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Q4 Special: Goodbye, 2021

WORLD

Hello, fellow leaders!

Have you ever stayed up late to do homework/work on a project? Well, world leaders had to stay up late finishing two summits this year as well.

  • Two summits? 2️⃣ Yep. The first one was the COP26 climate talks in late October, and the second one was a virtual meeting between Chinese President Xi and US President Biden.
  • Did anything get done? Quite a lot actually! Let’s start with the COP26 climate talks first – World leaders were so busy working the conference ended one day late.

A deal to fight climate change

The world leaders made a global deal to fight climate change, although it took a full two weeks of intense talks and a few all-nighters.

  • Let’s target coal 🚫 COP26 members agreed to reduce coal usage, the first time world leaders have ever mentioned coal as part of the fight 🆚 climate change.
  • World leaders also agreed to standardize carbon trading, agreed to cut down on methane and pledged to help countries that could be directly affected by climate change. 

Wasn’t perfect though 😌 Countries still disagreed on how to assist developing nations, and current pledges still missed targets of 1.5°C warmer, placing us on track for 2.4°C instead. (What happens if we miss our target.)

A surprising deal 😮 A big surprise at COP26 was a deal between the US and China to cut down on methane + illegal deforestation. It was a rare moment of cooperation – it wasn’t the last time the US and China would meet in the quarter either…

Two global leaders say hello

Due to Covid…online! The leaders of China and the US, President Xi and Biden met up for a 3-hour virtual talk 💬 in November.

    • Both leaders wanted to work together more, with Biden hoping the competition of US-China should not become “conflict”.
  • Improved travel ✈️ No concrete agreements were announced, with the only achievement being that China will adopt an upgraded fast track for US executives to enter China.

The meeting was the first time since Biden was elected President, and many hoped that this would at least improve relations between the world powers. 

 

BUSINESS

It’s time to split!

It seems 2021 was a time for a few companies to say “Let’s break up”, as we saw large companies split up, and others get into a fight.

#1 GE splits into three parts

The American giant General Electric founded by Thomas Edison (the lightbulb 💡 creator) in 1892 has decided in early November to split into 3 parts by 2024. 

  • Why? To stay focused, make its business simpler and allow each team to use their expertise in specific industries – and to ultimately make more money 🤑.
  • GE will split into 3 companies ① Healthcare 💉 splitting in 2023; ② Energy 🔋 splitting off in 2024; ③ Aviation ✈️, the company remaining after companies split off. All the names are not determined yet.

Shares of GE rose after this announcement, as investors figured this could help GE recover from its current position, and make more profits.

#2 J&J becomes two 

J&J, the world’s biggest health-product company also announced in November it would split up, after 135 years as a single company.

  • We’re growing apart 😓 J&J’s businesses have grown apart in recent years, as their consumer and healthcare divisions have different customers, business models, and managers.
  • Within the next few years, J&J will split into two companies: pharmaceuticals 💊 and consumer products 🧼. The healthcare arm will keep the original name, while the consumer arm will have a name…that we don’t know yet.

J&J shares, like GE, also rose after the announcement. Maybe the simpler the better for these companies…

#3 Amazon and Visa have a fight

This will probably shock Visa credit card 💳 users in the UK – In November, Amazon announced it would stop accepting UK-issued Visa credit cards starting next year.

  • Why are they fighting? 👿 Visa increased processing fees for online credit card payments from the UK to the EU. Amazon thinks Visa charges too much, and banned credit cards from making payments on its website – debit cards are still ok though.
  • We’ll resolve this soon 👍 Visa did say later it believes that it will sort out its relationship problem with Amazon eventually, but we’ll have to see what happens next year.

🐿️: Lots of break-ups this quarter…Maybe they’ll make up as part of a new years resolution?

 

ECONOMY

Taxes, tapering, and tln dollar bills

2021 has been a busy year for global economies as everyone tried to open up after the pandemic – the fourth quarter was no different…

#1 It’s time for a global tax standard! 🤝

October started with a landmark deal, as over 135 countries agreed to set the global minimum corporate tax at 15%.

  • Why? Businesses tend to flee to countries with lower tax rates so they don’t have to pay so much.
  • The G7 group reached a deal earlier in June to tax big tech more. In this new agreement, small businesses won’t be hit with the new rates.

Is my home part of this? We can see a full list of the countries that signed 👉 here.

#2 Finally, time to start tapering 💸

The US central bank was thinking about reducing its pandemic stimulus (i.e taper) for many months but finally said “it’s time” in November.

  • What does this mean? The Fed boosted the pandemic-era economy with stimulus, but as the US economy gradually recovers, it has also decided to slow down the stimulus pedal.
  • Why slow down? The stimulus caused higher inflation – an increase in prices of goods and services. The Fed announced in December it will double its pace of tapering to counter high inflation.

#3 Powell keeps his job 🙋

At that same time, it was time for US President Biden to nominate a new leader for the Fed, and he picked the current chair Powell to stay on for a second term.

  • Why Powell? Some said Powell offered more stability for the Fed, and that it was better not to “change horses 🐎 in the middle of the race”. 
  • Biden also nominated Powell’s competitor, Lael Brainard 🙋‍♀️ as vice-chair of the Fed –  Brainard is supporting more strict regulations on US banks.

#4 Time to “build back better” 🏗️

US President Biden is probably quite happy, as the US House passed his massive USD 1.75 tln social spending bill in November. 

    • What’s in the bill? Universal preschool for US children, paid family leave, and support for sustainable purchases like EVs. 
  • The bill passed to the US Senate but reached a block as one senator said he will not support the bill, which could possibly stop it before the bill is passed.

 

TECH

Apps are down, and history is made

The tech world kept busy this quarter, but not all of it was good news – A massive Facebook system failure, and milestones and scams from the cryptocurrency sector.

#1 My apps went down! 💥

You might remember a short time in October when all of us couldn’t use our Facebook, Instagram, WhatsApp + other apps… well, that’s because Facebook suffered its worst outage in over 10 years.

  • A day without social media 😠 Nearly 3 bln users were impacted around the world, and Facebook only solved the problem after 6 hours of outages.
  • What happened? Facebook lost its “internet address book” – so our devices couldn’t find the address of Facebook’s server. (A “DNS Failure” professionally.)

Facebook (now called Meta) hasn’t really recovered from this incident, as a recent survey announced Facebook was the “worst company of the year”. Maybe it’ll have a better 2022…

#2 The first-ever Bitcoin ETF launches 📈

History in the making for anybody interested in bitcoin, as the first-ever bitcoin exchange-traded fund officially started trading in October.

  • What’s a bitcoin ETF? Long story short – it allows us to invest in bitcoin with a brokerage account instead of using a digital wallet. 
  • It does have differences as it could underperform bitcoin but is safer 🆚 bitcoin… as it is regulated by the US SEC.

Here’s a warning Analysts have warned that the Bitcoin ETF might be risky, as its volatility is massive – it once last half of its value in two days last year.

#3 Losing millions from Squid Game? 😲

This is a good warning to be careful when investing in cryptocurrency, as a meme coin inspired by the Netflix smash hit Squid Game crashed from USD 2,800 to 0 within minutes.

  • What happened? 💰 A cryptocurrency called SQUID suddenly became popular, gaining 230,000% in a week –  before suddenly crashing to less than USD 10 cents. 
  • Reportedly, the owners of SQUID cashed out millions of dollars and ran away with the money – the scam is called a “rug pull” professionally.

A scam from the beginning? Some investors were already worried before the slump, as they were unable to cash out before the crash – one investor, unfortunately, lost his entire life savings after putting it into SQUID.

 

COVID

Another serious variant…Omicron?

Just when we thought we were finally done with delta, another variant appeared, and it has most of the world on edge – the omicron variant.

What do we know about omicron?

Best to tell you how it all started – the variant was first detected in S.Africa, and scientists said it likely evolved during infection of an immuno-compromised person,

  • More transmissible than Delta? 🦠 While there’s still more data coming, a recent study found omicron was 4.2 times more transmissible than delta variant. 
  • S.Africa has reported cases are milder 🆚 previous waves, but officials warned it is still too early to conclude.

Time for a booster? 💉  Pfizer + Moderna + S.African scientists all said booster shots can give us better protection against omicron, with two doses being less effective at blocking the virus. 

  • Some countries have already increased restrictions ahead of Christmas, as cases have reached everywhere from the UK to Singapore.

Thankfully, it wasn’t all bad news this quarter, as a few companies have revealed their own counters to Covid.

#1 Here comes a Covid pill? 💊

In October, the US pharmaceutical firm Merck revealed results from its Covid pill, saying it could cut the risk of hospitalization or death from Covid by around 30%. 

    • Citizens will still need vaccines, but US health officials said the pill is a good “additional tool” against Covid-19.
  • Be careful though ⚠️ US regulators have advised pregnant women not to take the drug, as pregnant women were not part of the Merck trials.

Pfizer’s got one too 🙋 Pfizer also announced its own Covid pill and said it is 89% effective at reducing risks of death or hospitalization, much higher than Merck.

#2 A plant based Covid vaccinev? 💉

Another possible breakthrough in October: The world’s first plant-based Covid vaccine could be coming – courtesy of Medicago, a subsidiary of the Japanese giant Mitsubishi.

  • Traditional vaccines use bacteria/animal cells to let the virus copy + produce the vaccine – Medicago produces the vaccine using a type of tobacco leaves.

We’re better too 💪 Medicago says it has a few benefits with the plant-based vaccine ① Faster production; ② Easier transport; ③ Lower risks. It hopes to apply for approval in Canada and Japan soon.

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