October 6, 2020

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

Politics

Tribal Sovereignty: The EPA has granted the state of Oklahoma regulatory control over environmental issues on tribals lands. This order strips 38 tribes in Oklahoma of their environmental sovereignty, and seems to us like a complete reversal of the Supreme Court’s decision in July that for legal purposes, half of Oklahoma was tribal land. Apparently, federal agencies can nullify Supreme Court rulings. This new move opens up tribal lands to illegal dumping and other hazardous waste, as the state is traditionally pro-fossil fuel and pro-big agriculture. This is particularly egregious when you consider how Tribes view the land itself.

Another Contested Election: Kyrgyzstan, which borders China and is a close ally of Russia, has long been a platform for geopolitical competition between Moscow, Washington and Beijing. The country had an election on Sunday, and mass protests broke out after the ruling party of President Jeenbekov won most of the seats in parliament. The Central Election Commission soon “invalidated the election results” and has scheduled a new election, although it is unclear who will be in charge of monitoring it. Today the opposition parties have effectively attempted a coup, seizing power and storming government buildings.

Florida Voters: Yesterday was the last day to register to vote in Florida, but by chance and of course, the voter registration website was down throughout most of the day. While this election was expected to re-enfranchise many former felons (the potential for over 1.4M formerly incarcerated persons to register to vote following the passage of a statewide referendum), many remained on the sidelines due to concerns and complications over unpaid fees and fines. Only roughly 85,000 of those eligible had registered to vote.

Venezuelan Gold: A British appeals court has overturned a judgment which said the UK had recognized opposition leader Juan Guaidó as Venezuela's president. The ruling allows Nicolas Maduro to control over $1BN of gold stored in the Bank of England. Maduro's government said it wanted the gold to fund its fight against the coronavirus pandemic, but opposition leader Guaidó asked the Bank of England not to hand the gold over to the Maduro government, arguing that it would be used for corrupt purposes.

Supreme Decisions: Besides the battle over the next Supreme Court justice, the Supreme Court has a lot on its plate this term which could determine whether Americans have any faith in the court. On October 7, the Court will hear arguments in Google vs Oracle, a battle over copyright protection, which could determine the future of software development. Generations of software has been built upon the premise that it makes little sense to duplicate some of the most basic parts of an application, especially the parts that make it easier for software to interact with other software, but Oracle is fighting for copyright protection of its APIs. On November 10, the Court will hear arguments regarding the Affordable Care Act. The administration and several State Attorneys General argue that since there is no longer an individual mandate, the entire bill should be discarded. Yesterday, two conservative justices called for the end of marriage equality when the Court declined to hear a case brought by a former Kentucky county clerk who refused to issue a marriage license for such couples. There are also several cases regarding the parental rights of same sex couples, and one which may strip all that is left of the Voting Rights Act. Elections have consequences, we are learning the hard way.

Business

Vertical Integration: The US House Committee investing antitrust in the tech sector has created a report (although delayed its release) calling for and end to ownership of a marketplace and selling their own products on them. This would force Amazon, Apple and Google to change their business models or spin-off their businesses. The proposal would prohibit tech companies from entering different lines of business and amount to a breakup of the companies.

007 Delay: Cineworld, the No. 2 cinema chain globally, said it will temporarily close its theaters in the UK and the U.S. (including 543 Regal Cinemas) this week after the latest James Bond film No Time to Die was delayed until April 2021. Many movies have been delayed because of the lackluster box office performance of Tenet. While Asian markets may be reopened, Europe and the US are seeing new surges of the virus and new lockdowns. Wonder Woman is still set for December release, while Dune was pushed back until next October.

China Tariffs: President Trump often falsely says Beijing is paying for the tariffs that his administration has slapped on China's exports. But they are actually paid by US firms, more than 3,500 of whom have now filed lawsuits alleging that the measures are no longer legal, and demanding compensation. The list includes American giants like Coca-Cola, Ford, and Disney. The premise of many of the lawsuits is that the US government was entitled to apply tariffs on Chinese imports regarding intellectual property violations for up to one year, but two rounds of tariffs fell outside of the time limit. The lawsuits have been filed at the International Trade Court, so even if the companies win, we aren’t sure the Trump administration will abide by the decision.

Commercial Appraisals: Commercial properties hit by the economic effects of coronavirus could have lost as much as one-quarter of their value or more, laying bare the scale of the damage being wrought across American malls, hotels and other commercial buildings. Wells Fargo data shows that properties are being written down by 27% on average with hotels being the hardest hit.

On the flip side, however, Cerberus Capital Management is repackaging commercial mortgage-backed securities into higher rated products, reminiscent of the financial crisis of 2008. The interest-only slices of the CMBS are being bundled into AAA rated securities, effectively creating a new CDO.

Climate Change

Prepared for the flood: The city of Venice has been plagued by rising sea waters and historic floods over the past few years. The city has apparently been sinking due to both climate change and a preponderance of tourists. This year the city finally unveiled a barrier system to protect it from floods. The system is not fully operational yet, and some infrastructure still needs to be completed, but it should be finished by December 2021. This weekend’s test of the system worked: “there wasn’t even a puddle in St. Mark’s Square” which can often flood with over 3 feet of water. We’re hoping the the barriers continue to function, saving the historic city, although we hope the Lagoon remains alive despite being cut off from the sea.

Exxon Surge: Exxon Mobil Corp. had plans to increase annual carbon-dioxide emissions by as much as the output of the entire nation of Greece, according to leaked documents. The largest U.S. oil producer has never made a commitment to lower oil and gas output or set a date by which it will become carbon neutral. Exxon has also never publicly disclosed its forecasts for its own emissions. The finding also uses data that comes before the global pandemic, but unlike its rivals, Exxon seems to be on the path of climate destruction rather than reduction.

In better news, NextEra Energy, a Florida utility which is also the largest producer of wind and solar power in the world, topped the market capitalization (for a moment) of Exxon Mobil this week.

Culture

Collabs: We’ve heard of fashion collaborations between brands, designers, influencers and celebrities, but this one we do not understand. Cole Haan (the shoe brand) has launched a collaboration with Slack (the workspace messaging app). The shoes will come in the Slack color palette, but otherwise we don’t see how this can be called a collaboration let alone an innovation.

On the other hand, McDonald’s is continuing its collaborations with musicians. Travis Scott had a special meal (that included fries with BBQ sauce) and now McDs is partnering with J Balvin for a new combo (Oreo McFlurry included).

Design Icon: When Apple released its iOs update in September, one new feature was the ability to design your own home screen and app icons. The new functionality was a way for many to express their creativity, or just waste more time on their phones in quarantine with a “productive” goal. One designer, however, has earned more than $140,000 for his minimalist, black and white icons.

Elephant in the room: Elephants in northern Thailand are being offered to organizers of video calls to help raise funds for their care. Rates start at $75 to bring elephants in on a Zoom video call for 10 minutes; for $145, callers also get a three-minute Q&A session with elephant experts. The program was started by the Human Elephant Learning Program Foundation, and the aim is to support the Elephant camp, which has been closed to tourists due to COVID.

Asking for it: A mummy that was found in Saqarra, Egypt, was opened for the first time in 2,500 years. Egypt's Ministry of Tourism and Antiquities hosted a gathering on Saturday to unveil the findings. This coffin was discovered along with 58 others; they are made of wood and you can see the painted colors on the outside. We are not sure why anyone would open a mummy in 2020 (fears of curses, etc), but we suspect it can’t get any worse?

Rock on: The epic rock battle between David Grohl and Nandi Bushnell continues with an original song by Nandi. We can’t wait for the duet.

— Lauren Eve Cantor

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