The radical, fundamental principles of freedom, rational self-interest, and individual rights. This is The Iran Book Show. All right, everybody, welcome to Iran Book Show on this, uh, what is it, it's May 22nd. It's even more good. Sound, sound, or this, that sounds a little better. Okay, maybe that's better. All right, everybody, welcome again to The Iran Book Show. Uh, thanks for joining us, and, uh, we, that doesn't sound right either. Anyway, we'll get back into the groove of things, um, uh, very, uh, very quickly here. Uh, I've been gone for the last few months. I know a few shows, uh, you know, uh, people have gotten out of the habit, the regular habit of, uh, listening to, uh, to the, to the, to the regular show, but we're gonna get back to that because as you can see, I'm home for a little while. I'm gonna be gone again, but hopefully, um, this trip, uh, which is just to Texas, I'll be able to, um, we'll be able to keep up the regular stream of shows. That is the, uh, that is definitely gonna be the intent. All right, um, uh, this week is gonna be, there gonna be a lot of shows just to give you a heads up, um, tonight, there will be a show, 8 p.m. east coast time. Uh, tomorrow we'll have, uh, every day we'll have the news show in the morning or in the early afternoon, like today, uh, and then, uh, I expected Monday, Wednesday, and Thursday, we will have shows in the evening on Thursday. I'll have Aaron Smith from the Ironman Institute, uh, here for an interview, uh, and then, uh, we'll have a show on, on, uh, Saturday, Sunday. We'll do a members only show. Those of you interested in becoming members and joining that show, you can become a member right here on YouTube, um, five bucks a month or something like that gets you in. This members only show will be a, a, in a sense, Rome part three. It'll be focused on a deep analysis with photos of some of the artworks I saw in Rome. So it'll be Michelangelo, Caravaggio, Bernini, and Vermeer, Vermeer from, from Amsterdam, which I saw a few days ago. So that will be on Sunday, uh, afternoon, probably three PM Eastern time. All right. So that's quickly. All right. Let's jump in the news. You probably heard, because it's all over the media and the Russians are gloating like hell and, uh, and, and the Russian trolls are repeating the gloating over and over and over again. So we're getting a lot of, uh, a lot of, uh, a lot of this news, uh, that, uh, Russia has, uh, basically taken control over Bakhmut, that they have one, one, one, one, in quotes, the battle of Bakhmut, um, God, where it was going to start. First, it's taken them 10 months.  It's taken them 10 months. They've had to completely and utterly flatten this place, turn it into dust and it's taken them 10 months. By some estimates, uh, they have suffered anywhere between 50 to 100,000 casualties, not deaths, but death plus injured millions, millions of rounds of ammunition of, of, um, um, uh, what do you call it, uh, shells of, uh, artillery shells. This has been the costliest battle, maybe in, in history, given that Bakhmut has no, and I said this months ago, no military significance, no strategic significance. It doesn't matter. The Ukrainians have used it basically to drain Russian resources, to kill Russians. There were days in which a thousand Russians were dying in a day. Now this has been very costly to Ukrainians, no doubt, but it was, it seems like it made sense the Ukrainian, uh, military command. This is astounding, um, that, uh, that it took them this long. It is astounding, uh, that, uh, they're making such a big deal out of this. It is, um, it is truly, uh, you know, an example of a complete dysfunction of the Russian regime from Putin on down. Uh, most of the fighting in Bakhmut was, was organized and run and commanded by a, uh, a private contractor, the Wagner group. They claimed to be handing over the Bakhmut positions to the rest. Even the head of the, of the Wagner group says, not to exactly why we took Bakhmut, I'm not sure exactly what strategic values it says for anything, but here it is. You know, we were signed this by the Russian military, so we did it in 10 months, 10 months, the second largest military force in the world. Anyway, uh, a massive, uh, massive fail on the side, uh, on the part of Russia. Uh, and, um, and, and now we'll see what the next step is. And I think the next step is probably going to be some kind of offensive, um, by, uh, Ukraine. But what is interesting is, is, uh, I think earlier today or yesterday, depending on the time zone, I guess, maybe yesterday. Um, yesterday it appears that Ukraine invaded Russia. Um, in, uh, in, uh, Eastern Ukraine on the board of Russia, you don't see this in much of the media covering this, but it does appear that Ukrainian forces or local anti-Russian Russians in T-72s and some American equipment, maybe, I, you know, who knows. Um, there is, uh, fighting going on in, uh, Bogrod, I think that's how it's pronounced, uh, Bogrod, something like that, which is in the Western part of, um, uh, of Russia. So while, uh, uh, you know, they claim it's partisans, Russian partisans, but clearly supported by the Ukrainians, and it might be Ukrainian troops, it's hard to tell. Um, but it, it, it's very difficult to get any information out of there. Clearly Ukraine doesn't want to tell us anything about what's going on there. But the reality is that there's literally fighting going on in Russia, in Western Russia. Um, the, the, and this is, um, for the first time in this war, uh, I'm not sure, uh, how Biden and the rest of the West feels about this, because they have cautioned the Ukrainians not to use American weapons on Russian soil. So Ukraine is probably not going to claim a responsibility. Thank you. It's Belgorod, Belgorod. Um, so who knows what exactly is going on? I certainly don't have no, uh, uh, superior intelligence with regard to this, but, um, we will find out, I think, in the days and weeks to come.  But again, it's hard to tell, and you have to be very careful on anything that appears on Twitter and on YouTube, because it could very well be, uh, propaganda or Spahn, or just ignorant or a lot of different things. And, um, I'm reading a lot about Russia and China's propaganda machines, uh, on social media and it's, whoa, and, and they're sophisticated and they're good. Um, so it's, it's not clear where this is coming from. Military bloggers, Russian military bloggers, pro Russian military bloggers are actually blogging about this. So it, it, it's going on. It's happening. There's no question. Something is happening in Belgorod, much more important than Bakhmut. Mainstream media is staying away from it because they don't know any, they don't know enough to tell us about it. Um, but it's, um, it's interesting, fascinating. It's a twist on the story as the Russians are celebrating in one place, the Ukrainians, uh, uh, in their homeland. So, um, we will see, we will see. Really interesting development, really something to watch. And, uh, I'm looking forward to, uh, keeping up the speed on the story as, uh, as it develops and as we get more information, uh, about it. Um, all right.  So, but we don't know that for a fact yet. All right. Let's see. Yes. China, uh, I've talked about this quite a bit, uh, but, but it keeps popping up in my news feed. And I think it's a, it's a basically a massive story, um, that we should watch, particularly as we continue to hear the hysteria and panic and, and concern and, and about, you know, China's this rising power and the danger it poses to the United States and so on. I mean, it is. There is a danger. There really is a danger, but we really have to, um, uh, you know, we have to really think through what that danger is and, and, uh, what the prospects, what, what, how to deal with that danger. But the reality is that China is in trouble. It's in trouble economically. It's in trouble short-term. It's in trouble medium-term. It's in trouble long-term. And, and, and the many manifestations for this trouble that China is in. And this is why, uh, and, and by the way, and I've done, I did a show about this a few weeks ago. America is in much better condition than people think it is. Russia, China is in much worse condition than people think it is. Generally, people have a, a, which is interesting, but people in the media, but people more broadly, Americans will broadly have a view of authoritarians as somehow powerful. And I think we know, or many of us know, that authoritarians are weak by the very nature of their system. They are weak. Uh, we're seeing that in Ukraine. We're seeing that in, in the pathetic performance of the Russian military in Ukraine and, and in the trouble, uh, Putin and, uh, and his military having, but you're also seeing that in China with, uh, uh, the, the economic problems that they're having. They basically being going through a crisis in the real estate market that has been going on for few years now, and that a slow economic growth significantly, uh, you know, diverted resources away from growth and, um, and they are trying to kind of, uh, unwind the, the, the challenges and the crises that is going on around real estate in China. The next, the next crisis that is already happening, um, is, um, is local government debt, uh, in, in China for many, many years, encouraged local and provincial governments to, they gave them a GDP, uh, target and they encouraged them to achieve that target. Well, one way, one way you can achieve a GDP target, uh, this is true in the United States as well. This is, this is true, is by the government just spending money, the government borrowing money and spending it. Um, and you saw this, uh, you see this, for example, in the fact that during World War II, American GDP went up significantly, um, and, you know, that, that it increases GDP significantly. Um, the, the, and of course at the same time, World War II reduced the, um, you know, the actual standard of living quality of life for Americans dramatically, dramatically. So GDP can go up and quality and standard of living can go down. War is a good example because GDP is going up because the government is spending the money. Government spending is part of GDP. So one of the things that setting GDP goes to local governments achieves is the private sector can get you the GDP you want. What you then do is you borrow money and you stop building stuff, building real estate, uh, some of these real estate companies were part of this scheme to juice up GDP in order to achieve that, right? Um, and, you know, and then, um, to juice up GDP. And then of course what the government can do is also build, build infrastructure itself. So local governments in China have built massive amounts of infrastructure. And indeed China has some of the most amazing infrastructure in the world. It has fantastic highways, ice speed trains. It also has just the most stunningly beautiful bridges you will see anywhere in the world spanning some, you know, just, just mind-defying abysses and, and all kinds of stuff. Some of them that actually are useful to get you from point A to B, some of them for tourists, all kinds of things. They just poured billions and billions of dollars into these projects and that gooses up, it increases GDP, but it's, it's, it's not productive. It's a, it's a debt asset. You build it. Yes, it can be used, but is it, but it's far from the best use of the money. And now you have the debt that you have to pay off. By some estimate, China has 23 trillion dollars, trillion, the T, of local debt that is just getting worse. And that there's really no way to pay for. And you add that, of course, to zero COVID, which shut down so many of local economies there. And, and that has the, you know, I don't think the Chinese economy is still recovered from fully. So you've got economic ballet and you've got massive quantities of debt that cannot be paid for. That is going to result in much slower economic growth. That's going to result in, in the government having to print money or the government have to reallocate productive resources to paying off the debt. It's, it's not good. You've got large sections of, of China that has a debt of over 200% of their local, of their local income, which is massive. And this is all municipal government provincial kind of debt. Right. A lot of these states and cities created different kind of financing companies. What is it? What do they call them? Public private partnerships. And of course, the public private partnerships have also accumulated massive amounts of debt in building all this infrastructure. So this, this challenge that China is going to face is going to continue to be a drag on its economy for years, if not decades into the future. One of the poorest provinces in China, you know, is one of the ones that have the most debt and is facing a literal debt crisis. Guizhou, something like that. This is in southwest China. It's a beautiful place with mountains and, you know, canyons and valleys and beautiful, beautiful geography. And they built on the most stunning architecture in terms of infrastructure. And the, but where does it all lead to? They're poor. They don't need the infrastructure. Right. The infrastructure is, is, you know, it's the, the whipped cream and the cake, but they don't have a cake. They have, just in this one state, they have 110 state-backed entities known as local government financing vehicles that have outstanding bonds, which again, they, they put out to build bridges, highways, tunnels. And they have $388 billion in outstanding debt, as of the end of last year, which is 1.3 times the gross domestic product last year. That's just these state-backed entities. And, you know, the, the, the Chinese federal government is federal. It's not federal. The government, central government is stepping in to help these provinces out, but it is a major, major mass.  Now the, granted, the United States has the hidden debt as well. The hidden debt in the United States is the unfunded liabilities, right? Of Medicare, Medicaid and Social Security, which put U.S. unfunded liabilities of probably $100 trillion. So, you know, you've got, the United States is in deep, deep trouble, but the United States is an economy that can maybe get us out of it, maybe. China does not. China's low-hanging food economically is already being done. The, the big move up, the big sustained productivity gain, the big increases in wealth and, and production have already happened. It's not clear what the next step is going to be, how China goes from where China goes from where it is today, from an economic perspective. Now, as a, as an illustration of the fact that I think the leadership in China knows they're in trouble, knows they're in trouble because the economy is struggling, because they've got real structural economic problems, because they have, they saw those demonstrations at the end of zero COVID. Do you remember those demonstrations? We did a couple of shows on them, a few shows on them, where people stood up to the, to the, to the government. The leadership of Xi has been questioned by the Chinese people. And Xi knows this. And Xi feels challenged by it. And what do dictators who feel challenged by the people do? Well, they take a page in China, they take a page out of Mao Zedong. And what they do is they launch campaigns of political indoctrination. And Xi, over the last three months, has launched such a campaign. It's, you know, the, the, the idea is to rejuvenate the Chinese nation. And this is, this is Xi, this is, this is a quote from Xi and, and God, this, this is so spooky, right? This is what he says, in order to rejuvenate the Chinese nation. Quote, the entire party must unify its thinking, unify its will and unify its actions. The entire party must unify its thinking, unify its will and unify its actions. I mean, have you ever thought of anything more collective, collectivistic, right? Everything needs to be one. We need to unify everything. There's no independent thinking here. There's no new thinking. Everything has to follow the guidance of the party. And what is the party? The party is Xi. The party is Xi. And in order to do that, he has launched a massive campaign, a reeducation campaign, just like Mao did in the 1960s, in the 1970s, well, late 60s. You know, so, you know, this is an indoctrination campaign, which, which has multiple phases. The first is what they call investigation and research. This is again from Mao Tse-tung. He's, he's basically telling the local leaders saying to them, you guys are responsible for any failure and problem that we have. You guys need to figure solutions for this. And to figure solutionals, I want you to go out and speak to the peasants and go and experience reality and gain some empirical information. But really, so he's telling them, it's your fault, go fix this. So the directive urges officials to quote, seek truth from facts. That sounds good across broad areas. You know, economic security, environmental protection, and efforts to shape a more egalitarian China through quote, common prosperity. This is echoes Mao's 1961 campaign again, to go out and investigate and research, investigate and research was led to sending all the leadership, the intellectuals from the cities to, to the countryside in order for them to investigate and research, right? Let's see. So the second phase of this campaign is a themed education program that is supposed to infuse all parts of the party, which is millions and millions and millions of people with Xi Jinping's thought. Remember Mao's red book, Mao had a red book, she has a red book equivalent of a red book. And you're supposed to study it, you're supposed to repeat it, you're supposed to memorize it, you're supposed to be able to know and follow everything Xi Jinping says and does. And what he says and does is the truth. It is the unity, the unity of the party. It is the unity of its thinking. It is the unity of its will. It is the unity of its action, Xi Jinping. So now when dictators do stuff like this, Mao did this after his campaign to industrialize the country generated anywhere between 20 to 50 million deaths of salvation. Whenever dictators do something like this, it's a sign of weakness. It's a sign that they're trying to cover up their own failures and their own inadequacies and they're trying to show up ideological support. And finally, as an infestation, I think of all of this. I think it was last week, a comedian in Beijing mentioned his name is Li Haoshi. I'm mispronouncing these, I apologize. But Li mentioned that he had adopted two stray dogs and he was watching them chase a squirrel. He said the scene made him think of a phrase used by the People's Liberation Army that roughly translates to fight well, win the battle, according to Reuters. That's two stray dogs chase a squirrel. It's fight well, win the battle. Fight well, win the battle is a phrase that Xi Jinping uses a lot in terms of rallying his soldiers. And Li Haoshi, she made a joke about this, comparing it to two stray dogs chasing a squirrel. Audience laughed. But one of the audience members actually complained to the local authorities. As a consequence of that complaint, the company, the company that hired Li, the Xie cultural media firm in Shanghai, suspended Li from doing any more concerts, his account, Li's account on Chinese social media site, Waibu, has been suspended right even after he posted an apology saying he felt deeply guilty and regretful. And a subsidiary of the firm that hired him has been fined $1.91 million for telling a joke about the People's Liberation Army. And what the authorities have basically said is we will never allow any company or individual to use the Chinese capital, Beijing, as a stage to wantonly slander the glorious image of the PLA. Free speech. Free speech. Now this is what censorship looks like. This is what a regime that will not tolerate any dissent, will not tolerate any questions. This is a regime that wants to shut down all opposition. Looks like this is not a regime that is confident in itself, in its ability. And this is not a regime, I think, that we need to be afraid of. This is a regime we need to think about how to strategically handle and defeat if it ever comes to actual conflict. But this is not a regime that you start out from the perspective of fear. All right, so that's China.  All right, we're going to make these pretty quick, I think, all three of them pretty quick. I don't have much to say about the debt ceiling crisis, debt ceiling.  I mean, at some point, the government runs out of money because we run deficits, which require the government to constantly borrow money in order to fund itself. You know, to fund itself, which means pay, so security pay. There is no social security trust fund. There's no fund. There's paper. So to pay social security, to pay government employees, to pay the bureaucrats, to pay the regulators, to pay all the stuff that we need to pay, the government needs money. And the government only source of money other than taxes is to borrow that money. And, you know, so the government borrows money, the debt ceiling is basically a cap on the ability of the government to borrow that money. Congress traditionally increases the debt ceiling whenever it reaches the debt ceiling. It always does because we run deficits always constantly. And so they'll constantly raise, Congress constantly raises the debt ceiling because the government can keep functioning by raising the debt. The reason people talk about default is that at some point, once you don't pay employees and you don't pay the bureaucrats and you don't pay social security and Medicare, I guess, you start not having the money to pay interest on the debt. You can't pay back the debt that you owe because there's just no cash. And, and that's the situation that the United States government could find itself in. Now, some people say can't the government just print money? No, because the government technically doesn't print money. The Federal Reserve prints the money. And then what it does is it, the government, the government then issues bonds, which the Federal Reserve, among other people, buy. And that's how new money enters into the economy. So the Federal Reserve just printing more money. It doesn't hand that money to the Treasury without the Treasury issues IOUs the Federal Reserve. That's how the system works. Those IOUs count toward the debt, the debt ceiling.  There will be a compromise, I'm pretty sure. Maybe it will take a government shutdown in order to get to that compromise, but they will ultimately be a compromise. The Republicans have one tool to force the Democrats to do what they want them to do. And that is that they have the House. And the Democrats need the House to pass the debt ceiling, to increase the debt ceiling. And Republicans say, no, we're not going to increase the debt ceiling unless you do XYZ. It's a game of chicken. In the end, they'll come to some compromise. And in the meantime, all this hysteria about recession, the end of the economy, the end of the world, if Congress doesn't increase the debt ceiling. Yes, there's an economic cost to it, but it's relatively minor. Much of the hysteria around us has more to do with, you know, the powers to be wanting a deal.  But in terms of actual significant long-term economic impact, I think it's very minor, indeed. It depends how long it goes, right? I mean, if the U.S. really defaults on its debt and doesn't pay its debt and things like that, yeah, that could have all kinds of disruptive effects in the world. But again, far less than what people are hyperventilating about. There's a lot of hyperventilation going on. All right, migrant crisis, I just want to give you one small, just to think about, right? And so, we're not going to get into all this discussion of immigration here, but here's the thought experiment. So, right, so all these people are coming into the United States. They're all coming in and they are applying for asylum. We don't have enough courts to deal with whether they should get asylum or not. So they all have to stay in the United States until they can get asylum or not if they don't get asylum, who shipped them out of the country. So, thousands, hundreds of thousands of people come in, apply for asylum, and they don't try to sneak in. They come in, they tell the Board of Patrol, here we are, we're applying for asylum, right? And the Board of Patrol then has to house them and feed them.  So, A, you've got a legal system that is way behind, way way behind, right? So, these people are coming here, they don't have exactly a status. And as a consequence of not having a status, this is the paragraph from this Wall Street Journal article that I want you to contemplate. So, just think about this. So, they're being sent to all kinds of places, Denver and New York has a bunch of them and of course, Texas and Florida and they're all over the country, Arizona, California. And local governments now have to pay thousands and feed them and so on. And this is huge cost. I mean, we're talking about massive cost, border cities like El Paso, the shelter is overflowing, it's really difficult for the local budgets. California has spent a total $1.2 billion on a program to temporarily shelter and assist migrant arrivers. It was initially launched for $25 million in 2019. It's up to $1.2 billion for $29 million. Why? Well, here's the only paragraph worth reading in the entire story about the migrant crisis and the funding crisis and how to pay for them. This is the sentence, right? New arrivals, I'm quoting the Wall Street Journal. New arrivals won't be able to legally work until several months to more than a year after they have filed an asylum application in immigration court. New arrivals won't be able to legally work until several months to more than a year after they have filed an asylum application in immigration court. Not because they know jobs, there's plenty of jobs, but because they won't have legal status to work. So deny them work, give them hope that they can get asylum and of course, you're going to get millions of people trying to get into this country. It's the same reason why all the Muslim Americans after the Syrian civil war tried to get to Germany and Sweden because Germany and Sweden gave them a 3,000 euro check housing and took care of them and didn't allow them to work for over a year. I mean, it's a free lunch. Well, it's somebody's expense at American taxpayer expense and it's wrong, but is anybody proposing don't feed them, don't clothe them, but tell them they can go get a job? Anybody proposing that? No, that's off the table. The problem with the migrant crisis, the entire problem with the migrant crisis is a broken system of legal immigration. It's not a matter of building a wall, it's not a matter of putting troops on the border. It is a matter of fixing the legal immigration system in the United States and not providing monetary incentives for people to come and get a check. It's simple incentive one on one. This is not hard economics. If they come, let them work. If they're here and we're not kicking them out, let them work. If they come and they don't have a job and they can't find a job, kick them out. Can't just be homeless. I mean, the argument the cities have is, oh, if we don't take care of them, they'll be homeless. Of course they won't. You're not letting them to work, allow them to work. God, solutions to the world are so simple and yet. All right, EU and big tech. Oh, God. All right. So the European Union has found this amazing thing, you know, amazing way to raise revenues for the European Union. It's a way to redistribute wealth and it's just fantastic. All they have to do is they have to, you know, go after an American company, figure out that they've done something wrong. Well, before that, let me let me do phase one. Phase one is pass cumbersome arbitrary impossible to actually fulfill rules and laws with regard to big American companies. And then when the big American companies fail to live to follow the ridiculous impossible to follow laws and regulations, find them. And this has been amazing. I mean, just to give you a couple of examples in 2021, the European data protection board. I mean, Europe has a European data protection board, don't you? Europeans out there feel so much safer because you have a government run data protection board organized by the you know, the upper ups, the bureaucrats. Anyway, they find Amazon for quote, breaches, breaches of the regulations, 746 million euros in 2021. Now they, but they're going after everybody. We don't want to sing a lot of Amazon, they're going after everybody that, you know, so now they're going after, they went after Facebook and they've just find Facebook. I mean, 1.2 billion euro over the transfer of European data to the United States. This is like TikTok transferring data to China. Maybe we should find them 1.2 billion dollars and that'll solve the problem. You know, they've gone after Apple, they've gone after Google, they've gone after and this is great. What an amazing cash cow. We just find all these American companies that we write laws that you can't live up to, you can't abide by, and then we find them. It's just so much better. Yeah, but don't forget, you've got the European data protection board, bunch of bureaucrats, making sure that your data is safe and sound. All right, let's see.  By the way, if you want to ask a super chat, I'm asking at this point to do $20 or more, we've got a bunch of $5 super chats. We've got to get the dollar amounts up on the shows, the amount raised on the show. So please consider doing $20 instead of the $5 questions. So from now on, $20 or more. Here's the last little nugget, right? This is from the New York Times. It's a real funny story. And I know I'm not supposed to use New York Times stories, but sometimes they actually do the news, and nobody else actually, and very few other people actually do. So sometimes you can actually learn something. Anyway, this is about 30 tons of explosive chemicals, ammonium nitrate, which can be used as fertilizer or explosives. They've gone missing. They were loaded up into a rail car, 30 tons into a rail car. The rail car was sealed, sealed, all the valves, everything was sealed. And then two weeks later, we're talking about 60,000 pounds of ammonium nitrate. And then when they arrived at their destination, so this was, they were sealed in Wyoming, they arrived in California. And when they arrived in California, the tank was empty. There was nothing there. And what's truly amazing and reminds one of Houdini, the seals were unbroken. They were intact. So nobody had taken the fluid out, not at least not from where it was put in. I think it's fluid, ammonium nitrate. The assumption is that during the two-week journey, this train car developed a leak, and 60,000 pounds of ammonium nitrate slowly leaked out of this train car all across the West from Wyoming to California. So if you're looking for some fertilizer or explosive, it's powder, David says. So it's powder. So if you're looking for some ammonium nitrate, you need some, I know, but for whatever, you just follow the train track and you can probably scoop it up along the way. 60,000, 60,000 empty, empty, just disappeared, gone. Anyway, that's the hypothesis that it leaked. They're looking for the leak right now. I thought that was a funny story of somebody's immense incompetence. I don't know who. All right, let's see. Remo from Amsterdam, Remo says, John Cochran recently said that it is a myth that low interest rates leads to extra risk taking by bankers. What other external factors do you then also need to lead to extra risk taking by banks at low interest rates? Well, there was no evidence that low interest rates over the last 12 years has actually led to bankers taking on extra risk. Indeed, they haven't. The risk quote that they took is that after COVID, when they got massive quantities of deposits into their bank because of all the stimulus, that they took that cash and they bought a safe asset, which are government bonds. They took all these deposits, they bought government bonds. Now, typically you would say, well, that's not risky. But the problem is that because of the zero interest rate environment, they bought longer term government bonds, not super long, not 30 years, but maybe five years, maybe two years. And with the increases of interest rates, the value of those government bonds, if they're not held to maturity, if they're held to maturity, you just get your money back. But if they're not held to maturity, if you have to sell them in between, the value of those securities has gone down a lot. But that, I mean, nobody, including the regulators, considered in 2021 the idea of banks buying two, five, 10 year government bonds to be a risky investment on the contrary. Indeed, God Frank and most bank regulations incentivize bankers to buy government bonds. So there is no excess risk. There was no excess risk taking among bankers during the zero interest rate environment period. When interest rates go up, the value of assets goes down. I've told you this many, many, many times. That's just the reality. There's no way around that. And some of these banks that had bought these bond portfolios and for a variety of reasons had to sell them, primarily because people were drawing a lot of money out of their accounts for a variety of reasons, landed up losing a lot of money. Okay, sometimes you lose money. But there's no massive risk taking by banks. Not in the same way as there was in the 1980s by the SNLs where they went out and purchased knowingly, purchased high risk assets to try to get massive returns on them to save them from bankruptcy. So I agree with John that low interest rates lead to extra risk taking by banks by themselves. If you want to think about what would lead to extra risk taking, deposit insurance would lead to it. Deposit insurance generally leads to moral hazard, which is an incentive to take risk under certain circumstances, not always, but under certain circumstances. What else? Yeah, I mean, taking on a lot of losses for some reason, and trying desperately to regain them with deposit insurance leads you to take on a lot of risk. But banks have over the last 12 years been amazingly cautious in their risk taking and their loans and in what they've done. I mean, it really is pretty amazing, you know, and what's happening right now in the banking space is a result of the increase in interest rates, but more of that a result of just people losing it. I mean, there's massive inefficiency in the pricing of banks right now that has. Now, maybe if there's a recession, things, the pricing makes sense, but just the bankruptcy of Silicon Valley Bank should not have justified, and first of all, probably should not have justified what is going on in the banking space over the last three months. It just doesn't make any sense. It's panic, and it's sentiment more than reality. Because if you actually look, the risks are there, but they were always there. They were there last year as well. They're there from having long duration assets in a rising interest rate environment. Everybody should have known this way back then. It's a question of, in what way did that risk manifest itself? How does it actually hurt the bank? It only hurts the bank if there's a bank run and Silicon Valley Bank was unique in the reasons for the bank run on it. I think that that grammar holds. Thank you, Remo. Ian, and by the way, you know, we can talk more about the bank crises and how they happen and what happened here. So I'm open to more questions about this, and particularly if somebody wants to sponsor a longer show about this, I'm happy to do that. Remind you that sponsorship of longer shows is $1,000 to sponsor a show on the topic of your choosing. We have an original clever idea about how to choose a topic, about a topic for that. I'll talk about it tonight on the show, I hope if I remember. Ian says, any thoughts on Tim Scott backed by Larry Ellison's money running for Republican presidential nomination nation? I mean, I'm very much for it. Again, my biggest worry is that you fragment the opposition to Trump. But generally, I think Tim Scott, I think Nikki Haley are the two best candidates out there. I've said what I've said, and I will continue to say what I dislike about Trump, and I'll talk about that. One of the long shows, because there's an interesting evolution of what's going on right now with the Santas versus Trump. I don't like the Santas. I think the Santas, in some respects, is worse than Trump. In other respects, bad, I mean some respects worse. So any alternative, and particularly an alternative from somebody who I think is, you know, is not crazy and is not, you know, is a reasonable guy. And I think Tim Scott seems to be a reasonable guy. It is good. It's good. Although, to a large extent, given what's going on with abortion, I think the Republican Party is just nuts right now.  How do you vote for a Republican? I mean, how do you vote Democrat? When they're doing evil stuff, but what they're doing with abortion is so evil, particularly with abortion pill, there's just, I don't know how you vote for any of these candidates. JD says, thank you for your excellent shows on the Renaissance. Odd Rome is despite the omnipresent religion, one of the most life-affirming places I know.  Yes, an amazing trip. Rome is super vibrant and active and a big city. I prefer Florence because of the size. I find Florence easily manageable. You can walk everywhere. Rome is a lot of taxes, lots of taxes. But it's an amazing city. And the Renaissance and the Baroque everywhere, those were the peaks of Italian culture, if you will, is that period. And that really centers on Florence Rome and that axis of Florence and Rome. And in that sense, those are amazing cities. As I said, I will be doing a show on Sunday for members only. So if you're not a member, you can become a member by clicking on the join button down here somewhere, right on the YouTube thing, and become a member. I'll be doing a show that is more specific about Michelangelo, Caravaggio, Benini, and Vermeer. But it's interesting because Vermeer and Benini are working at the same time, approximately. So it's Caravaggio, I think. So that'll be a lot of fun. If you're interested in art, I'll show paintings. I'll show photographs that my wife took on the trip. I'll do a little bit of analysis and comparisons thrown in with some history. So it should be a fun show. Members only on Sunday. Sunday. And I'll talk about the differences between Michelangelo, Benini, Caravaggio, Vermeer, and the different eras and the different areas. And anyway, I think it'll be fun. So hopefully you guys can join me. And if you're interested in art, if you're interested in the Renaissance, if you're interested in Italy, that's the show to join.  There's a member's join button somewhere down there. So please click it and join at, you know, just five bucks a month or something like that. And if you're already subscribed elsewhere, then just add this. Again, you can add it at $5. Just add it. Don't dump the other subscription, please. You know, YouTube is not the most generous in terms of the amount of money that comes to me relative to Patreon. Those are much better places. But it does have this membership feature does allow me to do these membership only shows. So I do like it. But in terms of financially, it's not, it's not really that good. All right, we're only $17 short of our goal of 250, although we really need to stop beating the goal to do some catch up this month. So hopefully somebody will ask a $20 question and we'll get past the goal. Michael says, what do you think about comedian skits? Will be about a fully objective of society? Will there be anything to be made fun of? Sure. I mean, there's lots of stuff to be made fun of. Evil, bad, you know, incompetence. There's lots of things to be made fun of. I think, but I think to be popular, to be successful, people will have to know what objective is. They'd have to know what kind of world that entails. So we're talking about decades, decades before that is something that is prevalent. There are objective as comedians today who do objective as jokes that are quite funny, if you're interested. All right, $17, we have 100 people watching do the math. Liam says, do delusional people know that delusional on some level is delusion equivalent to evasion? I mean, it depends, right?  They, you know, so not all delusion is a consequence of evasion. It could be a consequence of some real misfiring or real killing balance inside your brain. If you're schizophrenic, do you know you're schizophrenic? I mean, so I don't know that that's a psychological question. But I think for a normal person who holds a delusional view and who's an adult with some experience in life, I think at some level, they know that they're evading that it's a result of evasion and they know it. Shush up. Ukraine started offensive in Russia property. Yeah, I mentioned that. Thanks for pointing that out. And we think, you know, it's likely that that is actually going to happen. Rimo says, please, please, please do a Thursday interview with John Allison. Thanks, Rimo. I will, John's been a little under the weather recently, but hopefully he's better. I will contact him and we'll try to do a show with John. But that'll be that would be a lot of fun, actually. Thanks, Rimo. And Rimo has gotten us over the target. So thank you guys. Thank you to all the superchatters. I wanted to thank somebody specifically West, West at $50 earlier. Thank you, West. And I know Gail and Katherine and Alex and Ryan have all contributed also without asking a Marilyn and Steven have all contributed without asking a question. So thank you all. James asks, how do you maintain positivity and a growth mindset in irrational world?   You should really focus on staying positive on the things that you can control. Michael says, his objective is in the intellectualization of common sense. I don't like anything about that phrasing.  It's so much more than common sense, right? And intellectualization sounds like rationalization. No, objectivism is a philosophy. A philosophy consistent with common sense, if you will, but a philosophy. It's not an inter like intellectualization. It's a system of thought consistent maybe with common sense, but common sense is like a teeny piece of it. And it's not consistent because a lot of times people do things in common sense that are not rational at all. And if you're just going to redefine common sense as rational, that's me nails. I clock young says the debate was released between Craig Biddle and Stephen Hicks. In the debate, Craig stated that a right treats objectivism like a dogma and that position is holding back the movement. Craig doesn't know what he's talking about. Craig is is anyway, Craig doesn't know what he's talking about. And if anybody wants to present a piece of evidence to suggest that I know an institute treats objectivism like dogma, that I treat objectivism like dogma, present that evidence. Craig said has zero cognitive value in my mind or I think should have in anybody's mind. So you should place no value to it. I have for a variety of reasons. I think you know, I very little respect for Craig Biddle. So saying that objectivism, that a right treats anything as anything from Craig, who cares what Craig has to say. Ryan says happy, but they run. I hope you had a wonderful vacation. Oh, thanks, Ryan. Really appreciate that. I did. It was an excellent vacation. Long, but excellent. Stephen says, will China's debt problems destabilize other parts of the world perhaps by calling in loans they made to other unstable countries? It possibly could. And you know, those loans are already being called in and they're ready. They already made massive failures across the world from the loans that China gave in on bad terms. And it's not like China gave them in bad terms on purpose because they would gain the asset because the asset costs money to maintain and they're discovering that. So China's just in a bad situation across the board. Does it have bad implications? Yes. I mean, it has bad implications for everywhere, including us, right? Look, I believe in win-win, win-win. And China's failure is bad for America. China's inability to pay its debt is bad for America. Much better for us is a vibrant and free Chinese economy that is producing and creating and innovating and trading with us. I think the economic failure and economic destruction in China hurts America, it hurts the world. And I think it pushes China to potentially be more aggressive from a foreign policy perspective. Catherine says, what's reasoning for not allowing immigrants to work? Oh, well, because they're not really immigrants because they're only here seeking asylum because they compete with local labor because, because it's, you know, if they start working here, then it'll be hard to kick them out. If they start working here and then they don't get the asylum visa, then it'll be destructive for the economy. I mean, a million reasons. If they work, you know, do they get all the rights the workers get? They have a social security, do we do then provide them with a social security number and social security, but they're not really legally here. It's just a, yeah, I mean, it's just, I can think of a million bureaucratic reasons why not to let them work. Just pay them off. It's free money, right? It's just, it's just, it's just tax payer money. Nobody's going to miss it. I mean, tax payer money, all money, the money we pay in, those of us who actually pay taxes. But it's, on the Rome show, you sounded a bit Marxist when you talked about Vatican and Pope wealth by saying it was all in the backs of the poor people. Really, Frank? God, feudalism, all aristocrats and suddenly the church is all in poor people's back. That's how Marxist, that's reality. And Marx didn't, Marx agreed and he was right. It's applying that to the capitalism that is Marxism. But of course feudalism is all in the backs of the poor people, all in the backs of people who actually work. The feudal's don't do any work. They want like CEOs of corporations. They want like entrepreneurs. They want like innovators. They want businessmen. And the church was not. Now granted, the church provided them with some spiritual comfort. Yeah, by lying to them. So the church is like a million times worse than the aristocrats exploited the poor. The church was exploiting the poor with a promise of some bizarre afterlife that I think most popes realize doesn't exist. To some God that I think most popes realize doesn't exist. They got paid how? Where did the money come from? From taxes. From forced taxes. Yeah, they got paid. But they were, they got paid, they got taxed and then they got paid. So if you look at the amount of money, how poor these societies were, how poor these societies were, and the amount of money spent on these churches, the amount of money spent on these cathedrals, the amount of money spent on the gold all over the place and on the sculptures and on the paintings and all this stuff, the money money spent on skilled labor. Where did that money come from? Where does the church have money? The church produces nothing theoretically. So it has to come from the backs of somebody, the aristocrats, the poor, whoever has something for the church to take. So absolutely 100% exploitation and horrific. On the one hand, wow, it's beautiful. On the other hand, you have to realize and you have to conceive of okay, but where did it come from? How did they get this wealth? All right guys, thank you, really appreciate all the support, appreciate all the questions. Thanks for being here. These daily shows will continue this week. I will also see you tonight at 8 p.m. to be determined what the topic will be for a regular Yuran Book Show show. Thanks for getting us to the target. Really appreciate that, the support. And I will see you tonight. Those of you who want to support the show on a monthly basis, you can do so on yuranbrookshow.com slash support on Patreon and on patreon.com. Just put it in your Yuran Book Show. I will see you all tonight.


Andrew Zimmerman. Welcome to our pilot episode of China, Hawaii and you. We're very excited to tell you about this fascinating place in the east and how it's what's going on there affects us in the west and all those of us in Hawaii. So today I've got a really, really exciting guest that I really, really cannot wait to hear what he's got to say. You want to give yourself an instruction, Tony? Oh sure. Well, first of all, thank you very much, Andrew for having me on. And I assume most of your audience are North American based in Hawaii by the sounds of it. Yep. So my apologies in advance if they have trouble with my accent. I'm from New Zealand. So it's a bit of a funny accent at the ease in the A's New Zealand bed head. But I will endeavor to speak clearly. And if you can't understand something I say, I will do my best corny American accent to say it again. Thank you for having me on. In terms of my background, so I'm from New Zealand. I did my law degree in New Zealand. I worked briefly in public policy for the government there. Then I moved into private practice, mostly in corporate law litigation. But then soon after that I decided to move to China for several reasons, personal and professional. I moved to Beijing where I did a master of laws at Peking University. Now it was a master of laws, but the subject matter was not really related to law. It was more related to public policy, political economy and Chinese foreign policy. So that's what I studied there. Finished my masters and that was about six years ago. And for the last, I moved to Beijing six, six years ago. Since graduation, I've spent the last three to four years working in the private sector in China, mostly in project management and doing consultancy work on the side focused mainly on macro developments in China for clients based overseas. So yeah, that's a quick intro to my background and why you've got me here talking about talking about China. So the subject for today is a really, really interesting development that people have been hearing about.  They think about Alibaba losing half its value in a day. They think about 10 cents supposed to be on the chopping block next. But a really big thing that has kind of made people think like, I wonder why my portfolio is looking a bit lighter today is the Evergrande crisis. And that's our big topic for today. And a lot of people have drawn strange, not strange, but really interesting comparisons to the Lehman brothers. Yeah, yeah, yeah. And for those of you with maybe short memories, the Lehman brothers was a massive financial institution that collapsed in 2008. And many economists today agree that that was really what kicked off the great financial recession in 2000. So we'll get to whether or not those comparisons are appropriate in a minute. Yeah, I think to lay some background, the first thing that I want to talk about is, you know, when people, especially when people think of communism or communist China, right, this is the reaction I got from my parents, some people can't even believe that there's companies like this at all, right? It's kind of a strange thing to, it's kind of a strange thing to Americans in the way that they hear about the term the word communism. They can't really, they think like, well, how is it possible that you have these private companies that even had $300 billion that that they could get into, right? How is it possible in a country like China? So could you tell us a little bit about how China has sort of from the original, from the original state in the Maoist era, kind of made this transition to where a company of this size being too big to fail was even conceivably allowed? Can you tell us about how that transition happened? I really like how you framed that question. You actually touched on a couple of main points there. So let me sort of change my answer to change the order of my answer because you touched on several main points there. So then hopefully there's a good framework because I think you touch on something really important here, which sometimes it's hard enough to understand a crisis in your own country. If it's a financial crisis or some sort of economic problem, if you're sort of regular Joe or Jane or whatever, and you see you're reading in the newspapers, there's this crisis. Sometimes that's difficult enough to understand in your own system, let alone in a completely different system and a different civilization, then it becomes complex. And so we need to have an understanding of the system we're talking about to quickly touch on your first point. China is in name a communist country. Many people say that it's communist in name only. That is not exactly correct. I would say the best to use Western sort of language, it's a mixed economy currently. It was heavily socialized, nationalized during the Mao and early reform, there were liberalizations through the 80s and 90s, large parts of the economy were liberalized, but large parts of the economy were also not liberalized. Downstream industries, for example, the sort of industries that manufacture goods for export that provide goods and services for the households and consumers, the property market, which is what we'll be talking about today. And some of these downstream industries are quite liberalized. Their prices are set by the market, supply and demand. There's capital that flows into them, but upstream industries like the banks themselves, the financial sector itself, like electricity production, like heavy industry, a lot of this is either completely state owned and state run or is heavily influenced or heavily regulated to the point where it's basically de facto owned. It's a mixed economy and it's much more, it's much closer to a state intervention and central planning side of the mixed economy than laissez-faire sort of mixed economy. But in terms of how we got here, the first point you brought up was this idea of the Lehman brother moment in China or the Lehman brother moment of the East. And then the first question is, when we try and understand this issue in the background that led up to this issue, the first question is, is this a good analogy? And in some ways, it's a sort of a useful way to start the conceptualization when talking to a Western audience or an Anglophone audience, like your audience. But it can only go so far. When it comes to our analysis of the problem, using that analogy is not very useful at all. In fact, it can be counterproductive. So how is it similar to Lehman brothers? Well, it's similar in that you have this very large company that became very over leveraged, that was acting in a very reckless manner. And now this company could be a trigger for a larger, either collapse or sort of an economic crisis, whether in the region or internationally. So similar to Lehman's in that way and that it's a large company trigger. It's also similar in the sense that there is what is highly likely a speculative property bubble at play in the background. But that is where the similarities really ends. And the reason why we don't really want to use Lehman's as a lens for examining Evergrande is because when we do that, what we do is we look at what caused the crisis with Lehman's in the lead up to the 0809 crisis. And then we use that lens to examine Evergrande. And if it doesn't fit the framework, then we come to the conclusion, oh, there's not a problem here. But that's not actually, that's not a good way of approaching it because the system here is different. The nature of the property market is different. The options that regulators have are different. The question that regulators are faced with is different. And the consequences for the Chinese economy and the global economy are different. Some people say, oh, X, Y and Z led to the collapse of Lehman and the financial crisis. Let's look at the China example. There's no X, there's no Y, there's no Z. So there's no problem. But just because there's not X, Y and Z doesn't mean there's not A, B and C. So that's what I'd say on that. In terms of how we got here, let's take a step back. And I'll give you as a quick walk through the last 30 years and sort of how we got to this issue and then maybe talk about how I like to frame this crisis because it is a crisis. And it does affect a lot of, it affects the Chinese and it could potentially affect the world, not just economically, but geopolitically. But it's important that we understand how it does that, right? So in the 1990s, reforms had been in place for at least a couple of decades. Deng Xiaoping's opening up reforms started in earnest after the death of Mao. Mao, of course, was the leader of the country during a period of great upheaval. And the economic system was very much Marxist-Leninist. There was one of state ownership. There were no entrepreneurs. There was no property ownership. It was very much communist in the sense that I think many Americans think about communism. The reforms were introduced. It was bumpy, but there was a lot of early success. In the 90s, there were the Deng Wei reforms. The Deng Wei were sort of where people worked. And historically, these Deng Wei or these work units had provided housing for workers. People had houses that were provided by the government. And because it was provided by the government, there was a massive, massive shortage of housing. If you look at housing, if you, if you want to look at housing in terms of what is demanded by consumers, there was all this pent-up demand. So in the 90s, the government reformed this area and they liberalized the sector and they allowed people first, initially, the Deng Wei houses were privatized. And so people who were already living in them were given the opportunity to buy them at a very cheap rate. And this started the process of lots of millions and millions of households getting assets for the first time. And because this unleashed a lot of pent-up demand, the prices of these houses were up very quickly. And so you had millions of people in the lucky cities where they were given the option to buy the houses, their wealth skyrocketed. And then they could use that wealth to actually consume. And then you had household consumption that kicked in. And this started a positive cycle, a cycle where you had increases in household demand. But you also had an economy that was just really needed capital and needed investment into infrastructure and needed to build cities and need to build houses. So you had the skyrocket of the skyrocketing of prices and of activity. And we know the story, China grew very quickly. At that time, from the first 10 to 15 years since the reforms of the housing market, many observers in the West, especially who were not China experts or were not trained in the Chinese system, they believed that what they were looking at was a massive bubble because the property prices had skyrocketed so quickly and to such high levels. But what they didn't understand was that because they basically started from almost zero, there was so much pent-up demand that those prices, even though they were skyrocketing, they were actually linked to fundamental demand. The fundamental demand was there for people to buy houses. And so the prices rose. Buying houses was popular. We'll unpack some of these ideas shortly. I just want to give a basic overview for your viewers. Property prices were going up. People were buying houses. Developers were entering the market. They saw a lot of money to be made and they were building houses. Now, this went on for about 15 to 20 years. Now, about 10 years ago, for reasons we can discuss, we can unpack soon if you want, about 10 years ago the price of houses at some point became detached from fundamental underlying demand and then entered into speculation territory. You saw the beginning of a speculative bubble. We can talk again shortly why we believe that is and why the government believes there is a speculative bubble in the housing sector here. And once you had a speculative bubble, if you have sufficient moral hazard, that bubble can keep growing. And so for the last year, that bubble has been growing and the price has become increasingly detached from the price of housing has been increasingly detached from fundamental demand. And this is sort of like the definition of a bubble, right? The asset price is higher than what it really, what its intrinsic value is. So that's the first step. You've got a popular asset in China property. It's been growing rapidly and feeling in a very stable manner because there was real demand. So people see prices go up. They buy houses. And for the last 10 years, though, it's teams that we're looking at a situation where you have a speculative bubble. The second thing is you have the entrance of these property developers, these big property developers. And because of a mixture of factors, property bubble, moral hazard, and the nature of the Chinese growth model, which if we have time we can discuss as well, because this is really key understanding the crisis that Chinese policymakers face today in Beijing, the nature of the property bubble, the property development industry grew very large and became incredibly over leveraged. So that's the second thing to understand. They've been growing for about the same amount of time as the property market generally, but this over leveraging has happened has increased dramatically over the last 10 years, mostly in response to the massive stimulus package that Beijing unleashed after the Lemons crisis back in 08 and 09. So that's sort of an interesting time with the real Lemons example there. The third step is that regulators in about 2018 recognized that the bubble was an issue. You have financial risk. There's a need to transition the growth model. Property development is too large a percentage of GDP. And so this is very dangerous because if you have a turn down in the property market, this can have a huge effect on GDP growth. And this is a wider social and political issue. And so there was need to regulate the market. And so regulators stepped in in 2008. And by the way, this was not just in the property sector as well. There was financial risk across the economy and other sectors. Technology sector, some of the gray rhinos that we read about a few years ago like HNA and Unbang and some of these. And so basically regulators in about 2018 made it harder for banks and other lenders to lend to certain companies. Now this had an effect in some sectors, it had an effect in the technology sector to some extent, but some of those large gray rhinos like HNA, Baoshan Bank, some banks, provincial level banks, they got into trouble. The government had to step in and take over some of the obligations, take some of the bad assets off their balance sheets and give them over to state-run enterprises. And they were sort of dealing with these issues on a case-by-case basis. But the property sector continued to grow. And there's several reasons why that happened and we can discuss that as well. But the property sector continued to grow until 2020 when regulators basically said, okay, what we did in 2018 is not working. 2020 rolls along. We're not going to go after the lenders. We're going to put regulations directly on these property development companies themselves. And so 2020, August, September of 2020, Beijing introduced its three red lines. And its three red lines were basically three ratios that property developers, they had to meet these ratios in terms of interest-bearing debt as a percentage of the assets on their balance sheet. This made it much harder for property developers to get the financing they needed. Actually, the first time I spoke on my show that I have, the first time I spoke about Evergrande was actually in September of 2020, over a year ago, because at that time there was a leaked document where a leader from Evergrande had sent a private letter to the local government, I think in Canton, Guangdong, and basically was saying, hey, if you don't let us list on the Hong Kong Stock Exchange and have access to more capital, we might not be able to meet our obligations. And this is going to lead to slow down and social and political issues. So it's almost like a little bit of a threat. And it actually just shows the level of interaction you see between local governments and some of these wealthy property developers. There's a lot of this what in the West we call crony capitalist sort of behavior. But that sort of leaked and it caused a bit of a stir. But it seems that the central government didn't blink. And they were like, no, you have to meet these requirements. And no, you're not going to be listed on the Stock Exchange at this point. So the situation continued. Evergrande, not having access to cheap credit anymore, having difficulty with financing and getting funding for its operations, it was greatly overstretched. It was incredibly over leveraged. It had diversified in a poor and disorderly manner. So it brought up assets that weren't exactly good that fits for the business model. There wasn't much synergy. There were buying assets across the country and overseas and projects overseas. It looks like they may have been buying up land that was just not a very smart move. And the operations could only be met by having access to credit. And when that dried up, they couldn't meet the obligations. And that's where we are now. When they couldn't pay those bonds, the payments that were due to bondholders, when they couldn't promise apartments being delivered on time for the over one million people that have purchased apartments off plans, when they couldn't pay billions of dollars owed to suppliers and service suppliers and good suppliers who are providing a lot of the inputs for their property, when all this happened, the government had to step in. And that's what we're looking at now. So I know that's a lot to sort of digest, but we need to digest it because it's so different. The nature of the system and how we got here is so radically different to what we would see in a more open capitalist system where a lot of things are very different. So we can we can unpack some of these points if you want, because they're also under they're also important. But what I will also say while you're here, sorry, I've sort of commented this part of the interview, what I what I'll say straight away to your viewers is there's this question of, will there be a collapse? Will there be a financial crisis? And more importantly, is it going to affect me in the West? Well, if there's a financial crisis, yes, it will definitely affect you in the West. It will affect the entire world. In the case of a financial crash, it would be like a real bad one and a massive economic a massive reduction in economic growth in China. This has two effects. The financial contagion spilling overseas is less likely because the capital market here is quite closed and the financial banking system is quite closed off. So there's you don't have the same sort of contagion you saw, for example, in the US with Lehman Brothers that quickly spread to Europe and other places because there was so much like so much of the system are tightly intertwined. So you don't have that same financial contagion risk. But in the event of a crash in China and massive reduction in economic growth and activity in China, because China consumes, for example, 50% of global commodities, if you're a commodity exporting nation, like Australia or some of these Belt and Road countries, then that's going to have a huge impact on your economic system. And so all these flow on effects, just the simple flow on effects of a the second largest economy in the world seeing reduction and growth will have economic consequences for the entire world. And that in of itself, once countries and systems overseas, which are more interconnected, see hits to their economic performance, this could this could trigger something larger. The what you would see would likely be not as bad as the crisis in the US in 08 and 09 simply because the US is the larger economy, it's larger than China. And what drives global growth is some debate to this, but I think most economists agree, what drives global growth is demand. Now China sees a lot of growth, but a lot of that growth is selling to Americans, because America has a lot of demand and American household consumption is much higher, it's like twice the size of Chinese consumption. So while you would take a hit, the US a crash in the US would be much more devastating to the world than one in China. So probably would not be as bad as 08, no, not except for the Chinese, it would be devastating to the Chinese, obviously, and to key trading partners. Now in saying that, the question, do I think there's going to be a crash? My answer is probably not. I think that it is unlikely that there is going to be a crash. Can I really quickly, would an evergrande crash, so let's imagine evergrande just completely default, right? How likely is that to, I understand it's not likely to bleed over into the rest of the world, right? But how likely is it to lead to a Chinese economic crash? Okay, so this is where I think it's useful to frame, to talk about, because evergrande is a symptom of a wider problem. There is a decision that policymakers have to make. And there's many aspects to this decision. But if we take a step back and really look at it in its purest form, or as an aside, I should probably, I think this goes without saying your viewers probably know this. Evergrande, one of the reasons why evergrande is a big deal is because it's so big. It has $300 billion of debt. And the assets on its asset sheet are probably not worth as much as it says on the asset sheet. In fact, a lot of them are probably worth nothing. That's why it's a big deal. It's huge. Yeah, I think that's actually, that's one of the big problems that people have in analyzing the situation, right? There's a lot of weird speculation about like, will they, will they run big crash? And there's a lot of different things you can look at. But at the end of the day, corporations and especially like these kind of financial firms don't tend to open their books for the public, right? And so for the most part, it seems like, especially when you're dealing with Chinese, Chinese financial giants, you're kind of firing in the dark whenever you make these, make these sort of forecasts. Sometimes, yes, that's the case. And that's why it's actually, and you're right, you're absolutely right. And people have been stung. People were stung with luck and coffee. People were stung with Diddy. People were stung with and financial overseas. I'm talking about Wall Street bankers who had money or plan to put money into some of these companies. And they were like luck and coffee, which was last year. I think that when a lot of the fraud came out with luck and coffee, a lot of banks and Wall Street lost a lot of money. I'm sure your viewers are not losing much sleep over Wall Street bankers losing money. But you know, it's just a wider point about sometimes it's difficult to know the true value of assets on balance sheets of these big companies. But also, even if they were very accurate, if you're, if a lot of those assets are property, and you're in a speculative bubble environment, then they're even if it's 100% accurate on paper, the fact that it's in a bubble, suggest they're overvalued at any rate. And in the event of a systemic collapse, then those prices collapse as well. And then you cannot sell them. And then you have a fire sale and it makes it even harder to get much for them. You can't meet your obligations. The reason why I think it's unlikely that Evergrande is going to cause a what now Evergrande may be cut up and and and it's met some of its managers may be arrested. Evergrande, I don't think if you if you have stock in Evergrande, I'm sorry to say, I hope you diversified because you're probably it's probably not going to be saved. Yeah. Well, the Evergrande sorry, I want to get one point in what's really strange to me about the Evergrande crisis, right? It's like what actually put it in the news is that is that they they were on the verge of diverting of defaulting on this massive bond. But if you take a look at the average Evergrande stock, right? It's like you reported this back in September 2020. But and I took it just to look at the stock price. And it's been on the collapse for the last year. Yes, 100%. So people who own the stock knew what was going on people knew from when you have a situation where there's a leaked letter where they basically say, hey, you need to give us cheap credit, otherwise it could cause a collapse. If you see that and you own stock in that company, you probably want to get rid of that stock. It's not a good look. So Evergrande by itself, we need to sort of make sure it's a tree in a forest. We need to take a step back and look at the forest. And it's a it's a very big tree. It's a very over leveraged tree. Definitely. And it could the what has happened with Evergrande and the sort of policy response that regulators will need to use in dealing with it could actually cause issues for the wider property sector. And that's important because it's so big. But what I'll say in terms of whether there's going to be a crash or not, Beijing has the fiscal space and has the legal and economic tools to manage the Evergrande crisis. In fact, like I said before, they sort of knew it was coming because they they use these regulators, these regulations to basically slow them down. So regulators were expecting this to happen. Now, if it is mismanaged, if it's mismanaged, it could trigger wider collapse. If regulators make mistakes, which there's a there's some people say that the Chinese government is super powerful and all knowing it's not the cases like any other government mistakes can happen, then perhaps you might have some sort of like systemic trigger that causes a wider collapse. If that happens, I think it would stem from part of these efforts from regulators is to use market discipline for the better allocation of capital. And so what they want is for the market to price and risk more more accurately when lending money to different to different actors in the economy. They don't want it to be based on moral hazard. They don't want lenders to look at a company and go, it's too big to fail. It's supported by the government. I don't care if they've got really bad fundamentals. I'm just going to give them money because I'm going to get it back. That's what they want. They want more market discipline and the allocation of capital. If the situation in terms of the rock under the floorboards was much is much more worse than regulators expected, then this could be a nasty shock. Perhaps they expect maybe like financing for some industries, it becomes harder by say like 10%. But if it actually becomes harder by 30 or 40%, then that could cause some shock. The other big wild card is the price of property in China. Actually, that's one of the big things that I wanted to talk to you. I really, really wanted to talk to you about is the price of property in China and kind of how it affects the rest of the world because not a lot of people in the West kind of fully understands the there is external factors to why it's important to buy a house in China. It's not just the classic thought of like, okay, well, now if I'm paying my mortgage, at least I'm building personal equity. People don't necessarily have this financial calculus when they're buying a house in China. Of course they do, but one, you never really buy a house in China. There's 70 or rental leases. Two, the reason that you're buying the house more often than not is so that you can get married. That's right. You're absolutely right. I really do want to jump into that, but we're going to have to take a really, really quick break and bring this into a part two. Before we let out, I wanted to ask, do you want to take a second to talk about how if people are really interested in what you have to say, where they can find you? Well, I have a small, if you know, for years I did consulting on the side, but then I thought I really wanted, I felt there was a lack of voices. It's good to actually see voices like you, to be honest, it's wonderful. I thought there was a lack of voices that made following China accessible. And so I recently started a YouTube channel called China Update. China Update, it's quite small. So if you search for it, you need to go to the filter and filter for channel and then search China Update and you should find my mug on the logo. Very excited to talk to you in a part two. And for now, we're going to say to our listeners, thank you very much for tuning in and we hope to have Tony back in.


What is going on guys welcome back to the channel critical overlord here recently in an interview of Halloween 3 star Tom Atkins tease the return of the gentleman that you see on screen right now share bracket who was portrayed by Charles Seifer in the original Halloween from 1978 Tom Atkins starred in Halloween 3 season of the witch I believe he was the main character I'm not really too familiar with Halloween 3 season of the witch I've seen it about 10 times, but that was 10 times when I was like around the ages of five and six and Since then I've watched it like sporadically across the year. Sometimes I included in my marathon sometimes I don't I Just don't watch any of the movies that don't have Michael Myers in it and Halloween 3 is that movie? So I don't watch Halloween 3 but Tom Atkins the star from Halloween 3 season of the witch He recently teased or kind of hinted at the fact that Charles Seifer could be returning as Sheriff Brackett in Halloween kills now this is interesting this is an interesting development because If this is in fact true, I just want to make I just want to make this plain and plain and clear This hasn't been confirmed nor has it been announced by Blumhouse or anyone involved with the project nor did Tom Atkins say Concretely that Jason Blum or anyone from Blumhouse got in contact with Charles or anything like that So all the news report outlets that are running with this and confirming it is fact I think we all need to slow down. That's not the case There is no confirmation that any of these people that we have been reported of returning coming back There's no confirmation of that the only person we know is coming back at the moment is of course Michael Myers and Laurie Strode and Laurie Strode to Her to the two ladies with her her granddaughter and her daughter There's no confirmation on Tommy Doyle and there's no confirmation on Sheriff Brackett However, if Sheriff Brackett is in this film, which I hope he is I would like to see Charles Seifer reprises role And it will be an interesting development and that kind of tells me a lot about the possible direction That the movie goes in because I can't see the I can't see Annie's father Because if you if you remember the from the original film of Annie was among one of the victims that died in the Massacre that Michael Myers went on not even a massacre in this case. He killed like three or five six people I guess you can consider a massacre just a killing spree that he went on Annie was a part of that she was the daughter of Sheriff Brackett and the friend of Laurie Strode now for the last 40 years You would assume that Brackett has been just as distraught and heartbroken Maybe he's gone through some mental stuff just the same way Laurie has and he's been waiting for this opportunity to get back at Michael Myers for taking his daughter or maybe he just been Hoping right along with her that maybe one day he would escape or maybe someday He'd get an opportunity to get back at him now that opportunity presents itself I would imagine that this would now mean that Halloween kills is going to take place in the same night as the last movie Because realistically I can't see Sheriff Brackett waiting years later after the last Halloween movie And now finally deciding to turn up and get revenge on Michael if Sheriff Brackett is coming back I think realistically it's this means that the movie is going to be set in the same night as The 2018 film because I don't see why Sheriff Brackett would wait so long now to come back That's assuming that the next movie is let's just say the next movie is set years later after the 2018 film Why would Sheriff Brackett now all of a sudden show up now? Why didn't he show up in the 2018 film? Of course, they'll come up with excuses and stuff to that effect, but everything regarding Brackett and his motivations will just hint to the fact that he would want to get involved with it on the night of Halloween that Myers escaped and not that he would want to do this years later I just hope that this means that the next movie is set in the same night If it is a confirmation down the road that Brackett is involved, that's fine Even without Brackett's involvement the next movie needs to be set in the same night as the last film of If Charles Cypress comes back that is a great addition to the cast I haven't really seen him in too many projects outside of Halloween And then one episode of Buffy the Vampire Slayer because I am a huge fan of that show I probably saw him in a few other things when I was little not just Buffy the Vampire Slayer But I probably saw him in a few other things just didn't realize it But let me know what you guys think about this down in the comment section below Would you like to see Charles Cypress back? Would you like to see Sheriff Brackett back? What other characters do you hope come back for Halloween kills? Let me know down in the comment section below if you haven't already make sure your subscribers and our post notifications So you never miss a video in the description I'll have links on my social media accounts on my Facebook Twitter and Instagram You can message me there to let me know if there's any movies news or reviews You would like me to cover in the future with all that in mind guys. I will see you in the next video


Logo for Limitless and Institute of Physics. What does a typical physicist look like? Most people who I know who do physics are boys. I think physicists tend to be rich white people. To pursue physics you have to come from a wealthy background. I don't feel comfortable doing physics. I think there's not a lot of girls in the STEM sector. Physics has a serious diversity problem. Over a rapid montage of landscapes, classrooms and industrial workplaces. A series of bold captions. We face unprecedented challenges. A health crisis.  An economic crisis. A technical skills shortage. Young people can be the solution to all these problems. And physics has a critical role to play. Asian and black female students smile in a lab. Wind turbines turn. A robotic limb on a treadmill. The sun glints off solar panels. A dark-haired young woman puts on a hard hat. Female and male students of all ethnicities. Over an Afro-Caribbean girl studying the school library. Every young person should have the opportunity to be part of the solution. Because it's right. I guess if you like physics then nothing should stop you. Someone's always going to tell you no. As long as you think you can do it then you should go for it. Physics is for everyone. It doesn't matter how much money you have or where you come from. We are the Institute of Physics. We want to change the way people think about physics and physicists. People go into it thinking it's a lot more complex than it really is. It's not based on history, it's up to you. Just because I'm interested in physics doesn't mean I have to go to uni. I can do an apprenticeship as well. We want to welcome everyone. We want to help young people achieve their potential and change the world. A woman in hijab, another with piercings. Both my physics teachers are girls so it's really inspiring. Physicists are just regular people. Physicists could have silver nail polish. Anyone can be a physicist. It doesn't matter who you are or what you look like. If you feel like you can do it then do it. The future of physics is equal. Join our mission at iop.org or at slash limitless. Logo for Limitless and IOP. Institute of Physics.