(Washington)

In any interesting twist, President Trump has announced that he may personally testify in his impeachment probe. Trump has indicated he is interested in the idea of being able to set the record straight himself. He says “Even though I did nothing wrong, and don’t like giving credibility to this No Due Process Hoax, I like the idea & will, in order to get Congress focused again, strongly consider it!”. Trump’s comments came at the urging of House speaker Nancy Pelosi’s request for him to testify. The president could testify via writing or in-person.

FINSUM: We doubt this will happen (Trump’s lawyers would probably be remiss in letting him testify in person), but it is an interesting turn. Imagine the media frenzy!

(Hong Kong)

It might seem a bit of an over-exaggeration at this moment, but it is not too far-fetched. Hong Kong is continuing to devolve into ever more violent and disruptive protesting, and the pictures and developments seem to indicate that the situation might be devolving into a kind of disorganized civil war. Protesters have taken siege of the university in the city and the City’s security forces attempted unsuccessfully to forcefully take it back this morning.

FINSUM: What is the mainland going to do here? Things are getting worse and worse.

(New York)

After what was a great run for much of this year, ETFs investors are fleeing bonds. After yields fell sharply for most of 2019, investors have been stung this month as yields have shot higher. Ten-year Treasuries have gone from 1.7% to 1.9% yields, causing over half of all bonds to lose value. Investors have been pulling billions out of funds as a result. The iShares 20-year Treasury ETF has lost 7.8% since August 28th. One of the areas that has been more durable is high yield, where average prices have risen a little over 1% in the same time frame.

FINSUM: Bonds losing is a sign that investors are getting less worried about a recession, which in our view is an optimistic sign.

(New York)

Hedge fund icon Ray Dalio delivered a grim speech yesterday at a gala dinner for the National Committee on US-China Relations. The investor is worried about war in all it forms. He said that “There is a trade war, there is a technology war, there is a geopolitical war, and there could be a capital war”. Famed former US Secretary of State Henry Kissinger also spoke at the event and told both sides that they must avoid a shooting war at all costs, as no side can win.

FINSUM: Everyone on both sides will hopefully be somewhat relieved if a “phase one” trade deal can be reached.

(Washington)

Whether or not you are a supporter of Elizabeth Warren and her aggressive tax plans, one has to worry about the recent arithmetic that is coming out of her campaign. In particular, what is emerging is that many wealthy Americans would have tax rates over 100%. In many cases they would be as high as 158%. The reason why is a combination of the tax rates Warren favors, but critically, also her goal to tax unrealized gains. That means taxes would need to be paid in cash on investments that have not realized cash gains.

FINSUM: In our view, this is little more than divisive and punitive, not to mention rife with bad logic that will create unintended consequences. We are not in principle against the idea of some moderate level of redistribution to help strengthen the country and economy, but this is highly unfair.