China Preparing to Go It Alone

September 16, 2022
Leyendecker Executive Search

September 16, 2022

Politics is more difficult than physics.
Albert Einstein

THOUGHTS FROM DOUG

Volatility lowers valuations. Ask oil and gas companies about their 2015 to 2020 experience.

Sure seems like Europe will soon be nationalizing their electricity companies, maybe even all their energy companies.

I attended an energy technology conference this week. It was focused on renewables, energy transition, decarbonization, hydrogen, and the future of energy. A great many people were there. But unlike the tech conferences on the West Coast or conferences in Austin, where the dress is casual, this conference’s attendees were still wearing the same old “uniform.” If we’re going to get serious about new energy, maybe we should stop wearing long sleeve shirts, suits and sport coats when it’s 90 degrees or hotter in Houston.

Legendary investor Stanley Druckenmiller suggests the stock market may be flat for an entire decade. Wow. But flat from what level, Stanley?

I’m starting to wonder if government climate policies are going to kill more people and destroy more economies than actual climate change will. Hmmm…

About $8T of “wealth” has evaporated in the stock market. The housing market is now starting to turn down. So much for those excess savings. US household wealth is falling, while a recession seems around the corner.

The latest inflation report conclusion: The higher US dollar lowered global commodity prices. The lag in US real estate inflation is catching up. Food prices are skyrocketing. Watch out if oil starts rising again.

The IEA says the number of clean energy jobs exceeds that of fossil fuel jobs. But they count EV production as clean energy jobs while they don’t count ICE vehicle production or car mechanic jobs in the fossil fuel number. Is their data real or more fake facts from our “establishment” institutions?

Some of the best investment and new business opportunities in the world come during a recession. As the old saying goes, Buy when there is blood in the street. Institutional investors understand this. Today they are still quite open-minded about backing new investment managers.

The news media loves narratives that have no resolution. Let’s call it soap opera news. That’s why topics like climate change are so popular in the news. The climate is and always will be changing. Nothing sells advertising better than an end-of-the-world narrative…that has no end.

By the way, this is what “journalism” is all about today.

The larger and more complex a system gets, the more systemic risk builds. Covid and Ukraine suggest our complex, globalized economy created risks we hadn’t considered.

THE ECONOMIC VIEW

Consumer credit is exploding
Where’s all that excess savings?
While shoppers keep spending
But July sales were revised to negative

The FedEx earnings barometer
Suggests global recession may be forthcoming.

The housing market slowdown
In seven charts.
Some hot markets face big declines
Mortgage rates top 6%
Mortgage applications at 1999 levels

THE INFLATION BOGEYMAN

Inflation stays high
One more report left before the election.
Here’s who is suffering the most

Supply chain is a daily challenge
Says GE CEO.

Weather is still causing food issues
Can the Fed fix the weather?

THE LABOR VIEW

WFH to be a legal right in the Netherlands
Will this spread around the globe?
Well, people from around the world
Want to work from home.
Work is a four-letter word

US companies bringing jobs home
While robot sales reach a record high

Workers are striking more
Will a recession change this trend?

MEANWHILE IN EUROPE

Germany is ready to step up
And lead Europe militarily.
While it considers energy nationalization
Their energy industry needs a giant bailout

Will Europe de-industrialize?
European factories have a big problem
They relied on Russian energy.

Europe has a teacher shortage
Who wants to babysit spoiled brats?

THE NEW ENERGY TRANSITION

French nukes had to be shut down
It’s going to cost owner EDF $29B.
While the price of uranium is increasing

Europe wants to control energy markets
Energy nationalization may be coming.

Nigeria to supply gas to Europe
France about to get more Algerian gas
More Russian replacements are coming.

PLAYING WITH FIRE

Germany nationalizes Russian refineries
Nationalizing assets, a new trend?

Arming Ukraine is morally acceptable
Says Pope Francis.

German chancellor tells Putin to withdraw
You think Putin takes Germany’s advice?
But then maybe he’ll take Xi’s advice

GLOBAL

India overtakes the UK
As the world’s fifth largest economy.

India’s first chip plant
Will get Foxconn financial support.

Drought in East Africa
Could create a bad famine.

THE FINANCE WORLD

Quantitative tightening threatens bond liquidity
Central banks are walking on thin ice.

CIO of world’s largest hedge fund
Thinks we’re in a giant investment bubble

It’s been a stock picker’s year
Are index funds over?

Banks may have an LBO debt issue
Maybe a big issue.
Will private credit pick up the pieces?

TECHNOLOGY

Memory chip demand is collapsing
Falls 24.7% in South Korea.

MIT researchers build portable desalinator
Could this be huge?

Mega fines coming for big tech
South Korea getting in on the action
California sues Amazon

THE CRYPTO MEME

Ethereum announces The Merge
Now it’s simple to understand, right?

It’s been a bad year for crypto
It’s been worse for crypto miners

Crypto’s core values
Are running head first into reality.

THE NEXT NORMAL

CA’s Governor Newsom signs social media law
Guess who’s running for president in 2024?

College grads marry other grads
And then make more money.

The cost of streaming
Has surpassed the cost of cable

THE WAR ON CARBON

Breaking physics and economics ain’t good
Disaster is coming, suggests this author.

Renewables represented 24% of electricity
In the first half of 2022.
US power consumption reaches record

Coal is booming in China
Why won’t they listen to the West?

THE EV DREAM

US has copper for 275MM EVs
But the Apaches say, no mining here.

Cash pours into EV battery recycling
Can they do it net-zero?

Tesla’s lithium refining dream
Bring it to the USA.

THE CHINA SYNDROME

Senate approves $6.5B to fund weapons for Taiwan
You think China will be happy?

China bailing out property developers
Government buying their bad assets.

China preparing to go it alone
Without Western influence.

THE WASHING-TONE

New Biden order
To block Chinese investment in US tech

Federal workers may not get fired
For poor performance.

Biden celebrates Inflation Reduction Act
On the same day inflation is reported at 8.3%
“The future of America is bright!”
While median incomes stagnate

MAKING A BETTER YOU

A global look at wealth and happiness
See how they correlate across the globe.

Reasons to be cheerful
It improves your world.

The “joy workout”
Eight-and-a-half minutes is all it takes.

HOW ABOUT A BREAK

Small, charming Italian towns
Worthy of a vacation.

Which US states are getting younger?
They have the economic advantage.

The story of two cats (with lots of photos)
Relentlessly trying to get into an art museum.

SONG OF THE WEEK

Juilliard Jazz Ensemble
In a Tiny Desk concert.

VIDEOS OF THE WEEK

Burning Man 2022 Highlights
Decadence, hedonism, the next reality?

World Champion of Magic
Shows his card tricks.

Glass Onion trailer is out
The next Knives Out movie.

CASTING AROUND THE PODS

Is freedom good for us?
Professor Patrick Deneen and journalist Bret Stephens discuss with Bari Weiss.

FROM THE HEADHUNTER’S KITCHEN

Loaded baked potato soup
Here comes fall!

The next fast food trends
Can be found in Bakersfield, CA.

Before coffee became our morning go-to
People drank alcohol for breakfast

IN CASE YOU MISSED IT

Democracy Is Now in Decline
September 9, 2022

Are We Heading into a Chip War?
September 2, 2022

© 2022 Leyendecker. All rights reserved