A Warning From China: The Truth and Our Reality Are Often Far Apart

Andy Snyder|July 29, 2021

We couldn’t sleep last night. The moon was very bright.

Sometimes after a busy day, it’s hard to slow down. Even the smallest distractions keep us up.

It’s okay. It gives us time to think.

It led us to something we must share with you this groggy-eyed morning.

As we stared out the window last night and watched the fireflies pop and jive, we wondered whether the stars were really there.

We remembered an author, whose name we’ve long forgotten, who pondered how long it would take for us to realize the stars were all gone. If they all disappeared tonight, who would know?

Who would care?

It takes years for the light of even the closest star to reach our eyes. They could all be gone… and we’d never know.

Ahhh… the truth and our reality are indeed often light-years apart.

Or how about when we gaze out at a distant galaxy?

Way up north during our time in Alaska, the stars used to beg for our contemplation. A single slice of the sky would fill each evening with hundreds of lights. Our perception out there in the sticks was vastly different from that of the poor fella scratching out a living in the City of Angels.

The only stars he could see live in a different world.

Drawing the Line

Out in the wilderness, the stars seemed so close together. Surely if they filled the same void in our blackened sky, they must at least be in the same galactic neighborhood.

But we all know it’s not true.

We use simple lines to draw constellations in our minds… but the truth is, one star is unreachable from the next.

We can only look at them and wonder whether they’re even still there.

It creates quite a challenge for a guy who yearns for the truth.

Is our perception of reality as distorted as the gap between stars? Do black holes and roving waves of radiation distort things so perversely that we’ll never know? Are we even supposed to?

Late nights beg for tough questions.

The answers don’t come easy. But that doesn’t stop most folks stating their version of the truth.

Fact vs. Reality

Whether we’re talking about food or finance… politics or people… we now live in a world where our truth is the truth.

Be damned the rest of them.

Either you’re one of us or you’re one of them. You’re in or you’re out. You got the jab… or you’re killing those who did.

There’s no room for the thinking class – no room for the distortion of time and space.

It’s b.s.

And, frankly, it’ll extinguish the light of the stars.

Since our beat is investing, that’s where we’ll plant our flag. We hate to think of the millionaires who could have been because of the gap between reality and perception.

There’s no better place to point our finger this week than at China. For most folks, what’s happening there is light-years away.

Those stars on China’s flag might as well be a far-off constellation in the sky.

But these stars are falling… and bursting into our atmosphere.

Beijing, as you may know, is performing quite the crackdown. Because of it, all of the region’s major indexes are down big for the year.

It started when the government went after Jack Ma and his Ant Group. Just before the company’s stock market debut, Beijing stepped in and said it’s too much.

The company has too much power.

But the butcher kept cutting.

Last week, ride-hailing giant Didi (DIDI) got word that it faces major fines and a possible delisting. The government says it misused personal information collected from its app.

Investors are down 30% in a week.

Then, just days ago, China went after its private education sector. At least four U.S.-listed companies plunged 30% on the news.

And now the country has its eyes set on Tencent. It’s broken competition rules, China says.

There’s no word from Charlie Munger… Warren Buffett’s right-hand man who, just last month, said, “So my hat is off to China” after praising its moves to curb Ant’s growth.

While “our own wonderful free enterprise economy is letting all these crazy people go to this gross excess,” he said, the Chinese “step in preemptively to stop speculation.”

Ahhh… yes. To some the stars are far apart. To others, they’re darn near touching.

The Problem Is…

The folks at Time did the right thing and took a swipe at the news.

“China’s Didi Crackdown Isn’t All That Different From U.S. Moves Against Big Tech,” its headline earlier this month proclaimed.

From the essay…

It’s undoubtedly true that after years of lax regulation, Beijing is sending a signal to its tech champions: No matter how big you are, how successful you are, how much your founders are lauded and how much money you rake in, the government, not the private sector, is the ultimate authority and retains ultimate control.

But that’s China, right?

The stars shine brighter in America. The private sector is still in control.

The folks at Time see the galaxy in a different light.

State AGs may wish to do the same. But all are constrained by a clunky and complicated legal and legislative system that makes any such enforcement a multiyear affair with uncertain outcomes.

We’d be just like China, they conclude, if it weren’t for all those “clunky and complicated laws.”

Clearly, our Founding Fathers knew what they were looking at. The checks and balances they put their lives on the line for continue to pay off.

But as much as the folks in D.C. dislike a single company wielding undue power, they don’t seem to feel the same way about the breadth and tenacity of their own power.

The private and public sectors should have equal footing. The government’s power should be as limited as Facebook’s… but, alas, the bigger the star, the more it sucks into its orbit.

That’s how we get what we’ve got.

Eventually, either you’re in… or you’re out.

Our hero, the free market, is fighting back. All is not lost.

But the battle is getting harder by the day.

To win, we must know that only time knows the truth. Our eyes deceive. What seems near may be light-years away.

The stars could already be gone…

It will be years before we know.