Wednesday 8 May 2013
Photo, above: Berta Soler with His Holinees Pope Francis. See: Hour 3, Block C: Mary O’Grady, WSJ THE AMERICAS, on: Havana in Black and White; the dissident Berta Soler takes a big risk by telling the truth about racism and repression in Cuba.
JOHN BATCHELOR SHOW
Co-hosts; Gordon Chang, Forbes.com, and Dr. David M. Livingston, The Space Show
Wednesday 8 May 2013/ Hour 1, Block A: Anne Stevenson-Yang, co-founder of J Capital Research, in re: her analysis of China's property market. While statistics released are not reliable, govt can delay the bursting of the bubble. Every city has huge hulks of empty bldgs; 10% of inventory is moving, the rest is waiting, being paid by govt not to sell. Old man in small town: "Where will they get all the people to live in these buildings?" Every village in China dreams of recreating life overseas as long as they can copy the bldgs. Service sector: a mtg last week with a large dvpr in a large city in the wet: bldg a whole new district; his finances, of all credit getting 10-20% for new stuff; new credit goes to pay interest on the old. Property sector is a vortex into which everything is sucked, causing privation in the rest of he economy, Borrowing new money to pay debt svc on old; banks thus don’t have to recognize losses. NPL ratio therefore is nothing like as low as advertised. Everyone of means is movinghis money overseas; nmost peopke buy
Growth in China's services sector slowed sharply in April to its lowest point since August 2011, a private sector survey showed on Monday - fresh evidence of rising risks to a revival in the world's No.2 economy. The HSBC services Purchasing Managers' Index (PMI) fell to 51.1 in April from 54.3 in March, with new order expansion the slowest in 20 months and staffing levels in the service sector decreasing for the first time since January 2009. Two separate PMIs last week had already shown that China's manufacturing sector growth slowed, With the weakness spreading to services, which make up almost half of gross domestic product, the risk to the recovery may be increasing. "The weak HSBC service PMI figure provides further evidence of a slowdown not only in the factory sector but also in the service sector," said Zhang Zhiwei, chief China economist at Nomura Securities in Hong Kong. [more]
Last week brought another “Golden Week” holiday to China, and what better way to spend it than shopping for real estate? Ostensibly, prices continue edging up. But the stated prices often hide discounts that can be as high as 50%. While the practice of burying discounts in “gifted square meters” or other extras has been around for a long time, the level of discount now available almost everywhere suggests a new degree of distress on the part of developers. And yet many of the developments seem to be newly under construction again after widespread halts and delays, a sign of the credit flowing through the market. But even if sales volumes grow a bit, the additional inventory will easily engulf any added demand. By the weekend before May 1, the agencies all had employees on the street leafleting, wearing sandwich boards, offering gifts to induce people to visit properties--a lot like the U.S. time-share industry, but more widespread. Potential buyers were offered “free square meters,” free maintenance fees, free gas cards, parking spaces, gym memberships, and even a year of free hotpot. . . . [more]
Wednesday 8 May 2013/ Hour 1, Block B: Gordon Chang, Forbes.com, in re: No invitation to China for Aung San Suu Kyi: "too old" The Chinese Communist Party, inviting the National League for Democracy, puts an age limit of 60 on delegates. And the Lady is 67. Beijing’s revenge for losing its economic monopoly on Myanmar, following the democratic openness of the country. Yangon (AsiaNews / Agencies) - The Chinese Communist Party has ruled out any visit by Aung San Suu Kyi to China because she is over 60. In accepting a first visit by her party, the National League for Democracy (Ndl), Beijing set a limit that the representatives be no more than 60. Han Thar Myint, a member of the NLD Executive Committee, who organized the trip, set for next week, explained that "the invitation stated fact that the delegates must be under 60 years. Aung San Suu Kyi is 67 years old now, so can not go". This refusal to allow Suu Kyi visit has sparked speculation and criticism. She is an icon of democracy and thanks to her Myanmar has set out towards a more liberal system, limiting the power of the military junta, always supported by Beijing with weapons and economic aid. Under the junta dictatorship, China had become the nation's largest trading partner, accused of pillaging the mineral wealth, water and forests of Myanmar. The democratic openings of recent years have removed China's monopoly on Myanmar, opening the market to the rest of the international community. "This is why the lady is like a red rag to a bull to Beijing" - a source tells AsiaNews . In recent times, perhaps driven by realism, Aung San Suu Kyi has eased criticism of China and Chinese investment. Last March, for example, she and the NLD spoke out in favor of a copper mine in Monywa, managed by Beijing, even if there had been land grabs and neglect of the environment, reported by locals. [more]
Also: Chinese assertions that it's the US acting as a provocateur, or Xi explaining that his chat with Abbas will solve the Middle East, and a handful of other odd behaviors – are not coherent, and in fact make no sense. Seems that some factions are contravening others in PRC; apparent breakdown of authority in PRC foreign policy. "Premature aggression" – taking on a passel of different countries at once, some of which are stronger than China. Since Jiang, Hu and Xi are all alive at once, and old leaders never butt out of the apex of political power (Hu controls the Central Military Commission; Jiang, the Central Committee – leaving precious little space for Mr Xi. To boot:
Wednesday 8 May 2013/ Hour 1, Block C: Space Show, episode n. Dr. David M. Livingston, The Space Show, and Charles A. Lurio, The Lurio report, in re: suborbital: e.g., 110 mi above Earth; from a couple of minutes to 8 minutes in microgravity. A few yrs since the last privately-powered vehicle in suborbit; barring mishaps, will have one again next year. A tourist arrives at the spaceport; vehicle is suspended in under another vehicle called White Night II (dbl-hulled) – takes the tourist up in the smaller vehicle, and glide down to land. Maybe fifteen minutes. In Virgin Galactic: tourists can undo seat belts and float a bit. Tix: $200K. Simulation on people from their teens to their nineties, found that it seems do-able for all. Starting to line up for an exciting phase: head of XCor showed all the pieces coming together in the Mohave; certain frequency and accessibility to space that hitherto has never been possible. Bringing all sort of people in, incl amateurs. Spaceports: Virgin has 6Gs coming back; anticipated early on, will be lying down on seats that move back (pilots a bit more vertical). Is there a backlog? Dunno for sure, but they have reservations on 560 seats (downpayment of $20K); at 1,000 s9uld, may reduce the price. David Livingston: after 13 years, have done 2004 shows in hre face of many doubts as to whether or not there even would be private space. Congratulations!. (Vogue: correct wear for space travel.)
Wednesday 8 May 2013/ Hour 1, Block D: Patrick Chovanec, chief strategist at Silvercrest Asset Management, in re: accounting scandals in China. Chinese bankruptcy laws make it very hard to get your hands on any assets. The makings of very intense struggles . . . . Subtech, one of the largest solar firms in the world: Chinese creditors get paid back before foreigners [lao guei, old ghosts, as in, ghastly white people], who can get 1 cent on a dollar. Heading to a confrontation betw US & China, cd lead to delisting all Chinese companies on US markets. US securities laws oblige any listed co to be audited by qualified auditors; any suspicion of fraud, SEC has to be able to subpoena. China says: NO. Forget it. This goes to the heart of US securities laws, while China needs to protect secrets. This is China vs securities regulators worldwide. One Chinee co raised $760mil in the US – and disappeared.
Wednesday 8 May 2013/ Hour 2, Block A: Sikyong Dr. Lobsang Sangay, Prime Minister of Tibetan Central Administration = Tibetan government in exile, in re: Tibetan self-immolations; why Dr Sangay is in Washington this week; prospects for the Tibet issue. Young Tibetans, monks and nuns, destroying themselves in such a gruesome fashion: 117 have committed self-immolation in protest against the continuing occupation of Tibet and he oppression of he people. Most are lay people – farmers, students, parents – while many are monks and nuns. Marginalization of Tibetan people. cultural destruction, environmental damage, Protest leads to torture, disappearance, death. During XVIII Party Congress, many fire extinguishers varied by security personnel out of fear of a self-immolation; rather than realize that the hard-line policies in Tibet are not working, they come down heavier, thus finding more resistance. The policies cause the opposite of the desired result. Have criminalized self-immolation, given people long prison sentences: a person who was trying to rescue a body and give it a decent funeral, was jailed for years. Hu Jintao was notorious for harsh, murderous policies in Tibet. Xi Jinping shows no change: personnel – Politburo (20 poeple0 < there used to be one "minority" – and now none, In Central Committee, used to be 16,not reduced t o ten. At ground level, deeds criminalized. Xi's father knew the Dalai Lama, and the Panchen Lama had a close relationship; Xi pere wrote the Official obituary, a long one; Xi's wife is Buddhist – but the system allows zero latitude, Constant repression, and getting worse.
Wednesday 8 May 2013/ Hour 2, Block B: . Richard Fisher, Senior Fellow, Asian Military Affairs at the International Assessment and Strategy Center, in re: the Pentagon annual report to Congress on China – "90% of cyberespionage comes from China." No indication yet of any fightback, or how to defend ht US's secrets or money. Have to demonstrate that what they’re doing will cost them. , e.g., "For ten yars, the 750,000 student now studying in the US will have to leave, and new students will not be admitted" – and they come to the US specifically to learn to bring China's technology up to date. The Asst SecDef: China will bld several new aircraft carriers over the next 15 years, becoming 5 carriers in 20 years, This wd be a amazing dvpt, US wd have to work very hard to counter, Fifth-gen aircraft by 2018; ballistic missiles. The Shenyang J15 will be slightly better than our Boeing 18JEF. For the last decade, PLA has directed its historical research dept to study Japan 1940-1942, has produced huge body of material on that campaign and have many suggestions on how to do it better. Starts coming together well in late 2020s, early 2030s. They'll then feel in a dominant situation to move out and take over countries, This year, we cd see small actions having strategic impacts- esp if the move and we do nothing about it.
Wednesday 8 May 2013/ Hour 2, Block C: Joseph Sternberg, WSJ Asia editorial board, in re: Unearned Praise for Abenomics: Strong corporate profits are not exactly an endorsement of the weak-yen policy. GC: Abe has made bringing down the value of the yen a major policy; in fact, that's not working – companies take advantage of exchange rate: massive depreciation of yen value, and blowing up Japanese money supply to huge levels, it’s like a cold war, in a tripartite race of US, China, Japan. JS: I'm more pessimistic – it's a Hobbsian war of all against all, incl the euro, Bank of England, Asian economies (esp Korea) – a race to the bottom in monetary policy, Look for inflation picking up. Classic beggar-thy-neighbor policy. Sluggish growth and high unemployment in the US and Europe. Abe has few good choices. Not that Japanese forex income has often been strongest when the yen was strong.
Wednesday 8 May 2013/ Hour 2, Block D: .Gordon Chang, Forbes.com, in re: the ownership of the Ryukyus: China says that long,, scholarly study suggests a need to revisit the [thoughts]; they were a "vassal state of China in the late 1800s." China sees no pushback so pushes further out – these are the Third Reich of the Twenty-first Century; not happy with territories and wants to expand. Chinese have been telling us that they’re expanding and we haven’t been listening. The Japanese prefer to avoid confrontational language, but they’re really scared. JB: We don’t use the word "injudicious" in New York; we say, "Put up or shut up, guy."
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Bruce Bechtol, author of the just-released The Last Days of Kim Jong-il: The North Korean Threat in a Changing Era, discusses North Korea. President Barack Obama and South Korean President Park Geun Hye said North Korea’s regime is too unpredictable to know whether Kim Jong Un is ready to ratchet down tensions and they vowed his threats won’t win concessions. Park and Obama, at a news conference yesterday after they met at the White House, declined to comment on reports that North Korea had pulled medium-range missiles from a launch site, a possible move by Kim to step back from his recent threats and provocations.
“North Korea is isolated at the moment, so it’s hard to find anyone that could really accurately fathom the situation in North Korea,” Park said. “Its actions are all so very unpredictable.” Obama said he doesn’t know Kim and “can’t really give you an opinion about his personal characteristics. What we do know is the actions that he’s taken have been provocative and seem to pursue a dead end.” Park, three months into her presidency, is making her first foreign trip to mark the 60th anniversary of the U.S.-South Korean alliance. The two nations are seeking to expand cooperation on trade and energy as well as security. Park will address the U.S. Congress today. She and Obama sought to show a solid front on North Korea, with Obama saying the two long-time allies are “as united as ever.”
Standoff The U.S. and South Korea have been in a standoff with Kim’s regime since February, when it tested a nuclear weapon in defiance of United Nations sanctions and then threatened atomic strikes. Last week, the last remaining South Korean workers left the Gaeseong industrial zone jointly run by the two Koreas, severing one of the last channels of inter-Korean contact. North Korea also sentenced a U.S. citizen to 15 years hard labor for unidentified crimes committed after he entered the country last year as a tourist. Kim’s regime ratcheted up its rhetoric against the U.S. and South Korea following the February nuclear test. Last month, it said developing nuclear weapons is a top priority. Earlier, it said there was a “state of war” with South Korea. It cut a cross-border hotline, and it has threatened pre-emptive nuclear strikes in response to U.S.-South Korea military drills. Park said North Korea has “no choice but to change” and urged the world to send a message that the communist country would be rewarded if it drops its nuclear ambitions.
No Concessions Both leaders vowed that Kim won’t be allowed to wring concessions from other nations by making threats. Obama also warned that that the U.S. is ready to back its allies in any military confrontation. The U.S. “is fully prepared and capable of defending ourselves and our allies with the full range of capabilities available, including the deterrence provided by our conventional and nuclear forces,” Obama said. Park’s visit also is an opportunity for Obama to keep the momentum going during a high point of relations between the U.S. and South Korea, and at a time the U.S. is seeking participants in a multination Trans-Pacific Partnership trade pact. The U.S.-South Korea free trade accord took effect in March 2012, five years after it was first agreed to by former Presidents George W. Bush and Roh Moo Hyun. South Korea was the seventh biggest U.S. trading partner in 2012, according to U.S. Census Bureau data, with exports and imports totaling $101 billion.
Trade Relationship The U.S. trade deficit with South Korea was $1.3 billion in March, compared with $551 million a year earlier, according to figures from the U.S. Census bureau. The value of U.S. exports to South Korea in March declined to $3.85 billion from $4.2 billion at the same time last year. Obama’s rapport with Park’s predecessor, Lee Myung-bak, was on display in sealing the U.S.-South Korea free trade accord that went into effect 14 months ago. “What I think this summit will really be about, in addition to the issues, is building a relationship,” Victor Cha, senior adviser for the Center for Strategic and International Studies, a Washington policy center, said in a briefing last week. “She has big shoes to fill,” Cha said of Park. Obama “really did like Lee Myung-bak, and so I think there will be an effort to try to build or replicate, perhaps in a different fashion, the same sort of personal relationship.” The U.S. and Korea also discussed civilian nuclear policy, cost sharing for U.S. forces and a phase-out of combined forces command set for 2015. Park is accompanied by a delegation of Korean business leaders. She traveled to Washington from New York, where she met with UN Secretary General Ban Ki Moon.
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Wednesday 8 May 2013/ Hour 3, Block A: Dean Yates Lead writer, Asia Top News Team Thomson Reuters, in re: Bank of China Ltd (3988.HK) (601988.SS) has shut the account of North Korea's main foreign exchange bank, which was hit with U.S. sanctions in March after Washington accused it of helping finance Pyongyang's nuclear weapons program. Bank of China has moved against North Korea: closed the account of North Korea's main exchange bank, North Korea Foreign Trade Bank, which sends a msg also to other banks elsewhere doing bz with DPRK. Of course, it'd be a lot more meaningful if all Chinese banks cut ties. "The Chinese banking system is rather opaque." China Construction Bank, Agricultural Bank, & ______ have not closed bz with DPRK; China Construction Bank claims it has no relations, but DPRK has relations with all sorts of Chinese border banks. This cd be a Chinese effort t hold favorable relations with its counterparty Western banks, but almost surely is basically a political move. Ergo, witll DPRK have to go to barter? Already lots along the DPRK-China border. North Korea shit down hte Kaesong Commercial Zone, and so reduced its forex.
Wednesday 8 May 2013/ Hour 3, Block B: .Larry Johnson, NoQuarter, in re: Benghazi hearings today. Attack launched vs the ambassador's residence . . . put out an alert; six hours to conclusion. They knew in AFRICOM, Tripoli, Washington. "We cdn't have got forces there in time" – how cd anyone know how long it'd last?? Exactly, They didn’t know – so you have to prepare yr assets, line them up. What was done at highest level – P Kenndy, H Clinton, J Brennan, decided to do nothing. Leaderless position except for the Charge, the Dep Chief of Mission who became Acting Amb after Stevens died. This is why the Counterterrorist Extremis Force. Other elements cd have been mobilized and brought in. Dep Chief of Mission Greg Hicks gave very careful testimony today, did not say that the annex was CIA, said it was Ansar al-Shariah. GRS, Global Response, had to charter an aircraft!
Wednesday 8 May 2013/ Hour 3, Block C: . Mary O’Grady, WSJ, in re: THE AMERICAS Havana in Black and White; Dissident Berta Soler takes a big risk by telling the truth about racism and repression in Cuba.
Wednesday 8 May 2013/ Hour 3, Block D: John Avlon, CNN, The Daily Beast, and Newsweek International, in re: the Comeback Kid.
Wednesday 8 May 2013/ Hour 4, Block B: Paul Barret, in re: BIG LAW FIRMS’ SMALL FUTURE Law firms are merging and growing like startups. Sharp young minds keep flooding into law schools. But as D.C.-based law firm Howrey discovered – after its impressive rise, massive expansion and spectacular collapse – Big Law is about to get a lot smaller. Other large firms have already imploded, and more will do so. Just as law schools get ready to graduate a new crop of JDs to uncertain fates, assistant managing editor Paul Barrett examines how the larger U.S. law firms are battling issues ranging from growth for growth’s sake to breathtakingly incompetent leadership – and why it might serve the client well in the end. Read the story here: http://buswk.co/biglaw
Wednesday 8 May 2013/ Hour 4, Block D: Michael Balter Science, in re: Human Ancestors Were Fashion Conscious Changes in 75,000-year-old-jewelry show that even early humans cared about personal style
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