MARIA: THANKS SO MUCH, CHERYL.
WELL, AFTER A MONTHS’ LONG
FINANCIAL DRAMA, EVERGRANDE
CONSIDERED IN HE DEFAULT, A
RESULT OF A DOWNGRADE FROM FITCH
THIS MORNING, THE DEVELOPER
FAILING TO MEET TWO COUPON
PAYMENTS AFTER A GRACE PERIOD
ENDED ON MONDAY, THIS SETS OFF A
LONG BATTLE FOR WHO WILL GET
PAID FROM WHAT HE REMAINS OF THE
COMPANY.
JOINING ME NOW IS WOLF PACK
RESEARCH FOUNDER AND CHIEF
INVESTMENT OFFICER, DAN DAVID.
GREAT TO HAVE YOU.
THANKS VERY MUCH FOR BEING HERE
THIS MORNING.
YOUR ASSESSMENT OF REAL ESTATE
IN CHINA AND ITS IMPACT.
>> WELL, IT’S BEEN IN BUBBLE
TERRITORY FOR A VERY LONG TIME
AND THIS IS NOT JUST A DEFAULT
OF EVERGRANDE, THIS IS A DEFAULT
OF CHINA AND THE BANKING SYSTEM
WHO HAS PUSHED EVERGRANDE EVER
SO FORCEFULLY FOR THE LAST 10
YEARS TO BUILD AND BUILD AND
BUILD.
AND NOW THEY’RE GOING TO HAVE
THEIR BEAR STERNS MOMENT.
I DON’T NECESSARILY THINK THIS
IS THE LEHMAN MOMENT BUT THIS IS
THAT FIRST BIG ONE THAT’S GOING
TO HAVE A TRICKLE EFFECT, THAT
WE’VE BEEN CALLING OUT FOR THE
LAST 10 YEARS, THOSE WHO ARE
DOING DUE DILIGENCE RESEARCH
LIKE WE DO IN CHINA.
I KNOW ONE SHORT REPORT THAT WAS
DONE ON THEM EIGHT, NINE YEARS
AGO SAID THIS EXACT SAME THING
WOULD HAPPEN AND THAT PERSON,
THAT RESEARCHER WAS FINED BY THE
HONG KONG SECURITY COMMISSION.
MARIA: OH, YEAH, NO, I MEAN,
THE RETALIATION IS JUST BEYOND
WHEN YOU LOOK AT WHAT THE CCP
DOES TO COMPANIES, INDIVIDUALS.
WE WERE TALKING ABOUT
DISAPPEARING PEOPLE NOW FOR
SEVERAL MONTHS.
JACK MA AS WELL AS THE TENNIS
STAR.
BUT I WANT TO GET YOUR TAKE ON
THESE HONEY POTS THAT THE CCP
HAS GIVEN OUR BANKS BECAUSE YOU
MENTIONED BANKS IN CHINA.
YOU KNOW THAT THE CCP HAS
ALLOWED JP MORGAN AND GOLDMAN
SACHS AND A FEW OTHERS TO OWN
AND OPERATE THEIR OWN FINANCIAL
SERVICES COMPANY IN CHINA.
I DO NOT THINK THIS IS GOING TO
END WELL BUT THEY HAVE THESE
HONEY POTS, THEY’RE GOING THERE
AND THE CCPS IS EXPECTING THESE
COMPANIES TO LOBBY FOR THE CCP
AND TRY TO GET BETTER POLICY IN
THE UNITED STATES.
MY QUESTION FOR YOU IS DO YOU
BELIEVE AT SOME POINT THE CCP
TURNS AROUND AND SAYS TO THE
UNITED STATES, LOOK, WE ALLOWED
YOUR BANKS AND BROKERS TO COME
INTO CHINA, NOW WE WANT TO COME
INTO THE UNITED STATES.
AND WE’RE GOING TO START
ACQUIRING U.S. BANKS.
>> WELL, I THINK THEY’LL WANT
TO DO THAT.
TO YOUR POINT, NO, IT’S NOT
GOING TO END WELL.
IT’S GOING TO BEGIN VERY WELL.
RIGHT.
SO THAT’S GOING TO BE THE
ADVERTISEMENT FOR THEM, LOOK AT
HOW GREAT THINGS ARE GOING AND
THEN THEY’RE GOING TO GET
BUNDLED POOR DEBT SECURITIES
INTO OUR BANKING SYSTEM AND MAKE
SURE WE FEEL THE PAIN WHEN THEIR
BUBBLE BURSTS.
THAT’S THE WHOLE THING HERE IS
THEY WANT US TO COME IN THERE
AND TAKE THEIR BAD DEBT AND SOME
OF THESE BANKS AND THEN IT’S
GOING TO BE A -- MORE OF A
GLOBAL CATASTROPHE THAT AFFECTS
THE UNITED STATES IN A BIGGER
WAY.
BECAUSE CHINA WAS LARGELY
DISASSOCIATED FROM THE 2008
CRASH AND WHAT THEY LEARNED FROM
THAT WAS WE HAVE TO GET
EVERYBODY ASSOCIATED WITH OUR
PROBLEMS SO WHEN WE CRASH, HAD
THEY HAVE TO BAIL US OUT.
THIS IS WHAT THIS IS ABOUT.
AND IT’S THE SAME THING WITH RAY
DALIO.
THIS IS A COMPLETE SHAME AND A
SHAM.
RAY DALE HE YOW IS GOING TO --
RAY DALIO IS GOING TO MAKE A LOT
OF MONEY IN CHINA.
YOU KNOW WHY?
BECAUSE HE’S RAY DALIO.
THAT’S GOING TO BE ADVERTISEMENT
FOR CHINA.
LOOK AT HOW MUCH MONEY HE MAKES,
COME OVER HERE AND MAKE MONEY.
THE REST OF US ARE GOING TO
LOSE.
I DON’T KNOW HOW WE’RE NOT
SEEING HOW THEIR PLAYBOOK PLAYS
OUT TIME AND TIME AGAIN.
AND IT’S JUST A SHAME.
MARIA: IT’S QUITE EXTRAORDINARY
AND I WANT TO GET YOUR TAKE ON
THIS BECAUSE MY QUESTION NOW IS
WHERE IS THE POLICY OUT OF THIS
ADMINISTRATION TO ACTUALLY PUSH
BACK ON THIS TERRIBLE BEHAVIOR
AND PRETTY MUCH ALLOWING
INVESTORS IN THE UNITED STATES
TO FUND THE CCP’S EXPANSION.
WE HAD ROGER ROBINSON JUNIOR ON
THIS WEEK AND HE POINTED OUT THE
FACT THAT THERE ARE 5,300
CHINESE SECURITIES INCLUDING
MORE THAN 4,200 A SHARES THAT
ARE LET IN THE BACK DOOR BY
INDEX PROVIDERS, 900 COMPANIES
TRADED ON THE VIRTUALLY
UNREGULATED OTC MARKET.
IN OTHER WORDS, ENABLING
INVESTORS TO BUY CHINESE
COMPANIES THAT ARE LIKELY TIED
TO THE CHINESE COMMUNIST PARTY’S
MILITARY.
WE’RE FUNDING THEIR EXPANSION.
HERE’S ROGER ROBINSON JUNIOR
YESTERDAY.
WATCH THIS.
>> THE AMERICAN PEOPLE ARE
INCREASINGLY CARING ABOUT WHERE
THEIR MONEY IS GOING AND HOW
IT’S BEING USED.
THEY DO NOT HAVE A REQUIREMENT
ON THEIR INVESTMENT DOLLARS,
UNDERWRITING AIDING AND ABETTING
GENOCIDE, TRAFFICKING IN SLAVE
LABOR, EQUIPPING CONCENTRATION
CAMPS.
THIS KIND OF THING IS GOING TO
MAKE THE AMERICAN PEOPLE
DISTRACTED WITH ANGER, I CAN
TELL YOU THAT, AND THEY HAVE --
THE MORE THEY FIND OUT ABOUT
THIS, THE MORE OUT-OF-STEP WALL
STREET AND CORPORATE AMERICA ARE
GOING TO APPEAR.
MARIA: DAN, YOUR REACTION?
>> WELL, FIRST, ROGER IS A VERY
INTELLIGENT CHINA PURVEYOR OF
INFORMATION, GREAT MAN, A GREAT
AMERICAN.
I’VE SPOKEN TO HIM SEVERAL
TIMES.
HE’S WORKED WITH WOLF PACK
RESEARCH AND WE PLAN ON HAVING
HIM ON OUR PODCAST BECAUSE HE
DOES SO MUCH OF THAT CHINA WORK.
HE’S 100% RIGHT.
BUT LOOK, THIS IS NOT NEW.
THIS HAS BEEN HAPPENING FOR WELL
OVER 10 YEARS THAT WE HAVE BEEN
EXPOSING THE CHINA HUSTLE, THEY
ACTUALLY MADE THAT DOCUMENTARY,
THE CHINA HUSTLE, BASED ON WHAT
WE AMERICANS EXPOSED.
IT WASN’T CONGRESS OVER THERE
DOING IT.
IT WASN’T THE GOVERNMENT DOING
IT.
AND I WANT YOU TO KNOW, WE’RE
FIGHTING TWO COUNTRIES WHEN
WE’RE DOING THIS.
CHINA AND OUR OWN.
BECAUSE THEY DIDN’T WANT THIS
EXPOSED BECAUSE THEN THEY HAVE
TO DEAL WITH IT.
IT’S THE LAWS THAT THEY PASSED,
NOT GETTING GOODS FROM XINJIANG,
THEY’RE SIT STILL GETTING THEM
TODAY.
SOLAR GOODS ARE STILL COMING IN
AS OF TODAY.
I COULD EXPOSE THAT NEXT WEEK.
WHAT DO YOU THINK IS GOING TO
HAPPEN?
NOTHING.
MARIA: NOTHING.
IT’S THE SAME IDEA ABOUT JUST
RECENTLY LAST WEEK THE
SECURITIES AND EXCHANGE
COMMISSION FINALIZES A RULE THAT
ALLOWS THE S.E.C. TO DELIST
COMPANIES THAT FAIL TO MEET THE
AUDIT REQUIREMENTS, THEY HAVE TO
SAY THAT WHETHER OR NOT THEY’RE
SUBSIDIZED BY THEIR GOVERNMENT,
RIDE HAILING GIANT DIDI
ANNOUNCED IT’S GOING TO DELIST
FROM THE NEW YORK STOCK EXCHANGE
AS A RESULT OF THAT.
THIS STOCK HAS BEEN A COMPLETE
DISASTER.
JP MORGAN UNDERWROTE IT AND LOST
ALL THE MONEY THERE.
THE STOCK IS NOW AT 691 ON DIDI
GLOBAL.
DAN, THAT’S THE POINT.
IT LOOKS LIKE THEY’RE COMING UP
WITH POLICY THAT PUSHES BACK BUT
THEY’RE REALLY NOT.
THERE’S ALL THESE COMPANIES THAT
ARE IN INDEXES THAT INVESTORS
ARE INVESTING IN AND DO THEY NOT
UNDERSTAND THAT AT SOME POINT
YOU ARE FUNDING THE CCP’S
EXPANSION AND WHEN THE CCP DOES
OVERTAKE THE UNITED STATES AS
THE NUMBER ONE SUPER POWER,
THEIR KIDS AND THEIR KIDS AND
THEIR GRANDKIDS ARE OBVIOUSLY
NOT GOING TO HAVE THE SAME
UPBRINGING THAT YOU AND I DID IN
TERMS OF THE OPPORTUNITIES
AVAILABLE GROWING UP IN A FREE
MARKET AS OPPOSED TO GROWING UP
UNDER THE CHINESE EMPIRE.
>> YEAH.
AND THE POINT IS THOSE GRANDKIDS
NEED TO KNOW THAT THEIR PARENTS
AND THEIR GRANDPARENTS FUNDED
IT.
WE HAVE PAID FOR EVERYTHING IN
CHINA’S RISE.
WHAT THEY HAVEN’T STOLEN FROM
US, WE’VE GIVEN THEM IN CASH.
LIKE YOU LOOK AT APPLE.
THAT STORY COMES OUT WITH TIM
COOK, ANOTHER LIBERAL DEMI GOD
WHO ESPOUSESES VALUES HERE THAT
HE DOESN’T HE’S SPOUSE FOR HIM
-- ESPOUSE FOR HIMSELF IN CHINA,
WHAT I READ HE BRIBED OFFICIALS,
GIVES THEM TECH JOBS, GIVES THEM
TECH TRAINING THAT SHOULD BE
HERE, GIVES DIDI A BILLION
DOLLARS.
I WONDER WHAT HAPPENED TO THAT.
AND WHAT’S GOING TO HAPPEN WITH
THAT?
THAT IN MY MIND IS HOW CHINA
WORKS COMPLETELY AND IN MANY
OTHER COUNTRIES THAT WOULD BE A
FEDERAL CORRUPT PRACTICE ACT
VIOLATION.
MARIA: THAT’S RIGHT, APPLE CEO
TIM COOK IT WAS REPORTED THIS
WEEK THAT HE SIGNED A
$275 BILLION DEAL WITH CHINA
BACK IN 2016 THAT HE AGREED TO
TRAIN THEIR PEOPLE, HE AGREED TO
HELP THE CCP AND IN RETURN HE
GETS AN EASIER REGULATORY
ENVIRONMENT FOR APPLE.
YOU’RE RIGHT.
>> RIGHT.
MARIA: THAT’S THE REPORT.
ON APPLE.
THESE COMPANIES GET AWAY WITH
IT.
>> THERE WAS A QUID PRO QUO.
THERE ARE APPS BEING CANCELED.
SO THEY’RE ALL DOING IT.
MARIA: YEAH.
DAN, THANKS VERY MUCH FOR
RAISING THE ISSUE, VERY