Russian culture is getting cancelled
Also in today’s edition: Paytm is having it hard; Russia is turning the heat on big tech; Hong Kong is not that cool; Crypto grifts now in sport
Good morning! Contraband car culture is flourishing in Bolivia thanks to TikTok and an unlikely viral hit. The Guardian reports that chuteros (car thieves) flaunt stolen and smuggled vehicles—known as chutos—in videos set to the song Chutero Yo Soy. Local fiestas celebrate a way of life that crosses borders: about 25,000 chutos enter Bolivia from as far as Japan via Chile, while Chutero Yo Soy is the handiwork of Peruvian singer Simon Latorre. But not everyone is impressed. A Bolivian vice minister has compared chuteros to “criminal groups in Mexico”.
Good morning, listeners! Farheen Khan gives us a concise rundown of Paytm's problems. The firm is stuck in a never-ending loop of crises. We also look at how Apple Inc. promptly files a counter-suit against any business that is even slightly associated with its logo or the word. Tune in to The Signal Daily!
The Market Signal*
Stocks: Benchmark indices closed the week in the green buoyed by the BJP’s resounding victory in the state assembly elections. Global markets are keenly awaiting the US Fed’s mid-week meeting. That the Fed will begin hiking rates is almost a foregone conclusion. The question is: by how much? The Fed action will add pressure on the RBI to raise rates.
STARTUPS
Paytm Is Not Having It Easy
The RBI has banned Paytm Payments Bank from onboarding new customers citing a gap in the bank’s IT system and ordered a comprehensive tech audit.
Who can use it? This will not impact any existing customers of the bank but new users can’t sign up until further notice. But the news may hit the Paytm share which has already lost nearly two thirds of its value since listing in November 2021.
Strike three: The bank was hoping to file for a small-finance bank licence by June, which would help it solve several payment problems such as lending and accepting deposits of more than ₹2 lakhs. But with the ban, it will be hard for Paytm to approach for the licence. This is the third time that the bank has faced regulatory action.
Double trouble: Not just the company, CEO Vijay Shekhar Sharma was also in trouble recently. He was arrested and later released on bail for banging a deputy police commissioner’s car with his Land Rover.
BIG TECHNOLOGY
Russia Ups The Ante Against Meta
By the time you read this, Instagram would have been banned in Russia. The decision against the Meta-owned app, which has a Russian user base of 80 million, was Russia’s response after Meta temporarily allowed calls for violence against Russian soldiers (and Vladimir Putin) from former Soviet states. This was similar to its move in Iran last year. Another escalation included a related threat to declare Facebook an “extremist organisation”.
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This was coming: Russia’s crackdown against these big technology companies began even before its invasion of Ukraine. According to the Washington Post, Russian agents have been intimidating executives of companies such as Google, personally visiting them to serve ultimatums.
Elsewhere: Apple’s been prying around and challenging anything remotely connected to…fruits. This, as part of an aggressive legal bid to protect its trademark. TikTok is trying to close the loop on Oracle, not to be acquired this time, but as a “trusted technology partner” to store US user data.
Postscript: If you are a Meta employee reading us, you might soon have to start doing your own laundry. The company is cutting back on such perks.
GLOBAL FINANCE
Omicron Leaves Hong Kong Gasping
Hong Kong, once an entrepot to Asia, is gradually losing its lustre as a financial and trade centre, as it cowers in Beijing’s iron-willed embrace.
Virtual prison: Panicked residents of the city are hoarding daily essentials and medicines as one of the worst Omicron waves in the world sweeps through it, overwhelming hospitals and the administration. Thousands of people have fled, unable to bear draconian curbs, including forced quarantine of little children.
Professional exodus: Finance professionals have been leaving the city in droves over the past three years but now the outflow has intensified.
The Signal
Covid-19 has done what political turmoil failed to do. Hong Kong’s position as a pre-eminent financial centre, arguably only behind New York and London, is under threat since 2019 when pro-democratic protests against a new set of laws set the city aflame. Although the protests scared away some people and businesses, most big firms stayed put. The pandemic, however, shut down thousands of businesses. But even those who did not leave then are packing their bags now as Hong Kong toes Beijing’s line of zero tolerance for Covid-19. To contrast, the rest of the world is learning to live with the virus. Between mid-2020 and mid-2021 Hong Kong’s population declined 1.2%. Big banks and financial institutions face a severe talent crunch as people from other parts of the world do not want to work in what once was a carefree city.
It may not be the end of the road as Hong Kong is still a financial bridge between China and the rest of the world. And China is the world’s largest, and fastest-growing economy.
RUSSIA-UKRAINE
Russia’s Cultural Exports Face The Heat
Along with sanctions, came virtue signalling. The unfortunate casualties in the line of fire are Russia's artists. Netflix halted its service in the country and even shelved a contemporary retelling of Leo Tolstoy's classic Anna Karenina. A university in Milan backtracked from starting a class on Russian author Fyodor Dostoevsky.
Cold shoulder: In the last few days, Hollywood, the music industry and art venues have joined hands to showcase their support towards an event that is one for the history books. The Metropolitan Opera has cut ties with “Pro-Putin” artists. Russia's prestigious Bolshoi Ballet, which even survived the Cold War, has been canned in light of the Russian-Ukraine war. Russian cats aren’t spared.
Axed: Erasing Dostoevsky is on the nose given how he was sent to a Siberian prison camp for reading banned books. While sanctions aim to cripple Russia’s economy, its culture war has little to do with Putin. At best, isolating Russians only showcases moral grandstanding.
CRYPTOCURRENCIES AND NFTs
Socios Loses The Dressing Room
Blockchain-based fan token Socios is in hot water. An investigation by Off The Pitch reveals that Socios CEO Alexandre Dreyfus manipulated the price of his chiliZ cryptocurrency—of which Socios is a subsidiary—by withholding employee and advisor payouts worth millions.
Hand of God: As a fan engagement platform, Socios partnered with 55 football clubs and governing bodies, including UEFA. Even as he was snapping up sports franchises, Dreyfus withheld advisor dues and staff salaries that were to be paid in chiliZ, in order to keep the currency’s prices high.
Monkey business: Bored Ape Yacht Club has acquired Meebits and the world’s largest NFT collection, CryptoPunks, in a consolidation move. Speaking of apes, former Chelsea captain John Terry’s Ape Kids Club NFT plunged 90% in value following the Premier League’s legal intervention.
Reading list: The inside story of how Meta lost the plot with its once-ambitious Libra project, and why the Russia-Ukraine conflict hasn’t led to a Bitcoin boom.
FYI
Ticker: The government can launch LIC's mega IPO before May 12 without seeking fresh SEBI approval. Originally planned to debut in March, highly volatile stock markets after the outbreak of the Ukraine-Russia war derailed plans.
Tamp down: Home to tech giants such as Huawei and Tencent, 17.5 million residents in China’s Shenzhen were placed under lockdown to fight Covid-19.
Staying put: Warren Buffet will remain at the helm of Berkshire Hathaway after the company rejected four shareholder proposals to replace him.
Fresh tonic: United Spirits will invest ₹31.5 crore for a 22.5% stake in craft gin maker Nao Spirits and Beverages to expand its premium gin portfolio.
Chai break: The Indian tea industry is seeking a relief package following drastic drops in tea yields and prices, as well as dwindling exports owing to the Russia-Ukraine crisis.
In trouble: Finances of social commerce startup Trell are being probed by EY India over related party transactions and other irregularities.
Censored: Mark Bernstein, one of the top editors of Russian Wikipedia, has been arrested in Belarus for “distributing fake anti-Russian information”.
FWIW
Big on the web3: There's finally a democratic platform in town. In (finally) some good press for web3, NFTs are helping musicians make a living with their music. Turns out, selling songs as NFT is much more lucrative than streaming them on Spotify. Artists are now hoping that cryptos hit the moon this year.
Hits on tap: Odisha's Isak Munda has been living the life of his dreams. Munda struggled to make a daily wage after India imposed a national lockdown in 2020. That's until he decided to eat a plate full of homecooked food on camera—a la mukbang. Today, his YouTube channel has over 800,000 subscribers.
Between the spreadsheets: Google Docs is usually popular to collaborate at work. Some might say, it is a modern-day tool to cheat among students. For this couple, it is a place to fall in love. The two met on a Facebook group and kept the conversation going on Google Doc. Quite a meet-cute story, this.
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