The Silicon Curtain

President Trump opens a new offensive in the trade war:

President Donald Trump has issued executive orders effectively banning Chinese video sharing app TikTok and messaging service WeChat in a dramatic escalation of tensions with Beijing that sent stocks tumbling worldwide overnight.

Using national emergency powers, Trump on Thursday night signed the orders, which give TikTok parent ByteDance 45 days to sell the app, and bar WeChat from the U.S. after the same time period.

The orders also banned any U.S. transactions with WeChat owner Tencent, a major Chinese company that owns significant shares in Tesla, Snap Inc, and Reddit. Tencent shares fell as much as 10 percent in Asian markets overnight, and it was not immediately clear whether the company would be forced to divest its U.S. holdings.

Coming days after the United States ordered China to vacate its consulate in Houston, the move looks set to trigger retaliatory action by Beijing, stoking fears that a ‘Silicon Curtain’ is descending between the two superpowers. It raised the possibility that Beijing could retaliate by banning major U.S. tech companies from China, a major market for some of the top American firms.

‘China could block Apple or Microsoft from China. The information sector growingly looks divided into two camps. We could be seeing just the beginning of an information technology war,’ said Nana Otsuki, chief analyst at Monex Securities.

‘Investors in the West would have to hesitate to invest in China, missing growth opportunities there when there are not many investment opportunities except perhaps except for Nasdaq.’

Although this will tend to help the God-Emperor’s enemies in Silicon Valley fend off what would likely be a successful foray into the US market by Chinese technology companies, it’s the right thing to do in the long term. China has successfully defended and developed its technology sector, now it is time for Americans to free the US technology sector from the grip of the bad and mostly foreign actors who presently control it.

But this isn’t even the big news on the trade war front, as the report released yesterday by the President’s Working Group on Financial Markets appears likely to drive even more significant changes:

In response to President Trump’s June 4 Memorandum on Protecting United States Investors from Significant Risks from Chinese Companies, the President’s Working Group on Financial Markets (PWG) today released a report making five recommendations.  These recommendations are designed to address risks to investors in U.S. financial markets posed by the Chinese government’s failure to allow audit firms that are registered with the Public Company Accounting Oversight Board (PCAOB) to comply with U.S. securities laws and investor protection requirements.

“The PWG examined the risks to investors posed by the Chinese government’s failure to allow access.  The PWG unanimously recommends that the Securities and Exchange Commission take steps to enhance the listing standards on U.S. exchanges for access to audit work papers, among other recommendations,” said Secretary Steven T. Mnuchin, Chairman of the PWG.  “The recommendations outlined in the report will increase investor protection and level the playing field for all companies listed on U.S. exchanges.  The United States is the premier jurisdiction in the world for raising capital, and we will not compromise on the core principles that underpin investor confidence in our capital markets.”

The PWG recommends that the SEC take steps to implement the five recommendations outlined in the report.  In particular, to address companies from jurisdictions, such as China, that do not provide the PCAOB with sufficient access to fulfill its statutory mandate (“Non-Cooperating Jurisdictions,” or “NCJs”), the PWG recommends enhanced listing standards on U.S. exchanges.  This would require, as a condition to initial and continued exchange listing, PCAOB access to work papers of the principal audit firm for the audit of the listed company.

Translation: Chinese companies are not providing the US financial authorities the ability to audit their books.  The US government is now making it clear that any companies using auditors who are not subject to PCAOB oversight will not be permitted the ability to list or remain listed on US exchanges. So, this could lead to a mass exodus of US-listed Chinese companies from the US markets.

Urgent!

An SOS call goes out from the hive:

Urgent Message! Unauthorized cultists are on a mass flagging campaign to shut down our counter narrative. Accounts are getting suspended/deleted. Please keep your wits about things as we continue to fight. I’m working on setting up an off-site backup.

Oh dear, someone is using their tactics against them? How unfortunate!

A Mythology for England

What did Tolkien mean when he told Milton Waldman that he wanted to write “a body of more or less connected legend” that he could dedicate “to England,” sketching it in part, while leaving “scope for other minds and hands, wielding paint and music and drama”? In this episode, Professor Rachel Fulton Brown talks about Tolkien’s understanding of mythology and its relationship to the country, as well as what it means to take up his invitation to participate in this story-telling, and why it is a fundamentally Christian exercise to write fan fiction within Tolkien’s legendarium.

Episode 2 of The Forge of Tolkien, A MYTHOLOGY FOR ENGLAND, is now available for subscribers on Unauthorized. You can also support the video series with a subscription.

Professor Brown introduces the lecture series on her blog, Fencing Bear at Prayer:

I first read The Lord of the Rings when I was eleven. My mother gave me the boxed set for Christmas, and I read all four books in one trip to our grandparents’ house by New Year’s. Imagine my 11-year-old self struggling with the hobbits across Middle-earth as my mother drove us across the middle of America from Kentucky to Texas (and back again), and you will get some sense of the effect that it had on me.

Of all the things that drew me to become a medieval historian, reading (and re-reading, and re-reading, and re-reading) Tolkien is at the top of the list, although it took me decades to admit it. Tolkien lived in my imagination somewhere between stories I remembered reading as a child and my first (magical) visit to England with a school trip in high school—not really real, certainly not the stuff of serious scholarship.

Latin and Chartres drew me to study the history of medieval Christianity, not elves, hobbits and dwarves.

Or so I told myself.

That very boxed set was my favorite Christmas present too, after I was introduced to The Lord of the Rings at a similar age.

The death of the Devil Mouse

Their losses are not only accumulating, they are accelerating. Which is more than a little fascinating in light of what I wrote in Corporate Cancer concerning the Devil Mouse.

Debt, diversity, and the Devil Mouse

Investors often say that which cannot continue will not. But as one influential economist who was also a highly successful investor noted, “the market can stay irrational longer than you can stay solvent.” So, we can’t expect to know exactly when a converged company is going to succumb to the corporate cancer that has infested it. There is an awful lot of ruin in companies as big and resource-rich as Apple, Disney, Google, Intel, or Microsoft; a single disaster, or even a single series of disasters is probably not going to be sufficient to do them in.

But if the precise end of a converged company cannot be foreseen, the beginning of the endgame often can be. This is because a corporate failure cascade, or a process in a system of interconnected parts in which the failure of one or more parts triggers the failure of other parts, is often observable by even casual observers.

For example, Disney looks indomitable when seen from a distance. It has a market capitalization of nearly $250 billion and in 2018 reported an annual profit of $12.6 billion on $59.4 billion in revenue. It owns a veritable gold mine of intellectual property, from Mickey Mouse to Star Wars, and is arguably the most formidable entertainment empire in the history of the world to date.

But look a little closer and a less imposing picture begins to take form. In just the last year, Disney’s debt has increased by $38 billion, to a total of $53 billion now owed. And while that figure is considered low by industry standards, it has amassed that gargantuan debt to pay for projects that are already failing at an rate that is extremely uncharacteristic of historical Disney projects.

Consider, too, that Netflix now owes $12.4 billion in debt with $15.8 billion in annual revenue, so despite Disney’s low debt/equity ratio of 0.38, it has a debt/revenue rate of 89.2 percent, which is actually higher than the notoriously unstable Netflix’s 78.4 percent.

Star Wars isn’t the only one of Disney’s once-dominant properties and franchises that are failing. The two Galaxy’s Edge theme parks were failures at launch, attendance is declining at both its flagship parks, and ESPN has been losing two million subscribers a year for the last seven years.

Although it has ridden the Marvel Cinematic Universe—which it did not create—to record-breaking box office heights, its attempt to mine its rich cartoon franchise for live action films has not panned out very well when corrected for inflation—the 1994 Lion King made $178 million more than its 2019 remake—and its attempts to create new franchises that can be similarly exploited have repeatedly failed.

On the other hand, Disney is still generating mammoth profits, its seemingly endless series of remakes are profitable, and the launch of its new Disney+ streaming channel could lead to a whole new period of growth for the entertainment giant. Then again, the decision to retroactively censor old films from Song of the South to Dumbo and The Lady and the Tramp tends to suggest that convergence will cause Disney+ to disappoint too.

In the end, it is probable CEO Bob Iger’s declaration that the corporation’s push for more diversity in its entertainment products will be followed by an increase of diversity in its executive suite before he retires that will prove the most reliable guide for the future of Disney as well as a test of the central thesis of this book.

There are only three possibilities, after all. Either social justice convergence is beneficial for business, it is harmful for business, or it is irrelevant. And at this point, it should be eminently clear that is about as good for the average corporation as cancer.

Are we seeing the beginning of a series of convergence-related failure cascades across corporate America? Disney may prove to be a useful harbinger in this regard.

Remember, that was all written before Corona-chan devastated Disney’s vital parks business. So let’s look at what is happening of late on the Devil Mouse front:

Analyst Rich Greenfield recently looked at Disney and ESPN’s reports and found very troubling numbers for the sport network and its parent company. ESPN’s loss in subscribers is also shocking for its size. The loss of subscribers continues and is down another six percent year-over-year. So far, this year’s subscriber loss has accelerated over past years. The sports network was down 4.5 percent in the first quarter, off 5.5 percent in the second quarter, and down a whopping 6 percent in the third quarter. Indeed, the six percent decline ESPN saw in the third quarter this year is just part of the declines suffered in every quarter at since the third quarter of 2016.

ESPN+ ARPU down 22{4e01b0bc4ab012654d0c5016d8cbf558644ab2e53259aa2c40b66b3b20e8967d} year-over-year, as it is basically being given away within the Disney/Hulu/ESPN+ bundle. $4.18 vs. $5.33 last year. How do you make money at $4.18 of $ARPU? 

That 6-percent Q3 decline suggests that ESPN will be down to 78 million subscribers by the end of the year, down from 99 million in 2013. It certainly looks like a corporate failure cascade in progress. And while there is a LOT of ruin in the Devil Mouse, the speed at which its debt is accumulating means that it might not take as long as you would assume for that debt to become unserviceable. I haven’t run the numbers yet, so I don’t know how long it might take to go critical, but the fact that Disney is already running a higher debt/revenue ratio than Netflix is an ominous indicator.

Conservatives fiddle while the USA burns

The unmitigated failure of conservatism is now beyond undeniable. Even the Hillsdale crowd is beginning to recognize it.

What is conservatism in America today? It’s hundreds of millions of dollars a year spent fiddling while Rome burns. It’s ideas with little to no consequence. It’s getting trampled all over by History, but while yelling Stop!

Conservatism is the seven cheers for capitalism and the deafening silence on demographic change, feminism, and corporate malfeasance. It’s the same tired cast of speakers blathering about limited government almost a century after the New Deal. It’s the platitudinous Reagan quotes and the worn-out Buckley anecdotes. It’s the mindless optimism and the childish exhortations—if something can’t go on forever, it won’t!

If it were only that, conservatism would simply be a harmless persuasion for nostalgic Baby Boomers. Or to be more generous, one big Benedict Option to offer a semblance of an alternative to the pervasive progressivism of our age.

But conservatism is also the endless wars, the nation-building, and the outdated alliances. It’s the free trade fetish. It’s the foolish libertarianism that hates the government more than it loves America. It’s the unconscionable refusal to clamp down on immigration.

Worst of all, conservatism is the cowardice and accommodation in the face of leftist hegemony. It’s the long list of enemies to the Right. It’s the court eunuchs and other members of the controlled opposition who offer an echo, but never a choice. It’s the faux grandstanding while living in fear of being called a racist.

Admittedly, this is not the whole of conservatism. There are still dissidents, contrarian thinkers, and courageous gadflies who refuse to lick the boots that crush them. Alas, their voices are, more often than not, drowned out by those of the conservative establishment.

If this is conservatism, then we may be inclined to say, let the conservatives keep it. Perhaps the time has come for patriotic Americans tired of the Left desecrating all they hold dear to go beyond conservatism?

Conservatism may indeed be unsalvageable at this point. The old guard is too heavily invested in—nay, it benefits too much from the status quo to own up to its failures, correct its leftward drift, and reground itself in the realities of the 21st century. Its business model works, as evidenced by the hundreds of millions of dollars that flow into its coffers each year.

And yet conservatism, in its dotage, cannot shake the nagging suspicion that it no longer speaks to the country it loves, in particular to those who have no living memory of the Cold War. This dawning realization could be amplified through probing questions: is America today more conservative than it was when the conservative movement began 70 or so years ago? Is conservatism itself as conservative as it was then? On the off chance that the conservative agenda were to be implemented, would it fundamentally transform the United States of America and lead to conservative hegemony (or would it simply save us money and buy us time)?

Across the board, the answer is a resounding no. Conservatism must therefore overhaul itself. If it refuses, then it should be left to die with the passage of time. A new Right, in any case, is already overtaking it.

Call us whatever you will – New Right, Alt-Right, Nationalist Right, American Right, or Crusader Right – but our ideas are inevitable because the truth always breaks through in the end.

But they changed the world!

The cognitive decline of the Baby Boomers in comparison with past generations is not exactly a surprise.

American baby boomers scored lower on a test of cognitive functioning than did members of previous generations, according to a new nationwide study by researchers at Ohio State University.

The study, published in the Journals of Gerontology, described how the average cognition scores of adults aged 51 and older have been improving from generation to generation, starting with the greatest generation (born 1890-1923) to war babies (born 1942-1947).

But the study showed there were significant declines in the scores for early baby boomers (1948-1953) through the mid-baby boomers (1954-1959).

It would appear that pot, pina coladas, and narcissism are not good for the mind or the soul. What is somewhat of a surprise, however, is that Boomers are even more sensitive than the Millennials they deride as “snowflakes”.

Baby boomers are the most sensitive generation according to a recent study published in the Journal of Psychology and Aging. Baby boomers, or people between the ages of 55 to 73, are more likely to be narcissistic and hypersensitive. Findings suggested those in the baby boom generation were more likely to be full of themselves and more likely to impose their opinions on others.

Sadly, the researchers were unable to determine the relative sensitivity of Generation X, as none of their GenX respondents could be bothered to respond to their questions.

Qanon is winning the Narrative battle

The media is beginning to worry that it is losing control of the Narrative

Why it matters: QAnon is not just one fringe conspiracy theory — it’s a sprawling network of falsehoods that’s seeping into the mainstream. Its growing influence is sowing fear and confusion around some of today’s most important issues, such as election integrity and the coronavirus pandemic.

Catch up quick: QAnon is a far-right conspiracy theory that alleges the “deep state” is engaged in a global fight to take down President Trump.

QAnon rose out of the 2016 Pizzagate conspiracy theory and has grown into a decentralized network that analyzes cryptic prophecies dropped in remote online forums by “Q,” who claims, without ever offering evidence, to be a Trump administration official with high-level clearance.

Q maintains President Trump is secretly fighting a child-selling cabal in the U.S., though the conspiracy has spiraled to cover a vast array of claims, from JFK Jr. having faked his death to help Trump behind the scenes to the coronavirus being a hoax or a biological weapon engineered in either case by sinister elites.

By the numbers: Conspiracy theories tied to QAnon are growing more popular.

There was more than 10 times as much Google search interest in QAnon in mid-July than in mid-January, according to Google Trends data.

QAnon pages and groups on Facebook had nearly 10 times more likes at the end of last month than they did last July, according to data tracked by the Atlantic Council and shared with Axios.

There has been a 190{4e01b0bc4ab012654d0c5016d8cbf558644ab2e53259aa2c40b66b3b20e8967d} increase in the daily average number of tweets with popular QAnon hashtags since March as compared to the seven months prior, according to data from GroupSense provided to Axios.

Of course, the readily confirmable fact is that the Qanon narrative has proven to be vastly more reliable, and a better predictive model, than the mainstream media narrative. Which means that it would be better described as a sprawling network of uncomfortable truths that is seeping into the public consciousness.

The Beirut port explosion

I don’t have any theories about this myself, although there is certainly no shortage of speculation about the nature of the blast:

Survivors of a cataclysmic explosion that devastated the Lebanese capital of Beirut last night were picking through the remains of their city for victims today as the death toll topped 100 and was expected to continue rising, with more than 4,000 wounded. 

Beirut, once known as the Paris of the Middle East, resembled a huge scrapyard as the sun rose on Wednesday – with barely a building left unscathed in a blast caused by 2,750 tons of ammonium nitrate that exploded with a fifth of the power of the atomic bomb that levelled Hiroshima.

Street after street, neighbourhood after neighbourhood, buildings were left without roofs or windows, their interiors shredded by the force of the explosion – believed to have been sparked when a welder caused a fire at the port, which in turn set light to a warehouse storing chemicals which had been seized from a ship six years ago. 

The one thing that does look a little strange is the fact that the chemicals were supposedly seized from a ship six years ago. That seems a long time to leave such a large quantity of dangerous material just lying around the port. On the other hand, Beirut hasn’t been a particular focus for massive violence for quite some time now.

Feel free to speculate amongst yourselves.

Salvaging Creepy Joe

The New York Times is trying to save Joe Biden from being exposed as a dementia-addled figurehead on prime time in front of the entire electorate by the God-Emperor:

Nervous managers of the scheduled 2020 presidential debates are shuffling the logistics and locations to deal with the threat of the coronavirus. But here’s a better idea: Scrap them altogether. And not for health reasons.

The debates have never made sense as a test for presidential leadership. In fact, one could argue that they reward precisely the opposite of what we want in a president. When we were serious about the presidency, we wanted intelligence, thoughtfulness, knowledge, empathy and, to be sure, likability. It should also go without saying, dignity.

Yet the debates play an outsize role in campaigns and weigh more heavily on the verdict than their true value deserves.

This, by the way, isn’t written out of any concern that Donald Trump will prevail over Joe Biden in the debates; Mr. Biden has done just fine in a long string of such contests. The point is that “winning” a debate, however assessed, should be irrelevant, as are the debates themselves.

Sure it isn’t….