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The Meaning Of Xi's Visit To San Francisco

Portfolio Armor's Photo
by Portfolio Armor
Thursday, Nov 16, 2023 - 18:07

 

A Chinese Dragon dwarfing an American Bald Eagle.
A Chinese Dragon dwarfing an American Bald Eagle.

The Meaning Of President Xi's Visit To San Francisco 

We saw something extraordinary in San Francisco this week: that city finally getting a proverbial bath. As California Governor Gavin Newsom admitted, he was cleaning up because company was coming over, and that company was of course President Xi Jinping of China. 

But why did Newsom go to such lengths to lure Xi to San Francisco--and why did Xi go? Earlier in the week, Zero Hedge posted a series of X posts about this (San Francisco: Clean For Xi, Not For Thee), and one of them deserves a bit more attention:

The full text of the screen capture in that tweet: 

In advance of Xi’s visit, Newsom just held up a hand and rolled up SF’s seemingly permanent homeless encampments. He spent the political capital to do this, overriding all the Democrats paid by the city to feed drugs to addicts. Of course, Newsom could have done this at any time2 to the homeless industrial complex, but why now? Because their local business model is temporarily less important than his global power model: the question of how to hold onto power for his Party when his country is in decline.

Balaji Srinivasan, A Refresher 

Balaji Srinivasan holds a bachelors degree, two masters degrees, and a PhD in engineering from Stanford (one of the masters degrees is in chemical engineering, and the other degrees are in electrical engineering). He founded a genetics start-up that was acquired for 9-figures, and later worked as a general partner at one of the top venture capital firms in Silicon Valley, and also worked as the chief technology officer at Coinbase. So he's a bright guy, with experience at high levels in different fields.

Only Newsom Can Go To China

The quote in the tweet above came from this post of his, Only Newsom Can Go To China (the title is obviously an allusion to the saying "Only Nixon Can Go To China"). In it, Srinivasan made an interesting argument: Democrats realize they can't win against Russia, China, and Trump at the same time, so they decided to make peace with China:

Here’s the thing: after losing in Afghanistan and now Ukraine, losing control of Twitter and now Treasuries, and losing support in first the Middle East and then the middle of their party, Democrats are besieged on all sides. Moreover, an election year is coming up — and while they are prosecuting Trump and persecuting Elon, it really isn’t great optics to jail all the Republican candidates as insurrectionists.

So, the Democrats need to make peace with some rival tribe to retain power. Would that mean reaching out to their domestic Republican rivals, their “fellow Americans”? Hell no! Democrats won’t hire Republicans and 95% of Democrats won’t marry them either. So they certainly won’t ally with Republicans in any except the most cynical of ways — to get them to pay the bills and die for empire.

It's an interesting theory, notwithstanding Biden's impolitic outburst yesterday, calling Xi a "dictator", but the part about Newsom replacing Biden in the general election next year probably isn't happening. As Scott Greer pointed out recently, it's too late for Newsom or any other challenger to get on key primary ballots now. 

Still, the idea that Democrats would rather make peace with China than their domestic opponents sounds plausible. 

In Case You Missed It

It's rare that anyone gives away alpha in a free-to-read post, but we may have done so this week, in a post that didn't get many page views, Predicting Price Movements Post-Earnings. 

If you place any earnings trades, it's worth a read. 

 

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