ITK Daily | October 29
Happy Saturday.
To be ITK, know this:
+ @cnnbrk: The death toll has reached at least 120 during crowded Halloween festivities in South Korea’s capital of Seoul.
Bolsonaro, Lula’s final showdown unlikely to change Brazil race: Bloomberg reports Brazil’s Jair Bolsonaro and Luiz Inacio Lula da Silva traded barbs and accusations in a final debate that’s unlikely to be a game changer before Brazil’s Sunday runoff election.
+ Bolsonaro is lagging Lula by about 6 percentage points in major opinion polls
+ Candidates exchanged accusations in debate short or proposals
+ Last chance to reach millions of Brazilians before Sunday vote
+ On Sunday, the electoral authority will start releasing results after polls close at 4:00 pm ET
+ The winner will be sworn in on January 1, 2023
Li Qiang, Xi’s right-hand man: How will his business-friendly reputation fit with the Chinese president’s aims? FT
+ Xi has made it clear that politics and security will eclipse economics as he prepares the party to steel itself for “high winds and perilous, stormy seas.”
+ The biggest question about Li Qiang, 63, is whether he will now merely aid and abet Xi’s instincts and instructions, which have crushed the animal spirits of the world’s second-largest economy.
+ It was on his watch that the Shanghai stock exchange launched a new trading board for technology companies and Elon Musk built Tesla’s largest overseas factory in the city.
No ‘adults in the room’: Xi Jinping catches global investors off guard: Exclusion of moderates from China’s leadership spurs record stock outflows. FT
+ Xi’s decision to pass over pro-market candidates for his standing committee has unsettled markets.
+ “Investors were imagining a scenario where Xi basically got his own way, but there would still be some adults in the room with some kind of pro-market pushback,” said Thomas Gatley, an analyst at Gavekal Dragonomics in Beijing.
+ The absence of a single moderate figure, combined with the late release of disappointing economic data, sparked record selling of Chinese stocks by foreign investors. Market participants say this impact is unlikely to fade quickly.
+ Investors pulled a record $2.5bn out of China’s stock market, according to an analysis by the Financial Times, while the Nasdaq Golden Dragon index tracking the largest and most liquid Chinese technology stocks on Wall Street also fell by an unprecedented 14.4 percent.
Bloomberg: Biden trade chief says next phase of China relationship unclear
+ ‘Wait and see’ until Xi picks new head of economy portfolio
+ Tai says the US is prepared if China holds off on economic reforms
It’s ‘nerd vs nerd’ as British politics returns to normal: Sunak may have stopped the rollercoaster, but the question of how to restore economic stability remains. Camilla Cavendish
+ Historically, Conservatives have liked to think their role in politics is to clear up the mess of the public finances made by Labour. But the current mess is their own.
+ Sunak is no Davos man: he was a committed Leaver, who wants immigration control; a libertarian who argued against prolonging COVID lockdowns. But as chancellor he was always keen to be honest about trade-offs.
Desperately hard choices lie ahead for Sunak and Hunt: The cost of living crisis combined with the fiscal challenge pits support for households against even higher borrowing. Paul Johnson
+ Rishi Sunak and Jeremy Hunt, the new prime minister and chancellor, face two separate but intimately related economic challenges. The first is rampant inflation and the consequent “cost of living crisis.” The second is a slowing economy and consequent deterioration in the fiscal outlook.
How the UK became one of the poorest countries in Western Europe: Britain chose finance over industry, austerity over investment, and a closed economy over openness to the world. Derek Thompson
+ The past few months have been rough for the United Kingdom. Energy prices are soaring. National inflation has breached double digits. The longest-serving British monarch has died. The shortest-serving prime minister has quit.
+ In the American imagination, the UK is not only our political parent but also our cultural co-partner, a wealthy nation that gave us modern capitalism and the Industrial Revolution.
+ But strictly by the numbers, Britain is pretty poor for a rich place. UK living standards and wages have fallen significantly behind those of Western Europe. By some measures, in fact, real wages in the UK are lower than they were 15 years ago, and will likely be even lower next year.
+ Britain, which got rich as the world’s factory in the 19th century, had become the world’s banker by the 21st.
+ In the past 30 years, the British economy chose finance over industry, Britain’s government chose austerity over investment, and British voters chose a closed and poorer economy over an open and richer one.
+ According to the International Federation of Robotics, the UK manufacturing industry has less technological automation than just about any other similarly rich country.
+ With barely 100 installed robots per 10,000 manufacturing workers in 2020, its average robot density was below that of Slovenia and Slovakia.
+ Thus, the UK, the first nation to industrialize, was also the first to deindustrialize.
+ Americans who have visited the UK may not recognize the portrait I’m painting. That’s probably because they’re familiar with London, not the country as a whole.
+ “Take out Greater London—the prosperity of which depends to an uncomfortable degree on a willingness to provide services to oligarchs from the Middle East and the former Soviet Union—and the UK is one of the poorest countries in Western Europe.” --
+ “Take out Greater London—the prosperity of which depends to an uncomfortable degree on a willingness to provide services to oligarchs from the Middle East and the former Soviet Union—and the UK is one of the poorest countries in Western Europe.” -- economic analyst Matt Klein
+ Today, Britain seems trapped between a left-wing aversion to growth and a right-wing aversion to openness.
The Netherlands may be the first country to hit the limits of growth: The country has 507 people per sq km, nearly five times the EU average, while liveable land is shrinking due to climate change. Simon Kuper
+ I know over-construction and understaffing are now global problems, but they are particularly acute in the Netherlands. The country has run out of space and staff.
+ With hindsight, the Netherlands was too well-suited to the era of globalization. The trading nation with Europe’s biggest port experienced 26 years of unbroken economic growth until 2008, then a world record. Now it tops ETH Zurich’s KOF Globalisation Index as the world’s most globalized country.
+ Eighty-four percent of employers report labor shortages, one government study found. Recruitment signs are almost standard in shop windows. Employers even offer new recruits free holidays.
+ One constraint on growth is that the Dutch enjoy the developed world’s shortest average work week, at just 30.3 hours. Six workers in 10 – predominantly women – are either part-timers or temps.
+ “We focus far too much on purchasing power, but extra purchasing power barely makes us happier.” -- Sandra Phlippen, ABN Amro Bank’s chief economist.
The lithium market is hotter than ever and traders are moving in: Commodity traders are turning their attention to lithium, as surging demand shakes up the way the battery metal is bought and sold. Bloomberg
+ A vital component in most electric-vehicle batteries, lithium is becoming one of the world’s most important commodities. Prices have soared to unprecedented levels as demand forecasts keep growing, leaving automakers scrambling to secure future supplies.
+ “The activity of traders in the lithium market should make this a more transparent and efficient market over time,” said Martim Facada, a lithium trader at Traxys. “It's like oil in the 70s when governments would sell to consumers, but then traders started providing services, and that helped growing and developing the market faster. Lithium's starting to go through that process.”
+ The comparison with oil 50 years ago isn’t a perfect one. The lithium market is tiny compared with more established and liquid commodity markets — annual world oil production is worth more than $3 trillion at current prices, versus $30 billion for lithium.
Why Signal won’t compromise on encryption, with president Meredith Whittaker: Signal messages are more private than iMessage and WhatsApp. Here’s how. The Verge
+ Signal is a little different than the usual tech company: it’s operated by a nonprofit foundation and prides itself on collecting as little data as possible.
+ "Let’s be clear, we are not in the business of compromising on privacy, and we are not in the business of handing people who want and need Signal a compromised version of it."
+ "SMS basically gives your messages in plain text to your telecom provider. That is the opposite of Signal’s mission."
How augmented reality can cut down on returns: One study found that consumers who used AR to try products virtually were less likely to send purchases back. Bloomberg
+ Last year, American shoppers returned $761 billion worth of goods, or nearly 17% of all retail sales, according to NRF. In e-commerce, where consumers don’t generally have the option of trying before they buy, return rates can exceed 20%.
+ The transportation and logistics industry is already the biggest contributor to carbon dioxide emissions in the US, accounting for 27% of total emissions in 2020.
+ Fashion, too, has a big footprint, accounting for up to 10% of global carbon dioxide output — more than international flights and shipping combined. The more parcels sent back to merchants, the greater those emissions.
+ Roughly two-thirds of consumers who used AR technology to guide their shopping decision were less likely to return their purchase, according to a recent survey conducted by market research firm Alter Agents, which polled more than 4,000 shoppers in the US, the UK, France and Saudi Arabia.
Rise of the rest: The phrase makes for a good book title, but it is not the current reality of US venture investment.
Data CB Insights shows venture investment in Q3’22 by geography (followed by YoY comparison):
Silicon Valley: $10.7B (-61%)
New York City: $4.8B (-65%)
LA: $3.4B (-41%)
Boston: $3.2B (-53%)
Seattle: $2.0B (+32%)
Miami: $1.3B (-15%)
DC: $1.2B (+4%)
Chicago: $0.7B (-51%)
Dallas: $0.6B (+70%)
Denver: $0.6B (-16%)
Philadelphia: $0.6B (-64%)
Austin: $0.5B (-60%)
Raleigh: $0.3B (-58%)
Atlanta: $0.3B (-68%)
+ Companies based in Silicon Valley grabbed nearly 30% of all US funding, more than doubling runner-up NYC’s total.
Damian Lewis on grief, espionage and his new musical ambitions: ‘When someone dies prematurely, you’re left careering in a different direction.’ Simon Hattenstone
+ They were the golden couple of British acting, but Helen McCrory’s death last year left her husband shattered. Now he is putting the pieces of himself back together – and finding a new creative energy.
Canada Soccer releases statement on workers' rights, inclusivity in World Cup host Qatar: CBC reports the organization says it encourages continued efforts to implement labor reforms.
I suspect MNCs sponsoring this year's World Cup are going to be in for a few surprises and shock public affairs stunts during the tournament.
Rob Thomson, manager of the Philadelphia Phillies, is the first Canadian to lead a team to the World Series.
Wild.
Enjoy the ride + plan accordingly.
-Marc
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