Mid-Week Updates, No 12
Jiang Zemin, Markets and Iran
Jiang Zemin (1926-2022)
To me he will always be the man who took Zhao Ziyang’s place when he was ousted as General Secretary of China’s communist party. Also the man with the iconic glasses and the dyed hair. The man from Shanghai handpicked by the leadership after the Tiananmen massacre which at that point was still under control of Deng Xiaoping, it was up to Jiang Zemin to restore order. And not only that, he would eventually become president and lead China out of its dark and impoverished communist past onto the road of prosperity. He effectively became one of the key managers of Deng’s vision for China. And he also became the man to not only oversee the return of Hong Kong and Macau, he was also the first to voluntarily step back from his leadership role when his term was up.
In the days ahead you will see lots of mourning and Chinese citizens laying flowers in his memory. Remember that they are not just morning Jiang, they may very well be sending a very subtle message to the man who has done away with term limits. Jiang Zemin and Hu Jintao were effectively an interregnum between the old revolutionary leaders (Mao, Deng) who could only leave office once the grim reaper called them and Xi Jinping who has adopted a similar retirement plan. Despite Tiananmen and the omnipresent repression in China, history will likely have a relatively mild verdict on the Jiang years.
The Markets …
… lifted yesterday following Powell’s speech where he indicated a slower pace of interest rate hikes as inflation appears to be tapering off a bit. Similar numbers are coming from Europe. It is fair to say that 2022 was the year of the great adjustment, the post-Covid hangover had to be digested. What will continue to create headaches are the ongoing labour shortages which no doubt will keep rates at the current elevated level, but it does point to an economy that is not doing all that badly. Rather an unusual combination of factors have created a difficult economic environment. Anecdotally I hear positive noises on investment and mergers & acquisitions where people are expressing confidence on 2023. Remember there is lots of capital on the sidelines still, it may start trickling in as we enter the new year.
Iran
Much has been said about Iran’s soccer team at the World Cup in Qatar. From refusing to sing the national anthem as a way to protest in their first match, to the threats they and their families received in order to compel them to sing in their subsequent games. And rumours on how protesting fans in Qatar were intimidated before and after the games. But, Iran lost to the US and is now out of the tournament. Yes, the US, the country proclaimed by the ruling ayatollahs as the dreaded enemy. But look how the game ended. Whatever else happens during the tournament in Qatar, this transcends all sports and all politics. It is called humanity:
