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30 July 2020
Video commentary for July 29th 2020
Eoin Treacy's view
A link to today's video commentary is posted in the Subscriber's Area.
Some of the topics discussed include: Fed policy constrained by debt, risk of antitrust for US tech companies contrasts with risk of government control for China's, gold and silver steady, platinum and palladium weak, oil and copper steady,
Zuckerberg Goes Off-Script; Blasts Apple and Google in Testimony
This article by Kurt Wagner and Alex Webb for Bloomberg may be of interest to subscribers. Here is a section:
During today’s testimony before a Congressional antitrust panel, Mark Zuckerberg went off-script a little bit -- at least the script we expected -- pointing out how Facebook Inc. lags behind a number of competitors, including Alphabet Inc., Amazon.com Inc. and Apple Inc.
Zuckerberg isn’t hesitating to use some sharp elbows, pointing out that Amazon is the fastest-growing advertising platform and Google is the biggest.
“In many areas, we are behind our competitors,” Zuckerberg said. “The most popular messaging service in the U.S. is iMessage. The fastest growing app is TikTok. The most popular app for video is YouTube. The fastest growing ads platform is Amazon. The largest ads platform is Google. And for every dollar spent on advertising in the U.S., less than ten cents is spent with us.”
This is why the executives likely preferred to appear at once -- it allows them to spread the burden. The antitrust case against Google and Facebook is far stronger than the one against Apple, for instance.
Eoin Treacy's view
The five largest tech companies in the USA have dominant positions in the social/ecommerce/cloud computing sectors. They may compete with one another but the barriers to entry are so large that it is largely beyond the scope for smaller companies to compete. In fact the only way for established businesses to reach consumers in any other these sectors is to use the products and services provided by the big five.
Five Eyes alliance could expand in scope to counteract China
Thanks to a subscriber for this article by Peter Wintour for the Guardian may be of interest. Here is a section:
KÅno said Japan would welcome an invitation to join the Five Eyes grouping.
He warned the growth of the Chinese economy has allowed China to purchase foreign tech companies, adding: “This is a development we must monitor closely. Tech-partnerships with countries like the UK will be critical to countering China, pooling our investments and encouraging our people to study the skill sets needed for our high-tech sectors to grow.”
He added China was attempting to become independent of the US dollar economy through fast money-sending services, the introduction of their own internet, launching a digital renminbi and introducing a Chinese international order.
KÅno in his remarks stressed he was not seeking a military conflict with China, and was instead hoping to provide the Chinese Communist party with the space to cut defence spending, allowing democratic nations to take parallel steps.
Urging caution about economic decoupling, Pascal Lamy, the former World Trade Organization director general, predicted a more autonomous and closed China was likely to prove more dangerous. But he warned: “The west cannot coexist in a free trade relationship with a country that subsidies 30% of its economy. If China is not willing to accept global disciplines on state aid then we have to review a number of trade commitments – whether it is on public procurement or in specific sectors.”
Eoin Treacy's view
The coronavirus crisis has been an accelerant for just about every trend. That is particularly true of the Anglosphere’s awakening to the threat posed by China’s increasingly ambitious program of global domination. There is no getting around the fact that many countries are heavily reliant on Chinese suppliers for essential components and products to fuel their economies, and are also reliant on Chinese demand to absorb their exports. Therefore, the process of decoupling was never going to be a simple process but it is underway and is likely to persist.
Tencent Sogou Deal Brings China U.S. Exits to $12 Billion
This article by Anson Tam and Irene Huang for Bloomberg may be of interest to subscribers. Here is a section:
Tencent Holdings Ltd.’s proposal to privatize search engine Sogou Inc. means eight Chinese companies
have either abandoned or plan to quit U.S. markets in deals worth more than $12 billion. Should investors be anticipating more deals?
Tencent’s $977 million proposed Sogou deal follows the $6.5 billion private equity-led privatization of 58.com Inc. and a $1.6 billion acquisition of Sina Corp. The backdrop is strained U.S.-China diplomatic ties, with this month’s closing of consulates in Houston and Chengdu. In May, the U.S. Holding Foreign Companies Accountable Act raised the prospect of delisting should a Chinese company be found to have broken tougher rules.
Eoin Treacy's view
While the CEO’s of the USA’s tech companies are grilled in Washington, China’s tech CEOs face no threat of antitrust measures. In a command economy, a company either fulfils a need in supporting the rule and glory of the Party or it does not. To the extent its assists in supporting the government’s ambition size and scope are encouraged. In fact, complete market dominance is the ambition.
Eoin's personal portfolio: stock market long closed 22/7
Eoin Treacy's view
One of the most commonly asked questions by subscribers is how to find details of my open traders. In an effort to make it easier I will simply repost the latest summary daily until there is a change. I'll change the title to the date of publication of new details so you will know when the information was provided.
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