Paidy considers listing as ‘buy now, pay later’ catches on in Japan | Financial Times – Japan is a microcosm of what’s happening in terms of buy now, pay later on the web. Japan is notable, because like Germany, historically it has been a heavy cash focused consumer payments market. Mobile payments were mainly used for daily expenses like commuter travel or shopping at the combini. Many consumer e-commerce sites now have Klarna involved. Even Amazon is getting in on the buy now, pay later theme:Amazon Enters the ‘Buy Now, Pay Later’ Space Through Affirm – All of this looks like a consumer credit iceberg that might catch bankers et al by surprise. The buy now, pay later model itself isn’t new. Its payment by instalments model was used by catalogue businesses to furniture stores. It is lay away for more impulsive times.
Cantopop star Denise Ho flagged by law enforcement agencies: Sing Tao | The Standard – a few things are interesting which are further evidence of the maximalist interpretation of the Hong Kong National Security Law. Going after Ho is an indication that none of the pro-democracy movement will be tolerated, even as a Potemkin village type construct.
Chinese Official Dismisses Wave of Emigration From Hong Kong — Radio Free Asia – “Neither Beijing nor Hong Kong officials are willing to admit that there is a crisis in Hong Kong,” Cheng said. “Hong Kong residents lack confidence in the future and can’t tolerate the current situation, so a considerable number of people are choosing to emigrate.”
“I think the central government must care about that, because it will affect how its policies in Hong Kong are perceived in the international community,” he said. Cheng, who has himself recently emigrated, said the feelings of the people of Hong Kong are no longer being taken into account by Beijing. – I honestly think the Xi administration doesn’t care
ESG can be considered to be a form of ethical investing. Ethical investing of one form or another has been around for a while. In the US by the middle of the last century union pension funds were looking to invest in areas like affordable housing. There used to be funds and banks that wouldn’t invest in certain industries, such as tobacco or arms manufacturers. The Cooperative Bank in the UK screens business banking clients looking at issues such as animal welfare and supplying arms to oppressive regimes.
ESG or environmental & social governance can be seen as a way of standardising ethical investing and has been adopted by the US financial services sector. Environmental factors have been raised in importance due to concern about climate change. ESG as we now know it came out of the UN Principles for Responsible Investment which financial institutions signed up to. This happened in 2005 and by 2016 it became a ‘hygiene factor for asset managers as requests for proposals required being a UN PRI signatory.
The growth of interest in ESG can be seen by the amount of funds under management over time complying with PRI framework
The PRI is based around six principles
Incorporation of ESG issues into investment analysis and decision-making processes – this makes sense to a point. What are the best decisions from an environmental and social governance point of view is a matter of perspective as every decision requires trade-offs. The same kind of ‘religious’ disputes that caused Greenpeace to be formed by ex-Sierra Club members now drive ESG decisions. Here’s a hypothetical example. Internal combustion engine cars have a lower carbon footprint of manufacture than their electric counterparts. 70 percent of a vehicles carbon footprint is in its manufacture. Therefore I could argue investing in a secondhand vehicle supermarket a la AutoTrader or BringATrailer would be better than Tesla Motors. The reality is that Tesla tells a great story and the optics my valid rational argument for an investment decision would go down badly with the media and many investors.
Correlation data on ESG ratings via Schroders analysis 2021
Being active owners and incorporate ESG issues into our ownership policies and practices. So should investors be looking to get companies to divest oil production? Or should they be running down their oil fields in a responsible manner? If they divest their oil production, it could be going to custodian that would have less moral and social scruples. Again the optics on these decisions may drive a move that on balance would be worse for the environment.
Seeking appropriate disclosure on ESG issues by the entities in which we invest.
Promoting acceptance and implementation of the Principles to their peers within the investment industry. Which is why Larry Fink is doing these kind of interviews on business media.
Work together to enhance effectiveness in implementing the Principles.
Reporting on activities and progress towards implementing the Principles. If you dig into back and investment fund websites you will be able to find these reports for listed companies, financial institutions and even the likes of Harvard University
Why do investors use ESG?
ESG investing is considered to be a form of risk management
The rationale being that ESG aligns with companies there that are prepared for risks that other companies miss. However it is based on a fallacy that other people are stupid, rather than the risks not matching their client’s investment horizons.
Companies that have embraced sustainability are doing better
This is based on a perception that ‘virtuous investments’ as a strategy tend perform better than sinful ones. Yes there are a number of businesses in this category. Sinful companies can do well as well, and ESG investment funds don’t necessarily outperform their rivals.
An altruistic desire to drive down the cost of capital for green businesses versus their incumbent competitors in the carbon economy
Going down this route requires an admission that this might not outperform as an investment and won’t be a substitute for political, legal and regulatory action to spur economic greening.
ESG Earthquake
On August 2, 2021, Tariq Fancy dropped a proverbial bomb on the ESG sector. He didn’t say anything that hadn’t been said before. But the way he put it together into a cohesive story and the authority he had to talk about ESG made an impact.
Fancy comes from a background in investment banking, private equity and fund management. Most notably he formerly worked for BlackRock as their global chief investment officer for sustainable investing. In other words, he knew the ESG investment business inside-and-out.
What I considered to be his most relevant points were:
The tension between ESG lowers the cost of capital to green businesses, lowering investor returns. But are promoted as good performers by funds
ESG investments have long term time horizons that don’t match the requirements of investors. This creates a misalignment between profit and purpose. A secondary aspect of ESG investment being weak means that there will never be a critical mass of capital to make it work
People thinking that their retirement plan is going to help the world; stops them taking actions in their own lives that might help changing the world. (It’s the investment equivalent of liking or sharing the Kony 2012 video and expecting real political change in Sierra Leone)
Can you trust people on Wall Street or in the Square Mile to decide what is good for society?
I couldn’t avoid doing a post on Afghanistan given what had been going on this week. The Afghanistan conflict posed a number of interesting questions about:
What privacy and security means for the people left behind in Afghanistan in the digital age
Why strategy is seldom a teacher and several countries have made the same mistake in Afghanistan – (Britain did so twice!)
The failure of intelligence in Afghanistan reminded me of the failure of intelligence agencies to realise that the fall of the Berlin Wall would happen. There was also a failure to underhand who the players were and their motivations in Afghanistan
What will Afghanistan mean for Pakistan moving forwards? Once out, the west has the perfect opportunity to shun Pakistan; which will leave the country vulnerable to Chinese predatory practices
The US Is Removing Records of Its War in Afghanistan From the Internet – Lives are on the line here, but helping them may mean destroying—even if temporarily—the memory of the war and all that happened. It’s a horrible problem to face. One potential solution would be for the U.S. and its allies to take as many Afghan refugees as want to flee the country. – it assumes that the Taliban and supporters like the Pakistani ISI intelligence agency haven’t been caching this material themselves over the years. Things got rolled up so fast, they probably have hold of records from Afghanistan government payroll ledgers to intelligence reports
Germany Flew 65,000 Beer Cans Out of Afghanistan, but Just 7 People on an Evacuation Flight – “There was transport capacity for alcohol, but not for the local staff in Afghanistan,” read a piece in Germany’s Bild newspaper, referring to the fact that the German military had earlier flown home 65,000 cans of beer and 340 bottles of wine before it withdrew from its bases in Mazar-e Sharif and Kabul at the end of June. – surely they could have blown up the alcohol and put people on the flights? – this is the kind of thing that fuels future grudges that morph into terrorist attacks. But it also shows the colossal failure in intelligence in a microcosm
SIGAR | Lessons Learned. The Ides of August – a couple of good post-mortem reads on Afghanistan. A few things struck me. Mission creep had been baked in, although much of that was down to the allies partnering with the Northern Alliance and liberal values. The dual nature of Pakistan, which I suspect Pakistan will get punished for in the longer term. The lack of intelligence on the main players involved such as former president of Afghanistan Hamid Karzai
Beauty
Skincare Preferences by Generation | NPD Group – Despite the generational differences in skincare preferences, there are also commonalities. At the end of the day, it seems we’re not so different, after all. Whether they are more like my mother or my cousin, we see from consumers across-the-board that they are open to trying new things, are looking for clean ingredients, and simply want skincare that produces results from a brand they can trust. Regardless of the trends driving the category, the demand for efficacy and transparency is here to stay
Business
Wolfsburg, we have a problem: How Volkswagen stalled in China | Reuters – Last month, though, he said Volkswagen had fixed the problems revealed by the test, that the ructions of the episode had subsided and the carmaker’s Chinese business was recovering. “We have once again clearly one of the safest cars on the market in this segment,” Woellenstein told reporters in July. “We will once again take up the old leadership of the Passat.”But there is quite some ground to regain in the large family car segment. A total of 47,480 Passats were sold in the first six months of this year in China, some way behind the 91,110 Toyota Camrys (7203.T) and 89,157 Honda Accords (7267.T), according to LMC. The figures from the same period of 2019, before the pandemic struck, show how steeply the Volkswagen model has fallen away of late: 91,400 Passats were sold versus 111,968 Accords and 85,396 Camrys. – I am surprised by this, given Volkswagen’s obsession with common platforms
Tata’s rise mirrors the sweep of India’s history | Financial Times – Tata is no longer at India’s entrepreneurial vanguard. The likes of Mukesh Ambani’s Reliance Industries and Gautam Adani’s eponymous group, with their investments in telecoms and renewable energy, hold stronger claim to be the “nation builders” of today. These tycoons represent a different way of doing business, one that has prompted much consternation. They lack Tata’s ambivalence about the state, aligning themselves unabashedly with Narendra Modi, and share few of the conservative Tatas’ qualms about “wealth creation for its own sake”.
Biden is sandbagging on immigration – by Noah Smith – Noahpinion – the new American support for throwing open the country’s gates is more broad than it is deep. There’s a real desire to cleanse the stain of Trump’s human rights abuses and flirtation with white-nationalism — to at least be able to say that America is still the Nation of Immigrants, that we still have compassion for the people of the poor countries of the world. But beyond that idealistic impulse, I’m not so sure that most liberals have a strong, enduring commitment to welcoming in as many refugees, asylum-seekers, and economic migrants as possible.
One reason is that the Democratic party is increasingly the party of the educated, and to most educated Americans, people like refugees and asylum seekers live in a different world. There’s little natural class solidarity or empathy there. And when it comes to skilled immigrants — the people waiting desperately for that backlog of 100,000 green cards to be processed — well, to most educated Americans, that’s the competition. Both for themselves and for their kids in schools.
Beijing’s American Hustle | Foreign Affairs – U.S. institutions, especially in finance and technology, cling to self-destructive habits acquired through decades of “engagement,” an approach to China that led Washington to prioritize economic cooperation and trade above all else.
If U.S. policymakers and legislators find the will, however, there is a way to pull Wall Street and Silicon Valley back onside, convert the United States’ vulnerabilities into strengths, and mitigate the harmful effects of Beijing’s political warfare. That must begin with bolder steps to stem the flow of U.S. capital into China’s so-called military-civil fusion enterprises and to frustrate Beijing’s aspiration for leadership in, and even monopoly control of, high-tech industries—starting with semiconductor manufacturing
How Chinese pressure on covid origins probe shocked WHO — and led Tedros to push back – The Washington Post – When a WHO scientist on a coronavirus origins probe announced in February that the idea that the virus leaked from a lab was “extremely unlikely” and unworthy of further investigation, senior WHO staff in Geneva were shocked. “We fell off our chairs,” one member told the authors. The team in Wuhan appeared to have given in to Chinese pressure to dismiss the idea without a real investigation. Later, when the WHO-China team released a report that again dismissed that scenario, Tedros pushed back, saying that the research was not “extensive enough” and that there had not been “timely and comprehensive data-sharing.” Since then, relations between the WHO and China have nosedived. Chinese officials said in July that they would not accept any further investigation into the origin of the coronavirus in China and accused the United States of pressuring scientists. The WHO last week released a statement that resisted the idea that “the origins study has been politicized, or that WHO has acted due to political pressure.”
China, the WHO and the power grab that fuelled a pandemic | News | The Sunday Times – In 2017 Chan crowned her final year in office by welcoming Xi to Geneva. While he was there, she signed an agreement that committed the WHO to working alongside China on health as part of the country’s Belt and Road initiative. It was the first time any UN agency had signed up to the initiative, which seeks to extend Chinese influence and trade in more than 70 developing countries by financing infrastructure projects. The initiative is highly controversial because its critics argue that China uses it to shackle countries, particularly in Africa, to “unsustainable debt” as a way of gaining access to the continent’s raw materials and buying political favours. “I think health is too special to get into the really seedy politics that Belt and Road is part of, and I wouldn’t want the WHO to be associated with it,” Gostin argues. “The cost in terms of human rights and debt, and other adverse events for Africa, was a bridge too far.”
Hong Kong’s Leader Killed Her City – The Atlantic – Regina Ip, a pro-Beijing lawmaker and member of Lam’s cabinet, told me that simply having the laws on the books would provide a “deterrent effect” to protesters, and that the fears of journalists and activists over the curtailing of freedoms were not “completely misguided.”
How the daigou can help new brands | Vogue Business – The classic image of the daigou is of an entrepreneurial and well-connected individual who buys global luxury brands on behalf of Chinese clients abroad, where prices are lower and hard-to-find products are more accessible. But the new model daigou is also working closer to home, and mixing emerging Chinese designers with foreign brands. The motivation for the evolution of the daigou’s role comes from a wave of young Gen Z Chinese consumers who are seeking more interesting and affordable fashion and don’t care as much about the name on the label. This is good news for new brands in China – and elsewhere. In a fiercely competitive market, any well-designed brand has the potential to catch consumers’ eyes. What’s needed in the early days of a new brand’s development is an effective sales channel. – Building a similar relationship with daigou, that brands currently have with fashion stylists
[Report] Bad News, By Joseph Bernstein | Harper’s Magazine – In the beginning, there were ABC, NBC, and CBS, and they were good. Midcentury American man could come home after eight hours of work and turn on his television and know where he stood in relation to his wife, and his children, and his neighbors, and his town, and his country, and his world. And that was good. Or he could open the local paper in the morning in the ritual fashion, taking his civic communion with his coffee, and know that identical scenes were unfolding in households across the country. Over frequencies our American never tuned in to, red-baiting, ultra-right-wing radio preachers hyperventilated to millions. In magazines and books he didn’t read, elites fretted at great length about the dislocating effects of television. And for people who didn’t look like him, the media had hardly anything to say at all – give this a read
COVID slows Apple and Google production shift away from China – Nikkei Asia – AirPods — both entry-level and high-end models — were among the earliest products that Apple began making in significant amounts in Vietnam, having moved production there around two years ago during the height of U.S.-China trade tensions. Apple’s plan to bring some MacBook and iPad production to Vietnam has also been put on hold due to a lack of engineering resources, an incomplete notebook computer supply chain and the dynamic COVID situation, one of the people said. Production of smart doorbells, security cameras and smart speakers for Amazon, which recently moved to Vietnam, has also faced delays since May as assembly lines in the northern part of the country coped with a surge in local cases and tougher COVID prevention measures
Opinion | We built a system like Apple’s to flag child sexual abuse material — and concluded the tech was dangerous – The Washington Post – Our research project began two years ago, as an experimental system to identify CSAM in end-to-end-encrypted online services. As security researchers, we know the value of end-to-end encryption, which protects data from third-party access. But we’re also horrified that CSAM is proliferating on encrypted platforms. And we worry online services are reluctant to use encryption without additional tools to combat CSAM. We sought to explore a possible middle ground, where online services could identify harmful content while otherwise preserving end-to-end encryption. The concept was straightforward: If someone shared material that matched a database of known harmful content, the service would be alerted. If a person shared innocent content, the service would learn nothing. People couldn’t read the database or learn whether content matched, since that information could reveal law enforcement methods and help criminals evade detection. Knowledgeable observers argued a system like ours was far from feasible. After many false starts, we built a working prototype. But we encountered a glaring problem.
Our system could be easily repurposed for surveillance and censorship. The design wasn’t restricted to a specific category of content; a service could simply swap in any content-matching database, and the person using that service would be none the wiser. A foreign government could, for example, compel a service to out people sharing disfavored political speech. That’s no hypothetical: WeChat, the popular Chinese messaging app, already uses content matching to identify dissident material. India enacted rules this year that could require pre-screening content critical of government policy. Russia recently fined Google, Facebook and Twitter for not removing pro-democracy protest materials. We spotted other shortcomings. The content-matching process could have false positives, and malicious users could game the system to subject innocent users to scrutiny. – Emphasis in bold is mine
Technology
Laptops Shortage Is Easing as Pandemic Demand Wanes – Bloomberg – The waning demand for PCs will likely last for at least several more quarters. Memory prices are dropping precipitously on fears the chip cycle is over. But it’s good news for anyone looking to buy a laptop, printer, webcam or router. Expect them to be much easier to find in stores this fall. – I am hoping that the price of SSDs will fall again
Intel with an old take on big.little for Alder Lake | EE News Europe – Intel’s next-generation desktop chip, code-named Alder Lake, is the company’s first hybrid architecture to integrate two core types – the Performance-core and Efficient-core. This is similar to ARM’s big.little approach which used a small core optimised for low power consumption with lower performance alongside a larger, higher performance core. Both cores could run the same code depending on the context, avoiding the problems of having a scheduler to allocate tasks to multiple cores. This has traditionally been a limiting factor for the system-level performance of multicore chip designs
Epic’s Fortnite lawsuit has become a nightmare for Google – Protocol – Google ‘estimated in 2019 that it risked losing as much as $6 billion per year if app makers and app store operators banded together with Epic and began creating alternative distribution channels. So instead of offering a superior product, the company muscled its way to a market position now being viewed by U.S. regulators as potentially anticompetitive’ – this might feed into a wider FTC case later on given the focus on revenue. More related content here.
Netflix are doubling down on The Witcher franchise with their Witcher: Nightmare of The Wolf anime. The approach is very similar to the approach that Netflix took with Altered Carbon. Looking at how well that anime turned out, I have high hopes that Nightmare of the Wolf will live up to the trailer that Netflix has dropped.
The Witcher: Nightmare of The Wolf
OpenAI Codex demo
OpenAI demo-ed the use of AI to code from normal human language a web interface design. It’s a smaller move forward than you would think it is, but it has programmers worried. Secondly, its hard enough to work out what something does if it is coded by a human who doesn’t document as it goes. A machine learning based coder represents an even greater level of opaqueness, which poses challenges for when code would need to be updated. You can learn more about OpenAI Codex here.
Mercedes Benz 300SL
The 1950s saw Germany rebuilding after the war and its companies coming back after the war. Before the space race, there was the jet age and there was motor racing. Mercedes Benz looked to make a statement about its position in the motor industry and the way to do that was through motor racing. Stirling Moss driving a Mercedes 300SLR put the company back on the map. Two years later Mercedes released a two door version of Moss’ car to the public called the 300SL. It was light, expensive, exciting and had jet age vibes with its aerodynamic styling and gull wing doors. Something that still looked futuristic almost 30 years later on the DeLorean.
But the 300SL could also kill the unwary driver due to its rear swing axles. The car could go into sudden oversteer mid-corner if you stabbed the brakes or take the foot off the throttle in the bend. I know this, not because I had driven one, but because I was an avid reader of Car magazine from the mid 1980s to the mid 1990s.
Car magazine was in a golden age, when motor journalism was as much literature as product information. Journalists wrote up to the intellect that they wanted their readers to have rather than writing to a lowest common denominator. Something that I have tried to do with this blog over time, but not nearly as well. Back to the killer handling: and the expensive coupe.
Mercedes replaced the gull wing coupe with a roadster body shape and took the opportunity to change the handling.
Tyler Hoover of Hoovies Garage had a chance to drive one of the roaders.
Tyler Cowen interview
I have been following Tyler Cowen’s economics blog Marginal Revolution for years and posted links to it here. Ashish Kulkarni interviewed Cowen about some of his blog posts, the philosophy of economics and the challenges facing universities and their students. Cowen’s day job is a professor at George Mason University in Washington DC.
Fake reviews on products including Amazon Prime items (image via quote catalog
Shenzhen to support Amazon merchants | Trivium China – 50,000 merchants were banned from Amazon for astroturfing false reviews. The ban was worth up to 100 billion yuan in sales to these merchants. Half of the merchants affected are based in Shenzhen. Now the Chinese government is looking at what it can do to help the merchants practicing false reviews. Yet it wouldn’t tolerate false reviews if it was exposed in in the domestic market. One of the options being looked at is a platform to rival Amazon Marketplace, that would allow fake reviews
Study: Companies Aren’t Living Up To Chinese Consumers’ Expectations – Three in four (75%) informed Chinese consumers (defined as consumers interested or involved in one of 20 industries studied in the research) said CEOs should speak up on issues that “may not have a significant impact on the business but have a significant impact on society,” with particular focus on diversity and diverse representation within a workforce and its leadership. Yet just 35% of respondents in China feel companies in China can do more to make the workplace better. Similarly, 80% agree that CEOs should have a voice on the environmental policy debate, and three quarters (75%) say business leaders should have a role shaping health policy, the research found. Respondents ranked value and innovation as the top two drivers of brand perceptions in China. Only 35% of companies, however, are meeting expectations in those areas – the key term is ‘informed consumers’, I am sure that the Chinese government might not view things in quite the same way
The Hong Kong National Security Law: The Shifted Grundnorm of Hong Kong’s Legal Order and Its Implications by Han Zhu :: SSRN – the application of mainland laws in Hong Kong, the interpretation of the NSL, cross-border criminal jurisdiction, national security institutional infrastructure, and the legal language. To some extent, the enactment of the NSL is like a silent constitutional reform that has reshaped, and will continue to reshape, a wide range of aspects of Hong Kong law as well as the Basic Law. Due to the dualistic nature of the NSL as a national law which applies to both the mainland and Hong Kong, it has also expanded and deepened the interaction and conflict between legal systems in the two regions, highlighting the inherent tension of maintaining the unity of a heterogeneous legal order under one country, two systems
Influencers want to be paid more than ever. Blame the pandemic | Marketing | Campaign Asia – no one is asking the question in this article, are influencers overpriced, or even worth it compared to other “Industry can also factor in, with some influencer niches starting at a higher price point than others,” says Heather Rottner, director of social media at Coyne PR. For instance, she says the firm generally sees higher rates in high-end fashion and beauty, food and DIY. While there is no shortage of influencers looking for brand partnerships in these categories, “many influencers pride themselves on being selective and authentic which means they don’t jump on every partnership offer they receive or use just any product.”
Media
‘Spreading like a virus’: inside the EU’s struggle to debunk Covid lies | World news | The Guardian – Until the pandemic, there was no monitoring of fake stories originating from within EU countries or linked to countries other than Russia. While China Global Television Network (CGTN), an English-language cable news channel controlled by the Chinese Communist party, is considering a Brussels expansion StratCom until recently had just two people working on Chinese disinformation. Several former EU analysts said multiple state-backed disinformation campaigns, not just Russian, had taken advantage of Covid and Richter believed the EU’s limited focus on Russia “affected the legitimacy of the project.”
Security
The threat of a “cyber Pearl Harbor” is a red herring — Quartz – the damage of cyberattacks comes from a series of piecemeal hacks that are often hidden from public view and don’t always lead to immediate, tangible harm. The actual threat looks less like a barrage of bombs and more like a spy slipping a gloved hand into a filing cabinet or a mobster strolling into a shop to collect a “protection” payment
Who is being monitored? Tutanota – interesting data points, I would imagine that other western countries would have a similar split in use of monitoring
Huawei Accused in Suit of Installing Data ‘Back Door’ in Pakistan Project – WSJ – Another day, another dodgy security story involving Huawei – BES, says in a lawsuit filed Wednesday in California district court that Huawei required it to set up a system in China that gives Huawei access to sensitive information about citizens and government officials from a safe-cities surveillance project in Pakistan’s second-largest city of Lahore. Muhammad Kamran Khan, chief operating officer of the Punjab Safe Cities Authority, which oversees the Lahore project, said the authority has begun looking into BES’s allegations.
