Business
Banks’ Newest Fed Headache: Nonstop Instant Payments. “Speedier transfers carry another potential cost for banks. In addition to losing revenue from the time between a payment’s initiation and settlement, banks now have to worry about deposit flight outside of business hours. It comes just months after three major lenders failed in part because of rapid withdrawals and an inability to tap emergency sources of cash that were offline. Banks have traditionally assumed customer deposits were sticky—meaning they were less likely to be withdrawn at the first sign of trouble. That assumption allowed bankers to comfortably borrow cash at low rates and lend for long periods at higher rates. The premise also guides regulations that require banks to hold a buffer of high-quality assets that can be sold over a 30-day period to shore up cash in a stressed scenario. But instantaneous transactions allow customers to pull cash with ease, and without notice. That threatens smaller banks and likely requires stiffer cushions to mitigate adverse scenarios, according to Menai, an advisory council member of the Federal Reserve Bank of San Francisco. Regulators are expected to propose tougher capital rules for the banking sector in the coming months.”
Wedgewood Partners Second Quarter 2023 Client Letter. Wedgewood Partners wrote a nice letter talking about Apple, its App Store and the excellent capital allocation over the past few years.
How Allbirds Lost Its Way. There are several good take-aways from this piece. The first is that Allbirds seems to have a good product, not a good business. Whether you think it is ahead of its time or there is no product market fit, the fact and the matter is that the company is struggling badly in a hyper-competitive market. I won’t be surprised if it’s acquired by another company by 2025. The second take-away is that the dual-CEO structure does not seem to work. Salesforce, Oracle, SAP and now Allbirds are a few examples of companies that found the approach unsuccessful. I’ll be curious to see how it pans out for Netflix. The third is that Allbirds consulted with Boston Consulting Group only to be told to focus on its original product that put the company on the map. I mean, Allbirds could have done it without paying a handsome fee to BCG. The act of working with BCG, in my opinion, doesn’t reflect well on the ability of the management team or the Board of Directors.
This Arkansas Town Could Become the Epicenter of a U.S. Lithium Boom. I had never heard of Magnolia in Arkansas before reading this article. In fact, if you had asked me, I would have responded: is it in Italy? Nonetheless, as long as we don’t blow up the environment, I support whatever domestic extraction of lithium the US can do. Chips and batteries are strategically important to the future of the country and its battle against China. Lithium is the key component in manufacturing both. Hence, we need to reduce our reliance on China for Earth elements.
Other stuff I find interesting
To Help Cool a Hot Planet, the Whitest of White Coats. “In 2020, Dr. Ruan and his team unveiled their creation: a type of white paint that can act as a reflector, bouncing 95 percent of the sun’s rays away from the Earth’s surface, up through the atmosphere and into deep space. A few months later, they announced an even more potent formulation that increased sunlight reflection to 98 percent. The paint’s properties are almost superheroic. It can make surfaces as much as eight degrees Fahrenheit cooler than ambient air temperatures at midday, and up to 19 degrees cooler at night, reducing temperatures inside buildings and decreasing air-conditioning needs by as much as 40 percent. It is cool to the touch, even under a blazing sun, Dr. Ruan said. Unlike air-conditioners, the paint doesn’t need any energy to work, and it doesn’t warm the outside air.“
Canada Woos American H-1B Visa Holders Fed Up with U.S. Immigration System. The US is THE economy of the world thanks, in large part, to immigrant talent. Yet, the system that we immigrants have to deal with is nothing short of humiliating, frustrating and hostile. Canada is opportunistically trying to get frustrated and talented immigrants to its shore. Of course, big brother America will feel slighted, but what does it expect? Canada is doing everything right for its human capital and future while the US should respond as quickly as possible to this wake-up call before it’s too late.
‘An Act of War’: Inside America’s Silicon Blockade Against China. It’s an aggressive act of war because that’s what it takes to stop China from securing an important capability moving forward. The problem is that China supplies a lot of rare Earth elements crucial to the chip production process. The US must address this weakness in order to protect the integrity of this initiative. “Though delivered in the unassuming form of updated export rules, the Oct. 7 controls essentially seek to eradicate, root and branch, China’s entire ecosystem of advanced technology. “The new policy embodied in Oct. 7 is: Not only are we not going to allow China to progress any further technologically, we are going to actively reverse their current state of the art,”
Rich and Anonymous. “It’s a realization that once money goes from being a tool you can use to make yourself happy to a symbol of what other people measure you by, you are buried in a kind of social debt that’s hard to measure but has a real impact on your happiness.”
Rich lode of EV metals could boost Taliban and its new Chinese partners. “A decade earlier, the U.S. Defense Department, guided by the surveys of American government geologists, concluded that the vast wealth of lithium and other minerals buried in Afghanistan might be worth $1 trillion, more than enough to prop up the country’s fragile government. In a 2010 memo, the Pentagon’s Task Force for Business and Stability Operations, which examined Afghanistan’s development potential, dubbed the country the “Saudi Arabia of lithium.” A year later, the U.S. Geological Survey published a map showing the location of major deposits and highlighted the magnitude of the underground wealth, saying Afghanistan “could be considered as the world’s recognized future principal source of lithium.”
Stats
Peanut butter is a $2 billion industry in the US
One out of five BNPL users in the US since Apple Pay Later launch used the service, according to JD Power
Minh Quang Duong 
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