by Shane Ormond
On May 21, 2020
Target reported that online sales on an average day in April exceeded last year’s Cyber-Monday sale, because if you’re not going to buy a Cuisinart Perfectemp 14 Cup Programmable Coffee Maker at the end of the world, when are you gunna buy one?
- The NBA Apologizes to China for Tweet
- GE Puts 20,000 Pension Plans on Ice
- Federal Judge Orders Release of Trump Tax Returns
- Rickards: The Hong Kong Situation is More Dangerous Than You Know
The NBA Apologizes to China for Tweet
The entire NBA would like to “express regret” and “deeply apologize” for a single tweet that threatened billions of dollars in revenue from our old friend China.
Houston Rockets General Manager Daryl Morey (AKA Not-Welcome-in-China-Any Morey) tweeted a message of support for the pro-democracy protests in Hong Kong yesterday.
Morey quickly deleted the tweet but I’m afraid that’s not how the internet works, Daryl.
China responded in a calm and totally reasonable manner, severing all business ties with the Houston Rockets, the most popular basketball team in China. (Well, not anymore I guess.)
Within moments of hitting send, all Chinese sponsors announced they would drop the team immediately. (And I’m sure they came to that decision all by themselves without any pressure from a certain totalitarian government.)
Chinese broadcasting said they would no longer air the immensely popular Rockets’ games and the Chinese Basketball Association (who’s President just so happens to be former Houston Rocket and professional ceiling-bonker Yao Ming) officially severed all ties with the group.
The Rockets became the most popular team in China during Yao’s nine-year tenure just kinda putting the ball in the basket. But that same “special relationship” now threatens to unravel billions of dollars in deals for the NBA.
Morey sent out a couple more tweets last night, saying his opinions did not represent those of the Houston Rockets or the NBA (it would be weird if they did).
The Rocket’s general manager shied away from making an actual apology, instead saying he was “merely voicing one thought, based on one interpretation, of one complicated event” and has since had the opportunity to “consider other perspectives.” (Like the perspective of someone who has been blacklisted from the NBA, for example.)
The NBA responded in a statement saying the league was committed to the values of free speech… as long as its members didn’t use those values to talk about China because there is just so, so much money on the line here, guys.
“The values of the league support individuals’ educating themselves and sharing their views on matters important to them,” an NBA spokesperson said.
“We have great respect for the history and culture of China and hope that sports and the NBA can be used as a unifying force to bridge cultural divides and bring people together.”
The NBA’s milquetoast response quickly drew the ire of politicians from both sides of the aisle, with bipartisan comedy duo Ted Cruz and Julián Castro condemning the NBA’s message.
“We’re better than this,” said Texas Senator Ted Cruz. “Human rights shouldn’t be for sale & the NBA shouldn’t be assisting Chinese communist censorship.”
“China is using its economic power to silence critics—even those in the U.S.,” said Democrat presidential candidate Castro. “The United States must lead with our values and speak out for pro-democracy protestors in Hong Kong, and not allow American citizens to be bullied by an authoritarian government.”
GE Puts 20,000 Pension Plans on Ice
GE announced this morning it was freezing pension plans for 20,000 U.S. employees, in an attempt to slash debt and generally not have to give its employees a whole bunch of money.
The freeze will go into effect on Jan. 1, 2021 (if the country is still here by then) and lower the company’s net debt by about $4 to $6 billion.
Ice to See You: When a company freezes its pension plan, employees covered by the plan stop earning the benefits of the plan moving forward.
This is all part of an ongoing financial effort by CEO Larry Culp, who has been aggressively slashing costs and raising cash to pay off the company’s sizeable debt since he took over a year ago.
As of June this year, the multinational conglomerate that does a little bit of everything held total borrowings of about $105.8 billion, with an industrial net debt of $54.4 billion.
“Returning GE to a position of strength has required us to make several difficult decisions, and today’s decision to freeze the pension is no exception,” said Chief Human Resources Officer Kevin Cox, who’s unsure of how he got saddled with the job of making this announcement.
GE said that retirees already collecting pension benefits will be unaffected. And it will offer a lump-sum payment to 100,000 former employees who haven’t started their monthly pension plan payments.
Shares of GE (GE) rose 3% on the awesome news of all those pensions going away.
Federal Judge Orders Release of Trump Tax Returns
A federal judge has ordered President Trump to hand over his tax returns to the district attorney of Manhattan, in the latest twist of an ongoing scandal you and I and everyone else had completely forgotten about. (There’s a lot going on.)
Judge Victor Marrero rejected the administration’s argument that sitting presidents are immune to criminal investigations.
In his 75-page ruling (which could use some editing), Marrero called the president’s argument “repugnant” and said that presidents, their families, and businesses are not above the law.
“This Court cannot endorse such a categorical and limitless assertion of presidential immunity from judicial process as being countenanced by the nation’s constitutional plan,” said Marrero, who, like all judges, writes like an alien who learned English from a thesaurus.
In the past, we’d have to wait on a White House press conference to find out how the president feels about all this. But a wizard at the carnival grounds sold me a magic machine, called Twitter, that lets me know what the president is thinking at all times:
As we’ve definitely all forgotten by now, the office of the district attorney is seeking eight years of Trump’s tax returns in connection with payments made to porn actress Stormy Daniels in the lead up to the 2016 election.
Daniels claims that Michael Cohen paid her off with campaign funds to keep her quiet about an affair with then-candidate Trump. While the president denies that an affair happened in the first place.
With all that said, I wouldn’t buy a ticket for Rachel Maddow’sFantastical Tax-Return Hype Train just yet.
Trump’s lawyers have already appealed the decision and the appeals court has temporarily blocked the order. Even if the district attorney’s office gets its mitts on the returns, the documents would be subject to grand jury secrecy rules and wouldn’t be made public.
In Other News
ONE LAST THING
Rickards: The Hong Kong Situation is More Dangerous Than You Know
We’ve been covering the pro-democracy protests in Hong Kong for six months now.
Nobody thought the protests could or would go on as long as they have. And when you’re reporting on something for as long and as frequently as this, it’s easy to get lost in the weeds.
So today, I’ve asked my colleague and resident China expert Jim Rickards to swing by and offer up a fresh perspective.
Jim says the situation is more dangerous than the international community realizes and will tell you how to shift your allocations to protect against the financial fallout:
“Hong Kong has been making headlines the past four months due to street demonstrations against both the local administration of Carrie Lam and her bosses in Beijing.
“These demonstrations have escalated from entirely peaceful protests to more violent actions including Molotov cocktails, overturning cars, and smashing store windows.
“The escalation has been matched and prompted by escalating police tactics including thinly disguised thugs, rubber bullets, water cannons, armored vehicles, digital surveillance, arrests and the substitution of paramilitary forces for regular police.
“Violence came to a head last week when an 18-year-old protestor was shot with a live round at point-blank range (the protestor survived).
“The protestors show no signs of backing off their protests or demands. Continued escalation and more violence can be expected.
“Western markets have been remarkably complacent about these events. It’s almost as if the physical distance to Hong Kong insulates the West from the disruption.
“That view is a mistake.
“Physical distance is irrelevant in a densely connected digital world. Hong Kong is one of the largest financial centers in the world alongside New York, London and Tokyo.
“Already capital flight is emerging, GDP is dropping, property values are declining and talented professionals are moving out. Regional financial businesses are shifting rapidly to Singapore.
“At a minimum, this represents sheer economic waste. At worst, an unexpected entity failure or market crash could spark global contagion and a liquidity crisis.
“An increased allocation to cash and a modest allocation to gold or U.S. Treasuries are the right hedge.
“Complacency is not an option.”
Closing Data for 10/4/19
DIJA $26,570.84 ↑ 1.41%
S&P Index 500 $2,951.77 ↑ 1.41%
NASDAQ $7,982.47 ↑ 1.40%
Gold $1,510.30 ↓ 0.23%
Silver $17.63 ↓ 0.29%
Bitcoin $8,170.00 ↓ 1.06%
- Wall Street dips as investors remain cautious ahead of U.S.-China trade talks later this week.
- HSBC is set to cut up to 10,000 jobs in new cost-cutting initiative.
- Coinbase is in preliminary talks to acquire peer-to-peer rental startup Omni.
Editor, One Last Thing