Sometimes there are no smokes and mirrors.
This is hilariously ironic considering Alibaba is almost 100% smoke and mirrors.
"If, by some strange, impossible happenstance, I'm completely, totally wrong.... and Alibaba isn't actually the tip of the spear for the CCP's full frontal assault on the Western Financial System, the only other conclusion I can possibly come to is that Alibaba the goofiest, most convoluted, opaque, mis-managed accounting mess and business structure in history. That, unfortunately, is the "best case" scenario."
"Yet, Alibaba (BABA) continues to trade higher as increasing numbers of shares find their way into US Financial/Custodial Institutions. Because its value, like the RMB, at least for a time, is pegged/driven by the CCP through off-shore mechanisms, the risk of collapse grows larger by the day. At some point it all has to come tumbling down. But when? That's the immediate, multi-trillion-dollar question."
And read this if you want to get an idea of where their revenue comes from:
But how many of those domestic customers get their own paycheck from exports? China is moving towards a more domestic-focused economy, but exports are still a big deal for them.
If that assumption is reasonable, it is difficult to describe a situation in China where the customers get worse off due to reduced exports without the leadership going crazy (like shutting down all their factories and everyone sitting at home sulking instead of selling their goods locally at a discount). If they pretend the American dollar is the be-all-and-end-all they will get into trouble, but it is hard to see why they would do that.
I'd speculate the situation would be OK for any shareholders in China, where any on-paper drops would be countered by improved real access to stuff, and probably bad for shareholders in America where on paper drops may as well be real. Of course, real life is so complicated it is who can even guess?
Total overall revenues:
Alibaba reported revenues of RMB80.9 billion (US$12.23 billion), up 61% from the prior-year quarter. Also, revenues came in slightly above the Zacks Consensus Estimate of US$12.25 billion.
Total revenues related to selling exports:
· International commerce retail business (6% of the total revenues) - Revenues in the quarter were RMB4.3 billion (US$652 million), increasing 64% year over year. The increase was driven by robust GMV growth in two marketplaces, namely Lazada and AliExpress.
· International commerce wholesale business (2% of the total revenues) - This business generated revenues of RMB1.8 billion (US$278 million), increasing 14% from the prior-year quarter. The growth was due to an increase in the number of paying members on alibaba.com platform.
So a total of 8% of total revenues were due to selling exports. Plus, it's not clear how much of that revenue is from Lazada, which is not subject to US tariffs because its target market is Southeast Asia. If anything, everyone is suffering from US tariffs, so Lazada can only grow because it's a trade relationship that doesn't depend on the US.
BTW, AFAIK Ma seperated Alipay from the Alibaba entity.
The reason I'm suggesting that they're intentionally ignoring this fact is that it's actually in the information presented in the article. For example, the video they link in their section about the logistics explains this in detail.
This is also not true. China, like all developing economies that have reached the global stage, allows WFOEs and FICEs . There's significant taxes involved but these taxes are being decreased all the time .
(It's quite remarkable the stuff people believe about doing business in China. Really have to wonder where these ideas come from.)
Really recommend this write up on VIEs and Alibaba: https://www.hbs.edu/faculty/conferences/2017-imo/Documents/M...
I was with a 30-year-old Chinese lady last night. Entrepreneur... I asked who her role models are, and she said "Only one... Jack Ma".
Fan Bingbing is another example, and countless others.
And it proves that China, is still no different to how it operate in the Qing dynasty or all dynasty before hundreds to thousands years ago.
But of coz my guess are many of these stories don't get covered by Western Media.
In China as a business person it's extremely dangerous to become too powerful or rich, especially now. Maybe you could have gotten away with it 15 years ago. China of today is very different from China of the late 1990s and 2000s.
If Jack Ma had held onto his original contrived Ant position, he'd nearly be the richest person on earth, with a potential chokehold on finance, industry and retail in China. That position could have plausibly been worth several hundred billion dollars to him personally over time. That's not something you want to aspire to currently in China.
That thing you're building? Find someone who's really good at the current way it's done.
Sit and watch them. Don't talk, just observe and understand.
After you've sat silently for awhile, then ask any questions you have.
Your product will be immeasurably better in at least one way.
Also, after he graduated with an English degree, he had absolutely no qualifications to get a professional job and he resigned to being a lecturer until he got into Cheung Kong GSB.
To me, it feels like your comment isn't rooted in any foundation and is a manifestation of personal experiences and insecurities, I'm assuming a result of the American higher ed system and its "super expensive degrees".
However cynical you may be, please don't let your past experiences misguide your hope for future improvement.
Who knows, maybe we can have an intelligent conversation, expand our knowledge and understanding, and not just repeat partisan small-government talking points.
I am wondering how many years has China left, unconstrained kleptocracy can't last more than a few decades.
"I have no idea how PWC can audit this mess for the fees they charge. Every year, the hours of work required expand geometrically and the fees come in at about what you'd charge to audit a large US/Domestic publicly traded Car Dealership. Keep this in mind, Alibaba now has 920 Operating Units (Did I mention that?) scattered all over the globe, a massive Capital Structure "Enhancement", with many of these WFOE's and VIE's located in the PRC and all of these entities are audited from the PWC Hong Kong office. If I were trying to audit this we'd have substantial travel, staff time and training on both IFRS and GAAP accounting treatment and methods. All to be researched and applied to myriad business combinations, sales, mergers and divestitures. Incredibly, PWC Hong Kong does the whole thing, including tax services and consulting for US$12.8 million dollars ($13,900 per business unit @ US$12.8 million/920), up from US$ 8.4 Million the prior year. PWC is the the new "Dollar Store" of public accounting."
> As Alibaba has flourished, Mr. Ma has talked many times about how he did not want to spend his whole life at the company, saying he would retire one day and go back to teaching.
Claim going perpendicular to experience of every Alibaba employee I met.
A person who was singlehandedly running both business development and operations for all of Aliexpress has left the company after 5 years without a promotion.
The co has a reputation for squeezing work enthusiasm out from even most spirited people around.
It's possible it was just some low-quality middle managers underneath the talent which blocked his recognition as well.
Jobs and wages are not finite resources either. If the person was legitimately producing value for the company, well beyond his own 'cost' to the company then smart management should have been able to find a way to keep him happy. Sometime it even comes down to communicating your value and making sure you're noticed.
Working hard isn't always sufficient on it's own sadly. Sometimes easy for managers to miss and believe that the other people chomping at the bit for the position are just as capable.
Aliexpress was created with explicit intention of barging into US market, yet it ended up with them making more money in Russia than in every other market combined.
Of course overtime is not paid...
Probably opposite, not perpendicular then :)
I'd expect George P. to remember that from the dozens of PhDs.
I just checked the numbers and indeed, relative amount of money spend on philanthropy seems to be increasing, I couldn't find any global numbers though.
I'm talking about in real terms, standard of living has gone up across the world for decades, even as the population has grown.
It has gone up in the US.
The poor in the US are radically better off today than they were 40 or 50 years ago.
Medicaid only came into existence in 1965. Today, after decades of expansion, it covers the bottom ~22% of people in the US with free healthcare.
The Food Stamp Act came into existence in 1964. In 1990, 20 million people received food stamps. Today, after decades of expansion (including large expansions under the Bush Administration, an unpopular fact), it covers 40 million people. The SNAP program has gone from paying out $15 billion in 2001, to $63 billion in 2016.
The real per capita income transfer, for welfare policies, has nearly tripled since 1980. The US social safety net is almost infinitely better than it was in ~1967 near the peak of global US economic dominance post WW2. There was hardly any social safety net back then. And it's considerably better than it was in 1980 or 1990.
The cynics take this to mean the US economy is much worse off than in eg 1980 or 1990 (Rhetorically does that mean Denmark's economy is collapsing? Their welfare state is far larger than the US welfare state as share of the economy). That's not the case, the US welfare state has been expanded to include more people. That has helped push homelessness and poverty to near record lows currently.
I'm perfectly fine discussing the outcome of systems, or the individual aspect of systems, but you can't compare the net outcome of system A to the individual problems of system B
Edit: before anyone questions what my hisses might be they are as follows. I believe that capitalist US ended up better on a whole than communist USSR for the betterment of humanity. I also believe its inaccurate to different aspects of their systems and pretend one way was wholly better than the other
No, but their parents had longer to save. The average person born in 1990 has a higher average real wage than their parents did. Given the novelty of college debt, it’s difficult to say much more, but mean statistics point to a wealthier American population at all levels today than any time before. The issue is the rich have gotten richer faster, not that the poor are getting poorer.
Mean, yes, median, less so.
> but mean statistics point to a wealthier American population at all levels today than any time before.
“mean statistics” don't tell you anything about “at all levels”, and are misleading because of the increasing top-heaviness of the distribution.
Median quite so . Every class of American is getting richer, just not as fast as the ultra-rich.
Even leaving aside that outside of abject, starvation-level poverty, relative deprivation is a bigger contributor to disutility than absolute deprivation, such that everyone getting richer in absolute terms but the already rich getting rich faster would actually be a bad thing even if true.
Buffet had a nice, pretty old article about why leaving huge loads of money to your children is a bad idea but I can't find it at the moment.
Buffett is not cutting his children out of his fortune because they are wastrels or wantons or refuse to go into the family business -- the traditional reasons rich parents withhold money. Says he: ''My kids are going , to carve out their own place in this world, and they know I'm for them whatever they want to do.'' But he believes that setting up his heirs with ''a lifetime supply of food stamps just because they came out of the right womb'' can be ''harmful'' for them and is ''an antisocial act.'' To him the perfect amount to leave children is ''enough money so that they would feel they could do anything, but not so much that they could do nothing.'' For a college graduate, Buffett reckons ''a few hundred thousand dollars'' sounds about right.
That’s in 1986, so the equivalent figure is more like a million bucks and change today.
I’m sure Buffett and Gates are doing it for other reasons. But generic_billionaire donating paltry amounts of money is just buying goodwill from the public, other rich people, the local community, politicians, etc. A rich person donating 1% of their wealth each year may be donating a lot in absolute terms but very little relative to what they have
And when someone donates a lot of money, we just say they are buying PR and have calculated the ROI like the terrible capitalist they are, with zero evidence at all this is the case.
It's like running a company nowadays and wondering why your employees have no loyalty. Yea, maybe you're the one group that has acted honorably, but 90% of your peers have been rat bastards and you can't be surprised if the average person assumes you are too
Rather, the entire capitalist system, tax loopholes, and corrupt politicians have lead to increased disparity between the rich and poor.
I'm fine with the claim that some people who create value and are net-positive, such as many of the rich people, absolutely should have significant wealth.
However, they should not have the level of wealth they have now, wealth that is enough to feed every homeless in their cities for centuries, wealth that could house and clothe the needy for decades....
We should not have loopholes like the estate tax reductions which mean even after they die, their family line can greedily clutch onto the money for generations to come, creating a severe class divide.
Just because we are angry with the system does not mean we all think rich people are innately evil.
Also, we have all the evidence we need to condemn the current distribution of wealth: the current distribution of wealth is self-evidently disgustingly bad.
Preferential attachment in the absence of proactive redistribution leads to accelerating inequity.
As you know, too much inequity undermines democracy.
If we want a Liberal, democratic society, we need progressive policies. Some mechanisms to offset windfall profits, level the playing field. Debt jubilees, entitlements, UBI, Keynesianism, something.
While I'm (very) sympathetic to "late stage capitalism" rhetoric, I think it's besides the point. Inequity predates capitalism and won't be remedied by eliminating capitalism.
The actual statement is "The gap between the rich and poor is widening".
Of course the rich will be rich. That's a tautology.
They don't have to be rich at the expense of the rest of society, which is where we're at now.
Yes, that's correct. What, you think Bezos and Ma are genius visionaries for coming up with the idea of buying things on the internet? A democratically managed worker's co-op could have accomplished the same things as Amazon and Alibaba with almost none of the disgusting exploitative labor practices and wide scale human suffering.
I give a higher percentage of my income to charitable causes than any of these "philanthropists" and I manage to not waste an insane amount of money on a disgustingly wasteful life of luxury at the same time, but for some reason I don't have an army of sycophants defending my every action on the internet.