Macro ESG: markets, politics, and technology for a sustainable future with Greg Beier

Introduction: This strategic investment piece is an overview of a collection of ideas which will be broken out into a series of long-form pieces with more data and sources to explore and flesh out the theses presented here. While not yet polished, I hope that these points here will be helpful to you.

Why Did China Fail to Evolve?

Crude Oil and Market Fundamentalism are Finished

Authoritarianism and Chinese Companies Delisting From the US

Is China Apple’s Achilles Heel?

Macro ESG Trumps Company ESG

Emerging Markets Ex-China Long-Term Buy

The Era of China’s Digital Mercantilism Ends

The CCP is Really a Private Equity Firm

Shanghai Comp Resembles the Dow Jones in the 1920’s

China’s Ponzi Scheme

Hong Kong is China’s Switzerland

China’s Social Stability Risk

Will a Weak USD Increase Demand for RMB Debt?

New Research Format: Macro ESG will be transitioning its research format from the current beta-release approach that has been testing different formats to a tactical trading piece published daily and to strategic investment pieces published every few days. www.macroesg.com @macroesg

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The Macro ESG forecast on June 14th in “Global Investing Post Trump” was that Joe Biden would win the presidency, “oil would become a stranded asset,” and the “move to renewable energy becomes a global goal.”

The Financial Times reports today in The Big Read article “Biden gambles on placing climate change at heart of US energy policy” that Biden is delivering on this promise to go big on climate change with a plan to decarbonize the US electrical grid by 2035.

Clearly, Joe Biden is going to go very big on this. www.macroesg.com @macroesg

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Belarus’s recent instability is a product of international oil politics and the poor public health response of the European and American democracies to the pandemic combined with an aging autocrat that didn’t deliver much in the way of benefits to his people.

This is a prime example of global power dynamics at work and the events in Belarus are a byproduct of these primary changes.

That isn’t to say that Belarus wasn’t ripe for a change (it likely was) - but it shows just how interconnected the world is today.

Belarus was on the receiving end of a lot of feedback from the global system - now the only question is - what will Belarus’s feedback be back into the system of global power dynamics? www.macroesg.com @macroesg

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The similarities between what happened in Beirut and what is happening with climate change and biodiversity collapse are striking.

Like Beirut, the world has a bomb of climate change and biodiversity collapse risk metaphorically sitting in a warehouse by the port too and, literally, nobody wants to deal with it. Many complaints have been filed with governments by scientists, activists, and the public about this huge risk and yet it is still there, many years on.

The world, like Beirut, is run by competing interests but the way the game is set up, nobody is going to do anything about climate change and biodiversity loss until it is too late and the proverbial climate bomb has gone off. www.macroesg.com @macroesg

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Short Russia

Trade US Stimulus

Trade Chinese Cyber Retaliation

Go Long - Short the Supply Chain Slow Down / Break Down www.macroesg.com @macroesg

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China will strike back. There is no doubt about it. President Xi’s power rests on his aggressive call to action to the Party’s cadres to be bold. He can’t back down from any challenge to his authority - foreign or domestic. He can - however - bide his time so long as his supporters are confident that he will act, then he is safe. But the gloves are officially off. This morning, in Hong Kong, media mogul Jimmy Lai and his two sons were arrested on suspicion of foreign collusion and uttering seditious words.

And we may have a war on our hands before we know it. Today’s South China Morning Post ran a story about the US looking to “outgun PLA in Indo-Pacific” - and given the current environment - I think that story was directed from Beijing. The story concluded with the observation, “Beijing’s countermeasure is to disrupt the alliance. At the moment, only Australia is listening to the US. Its other allies, like Japan, Singapore, the Philippines, and the other members of ASEAN are undecided about what to do as they don’t want to take sides between Beijing and Washington.” www.macroesg.com @macroesg

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President Trump just this evening ordered that US firms stop doing business with TikTok and WeChat in 45 days.

This is not a surprising development. As Macro ESG has been writing this week, US mega tech (as there really isn’t a comparable entity in the EU or developed Asia) are going to become the interlocutor and guarantor of Chinese tech and media operating outside of China, particularly with respect to users’ privacy and data.

Moreover, this fits with the earlier piece on reciprocity becoming the standard and the hitch here is really with China – China will never open up its domestic market to foreign technology companies, let alone American, because the Chinese Communist Party can’t retain power without overwhelming 1984 Orwellian social control. www.macroesg.com #macroesg

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US mega tech only gets stronger from mediating the China - US technology fight.

Chinese bonds are going to drive capital flows to China - a win in the beginning.

Privacy and data issues are going to become even more seriously regulated because of the China affair. Www.macroesg.com @macroesg

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The Microsoft purchase of TikTok could be the new detente model for Chinese tech expansion while Trump bungles the global PR win with a colossal gaffe threatening global capitalism.

Russia at risk of becoming a massive short on snake oil vaccination program.

Treasuries on their way to zero yield.

#macroesg www.macroesg.com

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Next moves – I expect that the guiding principal of US – China relations will be one of “reciprocity” – particularly with technology. If US newspapers can’t be sold in China – then Chinese newspapers (eg. “The People’s Daily” here in the US) will be banned from sale. If American social media companies can’t have unrestricted and unfettered access to the Chinese market, then Chinese social media will lose access to the US. As China is a closed society with high levels of social control, I can’t see how any US technology will make it into China – which is odd as Apple produces most of its technology there in the first place. www.macroesg.com #macroesg

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