October 15, 2015

A quick look at the South China Sea


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US And China Play ‘My Ship Is Bigger Than Yours’ 

Hua Chunying, spokeswoman for China’s Foreign Ministry, was irate yesterday as she accused “other countries” (the US) for flexing “their military muscles again and again.” Ms. Hua was responding to a US Naval “incursion” into waters claimed by China in the South China Sea. The US and China have been engaged in a diplomatic tug of war over the past few years, which escalated after it was revealed that China was “building islands” in the contested waters.

Tell me more about the South China Sea…
A maritime dispute in the South China Sea has pitted China, Taiwan, Malaysia, Philippines, Vietnam and Brunei (powerhouse) against each other. The US, which is allied with a number of those countries and isn’t allied with China and coincidentally has a large carrier fleet in the area, has been trying to “resolve” the conflict. China, which considers this to be its backyard (its own Hawaii) feels that the US should bugger off and that everyone should listen to them because “China is a big country, and all other countries are small.”

Why is this important?
For starters, $5.3 trillion of trade passes through there (follow the money). It will also be the key foreign relations issue that will determine how a rising China will deal with a still very strong US. Finally, there are just a lot of people involved, meaning the probability of someone doing something stupid is high…  

GOOD READ: ‘What is China building in the South China Sea?’


Iran Begins Implementing Deal With ‘Great Satan’

Foreign investors are now one step closer to erecting a giant Quiznos in downtown Tehran after the Iranian “Guardian Council” ratified the Iran Deal yesterday. The Council found that the deal did not violate religious law (which presumably doesn’t cover nukes). Iran needs to dismantle the nuclear sites to be deemed eligible for sanction relief. Iran is set to have an “identity crisis” now that the US might not be “great Satan” after all.

Walmart Surprises The Market, Not In A Good Way

Walmart, a company whose annual revenues ($405 billion) would make it the 23rd largest economy in the world, forecast a 6-12% earnings drop in 2017. This caused its share price to drop by 10% in one day, the largest drop in three decades. The company blamed higher wages, spending on e-commerce and lower prices for the poor performance. Walmart’s emerging retail rival, Amazon, is quietly rubbing its online hands together.

Some Fantasies Are Too Good To Be True

The FBI and US Department of Justice launched a preliminary investigation into fantasy-sports sites to determine whether the business model is violating gambling laws. Since 2006, fantasy-sports sites have operated under an exemption to a law prohibiting financial institutions from transferring money to online gambling sites… yet maybe not for much longer. According to the WSJ, the Boston-based site DraftKings Inc. in particular is in question, as investigators have begun talking to customers about the company’s operations. If it’s a guilty verdict, then we fear for you DOJ and FBI. 

Keeping Our Eye On…

  • Israel: Tensions remained high despite an increased police presence in Jerusalem. Abbas and Netenyahu verbally sparred. Kerry (and for some reason De Blasio) is on his way. 
  • Syria: Russia and the US met to put traffic rules in place that will ensure the five or so air forces currently bombing Syria don’t accidentally crash into each other. 
  • Boko Haram: Obama announced that US troops will be joining the fight against the Nigerian extremist group, Boko Haram, from Cameroon. 



Game of Expensive Kyrgyzstani Thrones

Kyrgyzstan, a country with the longest poem in the world, has abandoned efforts to buy new seating for its parliamentarians after a mass campaign against the cost. The cost of 120 chairs had been estimated at $40,000 (2.5M Kyrgyz soms) with local bloggers calculating that the cost of each parliamentarian’s backside was roughly $3,500.  



What Do Low Oil Prices Mean

Energy prices have fallen, and it looks like they will stay that way, making life difficult for big oil companies and the occasional oil-rich dictatorship. It certainly doesn’t help that more people are shifting to more renewable (and less polluting) energy sources like solar and wind because of regulation, government subsidies (thanks Obama) and, well, a general desire not to destroy the planet. What does all that mean? You can find out at the Harvard Business School Energy Conference this weekend. Get your tickets here.

Ivanka Trump comes to her father’s defense on CNN. 
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