Honey, our savings have shrunk
Also in today’s edition: Vivek Ramaswamy’s anti-ESG crusade; Podcasters’ desperate measures; No texting for Wall Street bros; Not enough takers for iPhone 14
Good morning! Era-defining file-sharing platform Napster is making a comeback… as a web3 company, Protocol reports. And in doing so, it’s following in the footsteps of Limewire and Winamp. We still don't know if these OG platforms were waiting for the right time to make a splash, or just sniffed an opportunity. Here's hoping we don't see Napster in the Web3 hall of shame.
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The Market Signal*
Stocks: Rattled by the turmoil in the markets, Bank of England said it will inject £5 billion every day for the next 13 days to stabilise the UK economy, Financial Times reported. The country is passing through a period of instability unseen in recent times. On the one hand, BoE has raised rates to fight inflation and on the other, it’s printing money that could stoke prices, worsening the cost-of-living crisis. This could very well be the UK’s Lehman Brothers moment.
In India, all eyes are on the RBI which is expected to announce its fourth rate hike on Friday.
Early Asia: The SGX Nifty gained ground (+1.06%) at 7.30 am India time. The Hang Seng Index (+1.51%) and Nikkei 225 (+0.89%) also marched ahead.
SAVINGS
Indian Household Savings Have A Great Fall
After remaining closeted at home during the pandemic, break-free shopping emptied consumers’ bank accounts. Or so it seems. Household savings have dipped to a five-year low of 10.8% as a proportion of the GDP, Mint reports, quoting RBI data.
In the pandemic months, money in the bank was untouched as spending opportunities dwindled and, as a result, household savings hit record highs. When activity resumed and people got out to work and for leisure, spending rose too. By that time, however, conditions had changed.
Inflation: Rising prices meant buyers had to shell out more. So much so that they even began maxxing out on credit cards to meet daily expenses.
GDP: Output has risen from the shallows when Covid-19 hit, but savings have not grown in tandem. That means when measured as a proportion, savings fell.
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VENTURE CAPITAL
Conservative Investor Takes The Fight To Woke Boardrooms
Vivek Ramaswamy, the founder of Strive Asset Management who’s backed by Peter Thiel and fund manager Bill Ackman, is on a mission to checkmate ESG (environmental, social, governance) investing. And he’s doing so via DRLL, his exchange-traded fund that attracted $315 million within a month of launch.
What he wants: Ramaswamy launched DRLL to compete with activist asset managers such as BlackRock, State Street, and Vanguard. His goal is for companies, particularly those in the energy sector, to refocus on profitability rather than ESG.
Regression: Ramaswamy has written to Apple, urging it to halt measures such as diversity audits. He even urged Disney to stop speaking out in support of LGBT rights in Florida. No spoiler here: the asset manager has donated over $80,000 to Republicans since 2014.
TUNE IN
Who Blew Up The Nord Stream Pipeline?
Plug in your earphones for an analysis on how “revenge shopping” and price rise have depleted household savings. For the deep dive, we look into the mysterious Nord Stream gas leaks. The air is thick with rumours of sabotage. Tune in to find out the details!
🎧 The Signal Daily is available on Spotify, Apple Podcasts, Amazon Music, and Google Podcasts, or wherever you listen to your podcasts.
ENTERTAINMENT
Mobile Gamers Keep Podcasters Afloat
This headline is hyperbolic but hear us out: you know things are extraordinarily cutthroat when the world's largest podcast publisher, iHeartMedia, has to use adware to boost numbers.
Elaborate: iHeartMedia and the New York Post (which has eight podcasts) ‘buy’ listeners via popular games such as Subway Surfers, Bloomberg reports. Here’s how it works: while users sit through commercials to progress in a game, episodes of podcasts don’t just play for a few minutes but get downloaded on their phones.
These forced downloads inflate metrics—all so podcasters can hike ad rates for their shows.
The download mining strategy was executed by contractor Jun Group. iHeartMedia spent $10 million-plus to gain six million unique monthly listeners since 2018.
The Signal
In 2018, iHeartMedia was a bankrupt radio broadcaster that tried two things to survive: seek investors including Apple, and pivot to podcasting. The latter worked. Over time, iHeartMedia went on a buying spree, starting with HowStuffWorks’ podcast arm and continued with the acquisitions of five audio-tech companies.
But the hypercompetitive podcast space spares none: the now-behemoth is contending with an ad downturn despite stellar quarterly earnings. It doesn’t help that iHeartMedia’s biggest competitor, Wondery, is owned by ad juggernaut Amazon.
The fundamental question underpinning it all is: what constitutes a podcast play? If downloads are the be-all and end-all, we need to define what constitutes a legitimate download. Reminds us of streaming platforms’ inconsistent metrics.
GOVERNANCE
Wall Street’s Broken Record
If you are a Wall Street banker, broker or even Elon Musk, you better stay off WhatsApp, iMessage, Signal (that won't be us, of course) or any personal messaging app. The SEC found it unacceptable that some top bankers had taken to unauthorised use of these apps when they are supposed to keep a record of all they are talking about.
$1.8 billion: That is what 16 of them—including Bank of America, Goldman Sachs, Barclays, and Morgan Stanley—will pay in fines for the hush-hush chats.
Dodgy: Twitter lawyers claim Musk is a serial offender when it comes to private-chatting about deals. Musk and Oracle chief Larry Ellison, his potential co-investor in Twitter, were Signalling one another the night before the former tweeted that the deal was on hold, they say. Some texts are even missing.
TECH
Apple Sees What Others Don't
The Cupertino-headquartered tech giant will produce 90 million iPhone 14 units this year, the same as in 2021. Demand for the new phone is lower than expected.
Lowdown: Supplier Foxconn has been asked to swap production lines of standard iPhone 14 models in China with the more expensive and more-in-demand Pro line. Apple had previously scaled back production of the new budget export, the iPhone SE.
Outlier? The global smartphone market is witnessing a slump—shipments dropped as much as 9% in the last quarter. Response to the new iPhone has been lukewarm in China. What does Apple’s, considered somewhat of a bellwether for luxury goods and a good reader of trends, decision to cut production tell us? The global economy is in much worse condition than earlier thought.
FYI
Reprieve: The Delhi High Court has granted statutory bail to Chitra Ramakrishna, former CEO of the National Stock Exchange (NSE), in the co-location scam.
Board games: TikTok parent ByteDance is increasing its number of board members from five to nine, with the company facing scrutiny from regulators, advertisers, and consumers.
Cold comfort: Daikin, the world’s largest manufacturer of air conditioners, has talked up India as a market with “huge potential” in a post-Covid world.
Ka-ching: Pharmacy-focused B2B ecommerce marketplace Saveo has raised $4.5 million in funding at a $50-million valuation.
Brick by brick: Lego, the world’s largest toymaker, reported a revenue increase of 17% to $3.47 billion in the first six months of 2022, compared with the same period last year. Harry Potter, Star Wars, and Technic sets are doing well.
Greying population: One in four Singaporeans will be at least 65 years old by 2030. This is putting a lot of pressure on the city-state’s healthcare and social spending.
Getting into the game: Intel plans to start selling video-gaming graphics chips, with an aim to enter a lucrative market dominated by rivals Nvidia and AMD.
FWIW
A side of nostalgia: McDonald’s has finally understood the assignment. It is collaborating with a streetwear brand to serve adults Happy Meals. The icing on the cake? The custom items are all vintage McDonald’s mascots. The line is limited edition, aka the only way to rein in adults with toys.
Snooze hit: A game called Sheep a Sheep has gone viral in China at a time when gaming regulations are at their peak. As part of Tencent’s WeChat, it has managed to slip under the radar since publishing games with HTML5 code needs no permit. Will Chinese authorities intervene? That's a game worth watching out for.
Fresh approach: New-age morning-after pill companies are breaking the stigma and rebranding themselves for Gen-Z women. Marketing techniques include bright packaging, memes, and videos. A brand named Julie is using TikTok and its influencers to launch its campaign.
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