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Sheldon Adelson disciplines Trump Over the Trade War

It appears Sheldon Anderson scored a de factor point against the trade war. If that is the case, then traders will be excited to know that Macau stocks might make an entry. However, before this becomes a reality, we have October to live through.

There are potential risks at play when it comes to buying Macau now, even if we assume that the China/U.S trade war has hit a détente. The most volatile is Hong Kong, and the situation continues to boil.

It is likely that things might erupt in a week or so when the Chinese communist party begins its celebration of Mao’s triumph over the Chiang Kai-Shek. The whole affair might turn out into a provocative and bombastic, particularly for Hong Kong, which is already beaming with frustration.

Adelson states that he has been an open critic of Trump’s for his views on online Gambling. He also stated that he has sound knowledge of how economies work, and the things he has achieved over the years are enough proof. His success did not come from hustling the crown the way the president does.

Adelson called up the president, asking him to go slow on the trade war. It is not clear exactly what he put out there, but the fact is that there is a phone conversation between the two on the mainstream media, meaning one of them intended for the conversation to get out there.

It is possible that Adelson is the one who leaked the conversation because Trump would have nothing to gain from it. The phone conversation makes things feel as though his financiers were schooling him.

The leak’s intention is to calm things down between China and the U.S and to assure everyone else that things are perfectly under control.

Adelson’s license for the Macao casino is expected to expire in three years’ time. He is fighting to ensure the president does not ruin his businesses. The president is known to have destroyed venture in the past, and Adelson does not intend to be one of his statistics.

From a personal perspective, Adelson has reason to voice his views. According to the Hill report, U.S owned entities with bases in china have been cautioned by the state media that they are likely to be victims of the president’s abhorrent behavior. That can mean anything, especially now that Adelson understands what it feels like to almost go bankrupt. His fortune shrunk by more than 93 percent by close of the last financial crisis.

The hill also stated that there was a conversation, days ago, after Trump’s tantrum on twitter. He had stated his intention to raise trade tariffs by the start of October. Unfortunately, there is very little that Adelson can do about Hong Kong’s issues.

It seems things are calming down after the chief executive officer, Carrie Lam, finally expunged the extradition bill. Unfortunately, Hong Kong is still seeing flare-ups.

What Hong Kong and Macau watchers are not looking keenly at is the fact that Macau’s money system relied, heavily on Hong Kong’s dollar strength, which is also pegged on the American dollar.

As the Hong Kong economy continues to worsen, from days of serious protests, the Central bank in Hong Kong needs its forex reserves to protect its reliance on the American dollar. Hong Kong has been doing if the last drawdown is anything to go by.

However, Hong Kong has nothing to worry about because they have $433 billion worth of ammunition that they can use to defend the peg. Unlike other parts of the world, Hong Kong has been seen as an increase in interest rates from 2016.

If things calm down by the middle of October, Macau might resurrect and get back to playing in the period leading to America’s general election. The other advantage that the Macau stock might be seeing next year is that if the American president struggles in the polls and his opponent happens to be Elizabeth Warren, the American stock might freak out irrespective of the amount of money being pumped into the U.S banking system.

Thus, although Macau does not seem like an interesting venture now, it should be monitored closely for changes. If things get by calmly through October, when November comes, investors may have an opportunity to dip themselves back into the business.

Source: https://calvinayre.com/2019/09/24/casino/thank-you-sheldon-adelson-for-disciplining-trump/

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About the author

Catherine Wambui

Catherine Wambui

Catherine Nyaga is a freelance writer covering Real Estate and Technology. Her other interests include Nature, pets and accounting. She recently graduate from Nairobi University with a degree in Accounting.

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