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Learning by Proxy

Whether we can weather the Weather | Learning by Proxy

Usually, weather updates are for the end but I guess we need to start this one with some updates. If we had left it to our forefathers they would have just thought that the gods are angry with us. Unfortunately, we cannot brush this one away that easily.

Climate Change is real and it is finally knocking on the doors of rich people.

Weather

Studying in Agra in 2001, I was used to sweltering heat and freezing cold. Summers would reach up to 50 degrees Celsius. I have watched students collapse while walking from the hostel to the college which was about half a kilometre away. We usually had to deal with that in the absence of electricity given that the campus was located 20 km from the city and the electricity supply was not great. Winters used to be equally hard with temperatures plummeting to low single digits. This weather was a result of climate change.

I just used to think Agra sucked!

The countries in the tropics have been experiencing some of the worst impacts of climate change already. People from Guatemala have been migrating to the USA, not because of jobs – it’s because they want to live. People from Syria are going to Europe not for jobs – for life.

Put yourself in that position. Imagine leaving everything, all your possession, your identity, your life, your relatives and deciding to go to a foreign land undertaking a perilous journey that is half likely to kill you. Would you do that just to get a job??

The march of climate change has progressed to a point where the rich countries can now experience the same. Temperature fluctuations that range 20 degrees within a day, flash flooding, hurricanes, etc. The days of outsourcing pollution and calling it a day are over.

And used to pass Verviers often on the way to work

Germans are also required to go swimming in the mountains

In the meantime, as usual, Eastern US is underwater and the Western US is on fire.

Tropical storm Elsa put New York underwater.

https://www.usatoday.com/videos/news/nation/2021/07/09/new-york-city-subway-flooded/7909855002/

220,000 Acres have been burnt by the biggest of the 53 wildfires that are burning in the west. Temperatures have soared to 52 degrees Celsius in Oregon, a place that is under snow most of winter. That is like Shimla having 50-degree temperature. Unprecedented drought, it is so dry and so hot…

Firefighters battling the many wildfires in the region say the air is so dry that much of the water dropped by aircraft to quell the flames evaporates before it reaches the ground.

Source: BBC

People are also starting to realise that weather is a system and one change can affect others. The forest fires are starting to affect the weather in Toronto. Toronto looks like Delhi in Winter now.

Source: CBC

In China,

The subway train in Zhengzhou, a city of five million in central China, was approaching its next station when the floodwaters began to rise ominously on the tracks. The passengers crowded forward as the water rose, submerging the cars at the rear first because they were deeper in the tunnel.

As the water reached their waists, then chests, finally their necks, the passengers called emergency services or relatives. One gave her parents the details for accessing her bank account. Some cried. Others retched or fainted. After two hours, it became difficult to breathe in the congested air that remained in the cars.

Source: New York Times

There was flooding in a city of 5 Million people and the degree of flooding has been unprecedented.

Further west in Iran,

Iran is struggling with a fifth wave of the coronavirus pandemic, an economy strained by American sanctions and stalled talks on rescuing a nuclear agreement that was once seen as an economic salvation.

Now the country is contending with a different but easily foreseen crisis: a severe water shortage.

A prolonged drought and rising temperatures from climate change, combined with decades of government mismanagement of natural resources and lack of planning, have turned the water crisis into a volatile incubator of protests and violent unrest.

Source: New York Times

Iran is a classic case, where you can see how migrations begin. People desperate for water will be forced to move to another country. This will be projected by western media as a political failure and spun to try and extract a nuclear deal out of the country rather than take ownership of the climate catastrophe that they have perpetrated.

So now that climate has come beckoning to their doorsteps, EU legislators are willing to take action on it. They unveiled a new plan,

In what may be a seminal moment in the global effort to fight climate change, Europe on Wednesday challenged the rest of the world by laying out an ambitious blueprint to pivot away from fossil fuels over the next nine years, a plan that also has the potential to set off global trade disputes.

The most radical, and possibly contentious, proposal would impose tariffs on certain imports from countries with less stringent climate protection rules. The proposals also include eliminating the sales of new gas- and diesel-powered cars in just 14 years, and raising the price of using fossil fuels.

Source: New York Times

This proposal need not have waited till 2021. You did not need a flood to wash away two countries to decided to do something about it. Also, now that the troubles at your doorstep, moving too quickly on policy moves of this nature will hurt the developing countries.

Come to think of it, given that they have outsourced most things to other countries, implementing a tariff of this nature would be hard on them. Production and supply chains cannot be changed overnight. Eventually, the cost will be passed on to European consumers and the only solution is for their consumption to come down. In the interim, inflation will increase. How the EU will deal with the economic repercussions of this move will be worth watching.

Chinese Carbon Trade

I had explained the formulation, formation and challenges surrounding the carbon markets in the post I had written 2 months ago. In case, you have not read it, I would recommend it. Last week, China announced their very own carbon trading system. This system will apply to the 2200 power plants in the country, which account for 40% of the carbon footprint.

China has set up the trading platform of the national ETS on the Shanghai Environment and Energy Exchange.

As in other carbon markets, emission permits are allocated to participating firms, which they can use to cover their own emissions or sell on the exchange.

It is part of China’s plans to use market mechanisms to help bring emissions to a peak before 2030 and to net zero by 2060.

Source: Reuters

Carbon trading and emission restriction is an important first step in controlling climate change. It will make a huge difference to how the industries decide to regulate themselves.

Under the scheme, power plants will have a free permit to cover their verified emissions. But even if it exceeded its verified emissions by 100% it would be needed to buy only 20% of the surplus emission on the market. This entirely defeats the scheme on its own. If the power plant were causing 100% more pollution, even then, they would be needed to buy the 20% mandatory amount.

Further, there are deeper problems,

The biggest difference between China’s carbon market and Europe’s has to do with the total number of permits allocated. In Europe’s system (and in theoretical cap-and-trade markets that have been proposed by US policymakers, economists, and others), there is a cap on the total number of permits, which falls over time. This drives up the carbon price (Europe’s surged to record highs this year), and drives down emissions.

But China’s system doesn’t have a cap at all. Instead, permits are allocated to each plant based on a formula that accounts for how efficiently the plant runs compared to a benchmark for its class, and on how much electricity it produces relative to its maximum capacity. More efficient plants receive more permits, as do plants that run less often. These forces should push plants toward maximum efficiency, and favor newer facilities.

Source: Quartz

Also, the pricing of the carbon credits is far too low at 40 ($6.18) Yuan per tonne. Compare this with the European pricing of almost 50 Euros per tonne. The price needs to be set much higher considering that the maximum that any plant is needed to pay is also capped. Not to mention the fine is also fixed at a measly $4600.

China aims to expand the ETS to cover eight high-emission industries, including petrochemicals, chemicals, building materials, non-ferrous metals, papermaking, steel, power generation and aviation, though the timescale is not yet known.

Financial institutions or individual investors will not be allowed to participate in trading in the early stage of the national ETS, but institutional investors will be included once the trading mechanism matures.

Source: Reuters

This policy can be only credited as ‘something is better than nothing.’

HR Tech

For every company out there which loves all of its profits, the one thing they do not like to deal with is people. Unlike machines or code, people cannot be standardised. Each one needs to be recruited separately, each one needs to be led uniquely and each has to be evaluated separately. This is painful, time-consuming and most importantly needs a lot of manpower to undertake.

So you need to recruit to be able to recruit.

Companies that purported were founded to make this process easier have all been clubbed under the banner of HR-Tech companies. They all play a role in automating all of the HR processes, starting with recruitment going right up to evaluation.

Today, there are a lot of companies that will teach you how to build a resume so that you can game the algorithms that would evaluate your resume. Two can play this game. But what when an algorithm sends you home?

Stephen Normandin spent almost four years racing around Phoenix delivering packages as a contract driver for Amazon.com Inc. Then one day, he received an automated email. The algorithms tracking him had decided he wasn’t doing his job properly.

The 63-year-old Army veteran was stunned. He’d been fired by a machine.

Source: Bloomberg

MIT Technology Review went after the whole thing, conducting a detailed analysis of all of the different programs that companies have been using to screen candidates. They found software that evaluates you on the basis of your personality or the tone of your voice!!

Performance on AI-powered interviews is often not the only metric prospective employers use to evaluate a candidate. And these systems may actually reduce bias and find better candidates than human interviewers do. But many of these tools aren’t independently tested, and the companies that built them are reluctant to share details of how they work, making it difficult for either candidates or employers to know whether the algorithms are accurate or what influence they should have on hiring decisions.

Source: MIT Tech Review

All these algorithms are built with the biases that the programmers who were writing the algorithm had. To make matters worse there is no evaluation of it, it is just accepted for what it is.

We would never allow a drug to be sold in the market without having gone through rigorous testing — not even in the context of a health crisis like the coronavirus pandemic. Then why do we allow algorithms that can be just as damaging as a potent drug to be let loose into the world without having undergone similarly rigorous testing? At the moment, anyone can design an algorithm and use it to make important decisions about people — whether they get a loan, or a job, or an apartment, or a prison sentence — without any oversight or any kind of evidence-based requirement. The general population is being used as guinea pigs.

Source: Harvard Business Review

Algorithms are having an outsized impact on the lives of people. When your life can start depending on some stupid input that an algorithm got without context it will results in drastic consequences. We are still at a stage where we can stop this but the window is closing.

Also

Why train compartments are divided

Categories
Learning by Proxy

Learning by Proxy | COVID Climate

While climate change has been a topic of intense conversation, no world leader would have come anywhere close to forcing the kind of change that COVID has done. It also makes you wonder if nature knows how to protect itself. Snuff out the virus called Humans.

It is also causing industries to alter in unthinkable ways and the theatre business will never be the same again.

COVID a gift to the Climate

2020 started with a lockdown in China because of the widespread infection. China shuts down towards the end of January every year to celebrate the Chinese new year which usually occurs towards the first week of February. They extended their factory shut-down beyond the new year to ensure that people do not return to work and the virus can be controlled. And thus began the process of reducing global pollution this year.

If on the one hand, human activity led emissions have come down, on the other hand, 8.2 million acres of forest land was burnt in unprecedented fires across Western America. According to Wikipedia, this also destroyed 13887 building. That fire season has still not officially ended. Gusts of wind continue to blow this week and utility companies are still considering leaving Californians in the dark over the weekend to avoid fire.

Australian bushfires burnt through another 27.2 Million acres at the beginning of this year. A vast amount of it during the Australian summer from Nov 19 – Feb 20. This BBC report has some incredible analysis.

SpainFrance and Russia also saw thousands of acres burnt as a result of wildfires. The hills of Uttarakhand were ablaze in may in India and hundreds of acres of forest burned. 

Since we are on the subject of fires…

The fire broke out at the Ghazipur landfill site Tuesday night. Fire officials said cooling operations are on to control air pollution. A fire broke out at the Ghazipur landfill site Tuesday night, burning for almost 24 hours before firefighters could bring in under control. This comes even as the capital’s air quality worsened to severe on Wednesday.

[…]

According to a senior fire official, a part of the landfill was gutted at night and the fire soon spread to other parts but there was no damage to life or property. “Since the fire and smoke caused damage to the environment and health, a case has been registered against unknown persons to investigate the cause behind it,” said a senior police officer.

Source: Times of India

I mention all the fires because they put a lot of carbon emission back in the atmosphere. The Earth has become so warm that it is just burning up!

On the flip side, human contribution to climate change was reduced; substantially. Between March and July, several countries across the world were in partial or total lockdown. This included a lack of activity in industries that meant far lower contribution of green-house gases. Road transport was arrested completely in almost every part of the world for close to a month. Air travel took a nosedive. The move to telecommuting and video-conferences has also meant a huge drop in travel across the board reducing emission. 

People went back to cooking. This meant fewer things were eaten out of a packet. The packet did not have to be produced. The factory that put whatever it was into the packet did not produce as much and all in all, this reduced the carbon footprint. 

The fear of the virus meant that non-veg consumption went down across the world but more specifically in America. This led to a decline in cattle farming and therefore fewer methane farts!

Several circus shows such as Davos WEF were not put up, this meant we did not fly thousands of jets across the world so that a 2 days event could be held.

Also, it seems people are starting to re-use. The average cotton shirt we wear takes in about 1000 Litres of water to go from fibre to shirt. Once used, clothes are thrown away into landfills not because it cannot be worn but because it is old or out of fashion. 

A massive force is reshaping the fashion industry: secondhand clothing. According to a new report, the US secondhand clothing market is projected to more than triple in value in the next 10 years—from US$28 billion in 2019 to US$80 billion in 2029—in a US market currently worth $379 billion. In 2019, secondhand clothing expanded 21 times faster than conventional apparel retail did.

[…]

Less than 1% of materials used to make clothing are currently recycled to make new clothing, a $500 billion annual loss for the fashion industry. The textile industry produces more carbon emissions than the airline and maritime industries combined. And approximately 20% of water pollution across the globe is the result of wastewater from the production and finishing of textiles.

[…]

Our latest research supports this possibility. We interviewed young American women who regularly use digital platforms like Poshmark. They saw secondhand clothing as a way to access both cheap goods and ones they ordinarily could not afford. They did not see it as an alternative model of consumption or a way to decrease dependence on new clothing production.

Source: Quartz

Other under-currents can be witnessed.

EIA projected total US power demand will drop to 3,716 billion kilowatt-hours (kWh) in 2020 from 3,896 billion kWh in 2019 before rising to 3,753 billion kWh in 2021.

That compares with an all-time high of 4,003 billion kWh in 2018, according to federal data going back to 1949.

Source: Economic Times

First of all, it shows that electricity consumption has been declining since 2018 as it is. Let me just put that decline in perspective. America is expected to consume 3716 billion kWh of energy this year. If you do the maths, it amounts to a mere 3% decline. Nepal has an installed capacity of 733 MW which produces about 650 million kWh of electricity. The decline noted for America in 2020 alone can power Nepal more than twice over!

As of late summer, governments around the world had pledged $12.2 trillion of relief in response to the coronavirus pandemic. That’s around 15% of global GDP, three times larger than government spending put forward during and after the 2008-2009 global financial crisis and enough for every adult in the world to receive a $2,000 check.

[…]

Thus, taking into account the $1.1 trillion per year baked into the system already, the additional amount of clean energy investment needed to get on a 1.5°C track comes to just $0.3 trillion—or $300 billion—per year over the next five years.

[…]

Public funding appears to be available—for now—and given how massive this funding is, it provides a unique opportunity to catalyze the development, deployment, and dissemination of clean technologies during the next decade, an absolutely critical period in the fight against climate change.

Source: Quartz

To overcome the pandemic, every central bank has been printing money. This money can be put to use to re-focus economies in the right direction. Whether that is done or not will have to be seen.

The rural disruption that COVID has brought upon us has allowed us space and time to rethink. More important it has robbed the system of the inertia it had. It has upended a lot of existing practices and offers us an opportunity to pursue things differently. To use this as a point of inflexion and move towards sustainability. Obviously, there are several vested interests and the livelihoods of many at stake. It is rather easy to sit back and pontificate without having to figure out the practical challenges that this poses. Nevertheless, it is an opportunity.

Worst Hit

Movie theatres are usually mentioned when super-hit movies are released. This year, they have only been mentioned for the hit that they have taken in terms of business. Also, struggling to stay alive, producers have moved to Over The Top (OTT) services for the release for their movies. This would have been unthinkable blasphemy 11 months ago, no longer. 

The release of movies used to follow ‘Windowing’ to maximise returns. Windowing refers to the different window of release. The first 60-90 days went to theatres; then to television/OTT and then finally to CDs or Online purchase. Releasing them in these windows allowed each player to maximise the returns they got from the product.

Windowing be damned.

In another sign pointing toward where Hollywood is headed, Universal Pictures agreed to a deal with Cinemark—the second-biggest movie theatre chain in the US—to drastically shorten the time a film plays exclusively in theatres before it can be watched at home. The deal comes four months after Universal struck a similarly historic pact with AMC Theatres, the world’s largest cinema chain.

Under the agreement, all Universal films will play in Cinemark theatres for a minimum of 17 days (or three weekends) before the studio has the option to release some as digital rentals. After 17 days, a film’s shelf life in theatres—and its availability on-demand—will depend on its opening-weekend box-office totals.

Source: Quartz

Wonder Woman 1984, part of the DC Comics universe will release on HBO Max simultaneously. They don’t want to lose out of Christmas revenue just to keep the theatre chains happy. 

I heard the CMO of Asian paints a while back and he said our biggest problem is that we have no data about our customer. We have to just plan based on what the shopkeepers and distributors tell us. This was the same problem that production companies faced. The theatres owned the customers. Times Warner, Disney, and several other production houses are rolling out their streaming services, they can own their customers.

Some people still go to arcades to play video-games, but most people just buy a console and bring it home. It seems like theatres are headed that way. Theatres will have to work hard on improving the experience of the customer going forward if they want to stay relevant.

Digital Hit

Last week the Indian government made a very important change to the FDI policy as per the new policy, digital news media companies were brought under the FDI cap of 26%. This has been a sector that has had no regulation till now. 

The imposition of a 26 per cent limit on foreign direct investment in the digital media sector can hamper its growth potential, be a disincentive to incorporating companies in India, and lead to an unfair advantage for global players, said digital news companies and experts.

Source: Hindu Business Line

Media is playing a huge role in shaping the opinions of people and traditional new media has always had this limit. Given the importance of digital news media, it is only natural to extend this. I did not expect the repercussions to be this swift!

HuffPost India, the Indian web publication of the US-based digital media company, HuffPost, shut down on Tuesday after six years of operation, leaving the 12 journalists who worked there out of a job.

The closure is the first direct impact the Modi government’s new policy limiting foreign investment in digital media publications has had on the Indian media landscape. Under an official notification, FDI in digital media has been capped at 26% of equity. Media ventures with FDI beyond the limit have a year to disinvest. Until recently, there was no limit.

Source: The Wire

India = Google Lab

American companies are known for launching their latest products and features in the US before bringing it to the rest of the world. But for one company, that market has been fast seeing a shift. Google launched Android Pay, back in 2015, don’t be surprised if you have not heard of it, just a reflection of the disaster that it was. It was relaunched as Google pay in America and India in 2018.

Google Pay is already big in India with several thousand users. It uses the UPI system for money transfers, which is possible by providing the UPI code in the apps. One can scan the QR code as well and pay accordingly, besides using the usual method of sending it via by searching him/her in the contacts.

However, now the search giant is expanding the reach of its Pay service to new countries. This time it has brought Google Pay to 23 new countries and 24 new banks, as mentioned by Google in its dedicated page and reported by Android Police.

Source: Hindustan Times

Google has pushed its ad business to the limit and they are probably beginning to realise that they need to diversify. Especially with Anti-trust cases moving forward against them in the US. Also, the European Union starting to question many of their business practices. The French government has made Google agree to pay a portion of their ad revenue to French news publications since they populate their results with news links. The days of easy ad revenues are numbered. 

They are now coming with a new retail offering in India.

Tech giant Google is making a foray into airport retail with a tie-up with travel industry engagement platform Airbuy to make its services available across six airports in India.

Flyers can now use Google Pay at Airbuy app to book lounges and F&B. 

Founded in 2019 by a group of classmates at the Sloan School of Management, Massachusetts Institute of Technology, Airbuy aims to increase airport revenues and enhance the overall passenger’s shopping experience through advanced Machine Learning capabilities.

Source: Inc42

They have money. They just need to find new areas where they can deploy their products and leverage data. India seems to be the most benign policy landscape and hence the company is beginning to experiment in India and use the country as a lab to fine-tune their products before releasing it to the rest of the world.

This might also mean, many more jobs getting shipped to India!

mRNA

mRNA stands for Messenger RNA which is a single strand of the molecule of RNA that corresponds to the genetic sequence of a gene. It is read by the ribosome during protein synthesis. In layman terms, if you have seen a DNA helix, mRNA is like one side of the DNA helix. Since it is one-sided, it results in the development of the other half called the tRNA (transfer RNA) which is read by the Ribosome to produce the protein. 

The COVID vaccine by Pfizer and Moderna have announced use this technology. They have a very high degree of efficacy but require insanely low temperatures. They both use the same technique for drug discovery based on mRNA. This is perhaps the quickest any vaccine has been brought to market as well. Moderna is very excited because they call the mRNA a platform akin to a computer operating system on which many things can be developed.

Recognizing the broad potential of mRNA science, we set out to create an mRNA technology platform that functions very much like an operating system on a computer. It is designed so that it can plug and play interchangeably with different programs. In our case, the “program” or “app” is our mRNA drug – the unique mRNA sequence that codes for a protein.

Source: Moderna

Moderna is using the mRNA which has part of the Viral DNA code to synthesise the protein that is the virus and then have the immune system attack it. Since the mRNA is only one side of an RNA strand it is highly unstable hence the low-temperature requirement. 

Vaccine discovery will get faster in the coming years.

Also

Trump pardoned the TurkeyABC News @ABCRep. Adam Schiff on the president’s pardon of Michael Flynn: “Donald Trump has repeatedly abused the pardon power to reward friends and protect those who covered up for him.” abcn.ws/37dvco0

November 26th 2020172 Retweets1,079 Likes

Deep in the Utah desert, they found an impeccably crafted steel monolithNYT National News @NYTNationalThe monolith is 10 to 12 feet tall and appears to be made of stainless steel, put together by rivets and embedded deep into the rock. The authorities have no idea who installed it, or how long it’s been there. A Weird Monolith Is Found in the Utah DesertA metal monolith, planted firmly in the ground with no clear sign of where it came from or why it was there, was discovered at the base of a barren slot canyon in Utah’s Red Rock Country.nyti.ms

November 25th 20204 Retweets10 Likes

Punjab farmers have been protesting against the farm bill for over a month. They are now marching to Delhi to protest and the government does not want that.BloombergQuint @BloombergQuintHaryana police use teargas, water cannons to block Punjab farmers from going to Delhi. #FarmersProtest Follow more updates: bit.ly/33ePtsc

November 26th 202066 Retweets163 Likes


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Learning by Proxy

Learning by Proxy | Climate>COVID

COVID has had a huge impact on business in general. Some businesses have been heavily hurt while others not so much. Some are even thriving [healthcare, except in the US]. To me, this just seems like a glimpse of what is to come when the climate goes off the handle. Reminds of a cartoon.

COVID and Business

There has been much said about the hit that several industries have taken in the aftermath of COVID. The numbers are not offering proof and an insight into what has gone on. Businesses that need people to come out; entertainment, travel and hospitality, which apart from being real world are also discretionary expenses, which is a double whammy.

Flying Markets

Just for Context – Bombay Stock Exchange is almost back to its pre-COVID levels.

In stock markets, circuit breakers exist to avoid over steep rise or fall of share price in the stock exchange. When news breaks, often the markets do not wait to assimilate the impact of the news and react immediately. Circuit breakers stop trading in the stock if they are breached and give the market time to consider the impact before resuming. The markets have been so excited that the Bombay Stock Exchange has had to revise the circuit breakers for 647 companies from 5% to 20%.

BSE raised its circuit limits on as many as 647 stocks starting from Friday, including stocks such as Aavas Financiers, Adani Green Energy, Adani Transmission, Delta Corp, Centrum Capital, Eveready Industries and KPIT Technologies.

Source: Economic Times

Also, Dow Jones is back to its pre-COVID highs.

Let us see what the economy is like!

Cinema

I had mentioned in one of the earlier editions how PVR was seeking to tie-up with Swiggy to start delivering pop-corn! It is anticipated that the company would be reporting Zero revenue for the first quarter of 2020-21.

It’s expected to be a very weak quarter for India’s largest multiplex player PVR as theatres have remained shut for the entire Q1 and cinemas are expected to post near-zero revenues. The ET NOW poll estimates revenues to slump nearly 98% to Rs 20 cr and a loss of Rs 230cr for the quarter compared to a profit of Rs 16 cr last year. 

Source: Times Now

Aviation

While the cinemas have been closed completely, airlines have been flying in a spartan manner. International routes are still not open. It had already been reported that flight occupancy was down 95% in India. The revenue is equally down.

InterGlobe Aviation, IndiGo’s parent firm, on Wednesday, posted a net loss at Rs 2,844.3 crore for the quarter ended June 30. It had posted a net profit of Rs 1,203.1 crore in the corresponding quarter last year.

Revenue from operations plunged 91.9 per cent YoY to Rs 766.7 crore during the quarter under review. The operations of airline companies were heavily affected during the quarter due to government orders.

Source: Economic Times

Even internationally sales have been lower, not to the extent that it has been India. Looking at the data from Flightradar24 it is clear the number of flights flown is still 25% below pre-COVID levels.

Source: Flightradar24

Source: Flightradar24

No Flights, No Travel

Moving across the country is not easy right now. People are not travelling much and this also means they are not staying anywhere outside their home. Imagine the condition of a business that helps people book these flights and hotels.

Online travel agent (OTA) MakeMyTrip has recorded a 95.5% annual fall in its revenues in the first quarter of the financial year 2021 due to pandemic and resultant travel restrictions. The company made just $6.4 Mn versus $141.7 Mn in the quarter ended June 30, 2019.

Source: Inc42

Hotels are having a tough time in India. There is a mandate to not cross 33% occupancy by the government. The trouble is that the hotels are nowhere close to coming to 33% occupancy at the moment.

Tata Group backed Indian Hotels Company (IHCL) has posted an 86% drop in its revenue from operations for the quarter ended June 30.

The hospitality chain posted revenue from operations of Rs 144 crore for the quarter under review compared to revenue from operations of Rs 1020 crore for the corresponding period of the last fiscal. IHCL posted losses of Rs 313 crore for the quarter ended June 30, compared to a profit of Rs 5 crore for the same period last year.

Source: Economic Times

Stock markets were trading IHCL up 5% because they claimed to have cut costs down by 51%. The kind of times that we are living in.

Restaurants

Restaurants have been shut but for a long time. Without the delivery volumes, they would probably have been in the same boat as the cinemas. Despite this, restaurants that do not have a strong brand presence don’t seem to be doing too well.

According to the report released Wednesday, these restaurants are among the 83 per cent dine-outs that are currently non-operational. The remaining 43 per cent restaurants that are shut are likely to open as the situation improves.

“Out of the 83 per cent restaurants that are not open for business, 10 per cent restaurants have already shut down permanently… an additional 30 per cent restaurants might not reopen at all. The remaining 43 per cent, which are closed right now, are likely to open as the situation becomes better,” said the report.

The rest of the dining industry is operating at just 8 to 10 per cent of the gross merchandise value (GMV) from earlier levels pre-pandemic levels, it said.

Source: The Print

The idea of taking stock of many parts of the economy in this manner came up because Zomato had released a report card with some interesting insights. They work with many of the restaurants across cities and what they have been seeing is orders coming in from smaller cities. People are moving back to their hometown and bringing their city habits with them!

Real Estate

Real Estate is probably the hardest hit of all. Malls and other commercial buildings have been required to write off their rentals. Sales of property have slowed as the work from home trends seems to be certain to last months if not years. Many have taken to moving back to their hometowns. The bottom is falling out.

Realty firm Prestige Estates Projects has reported a 99 per cent decline in its consolidated net profit at Rs 1.6 crore for the quarter ended June on lower-income amid coronavirus pandemic. Its net profit stood at Rs 115.3 crore in the year-ago period.

Total income fell to Rs 1,296.3 crore in the first quarter of 2020-21 fiscal from Rs 1,567.4 crore in the corresponding period of the previous year, according to a regulatory filing.

Source: Economic Times

DLF, India’s largest real estate company saw its income fall by 65%.

Retail

The USA has seen a string of bankruptcy filings from various retailers with the pandemic exposing gaps in their operations. Amazon had already cut out gaping holes in their businesses. Already 26 Bankruptcies have been filed, you can find the list here.

India is doing no better.

Non-grocery categories have seen their businesses take huge losses and what is even worse is that with the ‘work from home’ trend, the demand is quickly shifting away from many of their products. Suitings companies have been struggling to find any demand for their clothing. Trent which runs Westside, which is not so much in the formal category also took a big hit.

When Trent Ltd announced its March quarter results (Q4FY20) in May, the initial signs of COVID-19 disruptions were visible. After all, stand-alone revenue growth had slowed to 8% in Q4FY20 from around 30% in the previous three quarters.

With the lockdown remaining in place for a good part of the June quarter, Q1FY21 results showed a much more pronounced impact of the pandemic crisis. Revenues fell 87% year-on-year to ₹96 Crore, below analysts’ estimates. The lockdown forced Trent to close its retail stores for a major part of the quarter.

Source: Mint

Healthcare

In India, hospitals have been doing quite well. They have also been using this occasion to scalp the patients and maximise their income. The stories that one gets to hear from anyone who has had the misfortune of having to visit a hospital are grim. Beds that would have normally cost Rs. 7000 a night are now being charged double.

Besides the one-time gain, Apollo Hospitals’ operational performance was strong, with revenue up 17% at ₹2,922 crores, while earnings before interest, tax, depreciation and amortisation (Ebitda) up 36% at 380.1 crores.

Standalone hospital business of the firm showed a 19% increase in revenue, while that from its pharmacy operations was up by a third.

Source: Mint

Climate

A system that moves between highs and lows is said to be showing volatility. The deviation that it shows from the mean is called Amplitude. If the amplitude is too high it can be catastrophic for the system. Every bridge moves a little up and down in the wind. It just cannot go beyond a certain amount, illustrated by the bridge below.

The climate of this planet has been undergoing a similar swing in recent times. The system might break! You would have often heard people say that we are – Killing the planet – No, we are not. The planet is not dying. 

We are.

California has been burning since last week and this has become a regular thing. There was a lightning storm that caused the parched earth to catch fire. The land was so dry, the fire spread incredibly fast. While the elections have been taking the spotlight, America has been suffering one of the worst droughts in history.

As the United States moves into the last weeks of climatological summer, one- third of the country is experiencing at least a moderate level of drought. Much of the West is approaching severe drought, and New England has been unusually dry and hot. An estimated 53 million people are living in drought-affected areas.

Source: NASA

On the other side of the world, rainfall has been at record levels. All the states on the Gangetic plains in India have been submerged. It started with Bangladesh getting flooded. Bangladesh floods every year just like California burns each year, so nobody noticed. After the flooding of Assam and West Bengal, the flooding is making its way to Uttar Pradesh and closing in on Delhi.

Millions have been forced to flee their homes in Bangladesh because of floods triggered by monsoon rains.

The flooding, which has affected almost one-third of the country, shows no sign of abating due to continuous rain.

Most of the country’s 16 rivers have overflowed – and according to local media reports, the torrential downpours have left at least 161 people dead.

Source: Sky News

According to a tweet by the chief minister’s office, posted on 18 August, the floods have affected 838 villages in these districts—which include Ambedkar Nagar, Azamgarh, Deoria, Gorakhpur, Kushinagar, Mau and Sant Kabir Nagar—and of these, 520 are submerged. In previous tweets, the CMO noted that multiple rivers, including the Ghaghara, were flowing at dangerous levels. 

Source: Caravan Magazine

In the meantime, the west coast has also been at the receiving end. Mumbai had to be shut down a couple of weeks ago due to torrential rainfall which left the city submerged. Again, Mumbai is a city is often underwater so people did not bother much, but then…

Seven people were killed in rain-related incidents in Gujarat over the weekend as intense spells caused flooding and water-logging, prompting the government to deploy 13 teams of the National Disaster Response Force in the state, officials said on Monday.

Source: The Wire

Further south, the states of Karnataka, Andhra Pradesh. Tamil Nadu and Kerala have also been receiving huge amounts of rain forcing them to release water from their dams. This causes villages downstream to get flooded since they are inundated with rain already.

Across the Bay, heavy rains are lashing Bangkok which is causing flooding and further scare of an increase.

Provinces in the lower part of the northern region are braced for flooding after downpours have submerged several areas for several days.

Chamnan Chuthing, director of the irrigation project in Phitsanulok, said on Sunday it was diverting water from the Yom River to tributary canals as it expected more water from the river to reach downstream provinces — first in Sukhothai and later Phitsanulok — by Sunday.

Source: Bangkok Post

Meanwhile in China

Water levels at China’s giant Three Gorges Dam on the Yangtze river are inching closer to their maximum after torrential rains raised inflows to a record high, official data showed on Friday.

Source: Reuters

There has been flooding around the dam in China – A video from Al Jazeera

Meanwhile in Africa

After long-running drought slashed their harvests, small-scale farmers in Lupane, western Zimbabwe, decided to switch away from irrigating their fields by flooding them, which wastes huge amounts of water.

Source: Deccan Herald

This is the majestic Victoria Falls, which spans nations.

This is as of December 2019

What do you think, when you think Afghanistan? Mountains, goats, Taliban, American turning another country into a shooting range, cold weather, snow, wonderful spring; but you never think floods. 

When the heavy rains came overnight, setting off flash floods in northern Afghanistan, the deluge quickly turned deadly and caught many residents off guard because they were sleeping.

On Wednesday, a hospital official said the floods had killed nearly 80 people and injured scores of others in Charikar, home to nearly 200,000 people and the capital of Parwan Province, just north of Kabul.

Source: New York Times

Now, this is not news collected from across time. This is all news from the last 3 weeks. As I write this the government of Indonesia has deployed the Army to prevent forest fires as drought peaks. Northern Turkey lost lives due to flash floods. While California is burning, Utah is flooded and Stanton is flooding. In the meantime, people in Californians are watching their homes burn as the fire scorches the land. Meanwhile, 2 hurricanes have made land in Louisiana and will rip through several states. Meanwhile, in Delhi, the Yamuna is at dangerous levels and there is a high likelihood of flooding.

Politicians have a way of confusing weather with climate, it is not the same. This GIF illustrates the difference.

The amplitude is increasing, slowly but surely. When will this system break? More importantly, what will that look like?

And you thought COVID was disruptive.

Assets and Loans

When the lockdown started, the first action that the RBI took was to infuse more liquidity to the lenders to avoid a collapse. The moratorium that was offered to help individual and businesses to tide through this period is about to come to an end on the 31st of August. The most optimistic estimates are that there will be Millions of defaulters. Indian banks have been struggling to reduce their NPAs for the past few years. There seems to be a plan.

The company says that the multi-year empanelment, renewed every five years, will leverage Quikr Realty’s builder relationships across 22 cities and 4800+ brokers in its network to oversee real estate e-auctions. Quikr says that the transaction mandate includes stressed properties worth more than INR 7,000 Cr.

“This is the second stint of empanelment of Quikr Realty by SEBI for valuation & liquidation of Stressed Assets. Quikr Realty’s earlier associations with SEBI included liquidation of Pearls Agrotech Corporation (PACL), Sahara and Unitech assets,” the company says. 

Source: Inc42

I would not surprised if RBI decides to empanel them to liquidate all of the asset-backed loans that go into stress.

Also

I have to thank Salma for sharing this insanely great ad by Mercedes Benz.

The moon waxes and wanes. Have you ever thought about how the earth waxes and wanes on the moon?

Signing off…

Categories
Learning by Proxy

COVID-19 and the changing world | Learning by Proxy

During a conversation a few weeks back, a friend suggested that I create a digest of things that one should be reading about. Since I read hundreds of blogs each day, it might be worth sharing some of the undercurrents that I notice.

So I am starting this series called ‘You need to know this’. I hope I don’t let this die away just like many other things that I have started in the past. So here goes the first one.

You need to know this – 4th April

COVID-19 Trends

There is a shortage in the CoronaVirus War supply chain. We were never prepped for this kind of response and that is becoming painfully obvious with each passing day. Governments are starting to request various companies to rework their factories to produce health equipment – the last time this was done was in 1942, World War II. How many genetic tests would have been run on a normal day? It is suddenly skyrocketed! Not only that, even medicines.

Also during this lockdown think about living in the absence of the Internet what would you do? This is exactly what the net neutrality debate was about. The calls to reclassify the internet as a public utility are growing in the US. I think it’s a public utility everywhere. But can they keep blocking the internet all over the world in authoritarian regimes then? It’s like cutting off the electricity to keep people in order.

People are sitting at home and watching a lot of TV. Also trading or getting into trading – Across the world. Zerodha saw the highest growth in sign-ups.

Health insurers are having a hard time – but car insurers? Nobody is driving around but they are all required to buy car insurance by law in most countries in the world. Car insurance companies are profiting a lot as claims drop off!

The poor people and the middle class are staying locked up at home by diktat. The rich on the other hand are taking their private jets to faraway lands. Is it right? You can see this on Flightradar24.com 

The one segment of the economy that we all have come to depend on heavily during these times is gig workers. The food delivery boys are still running around cities delivering food. Essentials are still being delivered, this is forcing a re-think about the classification of these workers. No worries so far as India is concerned, not for now at least.

People losing jobs in different places due to corona

The globalised supply chain is becoming more and more obvious. As Italy is ravaged with patients, garments workers who produced for Italian brands are losing their jobs in Bangladesh. One Million of them have lost their jobs.

One the subject of jobs. Do you know why the companies in the US are so rich? They take a 2 Trillion bailout for their government and then fire all their workers. 

Pollution reduction in the times of corona

The planet has probably been the greatest beneficiary of this crisis. Thousand Greta Thunberg’s could not have done what this one virus has done. Air traffic has ground to a halt completely. There is no movement of people in many of the large cities across the world. Industrial production is at its lowest. When we think pollution we do not think Italy – The video shows the precipitous decline. The same is true across the world.

Stimulus – Saving shareholders not employees

The USA released one of the largest stimulus packages that the world has ever seen and the businesses have gone ahead and fired their employees promptly both mentioned above. So the package was really about saving the shareholders and ensuring that their money is not lost, not about the workers. Oh, by the way, the airlines are standing with a bowl in hand. The same airlines which bought back shares worth 2 Billion dollars just a few months ago.

Japan on the other hand is giving away money to their people.

The Indian government was already struggling with lower tax collections and a slowing economy. They decided to increase the tax on oil despite the international price drop to ensure the government takes more from us.

Empty cities of the world

A lot of the cities are under lockdown across the World – Northern Italy, Spain, New York, All of India. This leaves these cities empty and they look like something you would have never seen.

Other

What VCs think startups should do

Is the coming generation going to be called GenC, Seth Godin makes a point.

And Finally, America has become the world leader in CoronaVirus cases in a very short time overtaking everyone. New cases are being added at a rate of 30000 per day, more than certain countries have in total. The death rate has spiralled to over 1000 a day. And leadership has been exemplar. Trump is the worst person to be handling this situation. This will send shockwaves through the global economy because America happens to be the largest economy in the world. I don’t know how long we will continue to say that though.

Signing off.