A flattering proposal…

Friday, 22 September 2017
Melbourne, Australia
By Kris Sayce

  • Masks on…
  • More than fear
  • Don’t be first
  • An unstoppable trend

Would you like se-ex?

Maybe it was the way she turned the normally monosyllabic word into a two syllable word.

Maybe it was the lack of knee-high leather boots (or PVC boots for the less prosperous or vegan hooker).

Or the absence of a belt-width short skirt, and see-through-everything clothing.

For this lady of the afternoon (it was indeed, just after noon), pastel colours were more her thing. Yellow blouse, red slacks, and an umbrella to fend off the heat.

In fact, if she hadn’t said what she said, we would have assumed she had come straight from recording the Chinese version of The Golden Girls. Bea Arthur’s character, I’d say.

But speak she did.

Despite feeling flattered that she thought your editor was so handsome to make such an offer, we declined the invitation — politely, of course. We didn’t want to offend.

We were busy. We had other things on our mind. And so we continued our walk around Beijing’s Temple of the Sun gardens.

For this was not China’s equivalent of Soho or St Kilda or Kings Cross. It was, we thought, a more spiritual place than those. Or rather, it seems, a different kind of spirituality.

More tales from Beijing below…


Overnight, the Dow Jones Industrial Average closed down 53.36 points, or 0.24%.

The S&P 500 fell 7.64 points, or 0.30%.

In Europe, the Euro Stoxx 50 index ended the day up 14.04 points, or 0.40%. Meanwhile, the FTSE 100 closed down 0.11%, and Germany’s DAX index gained 0.25%.

In Asian markets, Japan’s Nikkei 225 index is down 62.35 points, or 0.31%. China’s CSI 300 is down 0.45%.

In Australia, the S&P/ASX 200 is up 21.80 points, or 0.39%.

On the commodities markets, West Texas Intermediate crude oil is US$50.61 per barrel. Brent crude is US$56.41 per barrel.

Gold is trading for US$1,297.96 (AU$1,638.59) per troy ounce. Silver is US$17.06 (AU$21.53) per troy ounce.

Bitcoin is US$3737.51.

The Aussie dollar is worth 0.79 US cents.

Masks on…

One of these days, a yet-to-be-found successor to your editor will likely have some sorrowful news to report.

We fear that one day, news will emerge that your editor’s lifeless body has been found on waste ground in some foreign city.

For you see, your editor is a hopelessly naïve traveller. Our propensity to be hustled and scammed is surely second to none.

When a stranger approaches us at an airport, offering to drive us to our hotel, do we take heed of the warnings about ignoring approaches from unlicensed drivers?

Of course not. Our only questions are, ‘Can you provide a receipt?’ and ‘Do you accept credit cards?’

When they answer yes to the former and no to the latter, pointing us towards an ATM, still we have no qualms.

And when the fare appears to be two, three, or four times what we think it should be…we still tip. We still say thank you. Maybe it’s out of relief of having made the journey safely to the hotel — ‘Thank you for not killing me, here’s an extra 10% gratuity.’

To date, we’ve survived. Perhaps the warnings are overdone. Or perhaps your editor has just been lucky.

Besides, in Beijing, it doesn’t seem that it’s the local hoodlums we need to fear. If anything it’s the pollution. After three clear-sky sunny days, today it was not-so-clear-sky haze…or smog:

chart image

Source: Port Phillip Insider
Click to enlarge

That was the view from our hotel room on two days this week.

Perhaps it explains why we found this item the walk-in wardrobe in our room:

chart image

Source: Port Phillip Insider
Click to enlarge

Yes, a gas mask.

We’re sure our proximity to North Korea has nothing to do with it either!

More than fear

What’s that you say? Enough of the wittering, and more of the financial markets analysis.


We tried to check out the latest news on Bloomberg.com. But we couldn’t. The website is banned. Apparently, the organisation revealed some things it shouldn’t have revealed.

We’ve found it equally difficult to access the Wall Street Journal and the New York Times.

The Financial Times is fine. So are The Age, Daily Mail, and The Sun!

Handily, we can still access the Bloomberg Professional service. So all is not lost.

As for the markets, we still consider the US bull market to be in the final stages of its life. And just as your editor may end up on waste ground in the future, we believe it won’t be long before the US markets suffer a similar fate.

But tell that to bullish investors, who continue to rush in with glee. Another new record high for the Dow Jones Industrial Average.

And a near-new record high for the Dow Jones Transportation Average. What is there to fear when everything is going up?

Perhaps we should roll out the famous Franklin Delano Roosevelt quote, that the ‘only thing we have to fear is fear itself.

Sage words. Said in 1932. Just as the US and the world sank deeper into the Depression, and as the Second World War fast approached.

Not so sage after all.

Don’t be first

But among the gloom, and among the smog, there is hope and opportunity.

As Bloomberg reports:

China will likely order an end to sales of all polluting vehicles by 2030, BYD Co.’s Chairman Wang Chuanfu predicted, spurring the nation’s leading maker of electric cars to consider supplying batteries to competitors during the powertrain transformation.

Concerns over dependence on crude-oil imports will prompt authorities to come up with an aggressive timetable to phase out fossil-fuel powered automobiles, Wang told reporters in Shenzhen on Thursday. China, the world’s biggest auto market, may have all buses powered by batteries by 2020 and all other vehicles will follow suit by 2030, he said.

With the extreme pollution here, we can see why they’re so keen.

And we can see why the share price of BYD Co Ltd [HK:1211] has taken off. It’s up 53% this month.

chart image

Source: Bloomberg
Click to enlarge

However, wherever we see a silver lining, we can’t help but look for that filthy dark cloud. In this instance, we wonder how much low interest rates play into the current development of electric cars…and how much higher interest rates will play into the potential for stalled development of electric cars.

Of course, it’s possible that higher interest rates won’t stop the development of electric cars. It’s possible that if the development happens, the big capital costs may have been paid for, or the technological enhancements may have come to fruition before rates rise.

We’re not so sure about that. But as a grumpy bear, we would say that.

Regardless, we can’t deny the opportunity.

In all the time that we’ve railed against Tesla Inc [NASDAQ:TSLA] and its wild over-valuation, we undoubtedly would have been better off recommending investors buy it, rather than suggesting they sell it short.

Even so, we see Tesla as the ‘MySpace’ of the car world. Being the first mover isn’t always an advantage. The car industry isn’t necessarily the best sector where it pays to be first to the market. The capital costs are so high. That includes the initial building of a carmaking plant, but also the retooling, when the company needs to launch and make an updated model.

It’s one reason Tesla takes so long to ramp up production.

That may not seem such a big deal now. But it could be a big deal if technology moves so fast that its newest car is already obsolete by the time it comes to market.

Remember how quickly technology changes. Today’s cars really are ‘computers on wheels’.

Granted, this isn’t just a problem for Tesla. It will be an issue for all carmakers. What it comes down to is which of the electric carmakers have the best chance of adapting and surviving as the industry changes.

Will that be the high-priced Tesla, or lower-priced Chinese carmakers? We’ll see.

An unstoppable trend

On a completely different subject. From Forbes:

Under the laws of 29 states and Washington, D.C., patients seeking medical marijuana must get official recommendations from doctors. But a local lawmaker in the nation’s capital is looking to change that.

Under the Medical Marijuana Improvement Amendment Act of 2017, patients would be allowed to self-certify as qualifying for medical cannabis.

We don’t know if the law will pass.

One thing we do know, is that the sentiment and attitude to cannabis has changed. Many folks no longer think of cannabis as a dangerous drug. Now many folks consider it to be recreational. That’s not to say that there aren’t possibly some harmful effects.

But surely the harmful effects are no more so than alcohol and tobacco. And arguably, cannabis has many more benefits, including medicinally, when compared to alcohol and tobacco.

As far as we’re concerned, the trend towards full legalisation of cannabis is unstoppable. It’s happening in the US, and we figure it will soon happen in Australia.

That’s why Sam Volkering has spent so much time covering the subject here. Check it out.