Home About Archives RSS Feed

The Independent Investor: Chinese Checkers

By Bill SchmickiBerkshires columnist
If you are wondering why China is suddenly back in the news on various political and economic fronts, look no further than the November elections. America needs a scapegoat for all the pain and suffering we have endured during this pandemic. The world's second-largest economy is an easy target.
 
There is no dispute; if we want to cast blame on the country that originated the coronavirus, we know it originated in Wuhan, China. At the time, the World Health Organization, the U.S. Centers for Disease Control (CDC), the federal government, the White House, and the world at large, all applauded China's efforts to contain the virus. Back then (a few short months ago), President Trump actually applauded President Xi's efforts and said so many times publicly.
 
Since then, more than 5 million cases of COVID-19 and 330,000 deaths have been reported worldwide. Untold damage has been done to world economies. The United States, one of the worst-hit nations, has suffered massive unemployment and a big decline in economic growth that has led to our first recession in more than a decade. And all of this has occurred in an election year.
 
Whether warranted or not, President Trump and his administration have taken the lion's share of the blame for America's poor showing in combating the virus. A late and disorganized response, lack of medical equipment, and a continued paucity of testing, are some of the accusations directed at the White House. Donald Trump, however, believes that the best defense is a good offense. Who better to direct our angst and unhappiness at than China?
 
No never mind that Trump announced a "historic" but feeble trade agreement with that nation less than six months ago. Today, with Chinese promised purchases falling short as a result of their own virus-weakened economy, Trump is threatening to break the deal; but there is more.
 
Today, it's about preventing U.S. companies from doing business with Huawei Technologies, a Chinese leader in 5G technology for wireless networks. Last week, a new rule bars the Chinese company and its suppliers from using American technology and software. The escalation will hurt a number of American semiconductor companies that are already reeling from the present recession, but I am sure that somehow, someway, they will be compensated for their losses.
 
This week, the U.S. Senate voted (by unanimous consent) a bill that would expel Chinese companies from all U.S. stock exchanges if they continue to deny inspectors access to their accounting audits. The argument is that China has continued to ignore American demands that if they want to list their companies on an American exchange, they are required to submit to a U.S. audit and the Securities and Exchange Commission (SEC) will have access to those financials.
 
This bill, which will now go to the House, follows on the heels of an order by the president that the federal retirement board, called the Thrift Savings Plan, which invests retirees' stock portfolios, hold off on any new investment plans that might include buying Chinese companies, or any index funds that might include them in their offerings.
 
The estimated $4 billion in potential new investments, while small in comparison to the hundreds of billions in tax-deferred savings managed by the plan, is now off the table. The explanation for the move, provided by the White House, was that the national security and humanitarian risks of those investments were significant and violated U.S. sanctions rules.
 
I believe all of these actions appear to be an effort to refocus America's attention away from blaming those in charge for their COVID-19 response. They are doing so by escalating tensions and continuing the blame game, started three years ago, with what now appears to be America's number-one arch enemy, China. 
 

Bill Schmick is now the 'Retired Investor.' After working in the financial services business for more than 40 years, Bill is paring back and focusing exclusively on writing about the financial markets, the needs of retired investors like himself, and how to make your last 30 years of your life your absolute best. You can reach him at billiams1948@gmail.com or leave a message at 413-347-2401.

 

0 Comments
     

Support Local News

We show up at hurricanes, budget meetings, high school games, accidents, fires and community events. We show up at celebrations and tragedies and everything in between. We show up so our readers can learn about pivotal events that affect their communities and their lives.

How important is local news to you? You can support independent, unbiased journalism and help iBerkshires grow for as a little as the cost of a cup of coffee a week.

News Headlines
Hoosac Valley Regional Looking at Three Budget Scenarios
Conservation Commission OKs Art Installation, Charging Stations at MoCA
Berkshire Immigrant Center Steps Up to Serve Vulnerable in Pandemic
Williamstown DIRE Committee Member Running for Select Board
March Is Downtown Pittsfield Restaurant Month
Pittsfield School Committee Takes Stance Against MCAS During COVID
Letter: Hinkell Family Thanks Community for Support After House Fire
MedUX Wins Lever's Berkshire Manufacturing Innovation Challenge
Literacy Network Adds Two New Staff Members
Sheffield Land Trust Winter Lecture
 
 


Categories:
@theMarket (360)
Independent Investor (450)
Retired Investor (32)
Archives:
February 2021 (8)
February 2020 (2)
January 2021 (5)
December 2020 (6)
November 2020 (8)
October 2020 (7)
September 2020 (6)
August 2020 (6)
July 2020 (10)
June 2020 (7)
May 2020 (9)
April 2020 (9)
March 2020 (5)
Tags:
Europe Congress Pullback Banks Economy Debt Currency Debt Ceiling Federal Reserve Selloff Recession Rally Europe Greece Housing Crisis Interest Rates Taxes Wall Street Stock Market Stocks Jobs Euro Election Bailout Commodities Japan Fiscal Cliff Oil Deficit Energy Retirement Markets Metals Stimulus
Popular Entries:
The Independent Investor: Don't Fight the Fed
@theMarket: QE II Supports the Markets
The Independent Investor: Understanding the Foreclosure Scandal
The Independent Investor: Does Cash Mean Currencies?
@theMarket: Markets Are Going Higher
The Independent Investor: General Motors — Back to the Future
The Independent Investor: How Will Wall Street II Play on Main Street?
@theMarket: Economy Sputters, Stocks Stutter
The Independent Investor: Why Are Interest Rates Rising?
The Independent Investor: Will the Municipal Bond Massacre Continue?
Recent Entries:
@theMarket: Higher Interest Rates Clobber Stocks
The Retired Investor: SPAC Attack
@theMarket: Stocks Versus Bitcoin
The Retired Investor: Clubhouse Comes of Age
@theMarket: Financial Froth Infects Markets
The Retired Investor: Gambling, the Vice We Love
@theMarket: Stocks Regain Momentum
The Retired Investor: The Business of Space
@theMarket: A Roller Coaster Market
The Retired Investor: Make Way for the Retail Investor