Friday, June 06, 2014

2242 Alibottomline

Read a couple of disturbing stories recently. Good examples of how inconsistent we are with our supposed enemies. Okay, not our official diplomatic enemies, they're kind of our friends trading-partner-wise, but kind of our enemies in other ways, like, you know, dominance for world power. Our frenemy. China.

The first story was about the IPO for Alibaba. Alibaba, according to those who should know, is going to be an incredible addition to the stock market. It's the Chinese answer to Amazon, handling 80% of China's online commerce. Last year they moved $248 billion of merchandise. Incredibly, its profit margins are like 45%. It's bigger than Amazon and eBay combined.

Investors are slavering in anticipation. But wait a minute. It's not because of their business model. Or maybe it is. Because their business model is to have the Chinese government subsidize profits by shutting out foreign competition. 

Who doesn't want a piece of that?

The other story was about the U.S. indicting five Chinese hackers. Not just any old run-of-the-mill, long-haired, basement-dwelling, videogame-playing troll hackers either. Actual working-for-the-government military officer hackers. 

This is big stuff, since for the first time the U.S. is openly accusing the Chinese of not just military spying, but stealing actual trade secrets from Westinghouse, Alcoa, Solar World and even the United Steelworkers Union. 

Which, you know, if you're a Chinese company looking to have a business presence in America and the same unfair advantage you have over American companies in China, is pretty smart. Not pointing any fingers or anything, but what does that add to the background prospectus on the IPO for Alibaba?

As an investor, can I count on the Chinese Military to hack for me?

As I recall the story, Alibaba was a pretty clever guy, outsmarting 40 thieves and all...

America, ya gotta love it. 

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