September 6, 2017

If you were to read only one thing…

“First it put the squeeze on ideologically impure academics. Then it tried to censor foreign publishers such as Cambridge University Press. Now President Xi Jinping’s government is intensifying its drive to rewrite Chinese history by amending the archival record itself.”
“New research by a legal scholar reveals that Chinese authorities have been taking advantage of the digitalization of historical documents by systematically deleting Chinese journal articles from the 1950s that challenge the orthodoxy promoted by Mr. Xi.”
“In the past if someone wanted to censor, they had to go to the bookshelves and remove copies or pages but today, with a few keystrokes, you can wipe out content everywhere instantaneously.” – Glenn Tiffert, University of Michigan
“Mr. Tiffert said that digitalization has become an enabling tool for authoritarian regimes such as China, which has taken the lesson from the collapse of the Soviet Union that Communist governments ‘may not survive critical scrutiny’.”
“Although the Communist party has always tried to keep a tight grip on the historical narrative, Zhang Qianfan, a professor of constitutional law at Peking University, said it was getting worse, making ‘society and particularly the younger generations more ignorant about modern history’.”

Perspective

WSJ – Daily Shot: Business Insider – 17 US Companies with Biggest Cash Piles 9/4

WSJ – Daily Shot: recode – Tech companies lead in R&D spending 9/4

“Founded (the National Flood Insurance Program – NFIP) in 1968 to make sure homeowners in flood-prone areas could get affordable insurance, the program ends up paying most residential flood insurance claims in the U.S. Partly as a result, development along coasts and riverbanks and in flood plains has exploded over the past 50 years. So have claims for flood damages. The NFIP is now about $25 billion in debt.”
“The issues surrounding the NFIP go beyond just insurance and straight to the costs of climate change—specifically, whether the government will concede that the most vulnerable places simply can’t be protected. While hurricanes contribute greatly to costs, putting a sudden spotlight on the insurance issue, it’s the chronic flooding that happens away from the public eye, in places such as Dauphin Island (Alabama), that slowly drains the NFIP. The island has one of the country’s highest concentrations of houses that the Federal Emergency Management Agency calls ‘severe repetitive loss’—those that flood most often. The owners of those 84 properties have gotten almost $17 million since 1978, an average of $199,244 each.”
Of course, they’re not alone. “Last year the Natural Resources Defense Council won a lawsuit seeking to uncover how many homes FEMA has designated severe repetitive loss. The data the agency was forced to release showed that about 30,000 properties had cost taxpayers $5.5 billion since 1978.”

Worthy Insights / Opinion Pieces / Advice

“The psychological bias to expect a return to ‘normality’ will remain strong. But the drivers of post-crisis economic performance are so deep that no return to normality is likely any time soon.”

Real Estate

WSJ – Daily Shot: FRED – Total Private Construction Spending – Office 9/4

Finance

“The declaration Monday by China’s central bank that initial coin offerings are illegal and should be halted immediately shouldn’t come as any surprise.”
“Beijing had been mulling a plan for controlling this year’s boom in cryptocurrencies, with QQ.com reporting last week that authorities met with the chief securities and banking watchdogs. The state-endorsed National Internet Finance Association had also warned that ICOs pose a financial risk and may disrupt social economic order.”
“More than $1.8 billion has been raised through the 135 initial coin offerings listed at CoinSchedule this year.”

“The cryptocurrency correction may have started.”
“After months of unprecedented appreciation, almost every digital currency is seeing double digit losses over the last 48 hours.”
“The cryptocurrency market as a whole has lost 20% in just two days as it fell to $142 billion, down from a total market cap of about $180 billion on Saturday.”
“Of course it’s important to put things into context – this ‘crash’ still leaves Bitcoin at double the price it was just four months ago. But it shows why ‘investing’ in cryptocurrencies isn’t for the faint of heart.”
“So why did cryptocurrency crash this weekend? A few reasons:”
“This morning China outlawed ICOs, saying they have ‘seriously disrupted the economic and financial order.’ Whenever a government sanctions bitcoin or cryptocurrencies the market always takes a hit, especially right after the SEC warned against the legality of some ICOs.”
“Another possibility – the market was simply overheated. This crash started right around the time Bitcoin hit an all-time high of a few dollars under $5,000. In other words this may be a natural cool down – if you look at Bitcoin’s history periods of rapid growth are always followed by some type of downturn – the same thing happens when traditional equities rapidly appreciate.”

China

“Li Hejun, the entrepreneur and founder of solar energy group Hanergy who was briefly China’s richest man, has been disqualified from the management of any corporation in Hong Kong for eight years.”
“In a series of investigative reports into Hanergy in 2015, the Financial Times detailed creative use by its Hong Kong listed subsidiary Hanergy Thin Film Power of unpaid receivables from its parent to book profits, its reliance on China’s shadow banking market for funding and the tendency of its shares to book all their gains in the last 10 trading minutes of each day.”
“The Hanergy investigation drew attention to the role of shell companies in Hong Kong small-caps and the conflicts of interest between Hong Kong-listed businesses and the mainland Chinese parent companies that draw financing from the Hong Kong market without being subject to its disclosure rules.”

Japan

the janus observer