- Chinese mega-tech company on brink of implosion…
- … because of Commerce Department’s blacklist
- George Gilder on Trump’s “incredible mistake”
- Just how strong are China’s communist ties?
- Investor who predicted recession says “gold $1,700”
- M&A news: Billions for Botox
- Eurostar’s alcohol policy pisses off passengers.
“It’s entirely possible that Huawei might implode as a result of all of this,” says technology journalist Owen Williams at Medium.
Of course, the “this” Mr. Williams refers to is the Commerce Department’s very cloak-and-dagger “Entity List” of 69 companies the U.S. banned because of suspected intellectual property theft, all-out spycraft and — lest we forget — the trade war.
Because of the ban, U.S. companies lined up to cut ties with the Chinese tech giant Huawei; Google, for example, pulled its Android licensing, Intel refused its laptop CPUs and even Cambridge, England-based chip designer ARM stopped selling phone CPUs to Huawei.
“If any of these things happened in isolation,” says Williams, “Huawei might have been able to weather the storm until one side of the U.S.-China trade war backed down.
“But it’s hard to imagine the company lasting the year without falling apart,” Williams says, “unless there’s rapid political resolution….”
Which is saying something: Huawei is on the top-10 shortlist of most valuable tech companies in the world, right up there with Microsoft and Google.
“The company is a juggernaut at home in China, where it rapidly outpaced Apple’s growth to become the most popular smartphone brand.” And Huawei’s smartphones — less expensive than iPhones — have cornered the Asian and European markets, too.
Not that Huawei’s a one-trick pony…
“The company is a huge player in the infrastructure space, too, building out submarine cables to connect countries and mobile networks — including 5G — as well…
“Huawei’s lead in 5G-based technology has surprised experts and the competition,” the article continues, “leaving old-school tech infrastructure players like Nokia, Siemens and Ericsson years behind, struggling to keep up.”
According to Williams, there’s the rub. “5G is where this mess really started: a fight for supremacy over the next generation of mobile technology…”
Technology’s current holy grail — 5G — that promises lightning-fast speed, efficient networks… and the opportunity to dominate tech infrastructure for the next decade or so.
An opportunity too good to pass up and — to Williams’ way of thinking — something that’s shaped President Trump’s rhetoric starting in 2018 with the “Trump administration pushing an anti-Huawei message warning of spying risks and ultimately sanctioning the company…
“What this is arguably all about is political power and the potential for 5G to reshape a generation of connectivity,” Williams contends.
To that end, China’s not going to look the other way while a company like Huawei’s sacrificed on the trade war altar.
“We should all worry about what China will do in response,” Williams says. He believes China holds the most critical cards when it comes to technology — control of much of the world’s manufacturing and a cache of in-demand rare earth metals.
“If [China] wants to strangle the industry, it could raise the cost of exporting goods and acquiring rare earth metals, or impose taxes on products made there.”
Williams says: “No matter your stance on the company and the politics surrounding it, what happens next is likely to be bad for tech and the global economy.
“Huawei’s downfall might finally pop the [tech] bubble once and for all.”
And acclaimed best-selling author and tech-futurist George Gilder couldn’t agree more; recently, George accepted an invitation from Huawei’s founder and CEO, Ren Zhengfei, to speak at Huawei’s headquarters in Shenzhen, China.
George Gilder at Symposium with Huawei CEO Ren Zhengfei on Jun. 17
“I believe the trade war Trump is waging with China is an incredible mistake,” George says in an Op-Ed at The Wall Street Journal.
“And… the collateral damage being done to our relationship with Chinese technology leaders — specifically Huawei — might be irreversible.”
George believes the U.S. has much to learn from Huawei: “We should not be blocking Huawei from doing business with American companies. Quite the opposite… We should be embracing the company and its technology leadership.”
Of course, George’s point of view is contrarian, in direct opposition to the White House party line… that he believes is inherently flawed. Here’s why…
Fallacy 1: Huawei Is a State-Run Company
“State-owned enterprises in China have steadily shrunk as their private firms have boomed,” George says. “Today, Chinese government spending on businesses has dropped to around 17% (compare that with the U.S. at nearly 40%.)
As for Huawei, independent auditor KPMG found the company receives no significant state subsidies and validates Huawei’s private ownership structure — 98.6% employee-owned with Mr. Ren’s 1.4% stake.
Fallacy 2: Huawei Steals Intellectual Property
“The claim leveled most frequently against Huawei is that it steals,” George says. “But rival technology companies necessarily imitate one another — and use common components under industry standards.
“Yes, this provokes tensions over intellectual property.”
In recent years, however, “[Huawei] has paid U.S. chipmaker Qualcomm more than $1 billion in royalties… And it’s purchased billions of dollars’ worth of chips from American firms.”
The final red flag Huawei raises is an inescapable fact — Chinese Companies Have Communist Ties (But just how strong are those ties?)
“Nearly all Huawei’s American critics implicitly deny that it is possible to accommodate Chinese capitalism without supporting Chinese communism,” says George. And while George has spent much of his career fighting communism, he believes there’s a workaround.
“The truth is,” he says, “while I recently spent a month in China, speaking at many of their major universities, I scarcely met a real communist.
“I actually find Chinese students to be more capitalist in their views than American students,” he continues. No surprise there. Ber-nie! Warr-en! A-O-C!
“Vilifying Chinese companies simply for being Chinese would cripple the world economy,” George concludes.
“And I hate to say it, but without the help of Chinese capitalism, we’re pretty much over as a global power and economy.”
[Ed. note: Over the past 30 years, George has been spot-on with his predictions about the biggest technology revolutions in history.
Now he’s come out of retirement to share what might be the biggest technology disruption in history — a disruption so big, the ramifications will have serious impact on your daily life. From banking… to travel… to media.
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Here’s your chance to use George Gilder’s brand-new forecast to grow your account by potentially $1 million over time with just a handful of stocks…
It’s all going to be revealed at an invitation-only online event Tuesday, July 2, at 1 p.m. EST.
All you have to do is click to register for this event.]
“Billionaire investor Paul Tudor Jones must be rolling in bullion right now,” says an article at MarketWatch.
The notable hedge fund manager told Bloomberg on Jun. 12: “I think one of the best trades is gonna be gold. If I had to pick my favorite [bet] for the next 12–24 months, it’d probably be gold,” he said.
According to Jones, his prediction was based on a confluence of events — the Fed’s dovish stance and the ever-present geopolitical tensions.
“[Gold] has everything going for it in a world where rates are conceivably going down in the United States and going to zero,” Jones says. “It has everything going for it.”
Jones’s next prediction? If gold “goes to $1,400, it goes to $1,700 rather quickly,”
Gold is surging to new six-year highs at the time of writing — it’s added $9.20 to its price of $1,427.40.
Meanwhile, stocks are drooping… the Dow’s shed 120 points to 26,605.
The S&P 500’s down 17 points to 2,928 and the tech-heavy Nasdaq index is down 82 points to 7,924.
A barrel of West Texas crude’s up 11 cents to $58.01; as for bitcoin, it’s still flying high, up $382.70 to $11,353.96.
- The big M&A news today is pharmaceutical company AbbVie’s (ABBV) $63 billion bid for “cosmeceutical” company Allergan (AGN)… think Botox. It’s a strategic move for AbbVie, which loses its blockbuster patent on arthritis medication Humira in 2023. On the news, AGN stock got a sweet 31% boost
- Consumer confidence fell to a two-year low in June: The Conference Board’s index dropped to 121.5, down from 131.3 the month before. The Conference Board’s survey found just 18.1% of Americans believe business conditions will perk up in the next six months, versus 21.4% of respondents in May.
“You mean I can no longer bring a six pack of Belgian beer back home in my bag after a trip to Brussels?” asks Eurostar passenger Will Roberts. “That’s crazy!”
The high-speed Eurostar railway that connects England to France and Belgium via the “Chunnel” tried to quietly amend its alcohol policy for passengers.
The new policy? Passengers are now restricted to carrying one bottle of wine aboard or four beers. Absolutely no spirits.
And passengers are pissed (and we mean that in the American sense of the word… although the British euphemism might apply here, too. See Exhibit A below.)
Is it just us… or is this guy drunk tweeting?
Eurostar says: “This decision was made to maintain a pleasant environment on board for all our travellers. Those that wish to take more with them for consumption at home can do so using our registered luggage service, EuroDespatch.”
Customers complain EuroDespatch starts at £30, or $38.10.
Rail expert Mark Smith tells the BBC: “Previously, [Eurostar’s] policy was easygoing, it was sort of what you would expect.
“I’m aghast at the change, it seems draconian.”
Which may — or may not — be putting too fine a point on it…
Best regards,
Emily Clancy
The 5 Min. Forecast
P.S. Back in March, former Wall Street exec Nomi Prins predicted Allergan might get acquired… and today it’s in the headlines.
In fact, Nomi’s readers at Dark Money Millionaires were positioned to profit from the takeover, making a 78% gain!
Find out how she expects a new market anomaly to unleash billions into the market tomorrow, between exactly 12:45 p.m. and 1:15 p.m.
