Red Ponzi Defaults

Like Red Ponzi issues? Like cliff diving? Catching falling knives?

As WSJ reported in their story, it’s been a lot of “unwelcome surprises” for those who believe Red Ponzi financial statements (too funny – there are such people).

Sort of like those who believe there is no voter fraud.

Yongcheng Coal & Electricity Holding Group Co. defaulted last Tuesday by failing to repay a maturing short-term bond worth 1 billion yuan, or the equivalent of $151 million.

That’s a “state-owned” coal mining company a triple-A credit rating by China Chengxin International Credit Rating, a major rating agency in China. Then again, in the Red Ponzi these top grades are far more common.

Then there wasHuachen Automotive Group Holdings Co. failed to repay another 1-billion-yuan bond. Huachen Automotive is the parent company of Brilliance China Automotive Holdings Ltd. , BMW AG’s joint-venture partner in China. Its last financial report showed cash holdings equivalent to $7.6 billion.

Time and money certainly “flies.”

As for the “good news/bad news” joke in all these things,

Fitch says the number of defaults by China’s state-run firms is expected to rise marginally next year as the central bank has shifted toward a more neutral policy stance amid an economic recovery.

“Don’t be evil” (unless you’re Google)

“Apparently, Google does not deem it unethical to fire an employee for expressing the research-based view that differences between the sexes/genders may include occupational proclivities. Google must not consider it unethical to blacklist conservative or otherwise nonleftist news sites, websites, and users. Google must believe that autocompleting searches with patent nonsense represents the highest ethical standards. Google maintains that factual search results representing the world as it is amounts to “algorithmic unfairness” and changing them to desired results using “Machine Learning Fairness” is highly ethical. That is, nonideological, nonaltered search results represent unfairness, while fairness is the result of informational affirmative action results manipulation—in some cases. Algorithmically ranking search results in favor of leftist or left-leaning politics and down-ranking conservative or right-wing sites is most ethical. It must consider rating the “Expertise/Authoritativeness/Trustworthiness” of websites using Wikipedia as meeting the highest ethical standards.”

Banana Republic News Update: “We’ve identified mathematically the exact algorithm they’ve used—and planned to use from the beginning” that allegedly switched votes to Biden”

“We’re getting ready to overturn election results in multiple states,” Powell said on Fox Business, adding that she has enough evidence of election fraud to launch a widespread criminal investigation.  “I don’t make comments without having the evidence to back it up.”

It’s on like Donkey Kong.

Trump Lawyer Sidney Powell: ‘We’re Getting Ready to Overturn Election Results in Multiple States’

Commercial Loan Demand Crash

Last quarter, we saw collapsing consumer loan supply, tighter loan conditions, and consumer demand falling to record low levels.

That was then.

This is now. the latest round of bank earnings saw a collapse in loan loss provisions across the US banking sector, which miraculously plunged from near all time highs back to pre-covid levels in the span of just a few weeks.

True in C&I and real estate.

Despite that “open for business” attitude in the banking sector, not many takers.

For most Americans, the economic environment is depressing with C&I loan demand now at levels last seen just around the Lehman crisis.

With consumption-funding loans facing covid closures, what can one expect for the broader economy?

Deja vu

New York Times, February 19, 1994

“Saying Philadelphia’s election system had collapsed under “a massive scheme” by Democrats to steal a State Senate election in November, a Federal judge today took the rare step of invalidating the vote and ordered the seat filled by the Republican candidate.

“In many instances, according to Republicans who testified during a four-day civil trial last week, Democratic campaign workers forged absentee ballots. On many of the ballots, they used the names of people who were living in Puerto Rico or serving time in prison, and in one case, the voter had been dead for some time.

“‘Substantial evidence was presented establishing massive absentee ballot fraud, deception, intimidation, harassment and forgery,’ Judge Newcomer wrote in a decision made public today.

“The district, which includes white, black and Hispanic neighborhoods, is overwhelmingly Democratic by registration. Nonetheless, campaign workers testified that widespread voter apathy had prompted them to promote a ‘new way to vote’ to insure a victory.

“Indeed, the two Democrats on the three-member board of elections, an elected body, testified that they were aware of the voter fraud, had intentionally failed to enforce the election law and had later tried to conceal their activities by hurriedly certifying the Democratic candidate as the winner.

“Judge Newcomer ordered that Mr. Stinson, a 49-year-old former assistant deputy mayor of Philadelphia, be removed from his State Senate office and that Mr. Marks, a 36-year-old lawyer and former aide to United States Senator Arlen Specter, be certified the winner within 72 hours.

“‘This is extraordinary relief,’ Judge Newcomer wrote. “However, it is appropriate because extraordinary conduct by the Stinson campaign and the board tainted the entirety of the absentee ballots.”

“… some election experts noted today that there have been many larger cases of voter fraud in Chicago and Louisiana in the 1970’s and Alabama in the 1980’s.

“The case involving the Philadelphia seat, however, may be the largest example involving fraudulent absentee ballots

Georgia On My Mind

“In an Oct. 11 order, just weeks prior to the presidential election, U.S. District Judge Amy Totenberg agreed with the concerns associated with the new Dominion voting system, writing that the case presented “serious system security vulnerability and operational issues that may place Plaintiffs and other voters at risk of deprivation of their fundamental right to cast an effective vote that is accurately counted.”

Pre-Election Concerns Over Dominion Voting Systems Highlighted in Georgia Lawsuit

“Pennsylvania is irredeemably compromised”

“The thrust of their legal argument doesn’t hinge on the numbers of fraudulent ballots cast, but on the inconsistent and illegal application of Pennsylvania election law, which dilutes legally cast votes — so-called disparate treatment, from which the U.S. Constitution is supposed to protect us.

“The other key legal argument is that those changes in the election law, which were implemented by an unelected appointee of Pennsylvania’s executive branch, namely Secretary of the Commonwealth Kathy Boockvar, were an impermissible usurpation of the legislature’s prerogative even if Pennsylvania’s judicial branch approved them.”

Grand Solar Minimum (2020-2053)

Valentina Zharkova is a Professor in Mathematics at Northumbria University. She specializes in solar physics and has focused on testing low frequency coupled dynamics with atmospheric-terrestrial-oceanic effects.

In the referenced opinion piece, Dr. Zharkova uses newly discovered solar activity proxy -the solar magnetic field – to demonstrate the Sun’s entry into the modern Grand Solar Minimum (2020–2053). The predicted low frequency down-cycle will lead to a significant reduction of solar magnetic field and activity comparable to that experienced during the Maunder minimum. This reduction will likely lead to noticeable reduction of terrestrial temperature.

Sunspot magnetic fields take on a toroidal topology while solar background magnetic field forms a poloidal field.

Applying Principal Component Analysis (PCA) to the low-resolution full disk magnetograms captured in cycles 21–23 by the Wilcox Solar Observatory, Zharkova’s research team discovered two principal components of this solar background magnetic field.

The modulus summary curve obtained from the summary curve are shown in the top plot as a black curve. The bottom plot presents the modulus summary curve associated with the sunspot numbers derived for cycles 21–23.

So what does all of this mean?

Well, first off, let’s put this all in context.

The flagship IPCC GHG model is CMIP5. This model has never passed backtest against history.

One reason for this poor performance is IPCC limited the solar effect to total solar irradiance (TSI). For focusing on TSI, IPCC ignores the solar-terrestrial dynamics associated with the solar magnetic field. Since TSI doesn’t vary much, that assumption leaves only GHG concentration to drive atmospheric warming (and cooling) since 1850.

The problem is there isn’t enough warming coming out of GFG ECS parameter estimates (citations available). Thus, the statistical correlation between warming and GHG concentration is weak. Measurable but not material.

So, something else is driving the observed warming and cooling observed in the HadCRUT4 post-1850 data used in CMIP.

Zharkova argues the missing driver of warming and cooling utilizes both the TSI amplitude of a solar cycle and the leading magnetic polarity of solar magnetic field.

That driver looks like this – cyclical with a periodicity much longer than the 22-year high frequency solar cycle:

What do these low frequency cycles mean?

Well, for one thing, they explain history better than IPCC CMIP5.

“This discovery of double dynamo action in the Sun brought us a timely warning about the upcoming grand solar minimum 1, when solar magnetic field and its magnetic activity will be reduced by 70%. This period has started in the Sun in 2020 and will last until 2053. During this modern grand minimum, one would expect to see a reduction of the average terrestrial temperature by up to 1.0°C, especially, during the periods of solar minima between the cycles 25–26 and 26–27, e.g. in the decade 2031–2043.

“The reduction of a terrestrial temperature during the next 30 years can have important implications for different parts of the planet on growing vegetation, agriculture, food supplies, and heating needs in both Northern and Southern hemispheres. This global cooling during the upcoming grand solar minimum 1 (2020–2053) can offset for three decades any signs of global warming and would require inter-government efforts to tackle problems with heat and food supplies for the whole population of the Earth.”


Zharkova, V. (2020). Modern Grand Solar Minimum will lead to terrestrial cooling. Temperature (Austin, Tex.), 1–6.