☀️☕️ Apple hates hate speech and stopped ads on Twitter… is an AppStore ban next?

30 November 2022

☀️Happy Wednesd🐪y!

US large-cap S&P 500 closed 0.16% DOWN 🔻 Tech-heavy Nasdaq Composite closed 0.59% DOWN 🔻 Pan European STOXX Europe 600 closed 0.13% DOWN 🔻 HK’s Hang Seng Index closed 5.24% UP ▲▲Japan’s Nikkei 225 closed 0.48% DOWN 🔻  


China protests, markets shrug, HK rallies, China property🩹, Mickey go home


Today in stupid FTXApple hates hate speech and stopped ads on Twitter… is an AppStore ban next?Peaking inflation… soft landing or recession?

📖   MoneyFitt EXPLAINS

🎓 Inflation, Deflation and Disinflation


The first widespread public protests on the city streets and campuses of China in decades, involving many unhappy young people and triggered by deaths in a far-off province and two weeks of slight Covid relaxation (20 “optimized” measures on 11/11)… and markets seem happy to shrug them off in favour of the narrative that the general direction is, eventually, towards reopening. 

After a rough Monday, HK’s Hang Seng Index rallied over 5% to reach a two-week high. The Tech Index closed up 8% and China’s CSI300 (large caps from both the Shanghai and Shenzhen stock exchanges) closed up 3%. The positive market moves came despite an aggressive police clampdown on the protests and were probably not from any real expectation that zero-Covid policies would be dismantled soon — if anything, protests may have the opposite effect. That said, there was positive news in (1) an uptick in senior vaccination rates, a crucial precondition for eventually reopening the economy, and (2) an official referring to long-term lockdowns (that are too long) and the arbitrary imposition of restrictions as “wrongful” (blaming local governments.)

Something for China’s property sector: the securities regulator, the CSRC, is lifting its ban on share placements by property developers to raise money. Country Garden, the biggest by sales, popped 14% at the open, but eased to close up about 4%, which is still a solid 30% gain in just 5 days! These and other recent measures actually do help the property companies, but do they actually solve China’s fundamental property industry woes?

And then Shanghai Disneyland got shut down for the third time this year after a resurgence of Covid-19 cases in the city, having only just reopened last Friday. Disneytown, the shopping and entertainment district, the lakeside Wishing Star Park and two resort hotels will continue to operate normally (for now.)


Today in stupid FTX

Take a ticket and get in line. Newly bankrupt and essentially unregulated crypto lender/ exchange/ custodian/ whatever BlockFi is suing FTX’s Sam Bankman-Fried for the 7.6% stake worth US$472 million that he (personally) had in Robinhood Markets (HOOD) which he pledged as collateral against a US$680 million loan that BlockFi made TO Alameda Research (SBF’s trading vehicle and FTX’s sister company, the one run by the sultry wood nymph.) Thing is, SBF was allegedly shopping around that exact same HOOD stake along with other random assets as collateral to multiple OTHER creditors of FTX pretty much right while FTX was going under.

By that stage, FTX and BlockFi were already heavily intertwined. Back in July, SBF “rescued” BlockFi (from its own terrible business decisions) with a US$400 million credit line. With the FTX name there providing confidence, the line of credit may not ever need to be drawn on anyway, and SBF would buy BlockFi for next to nothing. BUT then FTX went bust and the US$250 million that FTX US lent BlockFi in the form of FTX’s own –freshly worthless– FTT tokens pretty much evaporated.

Meanwhile, back where Alameda’s former CEO used to be, a Hong Kong crypto exchange called Atom Asset Exchange (AAX) has effectively shut down after deleting its social media accounts and freezing withdrawals. Thousands of investors and clients are unable to reach the company, an embarrassing development for HK, which only earlier THIS month announced more retail trader-friendly crypto policies.

Apple hates hate speech and stopped ads on Twitter… is an AppStore ban next?

Apple has spent US$40 million or over 80% of its social media budget advertising on Twitter so far this year, so the broadsides Musk is firing in its direction are either business brilliance that we aren’t smart enough to understand or the opposite. Musk has reportedly been personally calling and scolding other chief executives of brands that cut back on Twitter advertising.

With Trump allowed back onto Twitter along with others who were kicked off in the past for hate speech, advertising agencies report “nearly all of the big brands they represent” such as Mondelez (Oreos, Toblerone), Carlsberg, United Airlines and General Motors have also suspended advertising there. Twitter will need every penny of its US​​$5bn-a-year advertising business to pay the billion dollars in annual interest payments that Musk’s takeover loaded it up with (see our Explainer on Leveraged Buyouts here.)

Meanwhile, Twitter searches on the recent China protests and the deadly Urumqi apartment fire led straight to spam, porn and random nonsense, which some are alleging is a deliberate use of bots to drown out information, videos and images. Draw your own conclusions. (Musk hates bots!)

Peaking inflation… soft landing or recession?

Inflation in Spain and Germany fell more than expected in November, supporting data elsewhere suggesting peak inflation is behind us. Producer prices, shipping rates, commodity prices and inflation expectations are all easing off from recent record highs, meaning global supply chain pressures are easing, presumably reflecting a looming recession. According to The Loadstar logistics trade paper,

“Ocean carriers are said to be in ‘panic mode’ as bookings from China to North Europe and the US west coast tank.”

Global inflation 🎓 is expected to peak at a record 12.1% in October according to Moody’s. Falling inflation doesn’t mean the battle is won. Prices are not going down (deflation 🎓 ), just going up slightly less quickly (disinflation 🎓 ), so interest rate hikes are still ahead of us. (But recession!!)

European Central Bank president Christine Lagarde thinks price growth “still has a way to go” and that the ECB “is not done yet” in raising interest rates. And the president of the New York Federal Reserve (which is a permanent voting member of the FOMC, the part of the US central bank that sets interest rates) also said interest rates would continue to rise, but to higher level than he previously thought, and would stay high for “some time”, but we could see rates cut in 2024. Rate cuts are good, but 2024 is later than the market expects.

Markets will be closely watching Fed Chairman Jay Powell speak after lunch today US-time on the “Economic Outlook, Inflation, and the Labor Market.”

If the pace of interest rate increases in the US does slow, the US Dollar may continue its recent weakening. This year to September, the USD (the flawed DXY index) rose a truly massive 20% but has since come down by 7%. A strong USD exported a lot of pain onto the rest of the world through higher prices for US goods and services and higher debt repayment costs for USD borrowings (on top of sharply higher interest rates.) A weaker USD would reverse those effects and provide some global relief, especially for the poorest nations.

Thank you for spending a few minutes of your time with us. Remember to take time for yourself and be thankful for what you have.

📖 MoneyFitt EXPLAINS:

🎓 Inflation, Deflation and Disinflation

Inflation is basically a general increase in prices in an economy over a period of time. 

When this happens, the value, or purchasing power, of money goes down. Inflation is usually caused by too much demand for something relative to how much is available or by the cost of producing (or importing) something going up. Both can lead to a vicious cycle of rising prices, usually when higher prices become expected and built into wage demands.The Consumer Price Index is a way of measuring inflation in an economy based on the increase in the overall price of a “basket” of items that an average individual would spend on. (There are many measures, but the “CPI” is the most commonly used.)

Deflation is the opposite: A decrease in the general price level of goods and services. This sounds good, but can be almost as damaging, as buyers may sit on the sidelines and wait for lower prices, thereby sending economic activity through the floor.

Disinflation, on the other hand, is a decrease in the rate of inflation, meaning that prices are still going up, but not as quickly as before on either a month-on-month basis or year over year. This is generally seen as a good thing, especially if inflation is above the target rate.

Please do your own research – we create educational and entertaining content so you can start the day understanding the financial and business worlds a little better. However, this is NOT financial advice.

MoneyFitt (Spendolater Pte Ltd) is not responsible for any errors or omissions, or for the results obtained from the use of this information. All information is provided “as is”, with no guarantee of completeness, accuracy, timeliness or of the results obtained from the use of this information. The information contained is not intended to be a source of advice or credit analysis with respect to the material presented. Any ideas and strategies should never be used without first assessing your own personal and financial situation, or without consulting a financial, tax or legal professional and independently researching and verifying information. Content is intended to be used and must be used for informational purposes only.

MoneyFit Morning Archive (to 07-Nov-22)

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