What a time to be alive. I see TV news about a former US president now requires bracketed warning notices saying “not a typo” running alongside chyron headlines. Not a typo. Yep, it certainly has its role in the media these days. But, while we’re at it, let’s consider the rather innocuous percentage of 15% of Americans in a recent poll who agree with a Qanon conspiracy theory that their government and other public entities are controlled by Satan-worshipping pedophiles running a child sex trafficking ring. That equates approximately to half the US voting population who identify as Republicans. So, it is possible.
However, if I turn that into an absolute number I’m compelled to attach a “not a typo” notice to the fact that potentially 50 million Americans are weapons-grade batsh*t crazy. Now, we are talking about a vulnerable audience which is within shouting distance of the populations of Spain, South Korea or Italy. Then, throw into the mix that 12% of Americans(40 million, not a typo) recently polled do not have a single close friend and I’m beginning to understand how bad news seems to win eyeballs. Moreover, the media moguls know it too. As a species, fear and bad stuff engages us more strongly on an emotional level, and what the consumer wants, the consumer gets. So let’s start with an example of the fear stuff this week.
Regular readers will know I’m slightly bemused by the negativity attached to “Jobs Biden” and the industrial revolution taking place in the US. Only today I see that, according to the Department of Energy, 95% of counties in the US have seen the number of jobs in energy increase(not a typo) between 2021 and 2022. What say the fossil fuel climate deniers to that awkward truth? And yet, the commentariat still manage to come up with a new fear. How about the spiritual home of oil, the Middle East?
Just last week I spotted a headline stating “America has lost the Middle East. Now it’s the turn of Russia and China to move in.” Cue, a cornflake choke in Gravitas Towers and a wipe of the eyes. Then, I double-checked the recent newsflow about China and Russia to reassure myself that all was not imagined. Sure enough, I picked up a distinct vibe that both China and Russia were moving, but not in a good way. Let’s go to the Middle Kingdom first which has managed to catch the eye of every financial trader on the planet in recent days, bar possibly the author of the headline referenced above. Here’s how China has been moving in recent weeks…
- China central bank unexpectedly cuts rates to support sputtering economy – Reuters
- China stocks hit after developer Country Garden suspends some bond trading – Financial Times
- China suspends youth unemployment data after record high – BBC
- China Property Investment Drop Deepens As Beijing Vows Help – Bloomberg
The uncomfortable truth for any autocracy is that the ‘party line’ can only work up to a point. Then, the money talks. Clearly, the $80 trillion Chinese property market and associated debt mountains are experiencing the Wile E Coyote moment familiar to Japan market veterans and survivors of the Troika Tricolour work-out period closer to home. Increasingly, we read of the potential “Japanification” of China – a multi-year unwind of huge debt mountains. We shall see, but what might be more difficult to imagine is China deploying investment capital overseas while it is shoring up balance sheets throughout its own economy. Of course, President Xi is not the only autocrat receiving a sharp lesson in international capital flows. The multi-year award winning war criminal, Vladimir Putin, has not only incinerated his best military assets on the mud flats of Ukraine, but has broken the Russian economy too. So, before he ‘moves in’ on the Middle East the following possibly needs his urgent attention:
- Russian Ruble At Weakest Level Since Early Days Of Ukraine War – Wall Street Journal
- Russia Sharply Raises Interest Rates As Wartime Financial Problems Pile Up – The Times of India
- Russia’s inflation spike sets Kremlin and central bank on collision course – CNBC
- Russia could reintroduce compulsory sale of FX revenues “at any moment” – Reuters
For me, the rogues are clearly in geopolitical retreat driven back by the realities of international financial markets. Of course, there will be those who will caution us to be careful what we wish for. Indeed, a Chinese economy in serious bother would not be a good thing but Japan-like subdued growth could help on the inflation fighting front. Also, did I mention another country with 1.4 billion citizens trucking along at 7% GDP growth rates? It might just be perfect timing for India to pick up the Asian growth baton and re-balance western economic dependencies and supply chains. Simply put, in today’s global economy there is more to Asia than China. Anyone spot a Vietnamese company doing an IPO in New York this week? For a brief moment the valuation of electric vehicle (EV) manufacturer, Vinfast, exceeded that of Ford and GM…..combined.
Anyway, I’m in the optimistic camp and firmly believe the more realistic fear is domestic implosion for either Russia or China rather than overseas ‘moves’. I’m also hopeful that the younger generation might become more savvy consumers of media. The median age of a Fox News viewer is 65, and he/she has binged on a Murdochian fear-fest of threatening imagery for years. … remember those Fox News ‘War on Terror’ chyrons blazing across our screens while gun manufacturing and Sackler opioid sales machines sold the real deal; domestic terror on a scale greater than total US losses in the Vietnam War, every bloody year.
So, scrutiny of words rather than emotional images might be a start. And, my favourite data point of the week is that, per YouGov, up to 60% of US under-30s prefer to watch TV with subtitles on, even in a language they speak. Hopefully, one day words and truth will regain primacy and the media rogues will fall into retreat too.
