Bill on Secure Freedom Radio 2/23/22

Night after night in cities across the country, black-garbed assailants clash with police in the streets, smash windows and throw Molotov cocktails in an effort to destroy police stations, federal courthouses, and local businesses all in the name of anti-fascism. Most Americans are now sadly, all too aware of the movement known as Antifa. But where did they come from? What do they want? And how do we stop their campaign of violent mayhem?



Transcript 2/23/22

Speaker 1 (00:00):

Night after night in cities across the country, black-garbed assailants clash with police in the streets, smash windows and throw Molotov cocktails in an effort to destroy police stations, federal courthouses, and local businesses all in the name of anti-fascism. Most Americans are now sadly, all too aware of the movement known as Antifa. But where did they come from? What do they want? And how do we stop their campaign of violent mayhem? The Center for Security Policy Press is proud to present, Unmasking Antifa: Five Perspectives on a Growing Threat. This new book looks at the history, ideology, organization, finances, and strategy of Antifa and provides an in-depth analysis for law enforcement officers, policymakers, and the general public. From street fighting tactics of the black block to fundraising by prominent left-wing foundations, Unmasking Antifa is the go-to guide to understand this elusive and dangerous threat. Get your copy of Unmasking Antifa: Five Perspectives on a Growing Threat at

Frank Gaffney (01:23):

We’re back and I’m very pleased to say we are joined by one of our regulars. His name is Bill Walton. He’s a former president and CEO of a major Wall Street investment house, Allied Capital, is these days the host of a terrific television podcast called the Bill Walton Show. Always delighted to have him with us. Bill, welcome back. It’s good to have you with us.

Bill Walton (01:42):

Hey, Frank.

Frank Gaffney (01:43):

I want to sort of pivot from what we’ve been talking about, Bill, in terms of the sanctions that are now apparently in the offing for the aggression that Vladimir Putin and Russia have perpetrated against Ukraine to a potential target of further aggression, his partner, Xi Jinping and the Chinese Communist Party, as they seemingly are poised and will be talking more about it momentarily with Colonel Grant Newsham, to engage in some of their own aggression. Talk a little bit about the condition of the Chinese economy at the moment and whether they may be more susceptible to such pressure with deterrent effect.

Bill Walton (02:32):

Well, we’ve talked in the past. The Chinese economy is highly dependent on real estate, specifically residential real estate. It comprises 30% of their GDP and compare that to roughly 16 to 17% here in the US. And just in January, the hundred largest property developers saw their sales fall, I’d use the word plummet, 40%, and this is continuing a seventh or eighth month decline in property sales in China. It’s a big deal. China has most of its investment savings in residential real estate. The home ownership level there is roughly 90% and we’ve seen the big one, Evergrande, suffer, but all the smaller developers are suffering more. Their stock prices are off 60, 70% and their sales are down 70, 80%. And it seems to be in a free for all. The governments have stepped in and said, look, we’ll help bail you out and finance more of your unsold properties, which they hadn’t been doing as much aggressively in the past. But it’s unclear that they’ve got the financial firewall to prevent this erosion. And there’s a great quote from one of the articles I took a look at. An older woman said, we depended on the Chinese Communist Party to preserve property values and create wealth for us. Now it’s like living back in the old pre-communist China, and it’s worse than ever. So this has implications for the regime.

Frank Gaffney (04:13):

That’s really where I’m going with this, bill, is to the extent that there are these dynamics at work in China and creating circumstances in which the hold on power of Xi Jinping may be jeopardized. Do you anticipate that that is to, all intents and purposes, an inducement to him to engage in the kind of aggression, whether it’s towards Taiwan or perhaps India, or maybe even both, that he seems to be using as a kind of social engineering, at least in the abstract, if not in the very specific.

Bill Walton (04:55):

Well, some people make the optimistic point about the United States in the 21st century, that demographically we’d like to see our population growing and growing younger because of immigration and higher birth rates. China, in the meantime, is seeing a population implosion. It’s already turned the curve and it’s declining. And while it’s declining, it’s also growing older and it’s economy is, I won’t say flat lined, but it’s not growing at the roaring rates it was growing in the past. It’s down four, 5% recently. And with the property issues that I’ve just described, it’s fragile. And some people say that’s good news. Well, I don’t think it is good news because a weakened adversary is more likely to strike than someone who feels like they’re operating from strength. And China’s not made a lot of friends around its borders in the last 20, 25 years with its aggressions, and also what it’s done internally in terms of the Uighurs and forced organ out-plants.

Bill Walton (05:58):

And this Olympics was hardly the PR triumph they hoped. I think Xi probably looking to disappear the people that decided that the ski jump ought to be located next to an abandoned steel mill. That was quite a dystopian image. But I think all this increases the risk that they’re going to do something about Taiwan. Now, I know our friend Gordon Chang thinks it’ll be a few years off and that may be true, but I think both Xi and Putin and any of the other bad actors are looking at Biden and the incredibly weak foreign policy team and national defense team that Biden has. And they’re saying, the time to act is now.

Frank Gaffney (06:40):

I’m with you. We’re going to explore this very pregnant question with Colonel Grant Newsham in a moment. And I think he’s leaning towards it may be being a little further off. We’ll see. But in the meantime, Bill, we certainly are watching partners, or least colleagues of yours in the past, riding to the rescue of the Chinese Communist Party to a degree that I continue to be just astounded by. Charlie Munger, a considerable friend of China, I think it’s fair to say, has taken to task one of the principle engines of that kind of bailout, namely Larry Fink of BlackRock. Walk us through what’s going on there and whether it has any significant insights for us as to where Wall Street is headed in this moment.

Bill Walton (07:38):

Well, Larry Fink has led an ascendancy of woke investors and CEOs in the last couple of years. And he’s one of several large money managers. He runs BlackRock, of course, but there’s also Vanguard and State Street. And together they control over 20% of all the market cap and the New York Stock Exchange and the S&P 500. And they’ve used that clout though, not to encourage companies to increase their returns, instead they’re encouraging them to go up along with the ESG agenda, environmental social governance, which we’ve talked about extensively, has very little do with increasing shareholder returns. And here you have Warren Buffet’s longtime partner, Charlie Munger. Charlie’s 98, Charlie can call it as he sees it. And I think he was quoted recently saying, we have a whole new bunch of emperors, and they’re the people who vote the shares and the index funds.

Bill Walton (08:40):

And by that he means Vanguard, BlackRock, and State Street. And he says, I think the world of Larry Fink, and he does. Charlie’s a very progressive liberal, but I’m not sure I want him to be my emperor. And so you get some hardheaded people like Warren Buffet and Charlie Munger, who are the best asset allocators on the planet, looking at what Larry Fink’s doing and saying, look, guys, you’re not aiming my investment dollars at targets that are going to increase my returns. Instead, they’re going to make you feel good and make you feel woke, but maybe ought to get back to your business, which is increasing returns to your shareholders. It’ll be interesting to see how this plays out. There are a lot of us that are calling out these money managers now. And I think we’re beginning to have some effect.

Frank Gaffney (09:27):

I hope so, Bill. It’s vital that these individual masters of the universe-

Bill Walton (09:33):

But Frank, their arrogance is overweening.Larry writes employees, employees are increasingly looking to their employers as the most trusted, competent, and ethical source of information. Think about that. You’re working in a Fortune 500 company, whatever, and you’re looking at your employer as your most trusted of information. I don’t think so.

Frank Gaffney (09:58):

Well, you’ve been there, you know, and I think it’s-

Bill Walton (10:00):

I do know.

Frank Gaffney (10:00):

It’s vital that-

Bill Walton (10:04):

I would’ve liked more of that.

Frank Gaffney (10:05):

I like to think they’re getting some of their information from programs like ours. But Bill, let me ask you this. When you see this kind of, well, perturbations in the forest, maybe you might call it, it’s really important. And I know that we sort of revert to this most of the time we talk about this subject, but I don’t think it can be said often enough, whether it’s Larry Fink or whether it’s his counterparts at Vanguard or State Street or any else on the street, it’s our money that they’re doing this with, investing in China, maybe even recklessly investing in China, for sure. But at a minimum, it is helping enable the mortal enemy that we confront. And I’m with Charlie Munger to this point, I certainly don’t want Larry Fink imperially disposing of our resources, whether it’s taxpayer funds or whether it’s veterans or-

Bill Walton (11:08):

Well, this relates to our earlier topic, Frank. I’ve said China has a primitive capital market. Most of its savings dollars are tied up in residential real estate, which is in a precarious spot, and bank accounts. And they’ve got no other way really to put their money to work. And China’s enlisted Vanguard, Goldman Sachs, JP Morgan, to come in and modernize its capital markets, in effect, helping bail out the Chinese Communist Party. The number two guy, the chief operating officer at JP Morgan was interviewed recently and they still see China as a growth market. And they’re not paying attention to the sort of things that they ought to be paying attention to, which is America’s security and the unfortunate human rights violations that the Chinese Communist Party is guilty of.

Frank Gaffney (12:01):

Those are things you’d like to think every American is focused on, and especially when it does come to your money being disposed of in ways that might be very harmful to our national security. But I think the other piece of it is that even on the business side, Bill, what you’re talking about doesn’t seem to be making a lot of sense given where they’re putting that money and the likelihood that the shareholders are going to benefit. We have to leave it at that, Bill. I’m afraid we’re hard out of time, but I just wanted to say thank you as always for your insights into all of these matters and the extent to which you’re bringing to bear a lot of hard-earned experience in the field. And it’s really appreciated that you share it with our audience. I hope you come back to us again next week. Thank you for your time today.

Frank Gaffney (12:50):

Next up, we’ll speak with Colonel Grant Newsham right after this.

Speaker 4 (12:58):

Go to today. It’s your freedom. It’s your country. Frank Gaffney’s Secure Freedom Radio.