Ma, No More: Kyle Bass Fears Alibaba Boss Will Be "Jailed, Disappeared" Within Next Year

From Zero Hedge 9/10/2019:

One year after announcing his intention to step down as chairman of the Chinese e-commerce giant Alibaba, founder Jack Ma finally stepped down on Tuesday, clearing the way for his anointed successor, CEO Daniel Zhang, to take his place. The FT heralded Ma's retirement - which took place on Alibaba's 20th birthday - as the first transition at the top of a Chinese tech behemoth, making it a major milestone for the Chinese tech industry.

Ma, 55, is China's richest man. He famously built Alibaba up from a company founded in his shared apartment into a behemoth worth $462 billion.

A former schoolteacher, Ma is also recognized for his embrace of Chinese nationalism. Last year, he revealed that he is a member of the Chinese Communist Party, and his regular appearances at Davos have helped to cement his status as one of China's preeminent business leaders.

But not everybody is so rosy about Ma's retirement.

In a tweet sent earlier this morning, hedge fund manager Kyle Bass, a prominent China critic, speculated that Ma isn't actually retiring - rather, his carefully choreographed decision to step down is the result of being "forcibly removed from his position, stripped of his shareholdings (transferred to "five unnamed individuals" with the same address), and will likely be jailed or 'disappeared' within the next year."

Kyle Bass

✔@Jkylebass

Clockwork-Jack Ma was forcibly removed from his position, stripped of his shareholdings (transferred to”five unnamed individuals”with the same address),and will likely be jailed or”disappeared”within the next year.This is how xi and wang treat any chinese that become too powerful https://twitter.com/pdchina/status/1171411752996810752 …

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9:33 AM - Sep 10, 2019 · Highland Park, TX

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It's unclear where Bass got this information. But the hedge fund manager insisted that "this is how Xi and wang [Qishan, vice president of the CCP] treat any Chinese that become too powerful."

Jack Ma

If what Bass says is true, it could create serious problems for Chinese markets, as the international investors that Beijing is hoping to court (most recently by raising the limits on foreign investment in its stock and bond markets) would undoubtedly interpret it as a sign of President Xi's hostility to China's business community.

Moreover, it would further bolster the perception that the world's second-largest economy lacks the rule of law.

Thanks to his regular appearances at Davos and myriad other appearances in Western media (Ma recently sparred with Elon Musk about the future of AI), Ma's disappearance would be impossible to ignore. And because of his still-substantial holdings of Alibaba stock, Ma is expected to continue guiding the company from behind the scenes, something that will help bolster investor confidence in a company that, when it went public in New York a few years back, marked one of the largest IPOs of all time as the company raised roughly $25 billion.

Courtesy of Statista

So far, Alibaba investors have been unfazed by Ma's decision to retire. The company's shares have gained 9.4% this year. The succession has been tediously planned, and Alibaba and Ma often talk about the company's deep bench of talent. Ma is leaving his successor some lofty targets: By 2036, Ma hopes the Alibaba "economy" can create 100 million jobs, support 10 million profitable businesses and serve 2 billion customers around the world - up from around 654 million today. The company is also targeting $1 trillion in gross merchandise value (the aggregate value of all goods sold on its platform) this year, up from $853 billion last year.

In his public remarks, Ma has remained committed to the Communist Party line, touting Beijing's resilience and unwillingness to cave to the US, even if the trade war drags on for decades.

But Beijing has a unenviable track record of exiling or jailing billionaires, often over murky charges of corruption or tax evasion.

If Bass's accusations prove correct, Ma would be the most high-profile figure to date to meet this fate. For Alibaba shareholders' sake, let's hope he is wrong. But given Xi's totalitarian bent, it would hardly be a surprise if Ma met a similar fate.

Virtual Reality is now solving real world problems

When you think of VR you think gaming, you think simulators at family fun parks – certainly you don’t think medicine, military, or addiction.  That’s all changing.  VR started out as a toy and has moved to being a very real technology that has applications as far ranging as Rehabilitation or “Rehab.”  It may sound crazy, but it actually works!  A company has created an application for Virtual Rehab, the hot new application in VR.  It’s real, and they call it Psychological Rehabilitation For Vulnerable Populations.  The company is called aptly Virtual Rehab.

Virtual Rehab allows you to confront and to overcome your fears while maintaining your complete privacy. The solution is in your hands. #MentalHealthMatters

That’s how simple it is.  What’s really the problem this solves?  The answer is fairly long so we’ll just summarize here.  It solves a number of problems including but not limited to mental disease, depression, alcoholism, Autism (ASD), drug addiction, and more.  And this isn’t any laughing matter, many of these unresolved cases end up in death or worse.  What can be worse than death?  There are many examples, one being mass shootings – an untreated psychopath goes into a WalMart and shoots 20 or 30 people before killing himself.  We don’t have a solid and stable mental health care system in America, so we are relying on innovative companies like Virtual Rehab to come up with solutions.

In the whole world, $136 Billion is spent on Prevention & Treatment, all inclusive of all related disorders.  That’s a huge amount.  Just in the US alone, 13% of Americans take some form of anti-depressants, according to Time.com:

As TIME reported in a recent cover story, clinical depression affects about 16 million people in the U.S. and is estimated to cost the U.S. about $210 billion a year in productivity loss and health care needs. Global revenue for antidepressants is projected to grow to nearly $17 billion by 2020.

The problem is out of control, and few clinical solutions present a real practical solution.  We’re not here to say that VR is the alternative that’s going to wipe out depression.  However, traditional methods clearly do not work.  This is a new type of treatment, and a new type of therapy.  It isn’t going to harm anyone to try it.  If it takes off, we’ve just solved a major health crisis. 

Think about this.  Treatment of any such ailment whether depression or addiction always involves monitoring by a case worker, healthcare professional, or social worker.  Do you really think someone who is addicted wants to be honest about their addiction, to the point that they admit that they can’t shake the addiction?  The reality is that treatment is not easy and involves a bit of hand-holding, there is no ‘magic pill’ to make someone kick a debilitating habit like Alcohol or pain killers.

But how does it work?  Here’s a snapshot from the provided materials:

The program is presenting users with real-life situations (in a virtual world) where they need to make difficult decisions or challenging choices about certain aspects of their lives or their surroundings.  The Virtual Rehab solution is used as a preventative tool from relapsing back into addiction (for example). Using real-life virtual simulation, users are subjected heads-on with their cravings. Leveraging cognitive behavior and exposure therapy, users are presented with stimuli (i.e. cues or triggers), such as an alcohol bottle or a drug syringe or similar stimuli, where a physician, a psychologist, or a therapist, can monitor the patients’ behavior and decision-making accordingly.  Different from one-on-one or group therapy sessions, where a patient may not be comfortable sharing all his/her information since they are afraid of repercussions, the Virtual Rehab solution allows and forces a patient into making certain decisions and confronting their cravings accordingly. Therefore, what may not be realized within a traditional therapy session, can be observed and monitored as part of the virtual simulation.  Using Virtual Rehab’s patented artificial intelligence solution, throughout the virtual simulation, and through the use of certain APIs, the solution gathers data relevant to the decisions being made by the user along with their actions and their reactions to the scenarios they are subjected to. In addition, the solution collects biometrics (heart rate, blood pressure, and biodermal activity) as well as eye-tracking activity, which are leveraged to detect the actual impact that the virtual simulation has on the patient.

So here we can see the real value of the ‘virtual’ approach.  Doctors and being in a hospital environment can be intimidating to begin with.  Patients can react differently in an institutionalized setting vs. the comfort of your own home.  Most patients who suffer from addiction, depression, and related ailments do want to get better, they just don’t know how.  So even if this only helps a marginal number of patients, the impact can be groundbreaking.  And the best part, this is all built on Blockchain technology using artificial intelligence. 

Who knows, perhaps VR treatments can change behavior modification in many unknown ways.  There is something in the US called “Troubled Teen Industry” which at the end of the day is a fraud, perpetrated on desperate parents to help unruly teens.  One NYTimes article notes how the ‘schools’ are run like bad prisons:

Several former students at schools operated by Mr. Robinson, a former amateur boxer, said in interviews — some dating back to the 1990s — that he had physically harmed them while disciplining them, and that they remained psychologically damaged.

No doubt that VR is going to have many applications, but how that impacts the market of “Vulnerable Populations” as they call it, can be profound.  That’s because vulnerable populations are open to be exploited, as in the above case with “Troubled Teens”  - desperate parents will do anything to ‘fix’ their kids even paying $40,000 a year to send them to an abuse camp that only has a few ‘deaths’ on the record, but overall good reviews.

Like any technology, the combination of Virtual Reality (VR) and Artificial Intelligence (AI) combined with Blockchain can be a real game changer, we just don’t know which industry will be disrupted most.

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Lending stable coin threatens traditional banking

Crypto seems to look more and more like the banking sector, as more projects launch and mature that resemble bank activities.  Recently we have written about security service Blackwatch Digital and their secured and insured custody service.  Now we are researching a unique stable coin and lending platform known as MyConstant.

What we like about this is that it truly resembles a platform, the way Crypto was intended to be designed.  In the platform lenders can choose their own terms, no credit check, and no nonsense – and find borrowers.  It’s all backed by a stable coin like the US Dollar so there’s no volatility worries in loan calculation.  This is really a micro-finance product they are just using Crypto as the underlying technology.  Frankly, programming a system like this using the US banking system, would be expensive, cumbersome, time consuming, and who knows what it might look like after all the regulatory approvals.

We should note that Constant began as a stable coin and evolved into the lending platform it is now – a healthy and normal evolution.  Borrowers need money and lenders want return on their money.  The platform charges a reasonable 1% fee on all transactions.

Pre IPO companies like Circle are snapping up startups, according to Crunchbase Unicorn Circle has already purchased SeedInvest, Poloniex, and Trigger Finance.  Are companies like MyConstant next?  As the platform proves itself, it may be an easy acquisition target for some of the Crypto ‘big boys’ to integrate into their existing ecosystem.  That’s what companies like Circle are likely waiting on.  Why invest in R&D when you can let the market do that, and then swoop down with boatloads of cash for a quick sale and acquisition? 

That’s the Microsoft strategy, who bought more than 10,000 companies in their lifetime.  It may be the strategy used by many of the larger firms in Crypto, copying the success of Microsoft.  It has always been a big question, why don’t firms engage in more R&D.  Perhaps this is why.

In case you don’t know what are stable coins, here’s a great explanation from Coin Telegraph:

Stablecoins are a new type of cryptocurrency that often have their value pegged to another asset. These coins can be pegged to fiat currencies such as the United States dollar, other cryptocurrencies, precious metals or a combination of the three. Fiat seems to be the most popular option in the marketplace right now, meaning one unit of a stablecoin equals $1. Stablecoins are designed to tackle the inherent volatility seen in cryptocurrency prices. They are normally collateralized, meaning that the total number of stablecoins in circulation is backed by assets held in reserve. Put simply, if there are 500,000 USD-pegged coins in circulation, there should be at least $500,000 sitting in a bank.  With bitcoin suffering abrupt crashes and sudden gains, advocates believe stablecoins help eliminate doubt about conversion rates — making cryptocurrencies more practical for buying goods and services.  Examples of the best-known stablecoins include tether (USDT), trueUSD (TUSD), gemini dollar (GUSD), and USD coin by Circle and Coinbase (USDC). Demand for such coins has been growing. In December, Cointelegraph reported claims that four major stablecoins had clocked up $5 billion in on-chain transactions within just three months — enjoying a 1,032% surge in November compared with two months earlier.

The reasons to use stable coins are clear – and it’s also a logical obvious fit for a lending platform.  There’s no reason to mention that lending is a growth business; lending is the main service of the banking environment in the world.  Only in the US, personal loans equal $138 Billion with a “B” according to CNBC:

Total outstanding U.S. consumer loans hit a record last year, driven by digital-first lending options. Financial technology, or fintech, companies now make up 38 percent of the personal loan market — up from just 5 percent five years ago, according to new data from TransUnion. “The rapid growth in consumer loans sits squarely on the shoulders of fintechs,” says Jason Laky, senior vice president and leader of TransUnion’s consumer lending line of business.

Fintech makes up 38% of that, and Crypto certainly is Fintech.  So what’s next?  It’s a simple move, to start using Crypto for your borrowing needs.  Bitcoin has already been used to purchase real estate.  There are even services that will facilitate Crypto purchases of real assets.  So Crypto lending isn’t so far-fetched after all.  Perhaps, as explained in Splitting Bits in 2017, we are all just one byte away from a Blockchain based financial system.