Tech Review 1) Extracting Huawei From Telecom Networks Impossible?

Tech Review (TR 2019-03-16)--Domain Mondo's weekly review of tech investing news: Features • 1) Extracting Huawei From Telecom Networks Impossible? 2) China's Headwinds, 3) Investing: The Week & Investor Notes: the Real Recovery vs Life Support, 4)ICYMI Tech News: Facebook, Google, Amazon, Apple, Turo, Boeing, GE.

1) Extracting Huawei From Telecom Networks Impossible?

Allies are under U.S. government pressure to shun China's Huawei, but Huawei's prevalence in existing telecom networks and dominance in 5G technology make that nearly impossible according to this video published Mar 11, 2019, by the Wall Street Journal (wsj.com).

2) China will face a lot of growth headwinds this year, analyst predicts

Le Xia, chief economist for Asia BBVA discusses the Chinese trade and economy outlook. CNBC International TV video above published Mar 4, 2019.

3) Investing

The Week: NASDAQ Composite +3.8% | S&P 500 Index +2.9% | DJIA +1.6%

       "Tech makes a comeback as Wall Street's trendy trade."

Wall Street's Charging Bull:

Investor Notes: the Real Recovery vs Life Support

 Effective Federal Funds Rate--Above: Jul 1954 - Feb 2019. Below: Feb, 2009 - Feb 2019.

Source: https://fred.stlouisfed.org/series/FEDFUNDS. Editor's note: "real recovery" (Fed Funds rate >.50%) started December 2016 after the election of Donald Trump (before then Janet Yellen kept rates too low, for too long, and was doing everything she could to "help" Hillary during election year 2016). The Eurozone (ECB) is still on "life support." The UK (Bank of England) left "life support" in 2018.

Reads of the Week:

• Everyone Is Wondering What Exactly Is Wrong With Europe--"The truth is that a currency union is destined to fail without fiscal union. And fiscal union is doomed without political union ..." 
• Brexit Madness - UK PM Theresa May to Ask EU for Brexit Delay (video)

• Ignore the nay-sayers – here’s why we’re still on course for a clean Brexit on 29th March

Store of value--A 2018 research paper from the Federal Reserve Bank of Chicago estimates that 60 percent of all U.S. bills and almost 80 percent of all $100 bills are now overseas. That's up from 15 to 30 percent around 1980, according to research from Federal Reserve Board economist Ruth Judson. She found that economic and political instability contribute to this demand--cnbc.com.

Consequences of “Leaving Interest Rates Very Low for a Long Time”--Bank of Canada Governor Poloz--A litany of problems, from too much debt to deflating housing bubbles in Vancouver and Toronto--wolfstreet.com.

Three Things You Should Know About the Great Recession--aier.org: it was preceded by monetary expansion, exacerbated by monetary contraction, and resulted in a radical change to the day-to-day conduct of monetary policy.

“Exceptional performance has to come from diverging from the crowd”--Howard Marks

4) ICYMI Tech News:

• Facebook and Google--today, over 70 percent of traffic is dominated by those two platforms--The Death of the Internet | zerohedge.com.
• Amazon: It Looks Like Day 2--seekingalpha.com. Amazon's massive opportunities in first-party eCommerce, Third-Party Services, AWS, and Advertising should warrant Amazon's full attention. It's time for the king of online to get back to its roots and drop its Whole Foods acquisition in the recycle bin--seekingalpha.com.
• Apple has $245 billion in cash on hand, up from $237.1 billion reported at the end of FY2018. See also: Spotify's antitrust complaint against Apple with the European Commission claims App Store rules limit choice and stifle competition--musically.com. See also EU antitrust authority considering Apple probe.
• Antitrust & Big Tech--US Senator Elizabeth Warren proposes breaking up Amazon, Google, and Facebook, as part of her 2020 Presidential campaign platform. 
• Disintermediation: Hertz Is One Recession Away From Bankruptcy--While we can argue that Lyft and Uber might not be direct competitors, it is absolutely undeniable that every Turo  (Domain: turo.com) transaction represents a transaction lost by traditional rental car companies--zerohedge.com.
• Boeing 737 Max: Pilots, FAA knew there was a problem with the Boeing 737 Max 8, licensed commercial pilot says.
• GE shares plummet after CEO Culp said the company was beginning to "embrace our reality." Remember when companies engaged in due diligence before they pursued multi billion deals?
• Personal Tech: Microsoft Windows 10 Home edition users baffled by updates--zdnet.com. Editor's note: just get a Chromebook.

-- John Poole, Editor, Domain Mondo  

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'Free Money' | Modern Monetary Theory a/k/a MMT Explained (video)

Bernie Sanders' 2016 Advisor On Trump's Economy And Modern Monetary Theory

CNBC video above published Mar 4, 2019: Modern Monetary Theory (MMT) is gaining traction in American politics, energizing the progressive left and roiling deficit hawks. Stephanie Kelton, who advised Bernie Sanders' 2016 presidential campaign, explains the basics.

2020 Election: She says Democrat presidential hopefuls are swinging for the fences with ambitious policy proposals while Trump appears to have changed his thinking on the deficit and debt since his 2016 run. On headwinds facing the economy, Kelton says she sees an "extraordinarily resilient" U.S. economy despite a "real" global slowdown and a small chance of additional rate hikes from the Fed.

Stephanie Kelton is a proponent of Modern Monetary Theory (MMT), the economic rational cited by rising political stars like Rep. Alexandria Ocasio-Cortez D-N.Y. She is currently a professor of public policy and economics at Stony Brook University. Previously, she served as chief economist for the Democrats on the U.S. Senate Budget Committee and was a senior economic advisor to Bernie Sanders ' 2016 presidential campaign.

Editor's note: key questions: what is your definition of "full employment"? What political system has the necessary discipline to apply the constraints required for an effective long-term MMT policy?

See also:

• Paul Krugman Asked Me About Modern Monetary Theory. Here Are 4 Answers. Deficit levels, interest rates and the tradeoff between fiscal and monetary policy, by Stephanie Kelton, March 1, 2019--bloomberg.com

• The left’s embrace of modern monetary theory is a recipe for disaster by Larry Summers--WashingtonPost.com.

• Modern Monetary Nonsense, Mar 4, 2019, by Kenneth Rogoff: "... Contrary to widespread opinion, the US central bank is not an independent financial entity: the [U.S.] government owns it lock, stock, and barrel. Unfortunately, the Fed itself is responsible for a good deal of the confusion surrounding the use of its balance sheet. In the years following the 2008 financial crisis, the Fed engaged in massive “quantitative easing” (QE), whereby it bought up very long-term government debt in exchange for bank reserves, and tried to convince the American public that this magically stimulated the economy. QE, when it consists simply of buying government bonds, is smoke and mirrors ..."--project-syndicate.org.

• Running on MMT (Wonkish)--Trying to get this debate beyond Calvinball by Paul Krugman--NYTimes.com.

• Modern Monetary Theory Isn’t Helping--jacobinmag.com

Tweets by StephanieKelton

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