Carrie Lam Threatens Hong Kong With Chinese Military Invasion
Uh oh. The mask ban didn’t work in Hong Kong and now Carrie Lam, Chief Executive, is telling Hong Kongers that she has a nuclear button. She will not rule out asking China to come in and take care of business. The ball is now in the court of the protesters. Will they back down now, or will they come out in full-out masked force and dare the Chinese to invade? If so, Hong Kong stocks are going to get taken out to the woodshed and beaten. Watch Tencent Holdings (OTCMKTS:TCEHY) as a bellwether for how bad things can get. Chinese stocks (NYSEARCA:FXI) wouldn’t do too well either, as foreign investment flows might get cut off from their valve on the island.
In more China news, the NBA is standing by the Houston Rockets in its defense of a tweet by its general manager expressing support for the Hong Kong protesters. China is now threatening to cut ties with the NBA, worth about $4 billion.
In even more China news, South Park creators Matt Stone and Trey Parker have issued an apology to Xi Jinping for insinuating that he looks like Winnie the Pooh, which is sort of true. China has now banned South Park. In any case, the two, known for never being sarcastic, are very very sorry. “We too love money more than freedom and democracy. Xi doesn’t look just like Winnie the Pooh at all,” they tweeted, adding their wishes for a bountiful autumn sorghum harvest and the success of the Communist Party of China.
Brexit Talks On Verge of Breakdown
The British government is getting mad, and Brexit talks appear to be on the verge of a total breakdown. A leak from The Spectator, probably sent there on purpose by arch Brexiter and Boris Johnson’s Chief of Staff Dominic Cummings indicates that the plan is to insist that any extension to Brexit would be pointless and discussion would not be reopened under any circumstances, and that the only reason that an extension is even being requested is that it is being forced by a “parliament as popular as the clap”. No word on whether gonorrhea will be mentioned explicitly in any letter sent to the European Union under the auspices of the Benn Act, which compels Boris Johnson to ask for an extension to January 31. Further, even if an extension were granted, upon winning an election, a newly mandated Johnson Administration would simply “[revoke] the entire EU legal order without further talks” indicating possibly that the UK would leave the EU without a deal even before the January 31 deadline, immediately upon reelection of Johnson.
Index Funds Passive Even On the Inside
Reuters is out with an interesting report on just how passive index funds are, even on internal levels in terms of their support for whatever company executives decide. BlackRock (NASDAQ:BLK), Vanguard, and State Street (NYSE:STT) have for example overwhelmingly supported decisions and pay packages for even the least popular moves of the worst companies their index funds hold. All three of the funds supported doubling the pay of the CEO of PG&E after its stock plummeted to all time lows over the California fires. They also all voted against the reform of splitting CEO and Chairman at General Electric (NYSE:GE) after the stock had cratered from years of bad financial management that nearly bankrupted the company.
Half of Deutsche Bank’s 18,000 Layoffs To Take Place in Germany
Germany, possibly already in recession, is about to lose a bunch of jobs from one of the most dysfunctional banks in the Western world. Deutsche Bank (NYSE:DB), which earlier this year announced a radical restructuring plan that included laying off about 18,000 workers, will be getting half that layoff number from its home market in Germany itself. The next hardest hit will be London, partly because of Brexit concerns. This comes as interest rates in Germany are still negative and went even deeper into negative territory last month. The bank is now getting the largest chunk of its revenue from its retail segment. Deutsche will have to keep shielding depositors from negative interest rates and eating the cost itself if it wants to prevent bleeding assets any further and losing even more, which may be inevitable.