Foreigners

AfD is 2nd most popular party in latest Bild poll

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The left leaning Bild newspaper published a poll showing the anti-immigrant AfD as the second most popular party in Germany with 16% (+2) The socialist SPD polled an awful 15.5% (-5), it’s worst post war performance. The Greens also polled well.

Yet another country growing tired of politicians from incumbent major parties who are failing to deliver to their constituents.

Regardless of what one’s views are on Merkel’s misguided altruism, it seems fewer people support it at home. Call it racist, bigoted it worse but the fact more people are prepared to back the party that answers their sense of frustration speaks volumes of underlying mood. Either that or the CDU is doing a terrible job selling its message. What does one expect when the media and police are muzzled?

Across the border Poland and Hungary are linking hands in a sign of solidarity to reject the EU’s forced migration quotas. On April 8 Hungarians vote on whether they want Orban’s Fidesz party to stay in power. It looks a formality. The question is by what margin? When 98.4% who voted in the Hungarian referendum several years back to reject forced migration, this seems an election issue which opposition parties stand no chance of getting up if they support it.

Gutter press or smutter press?

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Gutter press. No other word for it. One would expect better from The NY Times. Still why not make a baseless claim for the heck of it should it help paint a narrative? Indeed the Stormy Daniels $130,000 shut-up money story would have legs if she produced the ‘deposit slip’ and the contract which any media outlet would  pay “any price” to insure against any litigation for her breach of it.

Think of the $100s of millions media outlets have spent on tying to take the President down. Whether Russiagate which CNN’s own Van Jones called a “nothing burger” for ratings or MSNBC’’s Rachel Maddow who made that  embarrassing “we got his tax returns!” gaffe. Every celebrity event (Grammy’s, Oscars or Golden Globes) has become more about blasting Trump than blowing wind up the back sides of their own Hollywood hypocrites who blatantly turned a blind eye to all of the sexual misconduct that has gone on for decades in their own industry. Where is the outrage over that? Even career feminist Germaine Greer said that if one opened their legs for a movie role they “consented”.

Indeed if Trump frolicked with Stormy Daniels it appears it was consensual on the basis of the rumours. It is not condoning it but look at all the petty behaviour of Clinton post the election still crying to her elitist buddies in sympathy for losing to a man, who less than a week after the grab p*ssygate scandal, stared down the barrel of a camera to 100s of millions of viewers in the second debate to say “no one respects women more than I do” If indeed it was an election issue, voters overlooked it to boot the establishment. Case closed

Still the one-eyed NY Times has to make baseless read acrosses on Melania’s actions being about her acting in a huff over her husband’s supposed infidelity. Make no mistake had she cheated on her husband the mainstream media would celebrate it and chalk it down for a win for their side. They’d get panels of feminists talking about how his behaviour brought it on and how he deserved it for being a chauvinist pig.

However we shouldn’t point fingers at just the NYT.

Last week The Guardian wrote of Melania Trump: “Seldom seen and even more seldom heard, the former model may not be as popular as her predecessor Michelle Obama, but she is far more popular than her husband. Unfortunately for his Republican administration, she seems to have little interest in using that popularity to do anything of substance with the post.

Well had Tbe Guardian bothered to check, the left has made it clear of how they see her in the public eye. When she went to donate Dr Seuss books for children’s education, the recipient librarian at Cambridgeport School refused to accept the gift, criticizing the Trump administration’s education policies further writing that Seuss’s illustrations are “steeped in racist propaganda, caricatures, and harmful stereotypes,” Never did I know as a child that reading about the Cat in a Hat was some conspiracy by my parents to turn me into a hateful bigot. Now it’s all so clear!

The Daily Mail had to settle a $2.9mn lawsuit and issue a full public apology for libel against the First Lady for suggesting she gave more than “modeling services.” What awful slander! Could it be that the press is hardly lining up to champion anything she might host which is of social good? Is trying to be a good mother by not dislocating her son’s education in the early days a crime?

All the jokes from the left thanking immigrants for marrying Trump because Americans wouldn’t do it flies in the face of the very stereotypes they get so easily triggered over. Indeed the racist president married a Slav. Never mind the contradiction.

While the press can speculate over what FLOTUS might be thinking perhaps they should give her advice on the ways they wish her to behave. Should we anticipate Melania Trump’s hashtags on social media championing flaccid and impotent US foreign policy to terrorist groups like Michelle Obama? Mrs Obama is indeed a highly educated person but that doesn’t automatically exclude Mrs Trump from serving the office gracefully and proudly. The Trumps are a power couple

Yes, her husband leaves much to be desired in the manner in which he serves his country. However the scoreboard suggests many of the things he is doing are working. Such is the bias in the press about how world leaders hate him, CBS painfully admitted almost everyone of them lined up for a selfie with POTUS at Davos.

If we look at the last State of the Union address he blew the left out of the water. Even Van Jones admitted he’s going to do 8 years with talk like that. Now he has far more achievements to crow about. So yes, Melania will be there looking a million bucks and her face will speak of how she feels about Stormy Daniels. Storm in a teacup mode like it.

Austria proves again why the EU needs to listen more and talk less

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God gave us two ears and one mouth so that we’d listen more and talk less,’ so the old saying goes This is what the EU gets for trying to bully its member states. It wasn’t long ago that EU President Jean-Claude Juncker was telling Austrians that if they democratically elected Norbert Hofer of the right wing FPO then the EU would remove Austria’s voting rights and cut off any transfers. Well the Austrians have voted for a conservative anti-immigrant party (which wants a programme to get immigrants to assimilate with the local culture) with a 31yo leader, Sebastian Kurz. His People’s Party garnered 31.4% (+7%) of the vote with the far-right wing FPO coming in second at 27.4% and incumbent Social Democrat Party coming in third with 26.7%. The Greens will probably not make the cut off of 4% to make a party, So once again the EU has had yet another major repudiation of its totalitarian ideals.

CM has been making the point for ages that forcing one’s beliefs onto others must be done in a way that listens to the other side. Otherwise it delivers results like Trump. It seems the EU hasn’t learned a thing.

So what have we had?

-Le Pen garnered 1/3rd of the French vote (double the best ever achieved by Front National),

-the far right Freedom Party’s (FPO) Norbert Hofer still managed 46% in Austria farcical re-run presidential election),

-Geert Wilders’ 25% increase in seats for the anti-immigrant PVV in The Netherlands,

-the surge in the Sweden Democrats to the top of the recent polls, Elections in 2018.

-Italy’s referendum which turned into a backdoor vote to oust PM Renzi. Elections in 2018 likely.

Brexit (although PM May is handling negotiations in true British efficiency – Fawlty Towers ring a bell?),

the Swiss handing back a 30yr standing free ticket to join the EU,

-the AfD in Germany getting 13% of the vote (Merkel may have won but it was her party’s worse showing in 7 decades)

…these don’t look like promising trends for an EU which is already badly listing. Despite ample warnings the EU refused (and still refuses) to change its course or exercise due care. It just issues more threats.

While the left openly voices its rage at these ‘right-wing’ parties growing in support, they never bother to seek reasons why. The right are generally just dismissed as racists, bigots or worse.  Major party loyalty has never been worse. The fabric of the loyal party voter base is wearing thinner. Take Australia’s One Nation Party led by Senator Pauline Hanson. The popularity of the mainstream LNP and Labor Parties is at record lows. One Nation is now 10% of the vote from 2% several decades ago. While some parties may claim their loyal base has abandoned them the stronger case to be made is the clear shift of the parties away from their once faithful constituents. Why?

Incumbent governments seem to cower at receiving negative news from the 24-7 polling cycle that is social media. Being careful to avoid inviting attack, they pander to all of the socially acceptable agendas – climate change, gender fluid bathrooms, laws clamping down on free speech, open borders and afffirmative action.

However political correctness is clearly not the answer as these results across Europe and elsewhere show. People are sick of the brow beating by socialist activists. Tired of the constant protests and social justice bleating. The NFL might find that most of its fans are against police brutality but they aren’t wanting a weekly lecture in grievance politics with the price of entry or their cable TV channel. Growing weary of the idea that it is ‘free speech’ and anything against those ideals are deemed ‘hate speech’. It is not to deny some positions are not necessarily palatable but in the marketplace of free speech, ridiculous positions can easily be disproven. Better to give extremist voices a chance to talk and invite public opinion on them at their own peril. Shutting it down forces it underground., making it inherently more dangerous.

Too many mainstream political parties are moving off the policy reserve that defined them so their once loyal followers are actively seek ones that will. While Hanson’s One Nation or Senator Cory Bernardi’s Australian Conservatives may not tick every box to existing LNP voters, they cover enough of the positions that matter to them that they’ll tolerate some of the more out there ideas. It is not uncommon to hear the left complain at One Nation’s is growing popularity at the expense of the Greens but it is a devil of their own making.

So will the EU listen to the Austrian call? Will it pay attention to the Hungarians who voted over 98% against accepting forced migrant quotas? Think through the logic. If you were an asylum seeker, would you think your chances of unincumbered settlement would be best placed where 98.4% of the population doesn’t want you? It is irrelevant whether we think the Hungarians are insensitive brutes not to extend a welcome to those that are legitimately in need. It is their country and their democracy has spoken. If Brussels assumes to dictate to Hungary how it wishes to protect its culture and whatever it holds precious, why shouldn’t the EU have the same rights to enforce income tax, housing benefits and anything else it sees fit? Of course it is a preposterous notion.

It will not be long before the EU will be front and center on Greece. Let us not forget that the EU colluded with Goldman Sachs to ‘fiddle’ the accounts to make Hellas much prettier optically than it was. Was this pig without lipstick it wouldn’t have gained acceptance to the club. So the EU is not in a position to claim innocence over a deliberate ploy to ram-road the Greeks into its federal state yet have no qualms treating it with disdain. Talk about double standards.

In all seriousness the treatment of the Greeks by the EU is despicable beyond words. So for all of the left’s blind love for the EU and its socialist agenda, 36% of Greeks live below the poverty line and 58% of the youth are unemployed. So for all of the EU’s shared sense of purpose and equality, that means many can’t access affordable healthcare because it is generally provided by corporates and when you lose a job you lose the healthcare. This means many are forced to use A&E of major hospitals which are now overcrowded and understaffed as more doctors are leaving to seek better fortune for their services elsewhere.

If that wasn’t enough, mothers who had given birth were being restricted from taking their new-borns home if they couldn’t pay the hospital fees. While the government has banned this practice they have introduced new laws to allow the seizure of assets (e.g. homes) if debts are not settled.

Shortly, the Greeks are coming up for discussion over its debt position and austerity. With just months left before Greece’s latest lifeline expires, officials directly involved in the country’s bailout say they don’t have the stomach for contingent aid program when the current one expires in August 2018. While the EU and Athens are battle worn after 7 years of this knife edge rescue,  Greece will need to show it can go it alone but it’s eurozone creditors will be reluctant without further strings attached.

Here is betting that the EU doesn’t heed the lessons that have been ringing loud and clear for years. Sincerely hoping Greece leaves the EU and lets market forces revive its economy. Better to die on its feet than live on its knees.

I’ll stick with my instincts rather than fall for a Harvard study because it is from Harvard

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Harvard University is without question one of the top schools globally. It has an enviable reputation and having that on one’s CV is hardly a hinderance. It is a status symbol.  In a discussion over global warming an individual was trying to legitimize climate alarmism by citing a Harvard University study. Harvard by the way is ranked top 5 worldwide in Environmental Science. The study as it turns out had been funded by the National Science Foundation (NSF), a US government agency responsible for allocating 24% of science funding that had been raked over the coals by the US Senate for gross mismanagement, fraud and waste. The National Science Foundation: Under the Microscope” paper from 2011 documented some of the misappropriation of funds as follows,

An $80,000 study on why the same teams always dominate March Madness”, a “$315,000 study suggesting playing FarmVille on Facebook helps adults develop and maintain relationships”, a study costing “$1 million for an analysis of how quickly parents respond to trendy baby names”, a study costing “$50,000 to produce and publicize amateur songs about science, including a rap called “Money 4 Drugz,” and a misleading song titled “Biogas is a Gas, Gas, Gas”;” a study costing”$2 million to figure out that people who often post pictures on the internet from the same location at the same time are usually friends”; and “$581,000 on whether online dating site users are racist”.Ineffective management examples, cited in the report, included “ineffective contracting”, “$1.7 billion in unspent funds sitting in expired, undisbursed grant accounts”, “at least $3 million in excessive travel funds”, “a lack of accountability or program metrics to evaluate expenditures” and “inappropriate staff behavior including porn surfing and Jello wrestling and skinny-dipping at NSF-operated facilities in Antarctica”.

It is often a tactic to cite supposedly credible bodies to legitimize and seek to win an argument. However at what point do we view Harvard’s stance on climate change as balanced? On Harvard’s own climate change page it is littered with a predetermined view. It is not to doubt the intelligence of the professors and scientists within the university but intelligence and ethics do not have to be mutually inclusive especially when it comes to procuring funds.

One has to wonder that the  NSF, which dispenses 24% of all university grants (some $7bn) is best positioned to fulfill this role given its past. As the Harvard climate page reveals there does not seem to be much attention paid to the alternate view. The offshoot of that is if the NSF wants to get ‘green policy’ outcomes, best pour funds into those schools that will help give the results they’re after.

In 2015 a claim was made against Harvard for not disclosing financial conflicts of interest. A press release entitled ‘Clean air and health benefits of clean power plan hinge on key policy decisions’ constituted a gushing praise of a commentary entitled ‘US power plant carbon standards and clean air and health co-benefits’ by Charles T. Driscoll, Jonathan J. Buonocore, Jonathan I. Levy, Kathleen F. Lambert, Dallas Burtraw, Stephen B. Reid, Habibollah Fakhraei & Joel Schwartz, published on May 4, 2015, in Nature Climate Change

The claim (a letter to the Dean) suggested that “two of the co-authors of the commentary, Buonocore and Schwartz, are researchers at the Harvard T.H. Chan School of Public Health. Your press release quotes Buonocore thus: “If EPA sets strong carbon standards, we can expect large public health benefits from cleaner air almost immediately after the standards are implemented.” Indeed, the commentary and the press release constitute little more than thinly-disguised partisan political advocacy for costly proposed EPA regulations supported by the “Democrat” administration but opposed by the Republicans. Harvard has apparently elected to adopt a narrowly partisan, anti-scientific stance…The commentary concludes with the words “Competing financial interests: The authors declare no competing financial interests”. Yet its co-authors have received these grants from the EPA: Driscoll $3,654,609; Levy $9,514,391; Burtraw $1,991,346; and Schwartz (Harvard) $31,176,575. The total is not far shy of $50 million…Would the School please explain why its press release described the commentary in Nature Climate Change by co-authors including these lavishly-funded four as “the first independent, peer-reviewed paper of its kind”? Would the School please explain why Mr Schwartz, a participant in projects grant-funded by the EPA in excess of $31 million, failed to disclose this material financial conflict of interest in the commentary?Would the School please explain the double standard by which Harvard institutions have joined a chorus of public condemnation of Dr Soon, a climate skeptic, for having failed to disclose a conflict of interest that he did not in fact possess, while not only indulging Mr Schwartz, a climate-extremist, when he fails to declare a direct and substantial conflict of interest but also stating that the commentary he co-authored was “independent”?”

While I do not pretend to be a climate scientist by trade or study, fraud is fraud. The supposed beacons of virtue such as NOAA, IPCC, the CRU of the UEA have all been busted for manipulation of data to fit an end cause. The lack of ethics in certain cases has been so profound that had many of these scientists been in financial services they’d have lost licenses, paid multi billion in fines and served jail time. One person commented that too few in financial services have been locked up. I replied name me one scientist busted for fraud and misuse of public funds has seen the inside of a jail cell, much less fined or barred from teaching? The answer – NONE

I don’t need to possess a degree in astrophysics or science to determine poor ethics generally mean the science papers put forward should be viewed with deep skepticism. Yet we’re constantly told that the science is settled. How so? If one has to lie and deceive in order to scare us into action, how can one say that it is legitimate work? In fact I have been at pains to mention that the scrupulous acts of a few only ends up undermining potentially credible work conducted by others. Yet climate change has become a purely political issue and there is no question that sourcing funding dollars is easiest met when supporting alarmism. After all why would people want to throw dollars at skeptics who may come out with an alternative view? Don’t debate it. Some have suggested sceptics are like pedophiles and even more extreme views have suggested jail sentences. When people think that the only way to win the argument is to jail non believers you can be absolutely sure that the data is completely flawed in that it can’t stand on its own as an argument. Hence the manipulation to try to bully the movement onwards. Some Aussie universities (state funded mind you) are refusing a climate think tank being established on their campus for possessing an alternative view. You have to worry if universities, the bedrock of free thinking, are trying to ban it. Then again if kindergarten schools are being taught they are gender fluid and cross dressing is acceptable then you know there is a more sinister movement at work.

It was no surprise that Hurricane Irma has become Trump’s fault. Alarmists drew any data possible to connect Global Warming and hurricane activity despite the IPCC claiming several years back it  has little supportive data to prove it. So expediency is put before principle. Hopefully if no one has seen the IPCC climb down perhaps we can still convince them we can save the planet. All the meantime the IATA forecasts air travel will double in terms of passenger numbers between now and 2030 and SUVs top most vehicle sales in major markets.

To add to the farcical care factor for climate change by the masses The Australian noted, “On June 30 2017, after 12 years of “advancing climate change solutions”, the Climate Institute is closing its doors in Australia, a victim of the “I’ll ride with you but won’t pay” industry. You would think that Cate Blanchett, so happy to appear in the institute’s ads, could have taken the hat around her Hollywood A-list mates, such as Leonardo DiCaprio, Bono, Emma Watson and Brad Pitt, to tip in a few hundred thousand a year for the cause….But alas, the caravan has moved on and the greatest moral challenge of our time is now the Trump White House. For celebrities who fly eyebrow groomers to the Oscars, climate change is kinda yesterday. Still, to humour the faithful and to keep the dream alive, the 10th anniversary of Earth Hour was celebrated last Saturday night. You didn’t notice?”

When I was a staunch opponent of Greenspan’s reckless monetary policy in 2001 and said his actions would lead to a financial calamity in 6-7 years, many laughed at me. I bought gold at under $300. People thought I was mad as did the Bank of England. Barbs were frequent – “how could you possibly possess the intelligence of Greenspan? Back in your box!” I was told. Of course as a contrarian by nature, speaking out against pervading group think was met with a constant wave of ever increasing vitriolic criticism. Of course the simplest thing would have been to roll over and join the band wagon but I stuck to my guns. GFC was the result. In all that time, people used to shame my thinking by citing Harvard or other Ivy League studies on new paradigms. Indeed many of the brains behind the CDOs which eventually brought the financial sector to its knees were brainiacs from the Ivy League. In the end my instincts were bang on. Nothing to do with education levels.

The same arguments were hurled at me during Trump’s presidential campaign. Many people defriended me because my data kept showing to me he’d win. I am not American, I can’t vote but casting my own instincts ended up being a no brainer. Not once were credible arguments made to counter why Trump could win. People would post NY Times polls, CNN polls and so forth to legitimize the argument. Then say I was blind, stupid, bigoted, racist and the usual leftist identikit used to demonise a view. Group think is so dangerous. What it is doing is suppressing real views which show up in the polling booth.

Everywhere I read, the media wants to throw Trump to the wolves and run the lunatic, racist white nationalist card. For 9 months now. To be honest I think he will comfortably do two terms because the media has learned nothing and anything he does is vilified. Most Americans aren’t looking to him for spiritual guidance. He is vulgar and his manner is far from conventional and sometimes not very fitting of the office he serves. However he gets no credit for anything. The latest UN sanctions on North Korea are in large part because Trump has told China to get on with it. Trump said on national TV that he wants “China to sort it out and to stop delaying otherwise we’ll do it for you”. Yet the media is drumming WW3 rhetoric.

Same goes for the Paris Accord. What a stroke of genius. Let France, Germany and other nations pick up the tab for their ‘green policy’ madness and make up America’s renewable shortfall. It is kind of ironic that none of these nations ever pick on China, India or Russia which make up 50% of CO2 emissions for their lack of adherence to actually doing meaningful things to abate climate change albeit signatories to the UN accord. I argue it is like NATO in reverse. US pays a way bigger share into NATO, why not collect a refund via other nation’s virtue signalling which actually helps America First by making other nations less competitive. Brilliant.

DACA – many Americans, including 41mn on food stamps, will welcome the removal of illegal immigrants from their country who in their view are siphoning their ability to get out of poverty. DACA to them isn’t about not being compassionate but realizing that a $20 trillion deficit and loading more onto an overcrowded system isn’t helping. Once again regardless of what people think of Trump he had the fewest white voters and largest share of black and Hispanic voters than Romney or McCain. Hardly the result for a white nationalist, racist bigot. At the current rate if the Democrats run Michelle Obama, Oprah Winfrey, Hilary Clinton, Elizabeth Warren or any other identity politician against him in 2020 they’ll lose. The mid terms won’t be as bad as many calling. The one midterm already returned a Republican despite massive Hollywood support even ferrying voters to booths.

Transgender in the military. I spoke to two dozen US military personnel last month to ask their opinions. The 100% response was, “we think it is inappropriate for the taxpayer to fund sexual reassignment surgery while serving including several years of rehab and ongoing drug therapy…it is taking the p*ss…we serve our country because we love it and we don’t have room to support social experiments to protect freedom!” There was no real issue of transgender per se rather a problem of providing funds in n already tightly allocated budget for such medical expenditure. Several even spoke of the stupidity of LGBT pride day in the armed forces. What has the ability to fight got to do with what goes on in the bedroom? One said “if we had a heterosexual pride day” we’d never hear the end of it.

So when you communicate with the real people you find the truth if you are prepared to listen. The beauty of social media and indeed Google (which happily acts as a Big Brother on what it considers acceptable) is that many people reach for articles they probably haven’t read properly and use them as ways to ram home an argument because they carry a brand name. Harvard is a wonderful institution but as we’ve seen it has run into questions of conflicts of interest.

I happen to think that social media is having the opposite effect on brainwashing to tell the truth. 99.9% of what I see posted has little thought to it. The more people I speak to the more they are ignoring noise. Many people share articles without putting some basis of why they post it. In many cases people are too afraid to face a doxxing or backlash. Bring it on. To me if you post things in the public domain then be prepared to invite criticism. On my site I do not censor, cut off or delete readers. They are free to come and go as they please. I only request they keep profanity to a minimum.

So in summary, the idea that we bow down to venerable institutions to seek guidance is as flawed today as it ever was. I’ll gladly stick to gut instincts because to date they have worked so far. Having said that I should put a disclaimer that was always plastered on financial services product, “Past results are no guarantee of future performance”

Hungary to be stripped of its EU voting rights?

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The EU is voting to strip Hungary of its EU voting rights for consistent failure to heed their values, including migrant quotas. Last year an apathetic turnout to a referendum held on the subject said 98.4% of Hungarians were against forced migrant quotas. Putting to one side the altruism of the EU, trying to force a member state to tow the line is absurd, not so much for the country but the migrants.

Let’s not forget this is the EU making up for Merkel’s single-handed poorly executed thought bubble in the first place. She put forward a come one come all rhetoric on her own.

In a sense the EU can rant on all it likes about humanitarism (although 80% are economic refugees (i.e. not fleeing war zones) according to figures by Eurostat) but forcing asylum seekers into a country that doesn’t want them doesn’t seem optimal. We can snigger at Hungary and call them bigoted, racist or worse but the fact of the  matter is migrants on the whole won’t be welcome.

The EU forcing unwanted guests to a Hungarian dinner table has obvious consequences. The embittered host is likely to ruin the goulash and spoil the palatschinke in an attempt to get the visitors to leave.  Many are unaware the third largest political party in Hungary is Jobbik (won 21% of seats in the 2014 election) which has all the hallmarks of Roehm’s SA, right down to the uniforms. Jobbik has a record of roughing up Jews, Gypsies and Roma so before Brussels tells Budapest it must accept migrant quotas perhaps an assessment of the reality would be wise. Jobbik is left to do its ruffian business and Hungarian authorities turn a blind eye. That is the bigger issue at sort before imposing quotas.

Surely if refugees were asked Hungary is the last place they want to go after leaving their homeland. Refugees aren’t cattle but the EU is treating them so. Aren’t they surprised when the majority seek Germany as the end destination because of the relative generosity? Do the EU authorities think these migrants don’t have excellent internal information networks? Of course they do.

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To rachet this down a notch what are EU values anyway? The Brits are leaving because they don’t agree with EU values. The Greeks are being trodden on for refusing to accept EU austerity values. The Austrians were threatened with sanctions and punishment if they democratically voted in a right wing president. Are these worthy values? The Swiss handed back a 30 year free pass to join the EU presumably because they didn’t believe in EU values. The list goes on.

Sometimes it is had not to think of the EU as the Gallactic Senate from Star Wars trying to get aliens from different galaxies to agree on everything.

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We all know how unwelcome visitors are treated in the Star Wars Bar when different backgrounds and cultures literally don’t see eye to eye. The EU would do well to respect the diversity of its members, which includes diversity of thought and culture. It is not to say the EU doesn’t have a point from time to time they are dreadful executors of it.

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Japan fends off the Mongol hordes

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New Japanese Yokozuna (Grand Champion) Kisenosato has won back to back tournaments and his first in the top rank. Despite suffering a severe shoulder injury earlier in the tournament he fought on to win the lot, including the tie breaker. The Mongolian wrestlers have had a strangle hold on Sumo’s top rank for almost two decades since the Japanese yokozuna brothers Takanohana and Wakanohana retired. It is nice to see the pride Japanese have in reclaiming the title of a national sport. At 188cm and 176kg he is by no means the largest wrestler but he showed big heart yesterday.

Toshiba should be left to rot as a warning to others like Captain Kidd. Sadly Japan Inc is Captain Kidding

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In the olden days, pirates and criminals were left to rot and die as a gruesome warning to others. Japan should adopt the same policy for corporates which no longer reserve the right to function. I once conducted a study that showed that Intel by itself made more net profit over 25 years in aggregate than the largest 20 Japanese technology firms combined over the same period. Yes, that is right Intel made 40% more net profit than Sony, Panasonic, Toshiba, Mitsubishi Electric, Nidec, Canon, NEC, TDK, Hoya, Nikon, Kyocera, Ricoh, Olympus, Konica Minolta, Sharp, Tokyo Electron, Advantest, Fuji Film, Ibiden, Fujitsu and Brother combined.

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Fuji Film once boasted that it was a better company than Kodak on the announcement of its bankruptcy. The reality is that as a shareholder the decade preceding Kodak’s bankruptcy had higher total returns (dividends, buybacks) than one who held Fuji Film. Not exactly a proud boast to say you’re superior only in terms of survival. That is the problem many corporates face. They do not properly understand the importance of shareholders.

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I have lived in Japan for too long to know that foreign investors remain right to hold such a negative outlook on corporate governance here despite the introduction of the Corporate Governance Code I wrote about in 2015. Toshiba is without a doubt a poorly run company that has become an uncompetitive mess of its own doing. It is decades of poor business decisions that has led to its demise. Not bad luck . The way the government is trying to protect Toshiba and its 200,000 employees is exactly why foreigners will stay away. All such rearguard actions do is send a strong message to all other large Japanese corporates that there is a safety net if they screw up.

Toshiba tried to appeal to investors after the initial accounting scandal that a majority of independent directors would prevent it happening again. Reality is that they were completely ineffective. To that point the Japanese stock exchange (JPX) asked me to fill in a survey on what I thought of corporate governance and whether it should be made mandatory instead of ‘comply or explain’. 98% of listed corporates have volunteered to hire two independent directors so I asked why would you make law what almost all are already in step with? Talk about not understanding what the point of shareholder needs are from the exchange itself. It is embarrassing. I made the point that the “quality” of independent directors was most important. I wrote in the corporate governance report the following,

“Companies must focus on qualitative aspects when hiring independent directors over quantitative parameters. Soft options to meet minimum regulatory requirements to protect the status quo is a recipe for failure. Independent directors should not be viewed as an ‘unavoidable cost’ but as a ‘wise investment’ for firms. Which company would rationally choose inferior staff for its operations? Would an airline actively seek unqualified pilots to fly its passengers? That is not the way of sustaining good reputation in the long run.”

Toshiba is to all intents and purposes insolvent. It bit off way more than it could chew in nuclear. Westinghouse looked a huge boon at the time and many analysts fawned over the Japanese giant becoming a monster player in nuke power. Now the massive costs of building plants, the delays, the requirement for trained personnel to build them etc has become too much to bear,. Yet the government sees the banks propping it up through syndicated convoy support is the way forward.

I wrote in Jan 2016 about Toshiba as its market cap slipped below Y1 trillion.

“I once joked soon after Lehman shock that Apple’s overnight move of 5% was the equivalent of the vanquished Toshiba market cap. Now Apple only needs to move 1.29% to increase / decrease the equivalent amount of Toshiba’s mkt-cap. It shows just how far the Japanese tech giant (?) has slipped. When we look at reality, the accounting scandal, the appointment of 50%+ independent directors on the board and the likelihood of having to write down goodwill, the former tech giant faces further woes. Toshiba is in dire need of a ‘crisis’ manager to restore lost fortunes.”

I also argued in the same note:

“Toshiba may be trimming 16,000 odd staff into next fiscal year. Interestingly the decision to cut 6,800 employees from their overseas businesses highlights once again that domestic social harmony takes a front seat to shareholders. We’re not saying the action is not well intentioned but in a sense it is hardly the thing which will help get the supertanker turned around in the required time. Interestingly Nidec’s Nagamori has offered to hire software, communications and robotics engineers from Sharp and Toshiba to ‘help’. So the best engineers from Toshiba and Sharp will sign up for voluntary redundancy (aka tax effective bonus) and land a job with arguably one of the most profit focused Japanese tech companies, further gutting the ‘best assets’ from the ailing companies.”

Yet look at what Toshiba tried to do with fixing its ailing PC business. It’s independent directors voted to copy what abysmally failed in mobile phones, even worse teaming with an old partner. As I also wrote,

“One would have hoped that the independence of the majority of the board would lead to a heightened sense of urgency and crisis management. The recent news is that Toshiba is in talks with Fujitsu again to merge their loss making PC units where the two share 6% of the global market…There is a lot of precedent suggesting that this is a fruitless exercise. As one of my colleagues put it best, “two drowning men together don’t make a swimmer”. One would hope that Toshiba’s revived sense of corporate governance would see its board seek more severe action…

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“Japanese mobile handset makers have consolidated. Toshiba teamed with Fujitsu (surely a lesson in what a poor decision that has been), NEC with Casio and Hitachi, while Sony (albeit teamed with Ericsson until they merged) has had a rear guard action. Sanyo sold its handset business to Kyocera. Mitsubishi Electric just quit altogether in 2008. I remember a time when Japanese clam-shell phones were amazing. Friends from foreign lands would marvel at the designs, light weight and features versus the clunky Nokia and Motorola offerings of the time. They also were stumped at how these devices could get so much battery life. Alas, Japan kept them largely from overseas markets leaving them without the little scale efficiency from expansion abroad.”

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“As smartphones have caught on, Japanese handset makers have been left further in the dust. Sony has the highest global share among Japanese brands at 1.7% (Q1 2015), however even in the domestic market, Apple and Samsung command the leading shares. Japan’s market share in mobile phones globally has slid from 15% a decade ago to less than 4% in 2012. Japanese maker’s global share of flat screen TVs slump from 45% to around 20% over the same period. What magic can a Toshiba-Fujitsu PC alliance make?”

Alas Toshiba dithered and eventually knew that the government would throw out the emergency airbag to cushion its fall. How does throwing hands in the air and not taking more drastic action (selling cross shareholdings etc) sit with best in practice corporate governance and protecting shareholders’ best interests? Not a chance.

What Japan Inc should do is allow it to fail. Let the free market decide what assets they want. If Westinghouse is worth something to Hitachi or some other maker then so be it. Sharp was sold to a Taiwanese maker.  If Toshiba’s NAND flash business is only worth X to a foreigner or Y to a Japanese then that is reality. The market is there to match buyers and sellers. Somehow I fear that there is a ‘Hinomaru’ type structure that will form to absorb the chip businesses of several Japanese companies to form a burdensome partnership to appeal to social goals.

The government must understand that listed corporates are not there for national service. If that is the wish of the state then it should nationalise Toshiba. I’m sure the BoJ will be glad to add more toxic waste to its massive balance sheet which even dwarfs America. There is no way that foreign investors can glean any hope for true reform if protecting zombified atrophied elephants continues.

Japan is a shame culture. How is it that it doesn’t see that protecting Toshiba is in fact seen as so shameful to foreign investors and increasingly Japanese taxpayers.

Toshiba has till March 14th to find a solution before it gets put on the scheduled for delisting board. That I’d argue is even more embarrassing.