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Cyreenik Says

October 2021 issues

"I really, really want a conspiracy theory."

Don't invoke conspiracy when simple incompetence can explain what happens. -- Donald Rumsfeld

Bad surprises are unhappy events, and the unhappiness can last quite a while. This influences human thinking in a curious way.

One of the characteristics of human thinking is to be more upset with a bad surprise when there is no good explanation for why it happened. As a result people search hard for an explanation. An explanation that often becomes popular is one based on a conspiracy theory, as in, this event happened because there were evil people involved with evil intentions. The observed result is usually just what they intended, but it may be an accidental consequence of their secret evil machinations.

Either way, the conspiracy theory gains a lot of impact on social thinking about the event. If the event is thought of as just a bad surprise, ah well. If it is thought of as a bad surprise caused by a conspiracy... hmm, well, well, now we have a story to tell!

To see some examples, here is a list of conspiracy theories in Wikipedia.

Afghanistan's tribal violence continues, and in classic format

The violence continues in Afghanistan and it is continuing in classic formats, one of which is suicide bombing. This 15 Oct WSJ article, Afghanistan Mosque Bombing Kills at Least 38 Shiite Worshippers, talks about the repeated bombings going on in Shiite mosques.

From the article, "Friday’s attack followed a suicide bombing claimed by Islamic State that killed some 100 people on Oct. 8 at a Shiite mosque in the northern city of Kunduz." and "including a bombing outside Kabul airport that killed 200 Afghans waiting to be evacuated and 13 U.S. service members."

Suicide bombing continues going on strong in Afghanistan.

Another part of the pattern is that the suicide attacks are most often on neighbors, not strangers. This pattern adds to the surprise that 9-11 was. It was an attack on complete strangers.

The decades-long China property boom is busting

This is big. This is the biggest part of the world's second biggest economy, and it is starting to go bust. The property boom that has been going on in China for many decades now looks like it has hit a glitch. How big the glitch will be and how long it will last are still unknown. But given the size of China's property market and the centralness it is to China's economy, it is going to bring about a shake-up that will effect the whole world's economy.

Watch out now! And get ready to duck!

This 21 Oct 21 WSJ article, Chinese Developer Defaults Pile Up as Evergrande Contagion Spreads by Frances Yoon, Quentin Webb and Elaine Yu, describes the magnitude of the problem at its current level.

From the article:

o "The market has already endured its worst selloff in a decade, after property giant China Evergrande Group skipped some interest payments to dollar bondholders in late September, and smaller rival Fantasia Holdings Group Co. surprised investors by defaulting on debt that matured in early October."
o "'Global investors have been offloading high-yield bonds issued by Chinese developers because of the concerns that they have, rightly, about the future of those companies and their capability to repay debts,' said Jing Sima, China strategist at BCA Research. 'The lack of response from Chinese policy makers definitely adds to that concern,' she added."
o "At the same time, contracted sales at many developers have already fallen by more than 20% or 30% on an annual basis, and this slowdown is likely to continue. "
o "'The true concern is that this will negatively impact economic growth [of the whole Chinese economy], as it affects home-buyer appetite to buy homes,' said Tracy Chen, a portfolio manager at Brandywine Global."

This 22 Oct 21 WSJ article, China Evergrande Makes Overdue Interest Payment on Dollar Bonds, State Media Says by Elaine Yu, Quentin Webb and France Yoon, talks about a short-term reprieve. The government is quietly stepping in.
From the article, "Senior officials including Vice Premier Liu He and People’s Bank of China Gov. Yi Gang have recently said that problems with Evergrande and the sector are manageable, and Mr. Yi has said the rights of creditors should be protected. "

Update: The Chinese government is intervening massively but quietly to keep this big crisis a quiet one. This 10 Nov 21 WSJ article, China’s Plan to Manage Evergrande: Take It Apart, Slowly by Keith Zhaik Elaine Yu and Anniek Bao, talks about how the Evergrande situation is being managed by the Chinese government.
From the article, "Some investors feared that China Evergrande Group, the world’s most indebted real-estate firm, would collapse spectacularly, triggering losses far and wide. Instead, the Chinese state is dismantling the giant developer slowly and behind the scenes, in what amounts to one of the biggest financial challenges Beijing has faced in years."

 

 

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