Lockdowns are being eased around the world and the specter of a China-USA cold war is starting to unfold. Tik Tok.
China and Iran are nearing a historic militarily and economic partnership – a strong rebuke to US foreign policy for the country / region. The partnership will provide Iran a much needed lifeline and catapult China’s influence in the Middle East. The partnership will pave the way for billions of dollars in investment in Iran in the energy, telecommunications, banking, and transportation sectors. In return for the billions, Iran will provide China discounted oil for 25 years. The Trump administration’s aggressive policy against Iran, and cancellation of the 2015 nuclear deal, might have served as a catalyst for the Iran-China partnership. China obtains 75% of its oil from abroad, and Iran is a major oil producer. “Two ancient Asian cultures, two partners in the sectors of trade, economy, politics, culture and security” reported New York Times as per a statement in the draft agreement between the two nations. The Chinese investment in Iran could total over $400 billion over a 25 year period (The New York Times). While most of the western world is busy grappling with COVID-19, this development in the Middle East is seismic to say the least, and demands serious contemplation.
Few months ago I heard someone say “there could very well be a baby boom due to the COVID lock-downs with couples spending so much time indoors“. However, the BBC reported a startling global crash in children being born. Current trends show that every country is likely to experience a shrinking population by the end of the century with Spain and Japan expected to experience a dramatic contraction. In 1950, women were having 4.7 children – that figure nearly halved to 2.4 in 2017 – and is projected to fall below 1.7 by 2100. Such a low fertility rate will lead to a peak in global population by 2064 before falling to 8.8 billion by the end of the century. Interestingly, the population in Africa is expected to “treble in size to more than 3 billion by 2100” with Nigeria becoming the world’s second most populous country with a projected population of 791 million. More on BBC.
Elon Musk silently zoomed past Warren Buffet in net worth. Reuters reports the outspoken billionaire, Musk, climbed Bloomberg’s billionaire index to 7th place. His net worth grew $6 billion in one day when Tesla’s shares surged more than 10% on Friday, July 10th (Reuters). On a side note, Tesla is more valuable than Nissan, Honda, Ford, BMW, Aston Martin, Ferrari, and Volkswagen combined. And just for context, one of those companies, Nissan, manufactured more than 5 million vehicles annually, while Tesla is aiming for less than 350,000. Is that ludicrous or what?
The second richest woman in the world says she has donated $1.7 billion to charity to date. That would be Ms Scott, the former wife of tech legend Jeff Bezos. Ms Scott’s donations have included gifts to historically black US colleges, health organizations, and climate change groups. Ms Scott was one of Amazon’s first employees and received a 4% stake in the company after her split with Bezos. Shortly after her divorce, she signed the ‘Giving Pledge’ founded by Warren Buffett and Bill and Melinda Gates, which commits the wealthy to give away majority of their wealth to charity (BBC).
From fake news to fake licenses. Pakistan’s aviation industry descended into chaos after it was revealed that 260 of Pakistan International Airlines’ pilots had cheated on their pilot examinations. The country’s aviation minister said that “one-third of Pakistani pilots have fake licenses that were obtained either by fraud or with the help of dummy candidates“. Several reasons led to this state of affairs – staring with beleaguered former Prime Minister’s move to remove the Ministry of Defense’s supervision of aviation, and handing the reigns to a civilian minister (EuroNews). All this came in the wake of a tragic accident in late-May of a PIA jet that crashed due to pilot error.
Canadian Prime Minister’s beard just got grayer as he faces a third ethics inquiry in office. Justin Trudeau admitted his mistake but faces severe backlash for tapping ‘We charity’ (linked to his family) to oversee a $900 million CAD youth volunteer program in June. The Prime Minister’s previous forays with questionable ethics include a Christmas trip to the Bahamas at a billionaire friend’s place, and interference with an investigation of engineering firm SNC Lavalin (BBC). The fate of Trudeau’s minority government hangs in the balance with this latest crisis that has largely overshadowed his government’s successful fight against COVID-19.
A high profile confrontation with Harvard, MIT, and hundreds of other US colleges led to reversal of a controversial US policy on international students. With many colleges offering online only classes, the US government put forward a policy to rescind F-1 student visas for international students which would send the students back to their home countries for the Fall semester. However, US colleges staged a vehement defiance against the policy. Foreign students contribute tens of billions of dollars to the US GDP and without such reversal, the nation’s colleges would have lost a ton of talent, and revenue (Bloomberg).
Instagram proved quite useful for the FBI in a recent hunt for a conman. In a coordinated effort with the Dubai police, twelve fraudsters were arrested and $40 million in cash was seized in Dubai. The kingpin of the network known as “Hushpuppi” flaunted a billionaire lifestyle on his instagram account and courted more than 2 million followers. The crime: transnational network that specialized in sending fake messages to redirect financial assets and compromise bank details. Hushpuppi has been charged with conspiracy to launder hundreds of millions of dollars through heists that include targeting an English Premier Soccer club (Quartz Africa).
In a rare move, China imposed sanctions on two US senators. The retaliatory move is in response to US sanctions against China for its treatment of ethnic and religious minorities in the Xinjiang province. The two senators Marco Rubio and Ted Cruz, have little exposure to China, which makes the sanctions “largely symbolic” (The Guardian). This news highlights one of many scuffles in recent past as the economic and political tug of war between China and USA intensifies.
How do you feel about 180s? Well here’s one worth noting: UK will ban China’s Huawei from its 5G networks. I literally finished reading an HBS case study on Huawei a couple of weeks ago – its an interesting one. The surprise move by the UK will force mobile network operators in the country to stop buying equipment from China’s Huawei. Whats more: it could delay UK’s 5G roll-out by up to 3 years and cost as much as £2 billion. The move follows new sanctions imposed by the USA on Huawei in May. Huawei had invested in a research and development center in Cambridge to lead the 5G roll-out in the UK. The company has been at center stage of national security concerns sparked by the US that claim that Huawei bears the emblem of the Chinese Communist party (CNBC).
Real life Robinson Crusoe is in despair after receiving an eviction notice from his island paradise. The 81 year old Mauro Morandi has lived on the island of Budelli near Sardinia since 1989 when his catamaran broke down while on a sailing trip. Morandi lives in a former second world war shelter overlooking a bay, and powers his lights and internet through solar panels. He knows every nook and cranny on the island, and being so immersed in nature, its hard for the old man to fathom the idea of living in an established city. Morandi has an Instagram account which he has been working on improving as he shares his life on the untouched island – famous for its pink-sanded beach (The Guardian).
I love London for its history, culture, cosmopolitanism, and fashion. You really don’t have to try too hard to observe good mannerisms in the city. Its a city I once called home, and what fascinates me is London’s unique equilibrium with the old and the new. So much new development has shaped London over the past two decades, and yet the city maintains its historic architecture, and traditions. Sheets of glass, concrete and steel that make up modern facades, collide with Victorian-era buildings in the Old City. A walk down Bishopsgate by Threadneedle street will leave you in awe. My favorite place in that area is the courtyard grand cafe at the Royal Exchange, which was formerly home to Lloyds of London and celebrates an illustrious history. The striking clash of the old and the new, the modern and the traditional, the daring and the old-fashioned is everything Paris could ever desire to be. And on that note, I wanted to share these fascinating photos curated by the Insider that depict life in London 100 years ago.
China’s Nasdaq equivalent claims Alibaba-owned Ant group’s listing. Will US indexes become less relevant as China aims to become technologically self sufficient? The Chinese President ordered the formation of Star Market in response to souring relations with the USA. The index is already Asia’s most valuable stock market with a capitalization of more than $400 billion. Experts believe Star Market will attract listings from Hong Kong given the political uncertainty there, and also the USA which is taking unprecedented actions to clamp down on Chinese companies listed on its exchanges. The Nasdaq is 20 times bigger as it stands and was worth nearly $10 trillion at the end of 2019. “The reality of the size and complexity of China’s new economy play will always make China attractive globally – just as Nasdaq has done since the ‘dot.com’ days” said Jacob Doo, chief investment officer at Envysion Wealth Management (BBC).
Ancestry.com, the website that tells you about where your ancestors originated has been scooped up by Blackstone in a deal valued at $4.7 billion. Blackstone will own 75% of the company while GIC, the Singaporean sovereign wealth fund, will maintain its 25% ownership. Ancestry.com has over 3 million subscribers and more than 18 million people in its DNA network. The company went public in 2009 when it raised $100 million, before going private in 2012 in a $1.6 billion buyout (Yahoo Finance). Do you know where your ancestors are from?
Embattled airline company, Virgin Atlantic, filed for US bankruptcy. The company’s eccentric founder, Richard Bronson, has been on a mission to procure capital to keep the business afloat. He even put up his Caribbean island as collateral to seek a loan from the UK government, but was unsuccessful. The bankruptcy in the US is part of a broader restructuring plan for the company that halted operations in April and closed its base at Gatwick Airport – relinquishing 3,500 jobs (Yahoo Finance).
In closing, I heard Bill Ackman’s recent interview on Bloomberg and thought I share: Ackman’s recent success was a $27 million hedge earlier this year that turned into roughly $2.6 billion in a matter of weeks. Mr. Ackman, who started a hedge fund with $54 million in 2004 has delivered an IRR of 16% to its investors since the fund’s inception. He defines success as not-a straight-line-up and had his confrontations with failure; but at 54, Ackman is done with making mistakes. Ackman credits his success to 8 principles, which he has engraved, framed, and placed at everyone’s desk at his office. I couldn’t decipher what the 8 principles are from his interview – maybe they are part of his secret sauce. But he did highlight ‘investing in companies with strong balance sheets’ as his core tenet. Quite simple init? Ackman has spent majority of his time during the pandemic at his parent’s house – a time he calls beautiful. He believes remote working lacks the inspirational interactions and ideas that happen at the office. You can watch the full interview through the link and its one of those things I mentioned in my ‘About Author‘ page: “one can learn a lot by listening to successful people answer questions”. This is one of those listen-ins (YouTube by Bloomberg).
References: The New York Times, Reuters, BBC, EuroNews, The Guardian, Bloomberg, Yahoo Finence, Quartz Africa, CNBC, and The Insider. Please note that this briefing contains paraphrased summaries and attributes the original content to the news sources. Readers are encouraged to visit the links to access the full article in its original form for a thorough and complete view. You may need to subscribe to the news agency and source for access.