Top Glove posts second straight quarterly loss

 

BY JUSTIN LIM theedgemarkets.com

Top Glove Corp Bhd posted its second straight quarterly loss in the first quarter ended Nov 30, 2022 (1QFY2023), dragged by lower sales and ongoing normalisation of average selling prices (ASPs). 

The group’s net loss widened quarter-on-quarter (q-o-q) to RM168.24 million from RM52.59 million, as revenue dropped 36.11% q-o-q to RM632.53 million from RM990.1 million.

The group posted a net profit of RM185.72 million on revenue of RM1.61 billion for the corresponding period of the previous year (1QFY2022). Sales volume (quantity sold) eased by about 48% year-on-year.

Going forward, Top Glove expects to derive some benefits from the declining trend in raw material prices where average natural latex concentrate prices have declined by 7% to RM4.73 per kg and nitrile latex prices have decreased by 49% to US$0.91 (RM4.02) per kg year-on-year.

At the midday break, Top Glove's share price was two sen or 2.55% lower at 76.5 sen, giving the group a market capitalisation of RM6.28 billion. Year-to-date, the stock has depreciated 68% from RM2.39 on Jan 3 this year.

EPF dumps 43.5m shares in top 4 glove companies

 THE Employees Provident Fund (EPF) had disposed of some 43.47 million of shares in the country’s top four glove companies within the past month.

According to filings on Bursa Malaysia, a large chunk of the total shares dumped by EPF were in Top Glove Corp Bhd which totalled to about 17.01 million.

As at last Friday, EPF was left with 6.23% or 498.82 million direct shares in the glove company.

In the past month, the biggest disposal of shares that took place was worth about 6.3 million which was on Sept 22, 2021. On the same date, the fund also acquired 5.28 million shares.

As at last Friday, Top Glove’s share price stood at RM2.76. Year-to-date (YTD), its share price RM2.74 or 49.82%. It has a market capitalisation of RM22.65 billion.

The fund also sold approximately 15.41 million shares in Hartalega Holdings Bhd in the last one month.

EPF currently has 8.11% or 277.91 million of direct interest in Hartalega.

The largest amount of shares it dumped during that period was around 2.8 million which was done in two tranches on Sept 17, 2021.

Hartalega’s share price stood at RM6.02 at the closing bell on last Friday. YTD, its shares have slipped RM4.46 or 42.56%. It is now valued at RM20.63 billion in the market.

As for Kossan Rubber Industries Bhd, the EPF disposed of approximately 7.86 million in the last one month.

The fund is now left with 8.53% or 217.68 million of direct interest in the glove company. It dumped about 2.35 million shares on Sept 17 which was the largest amount disposed of within that period.

As at last Friday, Kossan’s share price stood at RM2.44. YTD, its shares have dropped RM1.50 or 38.07%. The glove company now has a market capitalisation of RM6.24 billion.

The EPF also disposed of 3.19 million shares in Supermax Corp Bhd where it now has 34.74 million of direct units.

Supermax’s share price stood at RM2.17 as at last Friday. YTD, its shares dropped RM3.34 or 60.62% and it is now valued at RM5.9 billion.

According to a research note by Maybank Investment Bank Bhd (Maybank IB) recently, local glovemakers are expected to see a weaker average selling price (ASP) of rubber gloves.

Its analyst Wong Wei Sum said the ASP of rubber gloves are expected to return to preCovid-19 level given that the ASP had been weak since the second quarter of 2021 (2Q21).

Wong said Kossan’s ASP is expected to decline 8% to 10% month-on-month and could return to pre-Covid levels of US$23 per k pcs to US$24 (RM99.60) per k pcs by mid2022, representing a 42% decline from the current level.

Separately in another report, Wong said Hartalega’s ASP is expected to drop 30% between 1Q22 and 2Q22 and may only normalise in early 2022, returning to pre-Covid levels by mid-2022.

In a report last month, Hong Leong Investment Bank also foresees a slowdown in the glovemakers’ ASP which will lead to a decline in their earnings by up to 58%.

Its analyst Chan Jit Hoong said this would be mainly due to the ramp up of vaccination rollout in key markets.

Opinion: Our constitutional crisis is already here

 “Is there no virtue among us? If there be not, we are in a wretched situation.”

— James Madison

Opinion by Robert Kagan

The United States is heading into its greatest political and constitutional crisis since the Civil War, with a reasonable chance over the next three to four years of incidents of mass violence, a breakdown of federal authority, and the division of the country into warring red and blue enclaves. The warning signs may be obscured by the distractions of politics, the pandemic, the economy and global crises, and by wishful thinking and denial. But about these things there should be no doubt:

First, Donald Trump will be the Republican candidate for president in 2024. The hope and expectation that he would fade in visibility and influence have been delusional. He enjoys mammoth leads in the polls; he is building a massive campaign war chest; and at this moment the Democratic ticket looks vulnerable. Barring health problems, he is running.

Second, Trump and his Republican allies are actively preparing to ensure his victory by whatever means necessary. Trump’s charges of fraud in the 2020 election are now primarily aimed at establishing the predicate to challenge future election results that do not go his way. Some Republican candidates have already begun preparing to declare fraud in 2022, just as Larry Elder tried meekly to do in the California recall contest.

Meanwhile, the amateurish “stop the steal” efforts of 2020 have given way to an organized nationwide campaign to ensure that Trump and his supporters will have the control over state and local election officials that they lacked in 2020. Those recalcitrant Republican state officials who effectively saved the country from calamity by refusing to falsely declare fraud or to “find” more votes for Trump are being systematically removed or hounded from office. Republican legislatures are giving themselves greater control over the election certification process. As of this spring, Republicans have proposed or passed measures in at least 16 states that would shift certain election authorities from the purview of the governor, secretary of state or other executive-branch officers to the legislature. An Arizona bill flatly states that the legislature may “revoke the secretary of state’s issuance or certification of a presidential elector’s certificate of election” by a simple majority vote. Some state legislatures seek to impose criminal penalties on local election officials alleged to have committed “technical infractions,” including obstructing the view of poll watchers.

The stage is thus being set for chaos. Imagine weeks of competing mass protests across multiple states as lawmakers from both parties claim victory and charge the other with unconstitutional efforts to take power. Partisans on both sides are likely to be better armed and more willing to inflict harm than they were in 2020. Would governors call out the National Guard? Would President Biden nationalize the Guard and place it under his control, invoke the Insurrection Act, and send troops into Pennsylvania or Texas or Wisconsin to quell violent protests? Deploying federal power in the states would be decried as tyranny. Biden would find himself where other presidents have been — where Andrew Jackson was during the nullification crisis, or where Abraham Lincoln was after the South seceded — navigating without rules or precedents, making his own judgments about what constitutional powers he does and doesn’t have.

Today’s arguments over the filibuster will seem quaint in three years if the American political system enters a crisis for which the Constitution offers no remedy.

Most Americans — and all but a handful of politicians — have refused to take this possibility seriously enough to try to prevent it. As has so often been the case in other countries where fascist leaders arise, their would-be opponents are paralyzed in confusion and amazement at this charismatic authoritarian. They have followed the standard model of appeasement, which always begins with underestimation. The political and intellectual establishments in both parties have been underestimating Trump since he emerged on the scene in 2015. They underestimated the extent of his popularity and the strength of his hold on his followers; they underestimated his ability to take control of the Republican Party; and then they underestimated how far he was willing to go to retain power. The fact that he failed to overturn the 2020 election has reassured many that the American system remains secure, though it easily could have gone the other way — if Biden had not been safely ahead in all four states where the vote was close; if Trump had been more competent and more in control of the decision-makers in his administration, Congress and the states. As it was, Trump came close to bringing off a coup earlier this year. All that prevented it was a handful of state officials with notable courage and integrity, and the reluctance of two attorneys general and a vice president to obey orders they deemed inappropriate.

These were not the checks and balances the Framers had in mind when they designed the Constitution, of course, but Trump has exposed the inadequacy of those protections. The Founders did not foresee the Trump phenomenon, in part because they did not foresee national parties. They anticipated the threat of a demagogue, but not of a national cult of personality. They assumed that the new republic’s vast expanse and the historic divisions among the 13 fiercely independent states would pose insuperable barriers to national movements based on party or personality. “Petty” demagogues might sway their own states, where they were known and had influence, but not the whole nation with its diverse populations and divergent interests.

Such checks and balances as the Framers put in place, therefore, depended on the separation of the three branches of government, each of which, they believed, would zealously guard its own power and prerogatives. The Framers did not establish safeguards against the possibility that national-party solidarity would transcend state boundaries because they did not imagine such a thing was possible. Nor did they foresee that members of Congress, and perhaps members of the judicial branch, too, would refuse to check the power of a president from their own party.

In recent decades, however, party loyalty has superseded branch loyalty, and never more so than in the Trump era. As the two Trump impeachments showed, if members of Congress are willing to defend or ignore the president’s actions simply because he is their party leader, then conviction and removal become all but impossible. In such circumstances, the Framers left no other check against usurpation by the executive — except (small-r) republican virtue.

Critics and supporters alike have consistently failed to recognize what a unique figure Trump is in American history. Because his followers share fundamentally conservative views, many see Trump as merely the continuation, and perhaps the logical culmination, of the Reagan Revolution. This is a mistake: Although most Trump supporters are or have become Republicans, they hold a set of beliefs that were not necessarily shared by all Republicans. Some Trump supporters are former Democrats and independents. In fact, the passions that animate the Trump movement are as old as the republic and have found a home in both parties at one time or another.

Suspicion of and hostility toward the federal government; racial hatred and fear; a concern that modern, secular society undermines religion and traditional morality; economic anxiety in an age of rapid technological change; class tensions, with subtle condescension on one side and resentment on the other; distrust of the broader world, especially Europe, and its insidious influence in subverting American freedom — such views and attitudes have been part of the fabric of U.S. politics since the anti-Federalists, the Whiskey Rebellion and Thomas Jefferson. The Democratic Party was the home of white supremacists until they jumped to George Wallace in 1968 and later to the Republicans. Liberals and Democrats in particular need to distinguish between their ongoing battle with Republican policies and the challenge posed by Trump and his followers. One can be fought through the processes of the constitutional system; the other is an assault on the Constitution itself.

What makes the Trump movement historically unique is not its passions and paranoias. It is the fact that for millions of Americans, Trump himself is the response to their fears and resentments. This is a stronger bond between leader and followers than anything seen before in U.S. political movements. Although the Founders feared the rise of a king or a Caesar, for two centuries Americans proved relatively immune to unwavering hero-worship of politicians. Their men on horseback — Theodore Roosevelt, Grant, even Washington — were not regarded as infallible. This was true of great populist leaders as well. William Jennings Bryan a century ago was venerated because he advanced certain ideas and policies, but he did not enjoy unquestioning loyalty from his followers. Even Reagan was criticized by conservatives for selling out conservative principles, for deficit spending, for his equivocal stance on abortion, for being “soft” on the Soviet Union.

Trump is different, which is one reason the political system has struggled to understand, much less contain, him. The American liberal worldview tends to search for material and economic explanations for everything, and no doubt a good number of Trump supporters have grounds to complain about their lot in life. But their bond with Trump has little to do with economics or other material concerns. They believe the U.S. government and society have been captured by socialists, minority groups and sexual deviants. They see the Republican Party establishment as corrupt and weak — “losers,” to use Trump’s word, unable to challenge the reigning liberal hegemony. They view Trump as strong and defiant, willing to take on the establishment, Democrats, RINOs, liberal media, antifa, the Squad, Big Tech and the “Mitch McConnell Republicans.” His charismatic leadership has given millions of Americans a feeling of purpose and empowerment, a new sense of identity. While Trump’s critics see him as too narcissistic to be any kind of leader, his supporters admire his unapologetic, militant selfishness. Unlike establishment Republicans, Trump speaks without embarrassment on behalf of an aggrieved segment of Americans, not exclusively White, who feel they have been taking it on the chin for too long. And that is all he needs to do.

There was a time when political analysts wondered what would happen when Trump failed to “deliver” for his constituents. But the most important thing Trump delivers is himself. His egomania is part of his appeal. In his professed victimization by the media and the “elites,” his followers see their own victimization. That is why attacks on Trump by the elites only strengthen his bond with his followers. That is why millions of Trump supporters have even been willing to risk death as part of their show of solidarity: When Trump’s enemies cited his mishandling of the pandemic to discredit him, their answer was to reject the pandemic. One Trump supporter didn’t go to the hospital after developing covid-19 symptoms because he didn’t want to contribute to the liberal case against Trump. “I’m not going to add to the numbers,” he told a reporter.

Because the Trump movement is less about policies than about Trump himself, it has undermined the normal role of American political parties, which is to absorb new political and ideological movements into the mainstream. Bryan never became president, but some of his populist policies were adopted by both political parties. Sen. Bernie Sanders’s supporters might not have wanted Biden for president, but having lost the nomination battle they could work on getting Biden to pursue their agenda. Liberal democracy requires acceptance of adverse electoral results, a willingness to countenance the temporary rule of those with whom we disagree. As historian Richard Hofstadter observed, it requires that people “endure error in the interest of social peace.” Part of that willingness stems from the belief that the democratic system makes it possible to work, even in opposition, to correct the ruling party’s errors and overreach. Movements based on ideas and policies can also quickly shift their allegiances. Today, the progressives’ flag-bearer might be Sanders, but tomorrow it could be Sen. Elizabeth Warren or Rep. Alexandria Ocasio-Cortez or someone else.

For a movement built around a cult of personality, these adjustments are not possible. For Trump supporters, the “error” is that Trump was cheated out of reelection by what he has told them is an oppressive, communist, Democrat regime. While the defeat of a sitting president normally leads to a struggle to claim the party’s mantle, so far no Republican has been able to challenge Trump’s grip on Republican voters: not Sen. Josh Hawley, not Sen. Tom Cotton, not Tucker Carlson, not Gov. Ron DeSantis. It is still all about Trump. The fact that he is not in office means that the United States is “a territory controlled by enemy tribes,” writes one conservative intellectual. The government, as one Trump supporter put it, “is monopolized by a Regime that believes [Trump voters] are beneath representation, and will observe no limits to keep them [from] getting it." If so, the intellectual posits, what choice do they have but to view the government as the enemy and to become “united and armed to take care of themselves as they think best”?

The Trump movement might not have begun as an insurrection, but it became one after its leader claimed he had been cheated out of reelection. For Trump supporters, the events of Jan. 6 were not an embarrassing debacle but a patriotic effort to save the nation, by violent action if necessary. As one 56-year-old Michigan woman explained: “We weren’t there to steal things. We weren’t there to do damage. We were just there to overthrow the government.”

The banal normalcy of the great majority of Trump’s supporters, including those who went to the Capitol on Jan. 6, has befuddled many observers. Although private militia groups and white supremacists played a part in the attack, 90 percent of those arrested or charged had no ties to such groups. The majority were middle-class and middle-aged; 40 percent were business owners or white-collar workers. They came mostly from purple, not red, counties.

Most Trump supporters are good parents, good neighbors and solid members of their communities. Their bigotry, for the most part, is typical white American bigotry, perhaps with an added measure of resentment and a less filtered mode of expression since Trump arrived on the scene. But these are normal people in the sense that they think and act as people have for centuries. They put their trust in family, tribe, religion and race. Although zealous in defense of their own rights and freedoms, they are less concerned about the rights and freedoms of those who are not like them. That, too, is not unusual. What is unnatural is to value the rights of others who are unlike you as much as you value your own.

As it happens, however, that is what the American experiment in republican democracy requires. It is what the Framers meant by “republican virtue,” a love of freedom not only for oneself but also as an abstract, universal good; a love of self-government as an ideal; a commitment to abide by the laws passed by legitimate democratic processes; and a healthy fear of and vigilance against tyranny of any kind. Even James Madison, who framed the Constitution on the assumption that people would always pursue their selfish interests, nevertheless argued that it was “chimerical” to believe that any form of government could “secure liberty and happiness without any virtue in the people.” Al Gore and his supporters displayed republican virtue when they abided by the Supreme Court’s judgment in 2000 despite the partisan nature of the justices’ decision. (Whether the court itself displayed republican virtue is another question.)

The events of Jan. 6, on the other hand, proved that Trump and his most die-hard supporters are prepared to defy constitutional and democratic norms, just as revolutionary movements have in the past. While it might be shocking to learn that normal, decent Americans can support a violent assault on the Capitol, it shows that Americans as a people are not as exceptional as their founding principles and institutions. Europeans who joined fascist movements in the 1920s and 1930s were also from the middle classes. No doubt many of them were good parents and neighbors, too. People do things as part of a mass movement that they would not do as individuals, especially if they are convinced that others are out to destroy their way of life.

It would be foolish to imagine that the violence of Jan. 6 was an aberration that will not be repeated. Because Trump supporters see those events as a patriotic defense of the nation, there is every reason to expect more such episodes. Trump has returned to the explosive rhetoric of that day, insisting that he won in a “landslide,” that the “radical left Democrat communist party” stole the presidency in the “most corrupt, dishonest, and unfair election in the history of our country” and that they have to give it back. He has targeted for defeat those Republicans who voted for his impeachment — or criticized him for his role in the riot. Already, there have been threats to bomb polling sites, kidnap officials and attack state capitols. “You and your family will be killed very slowly,” the wife of Georgia’s top election official was texted earlier this year. Nor can one assume that the Three Percenters and Oath Keepers would again play a subordinate role when the next riot unfolds. Veterans who assaulted the Capitol told police officers that they had fought for their country before and were fighting for it again. Looking ahead to 2022 and 2024, Trump insists “there is no way they win elections without cheating. There’s no way.” So, if the results come in showing another Democratic victory, Trump’s supporters will know what to do. Just as “generations of patriots” gave “their sweat, their blood and even their very lives” to build America, Trump tells them, so today “we have no choice. We have to fight” to restore “our American birthright.”

Where does the Republican Party stand in all this? The party gave birth to and nurtured this movement; it bears full responsibility for establishing the conditions in which Trump could capture the loyalty of 90 percent of Republican voters. Republican leaders were more than happy to ride Trump’s coattails if it meant getting paid off with hundreds of conservative court appointments, including three Supreme Court justices; tax cuts; immigration restrictions; and deep reductions in regulations on business. Yet Trump’s triumph also had elements of a hostile takeover. The movement’s passion was for Trump, not the party. GOP primary voters chose Trump over the various flavors of establishment Republicanism (Jeb Bush, Marco Rubio), and after Trump’s election they continued to regard establishment Republicans as enemies. Longtime party heroes like Paul Ryan were cast into oblivion for disparaging Trump. Even staunch supporters such as Jeff Sessions eventually became villains when they would not do as Trump demanded. Those who survived had a difficult balancing act: to use Trump’s appeal to pass the Republican agenda while also controlling Trump’s excesses, which they worried could ultimately threaten the party’s interests.

That plan seemed plausible in 2017. Unlike other insurgent leaders, Trump had not spent time in the political wilderness building a party and surrounding himself with loyalists. He had to choose from an existing pool of Republican officials, who varied in their willingness to do his bidding. The GOP establishment hoped that the presence of “adults” would restrain him, protecting their traditional agenda and, in their view, the country’s interests, from his worst instincts.

This was a miscalculation. Trump’s grip on his supporters left no room for an alternative power center in the party. One by one, the “adults” resigned or were run off. The dissent and contrary opinions that exist in every party — the Northeast moderate Republicans in Reagan’s day; the progressives in today’s Democratic Party — disappeared from Trump’s Republican Party. The only real issue was Trump himself, and on that there could be no dissent. Those who disapproved of Trump could either keep silent or leave.

The takeover extended beyond the level of political leadership. Modern political parties are an ecosystem of interest groups, lobby organizations, job seekers, campaign donors and intellectuals. All have a stake in the party’s viability; all ultimately depend on being roughly aligned with wherever the party is at a given moment; and so all had to make their peace with Trump, too. Conservative publications that once opposed him as unfit for the presidency had to reverse course or lose readership and funding. Pundits had to adjust to the demands of their pro-Trump audiences — and were rewarded handsomely when they did. Donors who had opposed Trump during the primaries fell into line, if only to preserve some influence on the issues that mattered to them. Advocacy organizations that had previously seen their role as holding the Republican Party to certain principles, and thus often dissented from the party leadership, either became advocates for Trump or lost clout.

It was no surprise that elected officials feared taking on the Trump movement and that Republican job seekers either kept silent about their views or made show-trial-like apologies for past criticism. Ambition is a powerful antidote to moral qualms. More revealing was the behavior of Republican elder statesmen, former secretaries of state in their 80s or 90s who had no further ambitions for high office and seemingly nothing to lose by speaking out. Despite their known abhorrence of everything Trump stood for, these old lions refused to criticize him. They were unwilling to come out against a Republican Party to which they had devoted their professional lives, even when the party was led by someone they detested. Whatever they thought about Trump, moreover, Republican elders disliked Hillary Clinton, Barack Obama and the Democrats more. Again, this is not so unusual. German conservatives accommodated Adolf Hitler in large part because they opposed the socialists more than they opposed the Nazis, who, after all, shared many of their basic prejudices. As for conservative intellectuals, even those who had spent years arguing that Woodrow Wilson was a tyrant because he created the Federal Reserve and supported child labor laws seemed to have no concerns about whether Trump was a would-be despot. They not only came to Trump’s defense but fashioned political doctrines to justify his rule, filling in the wide gaps of his nonexistent ideology with an appeal to “conservative nationalism” and conservative populism. Perhaps American conservatism was never comfortable with the American experiment in liberal democracy, but certainly since Trump took over their party, many conservatives have revealed a hostility to core American beliefs.

All this has left few dissenting voices within the Republican ecosystem. The Republican Party today is a zombie party. Its leaders go through the motions of governing in pursuit of traditional Republican goals, wrestling over infrastructure spending and foreign policy, even as real power in the party has leached away to Trump. From the uneasy and sometimes contentious partnership during Trump’s four years in office, the party’s main if not sole purpose today is as the willing enabler of Trump’s efforts to game the electoral system to ensure his return to power.

With the party firmly under his thumb, Trump is now fighting the Biden administration on separate fronts. One is normal, legitimate political competition, where Republicans criticize Biden’s policies, feed and fight the culture wars, and in general behave like a typical hostile opposition.

The other front is outside the bounds of constitutional and democratic competition and into the realm of illegal or extralegal efforts to undermine the electoral process. The two are intimately related, because the Republican Party has used its institutional power in the political sphere to shield Trump and his followers from the consequences of their illegal and extralegal activities in the lead-up to Jan. 6. Thus, Reps. Kevin McCarthy and Elise Stefanik, in their roles as party leaders, run interference for the Trump movement in the sphere of legitimate politics, while Republicans in lesser positions cheer on the Jan. 6 perpetrators, turning them into martyrs and heroes, and encouraging illegal acts in the future.

This pincer assault has several advantages. Republican politicians and would-be policymakers can play the role of the legitimate opposition. They can rediscover their hawkish internationalist foreign policy (suspended during the Trump years) and their deficit-minded economics (also suspended during the Trump years). They can go on the mainstream Sunday shows and critique the Biden administration on issues such as Afghanistan. They can pretend that Trump is no longer part of the equation. Biden is the president, after all, and his administration is not exactly without faults.

Yet whatever the legitimacy of Republican critiques of Biden, there is a fundamental disingenuousness to it all. It is a dodge. Republicans focus on China and critical race theory and avoid any mention of Trump, even as the party works to fix the next election in his favor. The left hand professes to know nothing of what the right hand is doing.

Even Trump opponents play along. Republicans such as Sens. Mitt Romney and Ben Sasse have condemned the events of Jan. 6, criticized Trump and even voted for his impeachment, but in other respects they continue to act as good Republicans and conservatives. On issues such as the filibuster, Romney and others insist on preserving “regular order” and conducting political and legislative business as usual, even though they know that Trump’s lieutenants in their party are working to subvert the next presidential election.

The result is that even these anti-Trump Republicans are enabling the insurrection. Revolutionary movements usually operate outside a society’s power structures. But the Trump movement also enjoys unprecedented influence within those structures. It dominates the coverage on several cable news networks, numerous conservative magazines, hundreds of talk radio stations and all kinds of online platforms. It has access to financing from rich individuals and the Republican National Committee’s donor pool. And, not least, it controls one of the country’s two national parties. All that is reason enough to expect another challenge, for what movement would fail to take advantage of such favorable circumstances to make a play for power?

Today, we are in a time of hope and illusion. The same people who said that Trump wouldn’t try to overturn the last election now say we have nothing to worry about with the next one. Republicans have been playing this game for five years, first pooh-poohing concerns about Trump’s intentions, or about the likelihood of their being realized, and then going silent, or worse, when what they insisted was improbable came to pass. These days, even the anti-Trump media constantly looks for signs that Trump’s influence might be fading and that drastic measures might not be necessary.

The world will look very different in 14 months if, as seems likely, the Republican zombie party wins control of the House. At that point, with the political winds clearly blowing in his favor, Trump is all but certain to announce his candidacy, and social media constraints on his speech are likely to be lifted, since Facebook and Twitter would have a hard time justifying censoring his campaign. With his megaphone back, Trump would once again dominate news coverage, as outlets prove unable to resist covering him around the clock if only for financial reasons.

But this time, Trump would have advantages that he lacked in 2016 and 2020, including more loyal officials in state and local governments; the Republicans in Congress; and the backing of GOP donors, think tanks and journals of opinion. And he will have the Trump movement, including many who are armed and ready to be activated, again. Who is going to stop him then? On its current trajectory, the 2024 Republican Party will make the 2020 Republican Party seem positively defiant.

Those who criticize Biden and the Democrats for not doing enough to prevent this disaster are not being fair. There is not much they can do without Republican cooperation, especially if they lose control of either chamber in 2022. It has become fashionable to write off any possibility that a handful of Republicans might rise up to save the day. This preemptive capitulation has certainly served well those Republicans who might otherwise be held to account for their cowardice. How nice for them that everyone has decided to focus fire on Democratic Sen. Joe Manchin.

Yet it is largely upon these Republicans that the fate of the republic rests.

Seven Republican senators voted to convict Trump for inciting an insurrection and attempting to overturn a free and fair election: Richard Burr, Bill Cassidy, Susan Collins, Lisa Murkowski, Romney, Sasse and Patrick J. Toomey. It was a brave vote, a display of republican virtue, especially for the five who are not retiring in 2022. All have faced angry backlashes — Romney was booed and called a traitor at the Utah Republican convention; Burr and Cassidy were unanimously censured by their state parties. Yet as much credit as they deserve for taking this stand, it was almost entirely symbolic. When it comes to concrete action that might prevent a debacle in 2024, they have balked.

Specifically, they have refused to work with Democrats to pass legislation limiting state legislatures’ ability to overturn the results of future elections, to ensure that the federal government continues to have some say when states try to limit voting rights, to provide federal protection to state and local election workers who face threats, and in general to make clear to the nation that a bipartisan majority in the Senate opposes the subversion of the popular will. Why?

It can’t be because they think they have a future in a Trump-dominated party. Even if they manage to get reelected, what kind of government would they be serving in? They can’t be under any illusion about what a second Trump term would mean. Trump’s disdain for the rule of law is clear. His exoneration from the charges leveled in his impeachment trials — the only official, legal response to his actions — practically ensures that he would wield power even more aggressively. His experience with unreliable subordinates in his first term is likely to guide personnel decisions in a second. Only total loyalists would serve at the head of the Justice Department, FBI, CIA, National Security Agency and the Pentagon. The chairman of the Joint Chiefs will not be someone likely to place his or her own judgment above that of their civilian commander in chief. Nor would a Republican Senate fail to confirm Trump loyalists. In such a world, with Trump and his lieutenants in charge of all the levers of state power, including its growing capacity for surveillance, opposing Trump would become increasingly risky for Republicans and Democrats alike. A Trump victory is likely to mean at least the temporary suspension of American democracy as we have known it.

We are already in a constitutional crisis. The destruction of democracy might not come until November 2024, but critical steps in that direction are happening now. In a little more than a year, it may become impossible to pass legislation to protect the electoral process in 2024. Now it is impossible only because anti-Trump Republicans, and even some Democrats, refuse to tinker with the filibuster. It is impossible because, despite all that has happened, some people still wish to be good Republicans even as they oppose Trump. These decisions will not wear well as the nation tumbles into full-blown crisis.

It is not impossible for politicians to make such a leap. The Republican Party itself was formed in the 1850s by politicians who abandoned their previous party — former Whigs, former Democrats and former members of the Liberty and Free Soil parties. While Whig and Democratic party stalwarts such as Henry Clay and Stephen Douglas juggled and compromised, doing their best to ensure that the issue of slavery did not destroy their great parties, others decided that the parties had become an obstacle to justice and a threat to the nation’s continued viability.

Romney & Co. don’t have to abandon their party. They can fashion themselves as Constitutional Republicans who, in the present emergency, are willing to form a national unity coalition in the Senate for the sole purpose of saving the republic. Their cooperation with Democrats could be strictly limited to matters relating to the Constitution and elections. Or they might strive for a temporary governing consensus on a host of critical issues: government spending, defense, immigration and even the persistent covid-19 pandemic, effectively setting aside the usual battles to focus on the more vital and immediate need to preserve the United States.

It takes two, of course, to form a national unity coalition, and Democrats can make it harder or easier for anti-Trump Republicans to join. Some profess to see no distinction between the threat posed by Trump and the threat posed by the GOP. They prefer to use Trump as a weapon in the ongoing political battle, and not only as a way of discrediting and defeating today’s Republican Party but to paint all GOP policies for the past 30 years as nothing more than precursors to Trumpism. Although today’s Trump-controlled Republican Party does need to be fought and defeated, this kind of opportunistic partisanship and conspiracy-mongering, in addition to being bad history, is no cure for what ails the nation.

Senate Democrats were wise to cut down their once-massive voting rights wish list and get behind the smaller compromise measure unveiled last week by Manchin and Sen. Amy Klobuchar. But they have yet to attract any votes from their Republican colleagues for the measure. Heading into the next election, it is vital to protect election workers, same-day registration and early voting. It will also still be necessary to pass the John Lewis Voting Rights Advancement Act, which directly addresses the state legislatures’ electoral power grab. Other battles — such as making Election Day a federal holiday and banning partisan gerrymandering — might better be postponed. Efforts to prevent a debacle in 2024 cannot. Democrats need to give anti-Trump Republicans a chance to do the right thing.

One wonders whether modern American politicians, in either party, have it in them to make such bold moves, whether they have the insight to see where events are going and the courage to do whatever is necessary to save the democratic system. If that means political suicide for this handful of Republicans, wouldn’t it be better to go out fighting for democracy than to slink off quietly into the night?

Does a 2nm Fab Really Solve European Chip Ambitions?

Earlier this month, the European Commission presented its ‘Digital Compass’, which stated the intent to have manufacturing capacities below 5nm nodes and aiming at 2nm, and the production of 20% by value of global semiconductor production in Europe.

This is clearly driven by concerns about overdependence on chip production in Asia and the potential for being caught up in any future US-Asia political crossfire, which could lead to future chip shortages. But building a $30 billion 5nm or 2nm fab is not really going to solve the issue, as some industry commentators have noted.

One of these is industry analyst Yole Développement, who said, “In reality, a $30 billion fab plant is a perilous way to secure European technological sovereignty.” In its snapshot of the semiconductor industry, Yole said constructing such a state-of-the-art facility, without support from TSMC or Samsung, will take at least 10 to 15 years and demand tens of billions of dollars of investment. In addition, it may not even end in success. Citing Intel’s challenges, Yole said, “Intel has encountered difficulties on delivering its own advanced 7nm manufacturing process – if the US computing giant can’t easily succeed at this process node, should Europe pursue an even riskier jump to 5 nm?”

Evolution of semiconductor process technologies and key players (Source: Yole Développement)

Yole’s view is that the only way for the EU to establish a 5nm fab in Europe would be to follow a similar path to the US, and team up with TSMC or Samsung. The joint effort would require fewer funds from Europe – around $10 billion – and dramatically cut development times from 10 to 15 years to around 3 to 4 years.

But this won’t necessarily solve the sovereignty issue. With or without TSMC or Samsung, Yole questions how much demand there will be in Europe for 5 nm, in three or four years’ time. “All the volumes of wafers to be produced for the continent’s telecommunication, automotive and other industries simply won’t fill such a fab, killing the rationale of this huge investment.”

So, what is the solution?

Well, the thinking is that there will be an increase in manufacturing outsourcing to TSMC and Samsung anyway, simply because it’s just going to take too long to build a fab, install and commission equipment. Yole said, “The best way to technological sovereignty is to invest wisely and create a robust manufacturing ecosystem that will deliver semiconductors to European companies in the long run.”

The analyst firm notes Europe is already home to cutting-edge chip manufacturers and equipment suppliers, each with annual sales from $4 to $16 billion. These include STMicroelectronics, Infineon Technologies, NXP Semiconductors and Ams as well as GlobalFoundries with its Germany fab, Intel and ASML. Meanwhile, several smaller but strong industry players co-exist in Europe, including semiconductor foundries, Tower Semiconductor and X-Fab, each generating between $500 million and $1 billion in sales every year.

After this, there are at least 200 companies, including the IDMs (integrated device manufacturers), subsidiaries of system makers and semiconductor equipment manufacturers, are sprinkled across Europe. The likes of Elmos, Murata Europe, Besi, EVG, Soitec and Siltronic each earn less than $500 million annually but sustain Europe’s manufacturing and technology independence.

Yole added, “Given this rich and established tapestry of industrial semiconductor players, the European Union and national states need a solid strategy to strengthen these suppliers. A first, important step, is to build the intermediary nodes, 14nm or 7nm foundries, in Europe that will support the continent’s current automotive, telecommunication, IoT and industrial applications. These facilities could be EU-funded but also co-developed with ST, Infineon, NXP, Ams and ASML.”

In addition, the EU should invest in activities such as heterogenous integration, advanced packaging and chip partitioning from 14 nm to 7 nm. This would avoid the urgent need for 5 nm and 2 nm chip production while enriching Europe’s technology know-how. A further step could be to leverage Europe’s strong R&D effort in emerging computing and photonics where a large number of companies and startups have a role to play.

This strategy would strengthen Europe’s semiconductor industry and provide a path toward 5nm and below in the longer term. It would also address the issue of more manufacturers being bought by US- and Asia-based companies, which is a growing trend. For example, in 2014, LFoundry shut down its fab in Rousset, France, in 2016 Italian fab, Avezzano, was sold to China’s SMIC and then in late 2020, Nvidia, US, proposed to acquire UK-based Arm. Earlier this year, Japan’s Renesas bought Dialog, UK, and Taiwan’s Globalwafers is in talks to buy Europe’s key wafer substrate provider, Siltronic, Germany.

Yole points out the fallacy of trying to build a 2nm or 5nm fab, stating, “The prospect of financing a 5 nm foundry in Europe while the continent’s finest semiconductor businesses are being subsumed by US- and Asia-based behemoths is akin to building a cathedral in the desert.” It believes that investing in home-grown businesses and infrastructure that will help Europe’s technology ecosystem to flourish is the only way forward, “otherwise the continent could one day become an industrial desert with an empty 5nm cathedral at the center.”

This kind of sentiment is echoed by others. In a recent interview with the Netherlands-based Bits & Chips, Imec chief strategy officer, Jo De Boeck, said, “Nonetheless, it’s going to take years and a lot of effort before Europe is ready to even consider building a fab. You can’t simply skip multiple nodes; we need to take steps towards it. At Imec, we believe Europe should continue to strengthen our strong base in R&D, manufacturing equipment and materials. When the basic technology is ready, we should bring companies together and start pilot production lines for promising applications that will be relevant for our industries and society. Once production-readiness is in reach, perhaps building a leading-edge fab makes sense. Another option is to consider bringing in a leading-edge player to accelerate this process.”

Indeed, Europe needs to take a more pragmatic, step-by-step approach. Having the big vision is great, but it will be a long-term iterative process rather than something that can be conjured up quickly by throwing money at constructing a leading edge fab. Europe needs to connect the dots between its excellent research and knowledge base with the established industry players already here, and then build upon the strong foundation it already has.

美国恐中症形成内卷化

亚洲周刊

外交是内政延长，内政是外交影子。恐中症病毒渗透到美国社会，形成奇特“内卷化”，将内部问题归咎中国；恐中变成美国政治万灵药，企图用来化解内部矛盾，但却导致内部矛盾更严峻。

美国的“恐中症”正在全国蔓延，总统拜登上任后，不仅继续对中国采取强硬的政策，还更上层楼，连接欧洲、澳洲、日本、印度等国形成对华包围圈施加巨大的压力。而背后则是一种挥之不去的“恐中症”，认为中国是美国在21世纪的最大敌人。

但这样的敌人又与美国过去的敌人完全不同。昔日美国对抗苏联，彼此经济上没有任何交集，但今天中美之间产业链犬牙交错，你中有我，我中有你，根本无法脱钩。因而美国最后只能与中国“竞合”。外交是内政的延长，但内政也往往是外交的影子。恐中症的病毒已经渗透到美国社会，形成一种奇特的“内卷化”的现象。

形成反亚裔狂潮

内卷化（Involution）本来是文化人类学的名词，形容无论如何努力都只是重复的劳动，不能提高到新的层次，反而是深陷其中，不能自拔。

牛津大学教授、中国知名人类学家项飙说，内卷化就是“不断抽打自己的陀螺式的无穷回圈”，也就是说，人类很多主观上的努力，无论如何折腾，但如果没有找到要害之处都是徒劳的。

对美国来说，恐中症就是一体两面，不但将中国的一切妖魔化，又要将内部的问题归咎于中国，形成社会上反亚裔的狂潮。恐中变成了一种政治上的万灵药，企图用来化解内部矛盾，但由于用错了药，反而导致更加病入膏肓，内部矛盾更加严峻，无论如何努力，如何抽打陀螺，都难以走出陀螺旋转的回圈。

美国由于经济上的需要，以及很多的国际议题，如气候暖化等问题，都要与中国合作解决。但美国外交谋士却被特朗普的影子所蛊惑，接过仇中火棒，点燃更多外交烽火，企图以此来凝聚内部，但却形成内部的恐中情结，处处都要与中国作出比较。

疫情的比较，正显示美国的弱势。3亿多的美国人，冠病疫情的死亡人数已经快60万人，多过美国在一战、二战和越战全部死亡的人数。而中国14亿人口，只死4000多人。美国疫情失控，其实就是没有发挥国家的力量，而是被反智、反科学的政策所害，社会上的任性与骄纵之风蔓延，很多人至今还是不愿意戴口罩，反对封城，认为这是侵犯人权与个人自由。

美国还以此来攻击中国，说武汉封城是违反人权与自由，并且将疫情“武器化”，美国网络上的KOL（意见领袖）还造谣说是中国有意制造病毒遗害世界，助长了美国社会的反华与反亚裔的歪风。民主党内部如众院议长佩洛西还加码仇中，不仅力挺昔日香港的黑暴势力为“一道美丽的风景”，最近还扬言说要抵制明年北京冬奥，左右美国的对华政策。

美国恐中症的内卷化现象也在于美国决策者耽于说谎，诬蔑中国在新疆“种族灭绝”。尽管美国国务院法律部门提出异议，反对说中国在新疆“种族灭绝”，指出没有任何证据，美官方说法站不住脚，但美国当局失去“知识上的真诚”，也使得美国的软实力在国际上流失。

视中国为重要参考系

以巴冲突，也带来中美关系的微妙博弈。由中国带头在联合国安理会提案，呼吁以巴停火，获得各国的支持，但只有美国一票反对，加以否决。这使得美国在国际舞台上陷入孤立，坐实国际上对单边主义的指控，而中国则首次外交上主动出击，邀请以巴双方来中国开会解决争端。这都对美国形成巨大的外交压力。

美国内政上也视中国为重要的参考系，拜登强调要在基建与新能源方面与中国较一日之长短。但美国起步太晚，加上内部掣肘太多，恐怕未来20年都无法与中国并驾齐驱。这包括高铁系统，中国已经是八纵八横，共长达3万多公里，美国还是零。而在新能源方面，尽管美国特斯拉电子车技术冠全球，如今它在上海设厂的生产数量与品质都超过美国制造，更厉害的是中国电子车的充电桩，全国高逾150万，美国则只有4万多远远落后。更不要说美国的5G还在起步，5G基站只有约3万个，而中国已在全国装设70万个基站，占全球近七成，领先世界。

美国的有识之士都已经看到恐中症的内卷化现象。这包括美国麦肯锡顾问研究公司，指出全球与美国依赖中国不减反增，而中国则越来越依靠内部经济的动能作为成长的引擎。

美国知识界对中国的了解，不及中国知识界对美国的了解。过去30多年，数以百万计的中国留美学生成为“知美派”，不断学习美国的优点，但也知道扬弃美国的糟粕。而美国留学中国、研究中国的人员则大幅落后，尤其一些官员被法轮功、异议分子郭文贵等人所误导，对中国的真实情况完全误读，形成中美双方“信息结构不对称”，也使得美国的内卷化问题越来越严重。

2020 2Q GDP

BNM announced on Friday the GDP in the second quarter shrank by 17.1% year-on-year, which was worse than market expectations and the worst single-quarter performance in history. The median forecasts of the "Reuters" and "Bloomberg" surveys are 10% and 10.1%, respectively. Faced with the Asian financial turmoil in 1998, GDP fell only 11.2% at the final quarter. Bank Negara cut its annual GDP forecast to a contraction of 3.5% to 5.5%. The economy is expected to rebound by 5.5% to 8% next year.

国家银行周五公布，我国次季国内生产总值（GDP）按年萎缩17.1%，比市场预期来得差，是有史以来最差单季表现。《路透社》和《彭博社》调查的预测中值分别为10%和10.1%。1998年面对亚洲金融风暴，当年末季GDP只跌11.2%。国行将全年GDP预测下砍至萎缩3.5%至5.5%。明年经济有望反弹5.5%至8%。

Buffett Indicator

Buffett Indicator measure the total market cap of all stocks relative to the country’s GDP. When it’s in the 70% to 80% range, it’s time to throw cash at the market. When it moves above 100%, it’s time to lean toward risk-off.

巴菲特指标衡量所有股票的总市值相对于该国GDP。 当价格在70％到80％的范围内时，就该向市场投放现金了。 当价格升至100％以上时，就该倾向减低风险。