Saturday, June 27, 2020

Escobar: The India-China, Himalayan Puzzle

The Indo-China border is a strategic chessboard and it’s gotten way more complex...
It was straight from an Orientalist romantic thriller set in the Himalayas: soldiers fighting each other with stones and iron bars in the dead of night on a mountain ridge over 4,000 meters high, some plunging to their deaths into a nearly frozen river and dying of hypothermia.
In November 1996, China and India had agreed not to use guns along their 3,800 km-long border, known as the Line of Actual Control (LAC), which sports an occasional tendency to derail into a Line Out of Control.
Yet this was not just another Himalayan scuffle. Of course there were echoes of the 1962 Sino-Indian war – which started pretty much the same way, leading Beijing to defeat New Delhi on the battlefield. But now the strategic chessboard is way more complex, part of the evolving 21st Century New Great Game.
Indian army marching in 1962 war, during which Indian Air Force was not used. (Indian Defence Review)
The situation had to be defused. Top military commanders from China and India finally met face to face this past weekend. And on Tuesday, Chinese Foreign Minister spokesman Zhao Lijian confirmed they “agreed to take necessary measures to promote a cooling of the situation.”
The Indian Army concurred: “There was mutual consensus to disengage (…) from all frictions areas in Eastern Ladakh.”
A day later, the breakthrough was confirmed at a videoconference meeting of the three foreign ministers of Russia, India and China, also known as the RICs: Sergey Lavrov, Subrahmanyam Jaishankar    and Wang Yi. President Vladimir Putin, Prime Minister Narendra Modi and President Xi Jinping Xi will meet in person on the sidelines of the G-20 summit in Saudi Arabia next November.
And that will follow probably another videoconference special next month, in St. Petersburg, during the combined summits of the BRICS and the Shanghai Cooperation Organization (SCO.)

So How Did We Get Here?

Our Himalayan drama starts way back in October 1947, when the Maharaja of Kashmir signed an Instrument of Accession – joining the dominion of India in return for military support. As much as the Raj, Kashmir was also partitioned: West and North became Azad (“Free”) Kashmir and Gilgit-Baltistan, under Pakistan; the state of Jammu and Kashmir was to become an autonomous part of India; and significantly Aksai Chin, historically part of Tibet, became part of China.
CIA map from 2002 showing traditional borders of Jammu and Kashmir. (CIA, Wikimedia Commons)
On a personal level, this has always been among my top “roof of the world” travel/reporting areas. Not only for the unrivalled, breathtaking  geological apotheosis, but for the people – Hunzakut, Baltistanis, Kashmiris, Tibetans.
Both Kashmirs – Pakistani and Indian – are majority Muslim. Everywhere you go you feel you’re in Central Asia, not India. Barren Aksai Chin is virtually population-free, apart from scattered military posts. Eastern Ladakh, historically and culturally, was part of the Tibetan plateau. The people are Buddhist, and speak a similar Tibetan dialect to the people of Aksai Chin.

Modi’s Move

The root of all contemporary strife is to be found less than a year ago, in August 2019. That’s when the Hindutva – Hindu nationalist, quasi-fascist – government led by Modi unilaterally revoked parts of the Indian constitution that established Jammu & Kashmir (J&K) as an autonomous region.
Narendra Modi in 2008. (Norbert Schiller,World Economic Forum, Wikimedia Commons)
Islamic J&K – heir to a long religious and cultural tradition – was deprived of a parliament and local government and de facto separated from Buddhist Ladakh and its very sensitive eastern border with China. They all fell under direct New Delhi control.
J&K’s characteristics shielded it since 1947 from mass immigration by Hindus. That’s now gone. The game now, for New Delhi, is about engineering a demographic change, turning a majority-Muslim area into majority-Hindu.
And even that might not be enough. For Home Minister Amit Shah, not only what the Hindutva describe as Pakistan-occupied Kashmir (PoK) but also Aksai Chin as part of J&K. They see the whole Kashmir Valley as an integral part of India.
It’s easy to imagine how this goes down in Islamabad and Beijing.
Add to it the interlocked strategic importance of the Indus river system – Pakistan’s main source of water: it starts in the J&K mountains. So it’s no wonder that for Islamabad, the whole province should be part of Pakistan, not India.
Recently, the action across the Line of Actual Control has been breathless.
India revamped the airfield of Daulet Beg Oldie (DBO), located on an old trade route through the Karakoram pass, and crucially only 9 km away from Aksai Chin. That happens to be right on India’s physical link to Xinjiang, and not Tibet.
(PANONIAN, CC0, Wikimedia Commons)
In parallel, India built the 255 km long Darbuk-Shayok-DBO road. This is an appraisal of what is innocently described as the single lane Indo-China border road. What it means in practice is that New Delhi now has more leeway to transport troops and military equipment across the LAC. No wonder Beijing interpreted it as an extra – unwanted – pressure on Aksai Chin.
As India built a new military access road, they had no clue the Chinese had finished their own on Aksai Chin: Highway 219, which links ultra-strategic Tibet to Xinjiang. Highway 219 then links to the legendary Karakoram Highway – which starts in Kashgar, crosses the border and weaves all the way down to Islamabad.
An important stretch of the Aksai Chin was in fact ceded to China by Islamabad in 1963 in exchange for financial and logistical support.
Predictably there has been a steady patrolling/military buildup on both sides. There are as many as 225,000 Indian troops right behind the LAC. That is matched by an undisclosed number of very well-equipped Chinese troops. The Hindu showed satellite images  of Chinese movements at Galwan before the border clash. No less than three Chinese military sub-districts – subordinated to the military in Tibet and Xinjiang – were involved in the skirmishes in Galwan.

It’s All About CPEC

The China-Pakistan border at the Khunjerab pass and the area right to the south, the visually stunning Gilgit-Baltistan, happen to fall exactly into what the Indians call Pakistan-occupied Kashmir (PoK).
Prime Minister Narendra Modi with Chinese President Xi Jinping. (Narendra Modi, Flickr)
There’s absolutely no way Beijing would ever allow any sort of New Delhi regional adventurism. Especially because this is prime China-Pakistan Economic Corridor (CPEC) territory – one of the key nodes of the New Silk Roads, all the way to Islamabad and down to the port of Gwadar in the Indian Ocean.
In the near future, Gwadar will have solidified its direct energy links to the Persian Gulf, and China may even expand them by building an oil/gas pipeline all the way to Xinjiang.
Counteracting China’s New Silk Road nodes, we find, strategically, India’s ambiguous role in both the Quad (alongside the U.S., Japan and Australia) and the U.S. “Indo-Pacific” scheme — essentially a mechanism to contain China.
In practice, and in the name of its own, self-described “strategic autonomy,” New Delhi is not a full member of the Quad. The Quad is such a fuzzy concept that even Japan and Australia are not exactly enthusiastic.
U.S.-India defense “ties” are legion – but nothing really significant, apart from a self-defeating move by New Delhi to cut off oil imports from Iran. To appease Washington, New Delhi prodigiously hurt its own investments in the port of Chabahar — only 80 km away from Gwadar — which until recently was touted as the Indian Silk Road gateway to Afghanistan and Central Asia.
Apart from that, we find – what else – threats: the Trump administration is furious that New Delhi is buying S-400 missile systems from Russia.

Self-Reliance or Containment?

China is India’s second-largest trade partner. Beijing imports around 5 percent of everything made in India, while New Delhi imports less than 1 percent of Chinese production.
Madras regiment of Indian Army. (Mannat Sharma, CC BY 3.0, Wikimedia Commons)
Only two months ago, in an address to the nation about Covid-19, Modi insisted on “self-reliant India” and “human centric globalization,” focused on local manufacturing, local markets and local supply chains.
For all of Modi’s bluster, foreign adventurism is incompatible with India’s tradition of non-alignment – and it would divert much needed efforts towards “self-reliance.”
There was a lot of expectation that India and Pakistan, becoming full-time members of the SCO, would defuse their myriad problems. That’s not what happened. Yet the SCO – along with the BRICS – is the way to go if India wants to become a significant player in the emerging multipolar world.
Beijing is very much aware of imperial containment/encirclement strategies. There are more than 200 U.S. military bases in the Western Pacific. The New Silk Roads, or Belt and Road Initiative (BRI), boast no fewer than seven connectivity corridors – including the Polar Silk Road. Five of these are overland. The only one including India is BCIM (Bangladesh-China-India-Myanmar).
If India wants out, BRI will keep rolling all the way to Bangladesh. Same with the Regional Comprehensive Economic Partnership (RCEP) negotiated by 15 Asia-Pacific nations. They want India in. New Delhi is paranoid that opening up its markets will balloon the trade deficit with China. With or without India, RCEP will also keep rolling, alongside BRI and CPEC.
Quite a few among upper caste ruling class Hindus cannot see that they are being played to the hilt, full time, by the imperial masters as a war front against China.
Yet Modi will have to play realpolitik – and realize that India is not a priority for Washington: rather a pawn in a full spectrum dominance, “existential threat” battle against China, Russia and Iran, which happen to be the three key nodes of Eurasia integration.
Washington will persist in treating New Delhi as a mere pawn in the Indo-Pacific drive for China containment. India – in theory very proud of its tradition of diplomatic independence – would rather use its ties with the U.S. to counterpunch China’s power across Southeast Asia and as a form of deterrence against Pakistan.
Yet Modi cannot possibly bet the farm on the Trump administration following his lead. The only way out is to sit down and talk to his BRICS/SCO partner Xi: next month in St. Petersburg and in November in Riyadh.

Friday, June 26, 2020

Who Is The Next Wirecard?

From Zero Hedge:

Now that the multi-year saga of German fintech megafraud Wirecard is finally over, the pain is only just starting for disgraced German regulator BaFin (with the EU launching an investigation into its borderline criminal "regulation" which punished short sellers while never once looking at the real fraud).
Also let's not forget about the company's "auditor" EY (aka Ernst & Young), which as we learned today could have caught the WireFraud years earlier... if they had only done their damn job.
Which brings us to the next point: who is the next WireCard? To be sure in a time of frenzied buying where fundamentals don't matter (thanks Fed) and lax auditing standards in a world where stocks just go up no matter the news, it is only a matter of time before the other cockroaches are spotted.
One obvious place to start is a look at the other EY clients, which reveals something fascinating: virtually every company that is at the forefront of S&P500 leadership is currently a client of the disgraced auditor: from Apple, to Amazon, to Alphabet and Facebook! The four biggest and most popular companies in the world are currently audited by a company that ignored billions in missing cash for years. In fact, one could go so far as to say that if there is fraud in any one of these 4 names, it could singlehandedly unleash the next market crash.
The list of EY's top clients is shown below (ranked by market cap).
One wonders: if the rating agencies were the permissive factor for the 2008 crisis, will shoddy auditors be the straw that finally bursts the biggest bubble of all time?
But while that is certainly an important discussion, we will save it for another time, and instead shifting back to the most likely next usual suspect to implode under its own fraudulent weight, we go to a report published overnight by Neil Campling of Mirabaud Securities - best known for being the only analyst to correctly have a price target of zero for Wirecard - titled the next "Big Disaster" and which lists 20 warning signs to watch out for when seeking to short the next WireFraud.
1. Massively promotional CEO who actively looks for publicity and spends a lot of time courting Wall Street/investors etc and is very media savvy
2. Huge CEO/Senior Management compensation package NOT tied to cash flow or Earnings but just to Sales and/or the stock price, creating the possibility of egregious wealth creation if the stock goes up a lot. Huge pledging of collateral by the CEO in return for margin loans to fund a billionaire lifestyle
3. Management compensation generally way out of line with peers despite notably less profitability
4. Glossy future projections that have a habit over a long period of being proven to be too optimistic
5. Questionable product quality, ie defects (boon??) or debatable technological leads over similar products
6. Some evidence of self certifying, whether it be through strange international subsidiaries or not having an Auditor or experiencing unusual and slightly sudden end of quarter surges in revenues, up to and including the last day
7. Unusual or unverified and large Receivables in a business where the product is exchanged for cash up front
8. Evidence that the company is existing on a shoestring, not paying Suppliers, Employees, Landlords etc
9. Unusual margin progression, with SG +A going down over time despite a rising global footprint, or GM's staying flat despite much lower ASP's over time, for instance.
10. High levels of Gross Debt. Cash balances not matched by notable Interest Income thereby suggesting they are fraudulent
11. High employee turnover, especially in the LEGAL and FINANCE areas. Co-founders or Board members leaving.
12. Aggressive pursuit via paid third parties and/or “heavies” of any critics or people who have too many questions, which in any case are “boring”
13. Dislike of Hedge Funds
14. Possible Narcissistic Personality Disorder on the part of the CEO. Additional points if he/she uses Twitter a lot
15. Large cabal of outcasts/weirdos/bloggers/Twitter groups who have been saying for years that everything is amiss but just get a lot of criticism because the stock keeps going up ergo they must be idiots
16. Slowing top line growth rate despite all the hoopla and supposed “growth stock” status. Evidence of competitors rapidly eroding unsustainably high market share.
17. Loss making. Ideally never made a profit but likes to pretend it did or failing that, that it will for sure in 2-3 years due to highly questionable new products. But the 2-3 years gets pushed out constantly
18. Extensive use/exclusive use of NON-GAAP Accounting and occasional bridging to get from a Net Loss to a (small) Net Profit via poorly explained one-offs/Other Items/unusually large Credits of some kind in a desperate attempt to get into an Index by illicit means
19. Weak Board, preferably also small and ideally in hock in some way to the CEO, who therefore do his/her bidding. Helps if some of them are related physically to the CEO.
20. Gullible media, gullible analysts and dozens of paid bloggers who produce Price Targets out of nowhere based on “Option Value” or put another way products that are at least 5 years away from having any material impact.
There is one very famour company that checks every single one of the above boxes. In fact, it is a name that is very familiar to our readers. Which is why the only question we have at this point: is PWC starting to sweat?

DraftKings Insiders Dump $596 Million Of Stock On Unsuspecting Robinhood Daytraders

From Zero Hedge:

DraftKings Inc. filed several Form 4s with the Securities and Exchange Commission this week regarding insider selling by the president of the company, Paul Liberman, and others. 
Insider Transactions 
It turns out, as more than 100,000 Robinhood daytraders panic bought DraftKings since its Nasdaq debut in April, soaring 237% in months - Liberman and other insiders dumped a whopping $596 million worth of shares.
Robinhood Track 
On the pump, Liberman sold $31 million worth of stock, with about $15 million left. CEO Jason Robin sold $70 million worth of stock, while director Hany Nada liquidated $37 million. 
Clearly, by now, readers should understand the parabolic rise in DraftKings' shares was nothing more than a spectacular pump - as what comes next is likely the dump. 
But wait, there are more insiders dumping stock: Director Steven Joseph Murray sold $40 million worth of shares, while directors Shalom Meckenzie and John Salter sold collectively around $125 million. 
Howard Lindzon, the co-founder of StockTwits, recently noted the meteoric rise in DraftKings share price happened at a time when most sporting events were canceled because of the virus pandemic:
 "The chart of the day is Draft Kings, which has quadrupled to $12 billion now since it reverses merged into a shell and then changed ticker to $DKNG...unbelievable outcome considering the long regulated road and the fact that NO SPORTS !? Face with tears of joy."
What goes up must come down: Robinhood traders will soon learn a painful lesson on gravity. 

AGS Class Action Notice: Glancy Prongay & Murray LLP Files Securities Fraud Lawsuit Against PlayAGS, Inc.

From Glancy Law

LOS ANGELES–(BUSINESS WIRE)–Glancy Prongay & Murray LLP (“GPM”) announces that it has filed a class action lawsuit in the United States District Court for the District of Nevada captioned Chowdhury v. PlayAGS, Inc., et al., (Case No. 20-cv-01209) on behalf of persons and entities that purchased or otherwise acquired PlayAGS, Inc. (“PlayAGS” or the “Company”) (NYSE: AGS) securities between August 2, 2018 and August 7, 2019, inclusive (the “Class Period”). Plaintiff pursues claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the “Exchange Act”).
Investors are hereby notified that they have 60 days from the date of this notice to move the Court to serve as lead plaintiff in this action.
If you suffered a loss on your PlayAGS investments or would like to inquire about potentially pursuing claims to recover your loss under the federal securities laws, you can submit your contact information at: https://www.glancylaw.com/cases/playags-inc/. You can also contact Charles H. Linehan, of GPM at 310-801-2829, or via email at shareholders@glancylaw.com to learn more about your rights.
On August 7, 2019, PlayAGS reported a net loss of $7.6 million for second quarter 2019 which included a $3.5 million impairment to goodwill and a $1.3 million impairment to intangible assets of the Company’s iGaming reporting unit, due to extended regulatory timelines which delayed revenues.
On this news, the Company’s share price fell $8.99, or nearly 52%, to close at $8.31 per share on August 8, 2019, on unusually heavy trading volume.
The complaint filed in this class action alleges that throughout the Class Period, Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the Company’s business, operations, and prospects. Specifically, Defendants failed to disclose to investors: (1) that PlayAGS was experiencing challenges in its business in Oklahoma; (2) that, as a result, the Company’s recurring revenue would be negatively impacted; (3) that PlayAGS was experiencing challenges in its Interactive business segment, including delays in securing regulatory approvals and relevant licenses; (4) that, as a result of the foregoing, PlayAGS was reasonably likely to record a goodwill impairment; and (5) that as a result, Defendants’ statements about the Company’s business, operations, and prospects, were materially false and misleading and/or lacked a reasonable basis at all relevant times.
Follow us for updates on LinkedInTwitter, or Facebook.
If you purchased PlayAGS securities during the Class Period, you may move the Court no later than 60 days from the date of this notice to ask the Court to appoint you as lead plaintiff. To be a member of the Class you need not take any action at this time; you may retain counsel of your choice or take no action and remain an absent member of the Class. If you wish to learn more about this action, or if you have any questions concerning this announcement or your rights or interests with respect to these matters, please contact Charles H. Linehan, Esquire, of GPM, 1925 Century Park East, Suite 2100, Los Angeles, California 90067 at 310-801-2829, by email to shareholders@glancylaw.com, or visit our website at www.glancylaw.com. If you inquire by email please include your mailing address, telephone number and number of shares purchased.
This press release may be considered Attorney Advertising in some jurisdictions under the applicable law and ethical rules.

Contacts

Glancy Prongay and Murray LLP, Los Angeles
Charles H. Linehan, 310-801-2829
www.glancylaw.com
shareholders@glancylaw.com


Thursday, June 25, 2020

Seattle Sued By Businesses, Residents Over CHOP

From Zero Hedge:

Over a dozen businesses, property owners and residents filed a class-action lawsuit against the city of Seattle on Wednesday over the decision to cede a roughly six-block area to BLM protesters, who then established the Capitol Hill Autonomous Zone (CHAZ) - now known as the Capitol Hill Occupying Protest (CHOP). 
Plaintiffs - which include several property management firms, an auto repair shop and a tattoo parlor, say the absence of police, firefighters and ambulances has subjected them to "extensive property damage, public safety dangers, and an inability to use and access their properties."
That said, the plaintiffs want everyone to know that they support Black Lives Matter "who, by exercising such rights, are bringing issues such as systemic racism and unfair violence against African Americans by police to the forefront of the national consciousness."
In short, they support the movement - just not the harms they've suffered as a result of it.
The occupation began after the Seattle Police Department decided to simply pull out of the neighborhood after days of escalations led to the deployment of tear gas and other crowd control measures. Instead of holding the line, SPD pulled out of the Capitol Hill neighborhood - after which rioters stormed the city's East Precinct and claimed it as their own.
Since then, there have been three shootings on consecutive nights which began last weekend.
In response, Mayor Jenny Durkan said that the city would shut CHOP down - by encouraging demonstrators to leave voluntarily so that police could retake their precinct.
Patty Eakes, an attorney for the plaintiffs, separately told Durkan in a letter Wednesday that she wanted the mayor’s office to provide a timeline by Friday for clearing out the protest and returning police, or the plaintiffs would ask the court for an immediate order that full public access be restored.
“City leadership have been on the ground daily having discussions with demonstrators, residents and businesses and trusted community-based, Black-led organizations to determine a path forward that protects the right to peacefully protest and keeps people safe,” the mayor’s office said in a written statement.
In the class-action lawsuit, filed in U.S. District Court, about a dozen businesses, residents and property owners said they had sometimes been threatened for photographing protesters in public areas or for cleaning graffiti off their storefronts. The owner of the auto shop Car Tender said a burglar broke in the night of June 14, started a fire using hand sanitizer as an accelerant, and then attacked his son with a knife when confronted.
The owner and his son managed to put out the fire and detain the burglar, the complaint said, but police never responded to their 911 calls. A large crowd of “CHOP participants” then came to the scene and forced the owner to release the arsonist, it said. -Washington Times
Other businesses said they were unable to send or receive packages because delivery companies refused to enter the protest zone, or because their loading docks had been blocked by barricades.
Plaintiffs are seeking damages for property damage, lost business, deprivation of their property rights and demand that full public access be restored to their businesses.
Read the complaint below:

Founding Member Of Black Panther Party Destroys BLM/Antifa

Pilgrim’s Pride PPC being investigated for possible violations of federal securities law

From GlancyLaw.com

Glancy Prongay & Murray LLP (“GPM”), a national investor rights law firm, continues its investigation on behalf of Pilgrim’s Pride Corporation (“Pilgrim’s Pride” or the “Company”) (NASDAQ: PPC) investors concerning the Company and its officers’ possible violations of the federal securities laws.  
If you suffered a loss on your Pilgrim’s Pride investments or would like to inquire about potentially pursuing claims to recover your loss under the federal securities laws, you can submit your contact information at https://www.glancylaw.com/cases-application/case-information/pilgrims-pride-corporation/. You can also contact Charles H. Linehan, of GPM at 310-879-1510, Toll-Free at 888-773-9224, or via email at shareholders@glancylaw.com to learn more about your rights.
On June 3, 2020, The Wall Street Journal reported that Pilgrim’s Pride Chief Executive Officer and others had been indicted “for allegedly conspiring to fix prices on chickens sold to restaurants and grocery stores.”
On this news, the Company’s share price fell $2.58, or over 12%, to close at $18.29 per share on June 3, 2020, thereby injuring investors.
Follow us for updates on LinkedInTwitter, or Facebook.
Whistleblower Notice: Persons with non-public information regarding Pilgrim’s Pride should consider their options to aid the investigation or take advantage of the SEC Whistleblower Program. Under the program, whistleblowers who provide original information may receive rewards totaling up to 30 percent of any successful recovery made by the SEC. For more information, call Charles H. Linehan at 310-801-2829 or email shareholders@glancylaw.com.
About GPM
Glancy Prongay & Murray LLP is a premier law firm representing investors and consumers in securities litigation and other complex class action litigation. ISS Securities Class Action Services has consistently ranked GPM in its annual SCAS Top 50 Report. In 2018, GPM was ranked a top five law firm in number of securities class action settlements, and a top six law firm for total dollar size of settlements. With four offices across the country, GPM’s nearly 40 attorneys have won groundbreaking rulings and recovered billions of dollars for investors and consumers in securities, antitrust, consumer, and employment class actions. GPM’s lawyers have handled cases covering a wide spectrum of corporate misconduct including cases involving financial restatements, internal control weaknesses, earnings management, fraudulent earnings guidance and forward looking statements, auditor misconduct, insider trading, violations of FDA regulations, actions resulting in FDA and DOJ investigations, and many other forms of corporate misconduct. GPM’s attorneys have worked on securities cases relating to nearly all industries and sectors in the financial markets, including, energy, consumer discretionary, consumer staples, real estate and REITs, financial, insurance, information technology, health care, biotech, cryptocurrency, medical devices, and many more. GPM’s past successes have been widely covered by leading news and industry publications such as The Wall Street JournalThe Financial TimesBloomberg BusinessweekReuters, the Associated PressBarron’sInvestor’s Business DailyForbes, and Money.
This press release may be considered Attorney Advertising in some jurisdictions under the applicable law and ethical rules.
Contacts
Glancy Prongay & Murray LLP, Los Angeles
Charles H. Linehan, 310-801-2829
1925 Century Park East, Suite 2100
Los Angeles, CA 90067
www.glancylaw.com 
shareholders@glancylaw.com