I am happy to criticize Biden or any one for that matter but in this Biden is absolutely right. Let's hit the highlights. 1. Quad can cooperate because they share values but also because they share interests on China. Whether it is moving supply chains 1/n politico.eu/article/us-joe…
Or improving security cooperation and capabilities. Europe fails on both accounts. They want to cooperate more with China and are unprepared to do most anything on security about any of the big authoritarian problems. Add n Europe is dysfunctional to a degree that nothing 2/n
Happens, one wonders what they even bring to the table or if they can accomplish anything. 2. The underlying complaint from Europe is a divergent view of how each side views multilateralism. Add I have emphasized repeatedly, multilateralism is not an ends but s means 3/n
This raises the question of why the US should prioritize European alliances. It isn't where the primary threat or risk is. There is little benefit to engaging and little downside to just generally ignoring. Europe gets angry because like a jealous ex, Europe wants 4/n
The attention but they do nothing, complain constantly, and expect you to pay for everything. What is gained from engaging? If Europe wants to be taken seriously, it needs to get serious. Simply getting miffed is not acceptable. Trade and change is not acceptable 5/n
Yes you do have to pick a side China or the US. That's just the state of the world. You should be responsible for the ordinary defense of your own continent by now. If you want to be taken seriously play a constructive role in addressing these problems rather than just blaming US

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More from @BaldingsWorld

27 Sep
Short thread on China electricity and epistemology. There is in all things a rush to impute motives or generate an understanding about a situation based upon pre-existing mental framework when the reality is we know very few facts about a situation. China electricity is great 1/n
I started hearing about this and other situations a few weeks ago but it made no sense why. There was no obvious reason why China should be facing electrical shortages. All of the narratives had glaring holes. It was only after talking to a number of people the pieces came 2/n
Together that was confirmed with multiple people. Now it is still important to note we really do not understand a lot here though the mechanics of the situation are clear. By that I mean, it is clear facts that end user price is fixed, generators buy basically at spot 3/n
Read 9 tweets
22 Sep
At the risk of touting my own research, let me explain how China does some of the crazy stuff it does in banking and capital markets to the uninitiated some of which comes from a paper I wrote 7 years ago now about some of the games they play 1/n papers.ssrn.com/sol3/papers.cf…
At least historically, when Chinese banks went public in Hong Kong they were stunningly honest in the IPO prospectuses probably because HK was still a pretty honest market, the lawyers were good, costs to non-compliance were not insignificant and they figured no one read them 2/n
Consequently, if you get hopped up enough on meth of get through 1,000+ pages you learn amazing stuff. The two things that I want to highlight here are what are Chinese lending standards and how do they bailout/disguise bad debt? Even most savy investors think these concepts 3/n
Read 17 tweets
20 Sep
I think there is an important definitional point that is taken for granted but shouldn't be about Evergrande. What do we mean by bailout? In the west we typically take it to mean a company is about the declare bankruptcy or collapse and the government steps up and writes 1/n
A big check to keep the company going. In China for many reasons, bail out needs to be defined much more broadly. What if a local SOE buys one of the unfinished developments at near historical investment cost. Is that a bail out? Likely yes. What if the government 2/n
Tells retail WMP holders they get nothing for redemption in the next 30 days but if they extend the duration 5 years and lower the interest rate, they will get paid off. Is that a bail out? Probably. What if a bad bank asset manager buys a loan from a mid size bank above 3/n
Read 8 tweets
17 Sep
I think the current state of journalism is awful because very few in the industry actually care about truth. It's 110% about selling a narrative and creating outrage. The Milley call to China is the PERFECT example of this. Follow me a second. 1/n
When it was first reported it was reported as part of an advance leak from a book (clue #1 to dig deeper). The initial report says Milley called around January 6th to tell China we would invade. Note how NOTHING revealed is technically false. It is so technically true 2/n
However, note as we proceed how by leaving out key facts it creates a very false picture of the actual events that intends to generate outrage playing to two different narratives. The first encouraged narrative was that Milley went rogue and yes the deep state was trying 3/n
Read 10 tweets
16 Sep
In all seriousness, DC politicians and related Galaxy Brains are the most worthless of all species when it comes to these questions. You can literally show these reptiles the raw data of how China does what it does, the companies involved, how this all breaks US law, 1/n
and literally invites the Chinese and Russian military INTO every sensitive sector and not only do these liberal arts major have no understanding of what you are talking about they don't even care even when you draw a straight line. The think tanks are too damned compromised 2/n
and have no idea about anything technical so unless it involves trying to write the next Kenan article or passing along juicy gossip from a meeting they could care less and dont have the intellectual depth to grasp what you are talking about anyway. Finally, US business 3/n
Read 5 tweets
15 Sep
Here is an Evergrande feed about some sub-topics that I think are misunderstood or being poorly analyzed. First, I have seen many people and journalists talk about how China has pushed to increase risk acceptance by emphasizing market mechanisms. This is just false. 1/n
Journos typically take one of a couple of quotes like Xi saying "houses are for living, not speculating" but forget in addition to the towering mountain of data and evidence to the contrary, all the little signals Chinese investors and buyers cue on to make decisions. 2/n
For instance, probably 1/4 apartments in China sit empty and the pace of building (supply) far exceeds any remotely conceivable level of demand. Highlighting the overly cited Xi quote is akin to saying the Taliban is on the UN Council for Gender so women are doing fine 3/n
Read 12 tweets

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