seditious libel
(2) A seditious libel is a libel that expresses a seditious intention.

Marginal note:Seditious conspiracy
(3) A seditious conspiracy is an agreement between two or more persons to carry out a seditious intention.

Marginal note:Seditious intention
(4) Without limiting the generality of the meaning of the expression seditious intention, every one shall be presumed to have a seditious intention who

(a) teaches or advocates, or

(b) publishes or circulates any writing that advocates,

the use, without the authority of law, of force as a means of accomplishing a governmental change within Canada.

There’s no real anti-sedition law in Germany

Section 73 of the Coroners and Justice Act 2009 abolishes sedition and seditious libel. This came into effect from 12th January 2010.

Has anti-sedition laws that date back from its colonial past. And it is highly controversial as it is mostly used to suppress dissent from the political discourse.

I believe that the best way to handle this situation is to be vigilant, to agree on the need for a mandatory national education curriculum, and for schools to define the curriculum together, instead of waiting for it to be imposed by the government.

Separation of powers need to be defined de-facto as part of the implementation of the legal framework. It should be defined and referenced as such in legal documents. Any changes by Beijing would then become obvious and likely to generate significant popular backlashes

Pan-democrats need to swallow their pride and accept the first step towards a more democratically elected C.E., which is to accept Beijing’s nomination committee as it was proposed, associated with a condition that the nomination procedure be reviewed every 4 years

In closing, the quote below sums-up what is the most dangerous frame of mind in the current discourse:
"Freedom of speech is not an absolute. It is subject to limits in practically all human societies. Sometimes such limits are justified; other times, not.
The First Amendment of the United States Constitution, in rendering free speech almost an absolute right, is an outlier. Many people admire it from afar. Then again, it’s much easier to deal in absolutes than having to acknowledge nuances and conditions.

It seems to me a far greater achievement for societies that have managed to balance free speech with the need for public order and social consensus."

The fact is that all modern, open societies, which also are the richest incidentally, all have very, very few restrictions to freedom of speech, usually centered on libel, hate speech, and advocacy of violence. The public order argument is almost always the argument of autocrats and despots…