David Fuller and Eoin Treacy's Comment of the Day
Category - General

    Thai Pro-Democracy Groups Dominate Vote in Rebuke of Military

    This article from Bloomberg may be of interest to subscribers. Here is a section: 

    Under a constitution promulgated in 2017, the military-appointed senators get to vote alongside the 500 elected lower house members to decide on the next prime minister. 

    Political parties affiliated with Thaksin, 73, have won the most seats in every national vote dating back to 2001, only to be unseated from power by dissolutions or coups. 

    Whether Thaksin’s planned return to Thailand in July will exacerbate tensions with the military elite is another question. The telecoms magnate has been living in self-imposed exile after fleeing to avoid prison over a corruption conviction that followed a coup that toppled his own government in 2006.

    Read entire article

    Sea's Path to Profit Paved With Layoffs, Single-Ply Toilet Paper

    This article from Bloomberg may be of interest. Here is a section: 

    Li’s shock treatment paid off. In March, Sea reported the first quarterly profit in its 14-year history, $427 million in GAAP-sanctioned net income. Its stock soared 22%. Last week, it said it would hand out 5% raises to most staff. Sea has now more than doubled its market value since November.

    Like so many tech startups of its generation, Sea had bled red ink for years. In fact, it lost more than $8 billion since its founding to pay for growth in its e-commerce, games and finance operations. For now at least, Sea is setting a different kind of example: It’s demonstrating that if your underlying business is sound and substantial, you can pull back on subsidies and expansions to break even.

    That’s proving a challenge for rivals. Among Sea’s regional competitors, Singapore’s Grab Holdings Ltd. is still losing more than $300 million a quarter, while Indonesia’s GoTo Group’s losses exceed $250 million. Sea may also cause trouble for global tech giants like Alibaba Group Holding Ltd. and Amazon.com Inc., which are both seeking growth in emerging markets. 

    “What you’re seeing is a separation of proper, monetizable business models from something that is a work-in-progress,” said Amit Kunal, managing partner of Growtheum Capital, a private equity firm in Singapore, speaking broadly about the tech industry. “Sea read the market much earlier, took appropriate steps — and delivered.”

    Read entire article

    Rand at Record Low on Fears Russia Row Will Hit US Trade Ties

    This article from Bloomberg may be of interest to subscribers. Here is a section: 

    Relations between South Africa and the US — its second-biggest trading partner after China — have soured over Pretoria’s insistence that it is taking a non-aligned stance toward Russia’s war in Ukraine. Even so, South Africa participated in naval exercises with Russia recently, while officials of the ruling African National Congress have expressed support for Russia’s invasion of Ukraine.

    State Department spokesman Vedant Patel wouldn’t be drawn on whether the US would consider sanctions against South Africa should the arms claim prove true, but added during a regular State Department briefing Thursday that the US had “serious concerns” about a sanctioned Russian vessel docking in a South African port.

    “The political stakes are high, with trade deals and market access all now in question,” economists at Rand Merchant Bank wrote in a client note. “This will add an additional layer of risk until the debate around this has cleared, and the rand should reflect that risk premium.”

    Read entire article

    Google Unveils Plan to Demolish the Journalism Industry Using AI

    This article from Futurism may be of interest to subscribers. Here is a section: 

    But it's not unfair to say that Google, which in April, according to data from SimilarWeb, hosted roughly 91 percent of all search traffic, is somewhat synonymous with, well, the internet. And the internet isn't just some ethereal, predetermined thing, as natural water or air. The internet is a marketplace, and Google is its kingmaker.

    As such, the demo raises an extremely important question for the future of the already-ravaged journalism industry: if Google's AI is going to mulch up original work and provide a distilled version of it to users at scale, without ever connecting them to the original work, how will publishers continue to monetize their work?

    Google has unveiled its vision for how it will incorporate AI into search," tweeted The Verge's James Vincent. "The quick answer: it's going to gobble up the open web and then summarize/rewrite/regurgitate it (pick the adjective that reflects your level of disquiet) in a shiny Google UI."

    Read entire article

    Ueda's BOJ Subtly Changes English Translation in New Era Signal

    This article for Bloomberg may be of interest to subscribers. Here is a section: 

    At Ueda’s first policy meeting last month, board members discussed “patiently” maintaining easing, according to a summary of opinions released by the central bank Thursday. 

    “Patiently” implies waiting for a condition to be fulfilled and contrasts with the previous wording of “persistently” keeping up with easing, a word that was used up until the March meeting, when the BOJ was still led by Ueda’s predecessor Haruhiko Kuroda.

    Given that the original Japanese word remained unchanged, the change in English doesn’t suggest a major shift. It does however hint at Ueda’s intention of signaling a gradual move away from the Kuroda era. Some economists suggest that the change acknowledges a shift in Japan’s economic reality. 

    Read entire article

    PacWest Reports Decline in Deposits, Western Alliance's Grow

    This article from Bloomberg may be of interest to subscribers. Here is a section:  

    PacWest Bancorp reported a drop in deposits and Western Alliance Bancorp said its deposits grew, with investors continuing to scrutinize the levels amid tumult in the regional-banking industry.

    Beverly Hills-based PacWest said in a regulatory filing Thursday that deposits fell 9.5% last week after Bloomberg News reported that the lender was in talks with potential investors. The bank didn’t specify its total deposit levels after the decline, but said it had total deposits of $28.2 billion as of March 31, and that it had immediately available liquidity of $15 billion as of May 10, exceeding uninsured deposits of $5.2 billion. Hours after the Bloomberg report last week, PacWest confirmed it was in talks with several potential investors.

    Read entire article

    China's Weak Inflation, Borrowing Show Economic Recovery Waning

    This article from Bloomberg may be of interest to subscribers. Here is a section: 

    Separately, data from the People’s Bank of China showed credit and new loans were much worse than expected in April as consumers and businesses curbed their borrowing.

    “China’s credit data came in well below estimates, reinforcing the concerns over the sustainability of post-Covid recovery,” said Zhou Hao, chief economist at Guotai Junan International Holdings Ltd. Overall growth momentum “has been slowing significantly,” he said. 

    Expectations of policy easing has been growing, and a “policy rate cut looks imminent in the second quarter,” he added.

    China’s economic growth accelerated to a one-year high in the first quarter after pandemic restrictions were dropped, led by stronger consumers spending on travel and shopping. Recent data has been more mixed though, with manufacturing activity contracting in April and imports plunging.

    Read entire article

    Dollar on Pace for Best Day in Nearly Two Months

    This article from Bloomberg may be of interest. Here is a section: 

    The US dollar is on pace for its biggest rise in nearly two months as concerns about a slowing US economy, hawkish policy messaging, a US debt-ceiling standoff and the solvency of regional banks supported havens. The pound fell after the Bank of England lifted its policy rate 25 basis points and indicated more hikes may be required to slow inflation.

    Read entire article