The Second Cold War

The trade war between the USA and China seems to be evolving to the formation of trade blocks, and then, Cold War blocks. China tried to prevent this development by its Belt initiative, building trade entrepots all over the world, but in the new world situation, we have to see if it can be operated.

An article referred to by Marginal Revolution blog maintains that Chairman Xi has recognized that China's aggressive and triumphalist policy was a mistake and now have to retreat in a Long March. We survived a bad Cold War already, we shall survive this too. Not me personally, but the Jewish nation. While friends of China, we are with the USA. (The ill. is from a Singapore paper, it is misleading). 

Paralysis in Israel

There is no government in Israel, and the bureaucrats are left unchained. They are the only ones that feel safe in their Olympus, they are like angry Zeus watching the human ants and feeling whom to strike down next. The bureaucrats in their airconditioned offices are privileged Whites while my Clients are mostly worthy Mizrahi people just out of the ghetto trying to realize their dream of an independent business - a pizza shop, a small worker restaurant, a small sandwich business. Tomorrow I promised to help a sandwich business in Hashmonaim Street Tel Aviv, in a dark underground cave. I hate to take money from this boy, but without the temptation of lucre, I am unable to work myself up and wear out my last grey cells to think out the solution to his problem.

To solve this problem, am meditating while drinking merlot and dancing the cumbia Alla va Maritza, yo me voy tras ella...  Colombia is the new jewel of the Caribbean, Cuba is no more. 

Dilemmas of an Israeli Water Engineer

I am designing the water system of an egg processing factory. On the one hand, I designed an ingenious used water recycling system, where the egg wash water is treated with flocculants and filtered and chlorinated, saving money on the water consumption bill. On the other hand, I am designing the wastewater treatment system, to render the water suitable for disposal in the municipal network. Egg sewage contains no sugars or easily fermentable carbohydrates but has proteins which cannot be degraded rapidly. To comply with the draconian regulations, I have to treat the wastewater almost to drinking water purity. The penalties for infractions are prohibitive and the unpaid accumulated debts to the water companies are a national problem. Recently there was some movement towards forgiving some mountainous debts, but we are living in a transitory year with no government able to take decisions.

Water costs about 5 to 10 dollars a cubic meter, for the industry, and sewage disposal costs about the same - if the sewage complies with the maximum content norms. If not, the cost of disposal jumps logarithmically. No kidding. Thinking of my Client, it would be better NOT to recycle the water and not to save drinking water, therefore increasing the volume of the sewage to be disposed of. The highly diluted wastewater would need less treatment to comply with the regulations, and most importantly, no worries of penalties.

Common sense says that Green/Environmental engineering harms the interests of my highly valued Clients, and does nothing to save the Earth. Israeli mothers warn their children to eat all the junk food because... children are starving in Africa. Israeli regulators are even more stupid, they force the factories to save water because in Erythrea it is not raining.

I shall adopt the Israeli method to deal with impossible choices: walk between the raindrops.

ללכת בין הטיפות

Solution

TASE Tel Aviv Stock Exchange Reflexions

Michael Rochberger writes in The Marker that the year 2019 is lost for large State projects because there is no government and the Ministers are busy in politics till the new elections in September and then to learn the subject.

The economy is stable, full employment, inflation low, private demand is not growing, so the great winners are the banks (red line on the graph). 73.77% growth in the last 4 years. The second line in green is real estate 45.09 %.

The total losers are technological companies, they lost 15% in 4 years. Terrible. I was hit by them big time - Bezeq and Tower and so.

Industrial companies are collapsing and cannot compete with Turkish imports. This development is very disappointing, I am a working engineer and my clients are hardworking entrepreneurs and I want them to profit, but in the current economy, it is impossible.

Open markets and the bureaucracy kill all local initiative. That's why I specialize in compliance vis-a-vis the regulators. I dislike this pointless torture, but it ensures me some income. Understandable, my Clients dislike (an understatement) spending on compliance and try to avoid paying me.

This is where I am now. What is to be done?

Portfolio Thoughts

TASE the Israeli Stock Exchange is falling. I have three big investments go bad: TEVA, BEZEQ and TOWER.

TOWER is chip fab. In the last ten years, I bought it and then, when started to fall, sold with a loss. Not once, but at least five times. Hope never dies.  Idiots never learn.

Bezeq was a communication monopoly bought by Alovitch, who distributed generous dividends (mostly to himself) and emptied the company. I feel the total amount of dividends I received may equal the loss on the stock, but I have no time to check. On the stock,  I am losing 70%.

TEVA is a well-known disaster. Fighting hostile takeover, they went into 20 billion debt, bought a fake Mexican company (they were in a hurry), they got hit by large penalties, and they cannot stabilize the firm. It seems directed toward Total Loss.

Prices are so low in Israel that I took out a loan (1% p/a/)  to buy something. What? The country is entering a phase of stagnation, with no government, the transitory thing we have now will not dare to take painful measures. The bourse will muddle through. There is a large unfilled demand for real estate, that may be a good area to invest. Weapon manufacturing seems promising. The Israel-China trade is booming. Israelis have money to invest, so all investable vehicles will rise.

I have decided to buy jewelry to decorate my daughters. They love it.   

Cumbia La Piragua

Me contaron los abuelos que hace tiempo
Navegaba en el Cesar una piragua
Que partía de El Banco, viejo puerto
A las playas de amor en Chimichagua.
Capoteando el vendaval se estremecía
E impasible desafiaba la tormenta,
Y un ejército de estrellas la seguía
Tachonándola de luz y de leyenda
(Coro)
“Era la piragua de Guillermo Cubillos,
Era la piragua, era la piragua”
Doce bogas con la piel color majagua,
Y con ellos el temible Pedro Albundia,
En las noches a los remos le arrancaba
Un melódico crujir de hermosa cumbia
Doce bogas ahora viejos ya no reman
Ya no cruje el maderamen en el agua
Solo quedan los recuerdos en la arena
Donde yace dormitando la piragua.

Guillermo Cubillos was a trader on the rivers of Cesar Province, Colombia. Like the Moroccan Jews of the Amazonas. I dream of those rivers and time. Improbable, but I am linked by blood with them.  

China inviting intervention

China"s Leadership is feeling strong enough to challenge the West. They say they will stop supplying rare earths, that are necessary minerals for the electronics industry. The price of this precious commodity will explode, making it worth to risk war with China. Black-flagged ships may soon be patrolling the Yellow Sea, waiting for a reasonable excuse to provoke China. Xi' peaceful rise may not be peaceful nor a rise. Very bad.