The red flags are getting bigger
Also in today’s edition: Winter economy all but dried up; RBI may free rupee more; Hollywood’s caught the chill; OpenAI 🤝Pentagon
Good morning! The latest workplace trend sweeping across the US is a rather unlikely one. As per The Wall Street Journal, employees are shunning the old open-floor designs for the quiet of private booths. In companies such as Amazon, demand for private and semi-private booths has doubled. Ostensibly, employees have gotten used to privacy and quiet during the pandemic and want to recreate the mood in offices. However, office gossip and camaraderie are the casualties of this trend and we all know how important they are to a workplace. 🙃
🎧 RBI frowns upon bankers making big bucks. Also in today’s episode, Himalayan resort towns are suffering from a shortage of snow. Tune in to The Signal Daily on Spotify, Apple Podcasts, Amazon Music, or wherever you listen to podcasts.
Dinesh Narayanan and Venkat Ananth also contributed to today’s edition.
The Market Signal*
Stocks & Economy: Led by HDFC Bank, which sank over 8% after a poor third quarter show, Indian equities crashed on Wednesday. For every stock that advanced, two declined. The slide was in sync with markets across the globe. The GIFT Nifty indicates the losing streak will likely continue today.
US investors, who were expecting early rate cuts from the Fed Reserve, contributed to a share sell off when it dawned on them it may not happen. US retail sales rose in December, indicating the economy was still strong.
The Nikkei 225 was the only exception among major Asian indices, all of which were in the red in Thursday morning trade.
Global oil supplies will be squeezed if the Red Sea attacks continue for long, Saudi Aramco chief Amin Nasser warned on the sidelines of the World Economic Forum meeting in Davos, Switzerland.
This Winter Will Leave A Prolonged Chill
Room heaters, geysers and warm clothes are flying off the shelves as a cold wave gripped India’s northern plains.
Winter economy: Temperatures in Delhi dipped to a nighttime low of 3.5 degree Celsius while the air remained noxious. Though sales have picked up, The Economic Times reports that demand is nearly not enough to clear up inventories piled up during an unusually warm December.
Brown slopes: Although the plains are shivering in a cold wave, the mountains are devoid of snow. The famed skiing slopes of Kashmir’s Gulmarg, which is snow-laden at this time of the year, are a mix of brown and green. That has skewered the local economy dependent on the tourist flow of the winter months. Hotel cancellations, especially by foreign tourists, have topped 50%.
The Khelo India winter games have been postponed. Lack of snowfall means water shortages are likely in the summer months.
INR Likely To Go Places Soon
Last month, the Reserve Bank of India had its knickers in a knot after the International Monetary Fund said its forex management had other aims than it let on.
The IMF proceeded to reclassify the Indian central bank’s currency management as a “stabilized arrangement” from a “floating” system for, in its eyes, trying to influence the rupee’s level. That got the RBI’s goat and it strongly objected to the assessment, calling it “unjustified”.
Beyond the border: Now the bank is preparing to allow the INR more freedom, perhaps after the general elections. It told bankers last week to get ready to deal in multiple currencies and not just the dollar. India is planning bilateral currency deals such as its rupee-dirham agreement with the UAE to allow the INR to be accepted in other markets and vice versa.
Google, meanwhile, has signed up to take India’s Unified Payments Interface global.
The world economy is Teetering
Peace begets prosperity, but the world is getting less and less of it these days.
Sparking fires: Yemeni Houthis are stepping up attacks on vessels in the Red Sea as Israel targets Hezbollah within Lebanon’s territory. Global trade has already dropped 1.3% as a result of the crisis.
North Korean chief Kim Jong-un will constitutionally identify neighbouring South Korea as its number one enemy, ruling out any possibility of reconciliation. Neighbours Iran and Pakistan are also on edge after Iran attacked two sites linked to a militant group in Balochistan.
China sputtering: Meanwhile, China’s high-growth party may be coming to a close. China’s population declined by 2 million in 2023, faster than in previous years. Its GDP grew faster at 5.2% but deflation was at record levels and debt-to-GDP ratio rose to an all-time high of 286.1%, largely driven by non-financial corporate and government debt.
Two wars and several brewing conflicts are pushing flashpoints across the globe to their breaking point. Ukraine’s war with Russia is stretching on even as President Volodymyr Zelenskyy beseeched the global elite at Davos for more aid. Israel’s war with Hamas and invasion of Gaza is now threatening to draw more countries into direct conflict.
With China’s growth engine stalling and western economies still not out of the woods, it’s looking like a difficult start to 2024 for the world economy, which had only just begun to heal from the scars of the 2019 pandemic.
‘Tis the season
The Apple/Fortnite feud seems to have reached its end. The US Supreme Court has declined to hear challenges to a lower court’s ruling against Apple’s anti-steering policy and Epic’s claim of Apple’s monopoly.
A tale of contrasts: The Hollywood awards season is here. Last week, the scandal-hit Golden Globes made a comeback. Its host, Jo Koy, was panned and the inclusion of an award category for Box-Office performance raised eyebrows. However, none of that mattered as the show garnered 9.4 million viewers, a 50% rise from 2023. Its counterpart, Emmy, wasn’t so lucky. The show attracted 4.3 million million viewers, the lowest in the award show’s history.
Meanwhile: The era of Peak TV might be over as Hollywood reels from the after-effects of strikes. TV and film production is severely down and Netflix is hiring a financial analyst for handling residuals, additional payments for reuse of content.
OpenAI’s Elections Pitch
Unlike its social media peers earlier, ChatGPT-maker OpenAI is taking a more preemptive approach to tackling election misinformation: safety first.
How? It will disallow political campaign and lobbying applications, impersonation of political candidates or institutions via chatbots, and applications that seek to encourage voter suppression via misrepresenting information.
Big deal: The World Economic Forum (WEF) recently termed (pdf) AI-based misinformation a major global risk as over 50 countries will hold elections in 2024. Synthetic (AI-generated) information such as deepfakes, indistinguishable from human-created content, has been on the rise and is already impacting electoral outcomes. India, which heads to the polls in 2024, is taking note of Big Tech’s inaction.
U-turn: OpenAI tweaked a prior policy on using its models for military or warfare applications, and will collaborate with the Pentagon on developing cybersecurity tools. Its ban on developing weapons, however, remains in place.
Blocked: US airline JetBlue’s attempted $3.8 billion acquisition of low-cost carrier Spirit has crashed with a federal judge disallowing it, saying the merger was against consumer interest.
Bleak: The World Economic Forum released its ‘Future of Growth Report’, which said most economies are growing “in ways that are neither sustainable nor inclusive”.
Stay put: BP’s board has appointed the company’s stand-in boss Murray Auchincloss as the chief executive. Auchincloss was handed the reins of the UK energy giant when CEO Bernard Looney quit for failing to disclose past relationships with colleagues.
No more 💲💲💲: The home ministry has cancelled the Foreign Contribution Regulation Act registration of the public policy think tank Centre for Policy Research for, among other things, publishing reports on “current affairs programmes”.
Bigger umbrella: The government may double the insurance cover under the Ayushman Bharat scheme to ₹10 lakh (~$12,000) to support cancer care and transplants. It also plans to expand coverage to 100 crore beneficiaries.
New partner: After ditching its venture with Vedanta, Foxconn is joining hands with HCL to set up a chip packaging and testing company. It will pick up a 40% stake in it for $37.2 million.
Left the building: Sheryl Sandberg will leave the company’s board of directors after a 12-year stint. Sandberg, who quit as Meta’s longtime COO in May 2022, will now serve as an informal advisor to the company.
THE DAILY DIGIT
The number of countries that have close diplomatic ties with Taiwan after Nauru threw in its lot with China. Taiwan’s friends represent a mere 0.17% of the global economy and 0.5% of the world’s population. (Bloomberg)
No regrets: That's the message from Brittany Pietsch, the former Cloudflare employee who became famous online after she posted a video of her being fired from the job. In the video, Brittany is seen demanding a reason for her firing and asking if her manager can be on the online call as well. The video has generated widespread response on social media and has reignited a debate about the ethics of handling bad news. While some HR experts believe firing should always be done in-person, others ponder about how routine office work is under constant monitoring in the age of social media. Eh, not sure how to feel about this one. 🤷
Another one: Dubai, home to some of the tallest buildings in the world, is adding another one to its skyline. The Aeternitas Tower, once completed, will be the world’s tallest residential clock-tower. This weirdly specific feat exists because the world’s tallest clock-tower is in Mecca and the world’s tallest residential building is in New York. The most remarkable thing about this in-between, neither-here-nor-there building is that it’s a collaboration between real-estate developer London Gate and Swiss luxury watch maker Franck Muller. The building takes inspiration from the Muller’s Aeternitas watch collection and its design will be reflected throughout the building’s interior. Cool?
X-items: Guess that’s what you’d call them now. When Elon Musk took over Twitter, he ordered a literal clean sweep of the company. That meant auctioning off old office furniture and relics like a 6-foot-tall statue of a hashtag, a wooden bird-shaped coffee table, paintings of famous events on the platform like the Obamas hugging after securing a second term and Ellen DeGeneres’s famous Oscar selfie. While most of them were bought by former employees of Twitter, the owners of some items like a vintage 1800-era log cabin that acted as the company’s meeting room are yet unknown. How times change. 🥲