China-investment

STAFF NEWS & ANALYSIS
Two of the Worst Investments You Can Make Right Now: Facebook and China
By Daily Bell Staff - March 21, 2016

New York Times … With ‘Smog Jog’ Through Beijing, Zuckerberg Stirs Debate on Air Pollution … Some noted he should have worn a face mask … Others simply took umbrage with where the photo was staged, at the heart of Tiananmen Square.“The floor you stepped has been covered by blood from students …” wrote a user named Cao Yuzhou. – New York Times

Mark Zuckerberg’s China trip turned surprisingly “hot.” There was a lot of local coverage regarding his recent jog, and some leaked into the Western mainstream media as well.

This reinforces a trend when it comes to Facebook coverage in the West. The mainstream media reports on Zuckerberg with a dutiful persistence based on his wealth and youth and doesn’t make much of a distinction as to what ought to be written about.

For instance, the media is as apt to cover his wife’s pregnancy and the breed of his pet dog as they are to report on his neighborhood real estate controversies.

Much more importantly, the news about his gigantic company is mostly of a “just-the-facts” variety.

The subtext of the “meme” is simply that Zuckerberg is a phenomenally wealthy and youthful genius whose actions are newsworthy because he is making them.

You certainly will not read that Facebook has strong ties to the CIA. Or that many of Facebook’s “innovations” are designed to enhance the transparency of user activities in order to benefit law enforcement.

For the most part, unless it is in financial news, you won’t read about the struggles of Facebook to shore up its audience.

You won’t read that it has lost up to half of its younger viewers in the US and that its US growth has slowed generally.

Nor will you read that Facebook has got to find new users overseas to make up for the viewers it is losing in the West.

Meanwhile, the ruling Chinese Communist party is happy to have Facebook as part of their Internet network so long as Facebook plays by their rules.

Zuckerberg is in China to negotiate the flexibility of those rules. But no matter what deal Zuckerberg comes away with, the reality is that he is negotiating in a repressive environment.

This is a regime for instance that arrests citizens for using the Internet in a number of ways. People can go to jail for long periods of time for making even mildly critical statements about the Chinese government. Even looking at websites that are critical of the establishment can be dangerous.

China is an extremely authoritarian country despite the “capitalism” that pervades the economy at the lower levels.

At high levels, observers have reported that the Chinese Communist Party controls major elements of finance from the commercial banks to the Chinese Central Bank and the larger industrial enterprises as well.

The fiction is that these large entities “compete.” The reality is that these enterprises are closely managed.

At the top of the financial hierarchy resides a Communist party monopoly.

This is actually not so different from the way things work in the West these days. Western governments have enormous power over the “private sector,” as well. But in China it seems even worse and more overt.

When it comes to Facebook, it is clear that almost from the beginning Facebook was seen by the CIA and other US intelligence agencies as a promising way to gather information on US citizens without them knowing about it.

Both Facebook and China represent a kind of “new fascism” that has terminally blurred the lines between private and public enterprise – and further jeopardized the freedom of billions as a result.

Nonetheless, many in the investment community in the West are increasingly positive about Facebook.

Recent articles in the mainstream media point out that because of its Internet dominance, Facebook is the one stock to buy at a time when the larger investment marketplace may not see significant moves this year.

In fact, Facebook’s equity valuation has moved from the low $20s in 2013 to over $100 today. But it is certainly questionable how much higher it can move this year given the larger issues that surround Western equity markets generally.

China Inc. – as an investment – is similarly challenged. The growth of the past decade has been decidedly diminished by the great worldwide “recession” that began in 2008 and continues today.

China’s economy has suffered as a result, and its financial markets took a tremendous beating in 2015. Whether the Chinese government can engineer a so-called “soft landing” of the economy remains to be seen.

What is the ultimate argument for avoiding investments in either of these enterprises – China Inc. or Facebook?

It is simple enough: They are fundamentally anti-freedom despite the enormous investments they have attracted.

The Chinese Communist leadership is a consistent abuser of human rights and free speech, while Facebook dedicates significant effort to undermining our personal privacy.

At a time when politics in the US are moving toward a confrontation with the powers-that-be over a broad spectrum of anti-freedom activities, it is important to select your investments carefully.

Conclusion: Invest in companies and countries that respect human rights and that are not pushing for less freedom in the world. Investing is not just about turning a profit, it’s about putting your money into what you want to see more of in the world. The power you hold in terms of where you invest your money has far more impact than any vote you can cast in a ballot box.

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  • “The power you hold in terms of where you invest your money has far more impact than any vote you can cast in a ballot box.”

    This is also true for your investment of all your psychological assets: time, friendship, love, etc. Positive and negative social preferencing (praise/encouragement versus censure to the point of total ostracism) can have such enormous impact, if done by sufficient numbers, that it can ultimately be the only method required to maintain minimally necessary social order.

  • Praetor

    Well said DB. Facebook and China Inc. maybe more alike than anyone would like to admit. Hard to say if facebook could make it in China, where the people are less likely to share their inner feelings about anything. And that being the case how could facebook be of any us to the communist Chinese. You could see it now, some poor Chinese peasant having a facebook page, (if they could afford it), I went to the fish market today and came home, ate the fish, went to bed. Lets face it social media is an extinction of the propaganda machine and the spy masters wet dream!!!

    • Thanks.

    • Bronskimlet

      The Chinese have the “WeChat” app which seem to be more useful than fb as it incorporate payment system, integrate with Uber etc. The online and web services seem to be pretty advanced, there is online shopping for everything and the delivery system is very fast cheap and efficient. You have pages upon pages where you can call doctors for consultancy services with differential prices and rating systems ala ebay. The chinese I relate to and which have the same social class as me are more wealty, have more savings in the bank compared to Norway where I am from. There is a very large number of people that strive to improve their life, they are generally smart, practical and very hard working which makes for more wealth creation.

  • Dimitri Ledkovsky

    It’s amusing to think that all those most intelligent students in the universe at Harvard didn’t recognize what this dweeby kid Zuckerboy was up to when he “created” Facebook.

    • mary

      Yes, he had a few choice words about that, being the kind and cultured piece of garbage that he is. Point your search engine to “Zuckerberg, dumb f#@$s” and you’ll find it.

      There is only one other face that engenders such a violent, visceral reaction in me, the future presidentress of the united state. [sic]

      • John Caudill

        Ah indeed, she is from Hitlers Stalag team, no doubt.

  • colinc

    A Rockefeller is Zuckerberg’s grandfather.I wonder if might tell us something.

  • Chuck

    Zuckerberg married an ethnic Chinese. Probably not a “cohen-cidence.”

  • rahrog

    Keep banging the drum DB! How much longer can it be until these neofascists come for the reformationists of the internet ???????????

  • REALIST

    HEY CIA, here I am. I’ve got guns, ammo and some call me a racist. I know I am on your list. NSA? HIllary has top secret memos on her home server, Did YOU know that?

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