December 8, 2020

empowering you with insights and information from the edge of today’s headlines

International

Venezuela goes all-in:  President Nicolas Maduro won total control over the Venezuela’s legislature, the National Assembly (AN), and fully consolidated his regime's grip on power in the country following Sunday's parliamentary election. Maduro's party claimed almost 68% of the vote, in an election which was mostly boycotted by the opposition. International observers like the EU and the Organization of American States (OAS) refused to send observers to Sunday's election and said the conditions for a democratic process in Venezuela do not currently exist. Even US Secretary of State Pompeo claimed the elections were fraudulent and a “sham” (without any semblance of irony or self-awareness). By winning a majority in the National Assembly, Maduro's Socialist Party has now gained full control of all political institutions in Venezuela which secures his ability to to pass budgets, ratify international agreements and sign deals with foreign companies.

Legalizing Cocaine: Colombia’s Senate is currently weighing a bill which would legalize cocaine. The bill attempts to create a legal industry that distributes cocaine to users for pain relief, not recreational use. Like that in Bolivia, it also hopes to bring hundreds of thousands of illegal coca farmers out of the shadows into a legal, homegrown industry. The bill proposes that the government purchase the entirety of the country’s coca harvest. (The programs for coca eradication each year cost $1B. Buying the entire coca harvest each year would cost $680M.) It costs less to buy the harvest than to destroy it. The legalization would bring about 200,000 farmers into legal employment and would help to end about 25% of Colombia’s annual deforestation. (In Colombia, the personal consumption of cocaine is already legal.)

EU vs Child Pornography: The EU Privacy regulator (the EDPR) has determined that new privacy laws that go into effect on December 20th will ban two means of combatting online child pornography. The rules will ban a shared system that can scan all images posted against a database of known-bad images in the hunt for child pornography, and the machine learning tools that look into chats to find bad actors attempting to groom children. The EU Commission is trying to get a last-minute solution, but technology regulations often have unintended consequences.

Business

Nasdaq Pushes for Diversity: Nasdaq filed a proposal with the U.S. Securities and Exchange Commission that would require all companies listed on its U.S. stock exchange to publicly disclose the diversity statistics of its board of directors. Moreover, the new rules would require companies on the stock exchange to have at least one woman director and one who self-identifies as an "underrepresented minority" or member of the LGBTQ community -- or face possible delisting.

Google fires its AI Ethicist: Timnit Gebru, the co-lead of Google’s ethical AI team, announced last week via Twitter that the company had forced her out. Gebru, a widely respected leader in AI ethics research, is known for coauthoring a groundbreaking paper that showed facial recognition to be less accurate at identifying women and people of color, which means its use can end up discriminating against them. She also cofounded the Black in AI affinity group, and champions diversity in the tech industry. Gebru’s exit was the culmination of a conflict over another paper she coauthored, as Google claims the paper “didn’t meet our bar for publication” and that Gebru had said she would resign unless Google met a number of conditions, which it was unwilling to meet. Many other leaders in the field of AI ethics are arguing that the company pushed her out because of the inconvenient truths that she was uncovering about a core line of its research.

Private Equity in the White House: Several of private equity firm Pine Island’s partners will be returning to government service: Tony Blinken and General Lloyd Austin, among others. Pine Island was formed in 2018 by former CIT Group and Merrill Lynch CEO John Thain, former Goldman Sachs partner Phil Cooper, and ex-Coca-Cola exec Clyde Tuggle. The firm focuses on mid-market companies in a variety of sectors, including aerospace and defense. The firm has also bought two companies via a fundless sponsor model and raised $200M for a SPAC. Pine Island’s future deals will most likely be scrutinized under the public eye for potential conflicts of interest if its high profile partners actually take the national stage.

Disrupting Banking: Fintech startup Stripe has announced an ambitious new product called Stripe Treasury. The company is partnering with banks to offer a banking-as-a-service API. (Stripe clients will be able to provide bank accounts to their customers.) Stripe becomes a financial platform offering a financial platform to its customers. Stripe itself doesn’t want to become a bank but it has partnered with a number of banks including Goldman Sachs and Evolve Bank & Trust to offer key solutions like creating customer accounts, storing money, earning interest and paying bills. Stripe also expanded its Stripe Capital product to allow users to build their own lending services.

Water Futures: California Water Futures joined other commodities like oil and gold and began trading on the US futures markets. The futures are linked to California’s $1.1B water market and were announced in September during the wildfires. They are meant to serve both as a hedge for big water consumers, such as almond farmers and electric utilities, against water prices fluctuations as well a scarcity gauge for investors worldwide. In California, the most recent acute dry spell stretched from December 2011 until March of last year, according to the U.S. Drought Monitor. The most dire effects took hold in July 2014, with 58% of the state’s land suffering “exceptional drought,” leading to crop and pasture losses and other water emergencies. We are beginning to wonder what taking physical delivery might look like.

Gaming becomes the runway: Fashion brands have been flirting with gaming for a few seasons now, and this week, Balenciaga released its fall collection through its own video game. Dior also announced that its next menswear show would stream on Twitch, following Burberry’s earlier lead, tapping a group of models and influencers to tee up the show by having a live chat ahead of its stream. Since runway shows are no longer in-person events, designers are moving to where their customers are, although they really haven’t broken outside of the box (the games are essentially digital runways).

Culture

Secret Herbs and Spices:  How’s this for a rom-com collaboration? Lifetime and KFC have teamed up to make a “finger-lickin good” original movie starring Mario Lopez. Lopez will play Colonel Sanders in A Recipe for Seduction. Luckily, this commercial is only a 15-minute mini movie, but we’ll be watching for the camp.

Selling Songwriting: Bob Dylan, the only songwriter to win a Nobel Prize for Literature, has sold his entire publishing catalog—more than 600 copyrights spanning 60 years—to Universal Music Publishing Group. Selling his catalog allows Dylan to earn a reportedly 100s of millions of dollars without having to go on tour and saves his estate from onerous tax payments.

How High is High: Up until now, China and Nepal had different measurements for the height of Mount Everest (China at 29,017 feet and Nepal at 29,028). The 11-foot difference between the two measurements is the difference between rock height and snow height. The two countries, however, have decided to create a joint observation and measurement for the peak using the distance from the sea level at the Yellow Sea. The joint announcement has been termed “an eternal symbol of the friendship between Nepal and China.”

Lonely Mona Lisa: The Louvre is holding an auction in order to boost its bottom line during the pandemic. One lucky bidder will get the chance to have a solo viewing of the Mona Lisa, during its annual examination. Christie’s will be hosting the online auction, and hopes to raise more than $1.2M for the 24 lots up for bid.

Kid of the Year: In case you missed it, or your parents didn’t hold it over your head, Time magazine named its first Kid of the Year: 15-year old Gitanjali Rao. Rao was chosen from a field of 5,000 Americans ages 8 to 16. The Colorado high school student and young scientist has used artificial intelligence and created apps to tackle contaminated drinking water, cyberbullying, opioid addiction and other social problems. (At age 12, she developed a portable device to detect lead in water.) “We have science in everything we’re involved in, and I think that’s the biggest thing to put out there, that science is cool, innovating is cool, and anybody can be an innovator,” Rao said. “Anybody can do science.”

Grab your Cardboard: Breakdancing has been confirmed as a new Olympic sport for the 2024 Paris games. Other newly added sports include skateboarding, sport climbing and surfing, all of which will debut at the delayed Olympics in Tokyo in 2021. Breakdancing went through a test run in the 2018 Youth Athletics where competitors held one-on-one dance offs. Maybe we should just have Red Bull sponsor the Olympics already?

Books for Christmas: Iceland’s Christmas traditions are quite different from what we experience in the US, and this is one tradition we’ll happily appreciate. Jolabokaflod is the tradition of exchanging books as presents, and then you spend the night in bed (or cozying up to a fire) reading and eating chocolate (or hot cocoa). Jolabokaflod started during World War II, when paper was one of the few things not rationed in Iceland. Because of this, Icelanders gave books as gifts while other commodities were in short supply, turning them into a country of bookaholics to this day.

— Lauren Eve Cantor

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