September 22, 2020

what we are watching...

empowering you with insights and information from the edge of today’s headlines

Politics

Say no to Drugs: The US House was set to vote on a bill which would have legalized marijuana (or at least remove cannabis from the Controlled Substances Act). However, due to the election drama, the vote is likely to happen post-November 3. The House seems to want to focus on getting the government funded and a COVID relief bill, rather than adding more fuel to the fire in a more than contentious election.

Hack the Police: Hackers went after the personal data of over 1,000 Belarusian police officers in retaliation for the violent crackdowns against protesters. The hackers threatened to continue releasing more information if the arrests of protesters continued. Many of the officers wear balaclavas (face coverings) so as not to be identified, but their aggressive tactics appear to be necessary to keep Lukashenko in power. Opposition leaders are set to meet with the EU Foreign Ministers, and the EU continues to weigh sanctions against Belarus.

Fly over country: Last week, the US sent Undersecretary of State Krach to visit Taiwan for a discussion on economic affairs and to attend a memorial for former president Lee Teng-hui. China did not take kindly to the US’s recognition of Taiwan: China views Taiwan as part of its own territory and opposes any formal diplomatic interactions. As a result, China sent 18 military planes, including fighter jets, to fly over Taiwan as a show of strength. The US is also considering a sale of military weapons to Taiwan, so we continue to poke the bear.

The trade war with China is also escalating: China's Commerce Ministry published a “Provisions on the Unreliable Entities List,” which restricts named companies from accessing business interests in China. China mentioned how it will punish companies if they appear on the list, but has yet to name the entities. Expectations are that a major US player will be sanctioned, further escalating tensions and in retaliation for Trump’s botched ban on WeChat and TikTok.

Technology

Tech Regulation: The tech giants have come under scrutiny from regulators across the globe in an effort to rein in their reach, control misinformation and protect users’ privacy. The European Union and China have been aggressive in enacting protections (although for quite different goals), while US regulators continue to wobble. Although the Congress has held hearings trying to take the tech giants to account, and the FTC fined Facebook $5B in 2019, the attempt at regulation has actually been anemic. One reason — budgets. The Federal Trade Commission and Department of Justice’s antitrust division have a combined annual budget below what Facebook makes in three days. That is like bringing an eraser to a gun fight. Without legislation from Congress, seems like we have little hope of changing big tech’s business model.

Theranos revisited? Earlier this month, General Motors invested $2B in Nikola Motors with the hopes of boosting its manufacturing of electric trucks. Unfortunately, an activist investor published an extensive report claiming that Nikola “is an intricate fraud built on dozens of lies.” As a result, the chairman and founder, Trevor Milton, resigned from his posts and the stock tumbled at the open on Monday (although later recovering). The SEC is reviewing the accusations, although Nikola calls them “false and defamatory.” Milton’s exit package appeared to be worth over $3.1B.

Short sellers have notoriously been active against Tesla, so Nikola seems like a fitting target. Today is Tesla’s battery day event, although Elon Musk has already notified the market that they are below target (which is also a common refrain coming from Tesla).

Reality in Space: A new reality show called “Space Hero” is in the works. The premise of the show will be a search for “everyday people from any background who share a deep love for space exploration” and they will be put through a variation of astronaut training. The winner of the contest will receive a trip to the International Space Station on the SpaceX flight in 2023. We expect a combination of Survivor, America’s Got Talent and the Eurovision Awards.

Smart-looking Glasses: Facebook and Rayban have teamed up to create a new version of smart glasses, which are expected to debut in 2021. The glasses appear to be similar to Snap’s Spectacles: they’ll have cameras and link to Facebook’s apps but they won’t have augmented reality functionality. Yet again, DVF was ahead of her time.

TikTok: We are giving up trying to figure out what is actually happening to TikTok as conflicting reports of ownership keep appearing from Oracle and Bytedance. We will however pay homage to Walmart’s apparent primal scream. Walmart partnered with Oracle in its bid to buy 20% of TikTok, but in its press release, Walmart published a typo that can only be described as a cry for help: “Ekejechbecehggedkrrnikldebgtkjkddhfdenbhbkuk.”

Finance

FinCEN files: BuzzFeed released a report in combination with a group of global investigative journalists that details how some of the world’s biggest banks have allowed criminals to move dirty money around the world. The report is based on over 2,500 documents (mostly reports that banks send to regulators regarding suspicious activities) and involves around $2T in transactions. Several Russian oligarchs avoided Western sanctions by laundering funds through Barclays; Deutsche Bank laundered money for organized crime, terrorists and drug traffickers, and JP Morgan moved over $1B in funds for someone on the FBI’s most wanted list. Despite heavy regulation to “know your customer” and to prevent money laundering, apparently dirty money pays more than the fines imposed by regulators.

Stakeholders over Shareholders: Last year CEOs pledged to serve stakeholders, not shareholders in the Business Roundtable statement. But there have been few signs that major corporations have taken real steps to serve non-shareholders. A new study was released, The Test of Corporate Purpose, and it found that members of the Business Roundtable have “failed to deliver fundamental shifts in corporate purpose in a moment of grave crisis when enlightened purpose should be paramount.” Some examples include Salesforce praising stakeholder capitalism, and then firing over 1,000 workers in light of the pandemic. Or Wells Fargo rejecting a shareholder proposal to convert the bank into a benefit corporation. Amazon also drew a lot of scrutiny — while the company invested in safety improvements (late into the pandemic), it also fired activist employees while raking in huge profits. There were some bright spots, however, including BlackRock which steers its investments toward companies that limit climate change.

Culture

COVID Reunions: COVID has certainly brought one thing we were sorely missing: celebrity reunions and table reads for charity. Last week, we saw two classics come to life — the Princess Bride and Fast Times at Ridgemont High.

The Princess Bride featured most of the original cast and raised over $4.5M for Wisconsin Democrats, while Dane Cook brought together a cast of celebrities to read the 1982 “coming of age” drama or epic stoner film. Shia LeBouf seemed to be method acting the part of Jeff Spicoli while the original, Sean Penn, sat in laughter and disbelief. Mostly, we appreciated the Brad and Jen reunion, and Julia Roberts laughing in the background.

Instagram Battles: Early in the pandemic, Timbaland and Swizz Beatz accidentally created an Instagram Live series - Verzuz. Essentially, two prominent producers or songwriters pair up for a competition similar to DJ battles. The Instagram audience scores the battles, and contestants have been challenging their rivals to battle publicly. While most of the battles have been from hip hop producers, two of the most recent included Brandy vs Monica and Patti LaBelle vs Gladys Knight.

Uber Battle: Although it is just a commercial for UberEats, we were more than excited to see Mark Hamill and Patrick Stewart set to duel over the pronunciation of “tomato.” I guess they are both vegetarians?

Looking for a pen pal: If you are in the mood to write and receive snail mail, Postcrossing is a new platform that allows you to send and receive postcards from random strangers. As the website says, “turn your mailbox into a box of surprises.”

Emoji Anguish: A new emoji was approved that attempts to express the utter drama that is 2020: a face with spiral eyes. We think they should have upped the ante: sprial eyes on fire? There is also a new tag that will let you add a beard to any face emoji to show how much you have aged.

— Lauren Eve Cantor

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