Who is Facebook's Marlboro Man?
Also in today’s edition: Power cut in China, Google spies on staff, Quad is about vaccine now
Good morning! Elon Musk is nursing a broken heart. You see, Joe Biden didn’t pat him on his back after Inspiration4’s splash landing. Musk has now found love in the arms of Xi. The billionaire spoke at a Chinese state organised conference and assured the country that Tesla would expand its investment despite economic turbulence. This is the second time in 10 days that Musk has praised China’s digital ambitions. What did you think we were talking about?
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The Market Signal
Stocks: Will the Nifty cross 18,000 now that the Sensex has breached the psychologically important 60k mark? That will probably be the event to watch out for. The benchmark had come within 55 points of the milestone on Friday but settled lower by end of the day as traders booked profits.
China is switching off lights
Last Friday, China conducted what many here would call a “surgical strike” on crypto, banning all crypto-related activities, including mining, circulating and offshore transactions. While it sees crypto trading as “breeding illegal and criminal activities”, it sees mining, which requires huge quantities of electricity, hurting its climate goals.
A different target? With the ban on crypto, it was only beginning the crackdown on power consumption. The country is seized by a surge in energy demand amid rising coal and gas prices. Beijing has ordered several energy-intensive industries to curb production or shut down completely.
Some cities are so badly off that they are switching off street lights. China is determined to reduce emissions to meet its steep climate change targets. President Xi Jinping has vowed to distance the country from coal but the determination has raised concerns of a shortage of coal for heating in winter.
An Employer And A Snoop
Big companies have always worried about information leaks. But with technology companies, the level of employee surveillance can go up a few notches.
Google: The technology giant has deployed an extensive toolbox of digital surveillance techniques to watch its employees. One of the techniques is closely tracking employee behaviour such as observing those who look up how to extend insurance cover if they leave the company. Google security also red flags attempts to take screenshots on work devices while running encrypted messaging services, bulk transfers of data onto thumb drives or cloud storage. It’s even sharing the toolkit with other companies.
Apple: CEO Tim Cook expressed his frustration in an email to employees last week after details of a companywide meeting leaked to the press. “We know that the leakers constitute a small number of people. We also know that people who leak confidential information do not belong here,” Cook wrote. Needless to say, someone thought the email was too juicy to not be leaked. The Verge published it here.
Big Tech’s Big Tobacco Moment is Here
You’ve likely read this headline before. Many times over. Especially when Facebook finds itself engulfed in a scandal, which, by the way, is quite often. But finally, the Big Tech-Big Tobacco comparisons could be inching closer than ever before to the point of inevitability.
Why? The Wall Street Journal’s revelations that said Facebook knew about Instagram’s toxic impact on teenage mental health has become a major subject of contention, stoking these comparisons. Facebook’s desire to launch Instagram for kids, despite opposition from a majority of American states, has only added fuel to these comparisons.
The smoking gun: The general belief is that just like tobacco companies use additives to hook smokers, social media platforms such as Facebook use ‘likes’ and ‘shares’ to acquire users at an early age and keep them hooked.
Newer grounds: Beyond user privacy, algorithmic transparency, and antitrust, American lawmakers are looking at consumer protection as an entry point into regulating companies like Facebook.
But this time, as Casey Newton notes, it feels a little different, “because it has been led by Facebook’s own workforce”. This also neatly complements the fact that a company whistleblower has sought protection from a set of bipartisan lawmakers, along with documents that have been turned over to them.
With teachers, paediatricians, and parents now joining the conversation, and with children and teens at risk, this could also alter public perception of these companies. Which brings us to the billion-dollar question: Can lawmakers, largely considered to be ineffective against Big Tech, finally deliver?
Winds of Change In The Indo-Pacific
Blame it on pandemic restrictions or the weather in Washington, Prime Minister Narendra Modi’s 5-day US tour was quite low key compared to his previous visits. No jamboree with the Wolverine at Madison Square Gardens or jamming with the diaspora in Houston, hand firmly in hand with the then President Donald Trump.
No arms: Although PM Modi’s visit was centred around the United Nations General Assembly, the highlight was the meeting of the Quad, originally seen as a security alliance of the US, India, Japan and Australia to keep China in check. However, President Joe Biden sees the Quad as a regional cooperation initiative that deals with vaccinations, student fellowships and climate change. Secretary of state Antony Blinken made it clear during his India visit in July that Quad was not a military alliance. Meanwhile, the US, the UK and Australia created AUKUS, a controversial Indo-Pacific military grouping.
Vishwa Guru: The change was cemented when Modi said on Friday that Quad would play the role of a “force for global good”. Some analysts, however, see the institutionalisation of the Quad as the biggest gain from the summit. The lack of celebrations in the US was made up when the PM landed back in Delhi though.
Red Pill Or Blue Pill?
Stop the gushers: The Bank of England has indicated it might begin raising rates in November while two of its monetary policy committee members pushed for ending bond buying earlier than scheduled. The US Federal Reserve chairman Jerome Powell said tapering “may soon be warranted”. He said the Fed could “easily move” to reduce bond-buying from November. It has also indicated it will raise rates in 2022.
Inflation worries: Central bankers are in a quandary. They want to close the spout of easy money as inflation threatens to get out of hand. Wobbly recovery is holding back the US and UK from fully committing to sharp actions just yet which means liquidity is unlikely to recede quickly. The key question they are grappling with is whether price rise is recovery driven or because of supply chain disruptions.
What Else Made The Signal?
Meesho is sexy: When it rains it pours. The live commerce platform, Meesho, is reportedly raising a $500 million round at a valuation of $5 billion. It last raised capital from Softbank at a $2 billion valuation.
Can’t do it: Nike was forced to slash revenue growth numbers owing to supply chain issues in Vietnam. The retailer had flat first quarter sales too. It, however, managed to make profits after slashing discounts.
Even-steven: Huawei Technologies’ founder Ren Zhengfei’s daughter and company executive, Meng Wanzhou, reached China to a hero’s welcome after being jailed in Canada for three years. In exchange, China released two Canadians that it had jailed.
Straight through: Nearly six months after banning direct flights from India, Canada said it will allow them from Monday.
Languishing no longer: Companies across the US have decided to give their employees a week off as burnout leave. The lines between work and life have been blurring since the pandemic began. And while most companies give employees the week off at the end of the year, this is a middle-of-the-year exercise to help people recharge their batteries.
Tomato pill: What do you think of eating a tomato instead of popping pills to keep blood pressure under control? Tokyo startup Sanatech Seed co has put on the market genome-edited tomatoes that contain five times the usual amount of gamma-aminobutyric acid, a substance that keeps blood pressure down.
Top score: K-Pop has cracked another record. Only four K-Pop solo musicians have ever got into the Billboard Global 200 and all of them are women.
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