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- Market Munch 🍎 | 20 March 2023
Market Munch 🍎 | 20 March 2023
UBS goes shopping, wheat vessels float around, and Indian jobs dry up. 🔥
Aryaansh Rathore
March 19, 2023
Happy Monday, Munchers! 🙏
Hope you had a class weekend. Back to the grind it is.
As always, here is your daily dose of the news that matters, from Wall Street to Dalal Street - in 4 minutes and 55 seconds.
Yesterday, Swiss banking went boom, Putin let people eat, and India’s job market came under pressure. 🔥
Let’s dive in.
What’s hot, what’s not?
Market Commentary
All of this banking contagion has given crypto bros another reason to come out of their caves and start hawking Bitcoin. Balaji (the CTO of Coinbase) made a bet on BTC going to $1 million in 90 days. If he’s right, he earns $50 million. 😂
Markets regained some confidence after UBS took over CS to ensure that all goes well in the world of high finance.
Not much noise from everyone else over the weekend. Guess all the Wall Street hotshots are busy sipping their iced coffees and enjoying the start of summer. And thinking about their jobs, for those whom it applies to. 😅
Story Roundup
It’s crazy how quick people change.
Yesterday, almost every AI “expert” suddenly turned into a CFA who’s been watching the banking system for the last 20 years.
And if I’m honest - I get where they’re coming from.
This weekend was historic for the financial markets.
UBS spent about $3.25 billion to acquire Credit Suisse.
Might seem like an easy piece of weekend shopping, but it is a MASSIVE purchase.
The big winners from this deal are UBS and the Swiss banking system.
Virtually everyone else who came close to CS with a 10-foot pole loses out.
Almost $17 billion of debt that CS had is now worthless, and this deal was also to a 62.5% discount to their market price on Friday.
And if all that wasn’t enough, UBS also gets a $100bn credit line from the Swiss National Bank to play around with.
Big money. 🤷🏻
A few months back, Russia decided to stop bombing Ukrainian grain ships (but continue bombing everything else).
This helped a LOT of people around the world - since Ukraine produces about 10-15% of global grains. If there's more of these grains floating around, prices are cheaper.
That ceasefire has just been extended by 120 days.
The end result is a lot more food security and a much easier life for anyone trying to put dinner on the table.
Papa Putin is feeling benevolent. 💀
The world’s largest country could have a problem on it’s hands.
Too much economic growth, and too little jobs.
Persistent unemployment could end up being a struggle for both the economy and Narendra Modi’s 2025 re-election.
Talented youth that graduate from India’s top colleges are being forced to sit at home, deliver groceries, or drive taxis simply because of how crowded the job market is.
India’s economy will expand from 6.1% to 6.8% this year, but employment went up from 7.1% to 7.5%.
This growth is being driven by corporate India (an amazing thing) but corporate India does not employ as many people per unit of output when compared with other unorganized sectors.
On the one hand, you see young people not getting jobs; on the other, you have companies complaining they can’t get skilled people.
Sticky situation. 💼
2022 dealt a hefty blow to the creator economy, but nature is healing and TikTokers have come out from their caves.
TikTok themself have decided to set up something called the Creativity Program - which is gonna be just like their $1 billion creator fund, with more perks.
Specifics haven’t been announced, but here is the kicker.
Creators who want to make money using this program need to create original videos that are longer than a minute.
That’s a big U-turn from TikTok’s original philosophy of quick “shots” of content that give you a small dopamine release.
The interesting thing in this?
Everything suddenly becomes clear when you notice that YouTube began sharing ad revenue with YouTube Shorts makers.
TikTok doesn’t want it’s aggressive creator-led growth to stop, and they’re putting their money where their mouth is.
Chinese fast fashion companies are minting millions but absolutely hammering the environment while doing it.
Shein is the biggest and baddest shark in this pond, and they’re asking for big money from investors.
They made $23bn in revenue last year, and they think that 2025 will be the year that they cross $60bn.
Shein has become the shopping destination of choice for Gen Z customers in the West - but this poses a problem in itself.
A younger market is more “flirtatious”, which means that customers who repeat orders are low.
High repeat rates are crucial in any online-first business, so Shein needs to sort that out.
Oh, and they also need to fix their -
- ill fitting clothes
- employee abuse complaints
- sweatshop working conditions
- bad customer service
It’s a pretty long road to walk. 🚶🏽
Hope you enjoyed this issue of Market Munch. If you’ve got any feedback - good or bad (😏) you can hit reply to this email and I'll get a ping in my inbox. Thanks a ton for reading!
Cheers, and have a lovely day. 🙏
- Aryaansh ⚡