Your Financial News Roundup
November 16, 2022
TL;DR
- World: Last week, Iranians demanded international help and the world responded; some U.S. election results are still being counted; the world reached 8 billion people.
- Tech: Social events app 222 brings adults together with AI; Tesla wants its EV charger to be the North American standard; crypto exchange FTX has imploded.
- Economy: The CPI report implies the economy reached peak inflation (finally!); the Fed may slow the pace of rate hikes; global leaders meet in Egypt for the COP27 climate conference.
World
🇮🇷 Protesters Look for Help: Iranians have protested for 8 weeks, but the government has responded with violence and Internet blackouts. Protestors demand that international organizations hold the regime accountable and expand media coverage. Prince Reza Pahlavi, son of Iran’s prior Shah, is asking the U.N. to investigate the killings and for the international community to expel Iranian diplomats. Western nations have responded with targeted sanctions and harsh rhetoric, but must balance their responses to ensure Iran cooperates over talks about its nuclear program. (Source)
🗳 Election Outcome Delay: The midterm election saw a voter turnout of 112M, but Washington’s balance of power is not fully set. Factors contributing to this year’s delay include historic turnout in some states, 42M early voting and vote-by-mail ballots, differing state laws, and the need for a runoff election. In the U.S., each state operates its election, leading to differences in how they are run and when votes are counted. For now, it looks like the Senate will stay in Democratic hands, while the House will have a slight Republican majority. Election officials urged patience with vote tallies, but some candidates have expressed skepticism over election integrity. (Source)
🌏 8-Billion Milestone Reached: According to the UN, the world has now reached a population of 8 billion. Previously, it took 123 years for the world population to rise from 1B to 2B, but only 23 years to reach 8B from 6B thanks to significant medical advances. Much of the next half billion people will come from 8 countries, primarily in Africa, with the world population estimated to peak at ~10B sometime between 2060 to 2080. Meanwhile, many countries around the world are starting to grapple with declining fertility rates, which will impact their economies as older generations retire. (Source)
Tech
👯♀️ Making New Friends: Social events app 222 hopes to solve the adult friendship problem by helping strangers connect through social outings. Inspired by pandemic-era backyard dinners, the 3 co-founders use machine learning to curate their guest lists. They took the idea to L.A. by creating a marketplace for venues and members who want to meet up and explore the city through live experiences. 222 asks its users to share personal information and answer personality-based questions. Its algorithm matches you with 1 of 16 personality types and invites you to a partner-hosted event with others. While the algorithm learns from real-world experiences, it uses personal data to create a psychological profile of each member — raising concerns over its data use. (Source)
🔌 EV Charging Standards: Tesla released its charger design and is lobbying to make its design the public standard for North America. Claiming its charging standard is the most widespread, Tesla calls its version the North American Charging Standard (NACS). Most EVs use the Combined Charging System (CCS), but Tesla’s is more compact and boasts better performance. No major competitor backs the idea so far. Tesla’s move would make its chargers even more critical to the EV ecosystem and provide recurring revenue for the company. (Source)
📉 The Rise and Fall of FTX: Run by (former) multibillionaire Sam Bankman-Fried (SBF), FTX was a powerhouse crypto exchange that was making crypto mainstream… until it was revealed that they defrauded their customers. While it was an open secret that FTX and Alameda Research, SBF’s quantitative trading firm, were closely tied, a leaked balance sheet from Alameda revealed a shocking discovery – a significant portion of their assets were denominated in FTX’s native token FTT. On top of leveraging FTT as collateral, Alameda traded billions of dollars of FTX customer funds without their explicit consent, leading to a contagion effect across the rest of the crypto industry and the victims of their crimes. (Source)
Economy
👏🏽 Reaching Peak Inflation: Last week’s Consumer Price Index (CPI) report showed a 7.7% increase in October, down from September’s 8.2% — signaling inflation may have peaked. October also saw 261,000 people hired, beating analyst expectations. Prices for homes, rent, gas, and used cars have been going downwards too. Yet, the Fed may have to raise rates higher than anticipated to curb job growth, which would decrease wages and spending. As inflation outstrips income gains, many have mixed feelings of whether the Fed can halt inflation without causing a recession. The Fed has a conflicting mandate to keep inflation low and avoid unemployment. (Source)
🎯 Slower Pace of Interest Rates Looming: According to Federal Reserve Vice Chair Lael Brainard, the central bank is expecting to slow down the pace of its interest rate hikes. While that does not mean the Fed will completely halt interest rate increases, the consecutive 0.75 percentage point raises may finally come to an end. Brainard’s announcement comes a week after the Fed set its benchmark interest rate range to 3.75%-4%. Although inflation has slowed down, the Fed is aiming to bring inflation back down to 2%, which requires additional work. (Source)
🌳 Global Climate Meetup: Global leaders are meeting in Egypt for the COP27 climate conference. With “reparations” on the agenda, less developed countries blame the fossil fuel usage of rich countries. Developing countries, such as the island nations of Tuvalu and the Bahamas, are very prone to the effects of climate change. The nations least responsible are the ones most affected by climate change. Leaders of developed countries are committing to the green energy transition and the need for financial aid — both of which would have a significant economic impact on global energy markets and investments. (Source)
Recommended Resources
- We Talk to Plants – They Tell Us How Happy They Are (BBC)
- Stunning Ancient Artwork Found at Site Sacked by ISIS (Good News Network)
- When Should I Sell My Cryptocurrency? (Finance Futurists)
- Weak Yen Puts Japan’s Economy into Reverse in the Third Quarter (Financial Times)
- My Credit Score Dropped For No Reason – What Happens Now? (Finance Futurists)
- China’s Economy Loses Steam as Factory Output (Reuters)
Tip of the Day
💸 Saving your money in high-yield savings accounts (HYSAs) with online banks like Marcus by Goldman Sachs or Ally Bank will get you more interest back on your money. They come with the same protections as using Chase, Bank of America, or other major bank.
#Oof
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