In Chinese, the Emphasis is on the Second Syllable

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To inspire and nurture the human spirit – one person, one cup and one neighborhood at a time.

That’s the Starbucks corporate mission statement. LOL.


Starbucks Faces An Escalating Crisis In Hong Kong  [International Business Times]

Starbucks’ stores in Hong Kong were recently burned and vandalized amid the escalating protests and riots across the city. The protesters justified the attacks by claiming that Maxim’s Group, which owns Starbucks’ licenses in Hong Kong and Macao, supports Beijing and opposes the protests.

The attacks started after Annie Wu, the daughter of Maxim’s founder, spoke out against the protests during the UN Human Rights Council meeting in mid-September. Speaking to CGTN (the overseas arm of China’s state-backed CCTV), Wu called the protests “riots” and expressed hope that the Hong Kong police force would “maintain law and order.”


The point of this article is that Starbucks is “between a rock and a hard place” when it comes to Hong Kong, as the franchisee who owns the HK stores – Maxim’s Group – is kissing Xi’s ring, which has resulted in some store damage from protesters, plus something of a Starbucks boycott in the city.

This is a bad take.

The truth is that there’s no rock and no hard place in the store damage or the HK semi-boycott.

The lost sales on 174 HK-based Starbucks are the cheapest insurance policy the company could possibly buy against an NBA-like disruption on its 3,748 other Chinese stores.

Even better, because the Starbucks stores are franchised to Maxim’s Group, who is more than happy to do the dirty work here, Starbucks itself can remain pleasantly anodyne.

Starbucks itself can wallow publicly in its mission statement of “inspiring and nurturing the human spirit” … everywhere except Hong Kong, that is.

Don’t get me wrong … it’s a very clever strategy. Very coyote-ish.

But ultimately, I think this strategy will prove to be too clever by half.

Why?

Because when you’re dealing with a government that says this …

We believe that any remarks that challenge national sovereignty and social stability are not within the scope of freedom of speech.

… then ultimately you’re going to be forced to make a choice.

Do you want to preserve your authenticity and your brand, or do you want to preserve your earnings guidance and share price?

Choose one. You can’t have both.

THIS is the rock and the hard place that Starbucks and the NBA and Activision and Disney and GM and every other US corporation with consumer-facing products in China now find themselves between.

No one will believe me when I say this, but it’s the truth:

This is bigger than tariffs.


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chudson
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chudson

This is almost the same as almost any registered financial institution, and much more so with any cryptocurrency MSB. You have a license to protect.

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Barry Rose
Member
Barry Rose

Agree. However, Starbucks management has a bad habit of opening their mouths and inserting their feet. It will be interesting to see how long the Seattle SJW’s can duck & cover.

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Desperate_Yuppie
Member
Desperate_Yuppie

You don’t have to be a customer of theirs to use their bathroom or their WiFi. Because you are special and they care about more than your money. Also they are fine keeping their mouth shut when the Chinese government is locking up political prisoners, oppressing religious freedom of Muslims and Christians, and controlling the flow of information. Because unlike the homeless vagrant in Seattle, the targets of systemic oppression *in China* are not special. I’m interested to see how they square this circle. Because they cannot pretend like their brand of wokeness is compatible with the current Chinese regime. But I bet they spend a lot of money on a PR firm to craft a message that says otherwise. Will be fascinating to watch.

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BobK71
Member
BobK71

The conflict between the US and China is similar to the one between Britain and Germany a century ago.

In both cases, a financially leveraged great power is trying to contain a rising great power that has been using its real productivity to prop up the money and debt of the former.

The real problem for the reigning hegemon is that the rising power is not friendly enough to want to continue to carry its water, to continue to believe in the value of its issued assets and keep it afloat. That the rising power is a dictatorship is all the excuse required to beat it down in any way one can.

In the case of Germany, the flimsiest of excuses were used by Britain to join World War I that resulted in massive death tolls for Britain. In the US, freedom of expression was suspended (the Espionage Act of 1917 made it illegal to write against the US joining the war.) Let us hope this time we don’t eventually have all-out war.

Indeed, this is serious business. Not many people truly appreciate the financial fragility of the global imperial system, or the ability of an unfriendly big state to destroy it. All efforts must be used to contain that state.

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The Daily Zeitgeist

The Common Knowledge of Inflation

By Ben Hunt | October 11, 2019 | 3 Comments

“Until an hour before the Devil fell, God thought him beautiful in Heaven.”

That’s my fave Arthur Miller quote, from The Crucible.

Our Devil is inflation, and today we think him beautiful in Heaven. You’re not ready for the Fall.

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Imagine That.

By Ben Hunt | October 7, 2019 | 6 Comments

They keep us sick, you know.

They keep us hooked on this framing of something-something Republicans vs. Democrats.

The cure? Take back your distance.

You’ll find your local library to be the perfect place to start.

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Fear Factor

By Ben Hunt | October 4, 2019 | 3 Comments

Yeah, yeah … I know that the Deep State is a powerful adversary. Or at least that’s what my MAGA buddies on twitter keep shouting at me.

But I’ll take the Deep State as an enemy any day compared to Steve Schwarzman and the rest of the Private Equity Tong looking to keep their carried interest tax treatment.

I bet Elizabeth Warren feels the same way.

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When the Product is Free, You’re the Product

By Ben Hunt | October 2, 2019 | 3 Comments

This isn’t a note about Facebook. It’s a note about online brokerage fees. And it’s a note about Facebook.

As a consumer … don’t cry for Argentina, and don’t cry for the online brokerages who are taking their commission fees down to zero. As an investor in or an employee of ANY financial services company, on the other hand … maybe it’s time for a good cry and a hard look at your future prospects.

“Yay, free!”

Read more

The Emerging Market Zeitgeist is Broken

By Ben Hunt | September 30, 2019 | 2 Comments

Yes, Deadwood is the greatest HBO series ever. Don’t @ me. I’m not having it. David Milch is MY President.

And while Al Swearengen is the greatest character of that greatest show, the fact is that it’s another character – George Hearst – who drives the narrative arc for the entire series (and movie).

You see, Deadwood is a show about property rights.

So is the Argentina – IMF show.

Read more

The Right Price of Money

By Ben Hunt | September 27, 2019 | 15 Comments

Overnight repo is where the interest rates that central banks SET meet the interest rates that real economic actors USE.

So what happens when the setting of interest rates becomes a disembodied symbol of governmental will rather than a clearing price of money in the real world? This.

It’s a new common knowledge about central banks, and it changes EVERYTHING.

Read more

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