Generational Financial Fatalism

Plus: If India is the new China, Indian unions didn’t get the memo. ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌

June 2, 2023

Read in Browser

TOGETHER WITH

Good morning and happy Friday.

Forget nonfarm payroll and consumer confidence numbers. If you want to know if a recession is on the way, just go to your local Costco and head to the poultry section.

In a call with investors Thursday, the membership warehouse club’s CFO Richard Galanti noted two key trends that have, in the past, doubled as harbingers of broader macroeconomic doom. The first indicator: Chicken and pork sales are increasing while beef sales are declining. The second indicator: more and more customers are turning to the cheaper “Kirkland” brand alternatives to name-brand products. Then again, perhaps shoppers are merely recognizing the simple superiority of Kirkland-branded peanut butter.

Morning Brief

•

Apple has trouble copy-pasting China’s labor laws into India.

•

Burned SPAC investors clapback.

•

Millennial and Gen Z wallets are feeling light.

Tech

Indian Unions Oppose Apple-Backed Labor Laws

How do you say “take this job and shove it” in Tamil?

According to a new report from Rest of World, Indian unions are fighting back against labor reforms for which Apple and its manufacturing partner Foxconn lobbied. Those reforms align Indian labor laws more closely with China’s, and are part of Apple’s strategy to diversify its supply chain and be less reliant on China — but still keep the perks of the country’s infamously punishing work culture.

Made In (Anywhere Other Than) China

India’s government is pushing to make the nation the globe’s new factory floor. Having overtaken China as the most populous country in the world, New Delhi also wants to attract foreign companies which have historically looked further east for their manufacturing needs. This dovetailed neatly with Apple’s plans, as the iPhone maker was reminded very painfully during China’s various lockdowns just how dependent it was on the country for its supply needs.

But not everyone shares China’s zeal for draconian labor laws and a working culture that gave birth to the so-called “996” week, which is shorthand for 9 a.m. to 9 p.m. six days a week. There are plenty of Chinese citizens who don’t like the 996 system and it’s frequently the subject of controversy.

Apple and Foxconn successfully lobbied the regional government of the Indian state of Karnataka to, among other things, lengthen maximum factory shift hours from 9 to 12 hours. But unions and political groups aren’t taking the news lying down:

•

While Apple tried to lobby the neighboring state of Tamil Nadu into introducing a similar bill that would have lifted the ceiling on work shifts to 12 hours, the bill was later repealed following push-back from labor groups and political opposition.

•

Earlier this month the government of Karnataka was voted out and replaced with a political party that vehemently opposed the Apple-backed bill in the past, so it’s possible that too could get iced.

Labor unions also filed a complaint about the Karnataka law with India’s International Labour Organization, and K. Radhakrishnan, president of the All India United Trade Union Centre, told Rest of World that the measure “is against every rule in the labor law book.”

Goggle Troubles: While Apple has met a feisty reception in India, it’s probably wishing it could generate a few more sparks on Wall Street. Bloomberg reports that investors are fairly lukewarm on Apple’s upcoming AR/VR headset. Part of the problem is that the investor hype surrounding the metaverse and its associated products has been swept away by ChatGPT.

– Isobel Asher Hamilton

Stock Market

SPAC-Mongers Face Mounting Lawsuits

SPACS may have gone splat, but the SPAC kings made a killing. Now comes the legal SPAC attack.

According to a new Bloomberg report, a wave of lawsuits backed by scorned investors are hitting SPAC-happy executives like Chamath Palihapitiya and Alec Gores, who, more often than not, made out with small fortunes even as newly-public companies crashed and burned.

Beware the SPAC Men

The SPAC pitch to investors was always simple: Back a so-called blank-check special-purpose acquisition company as it IPOs, then make bank when it eventually acquires and takes public a startup or private company. But the math oh-so-rarely worked out in most investors’ favor. Over 100 companies that have completed SPAC mergers since late 2018 have seen their share prices plummet over 90% since their public market debuts, according to Bloomberg’s analysis. Here’s another stat to make you wince: over $100 billion in value has been wiped off companies that went public via SPAC mergers, with at least 12 having already filed for bankruptcy, according to a recent analysis from The Wall Street Journal.

The math did, however, work for many of the orchestrators. SPAC executives and major early investors in companies that went public via SPAC mergers scored $22 billion in share sales, often by executing trades right before or right after said mergers, according to WSJ. A bevy of lawsuits now allege the game was rigged, with SPAC executives incentivized to push and encourage deals — even those to take risky or unsustainable startups public — thanks to the promise of massive windfall sales of their founder shares on the other side:

•

Here’s a prime example: According to filings, when Palihapitiya’s SPAC company took Virgin Galactic public in Fall of 2019, the SPAC king scored $310 million from selling shares while Virgin founder Richard Branson raked in over $1.4 billion. A lawsuit now claims the company misled investors about the viability of its space-tourism vehicles while pushing through the merger.

•

According to Bloomberg analysis, dozens of lawsuits alleging similar executive misbehavior, including 21 filed since just June of last year, have been filed in the Delaware Chancery Court, where merger disputes are often settled. Over 60 SPAC-related class action lawsuits have been filed nationwide since 2020, Woodruff Sawyer consultant Yelena Dunaevsky told Bloomberg.

Always Be Merging: “The incentives were to close a deal, any deal,” Usha Rodrigues, a professor of corporate law at the University of Georgia, told Bloomberg. “There were too many SPACs chasing too few targets and inevitably companies went public that weren’t good candidates for the public market.” The next time you have a fever, SPAC-induced or otherwise, save your money and just take an Advil.

– Brian Boyle

SPONSORED BY POWER CORRIDOR

Money Is Power Is Money Is…

We’re not telling you anything particularly groundbreaking; you already know the worlds of politics and business are well acquainted. With The Daily Upside’s free newsletter, Power Corridor, you can get an inside view of just how that relationship plays out — and how it affects the global economy.

Investigative powerhouse Leah McGrath Goodman sends twice-weekly missives on the people and forces that shape our world, from Pennsylvania Avenue to Wall Street to Silicon Valley. Recent features include:

•

From TIME’s Most Influential to Time Behind Bars: Elizabeth Holmes checks in to her new home

•

Debt Ceiling Vote Looms as US races to dodge default

These various players and the decisions they make determine…well, everything, but if you’re interested in keeping up with global economic conditions, it’s especially crucial to understand the topics covered in Power Corridor.

Money

America’s Youth Doesn’t Feel as Financially Sound as Their Parents

(Photo Credit: Devin Avery/Unsplash)

Parents just don’t understand.

A new survey from the TIAA Institute and the AgingWell Hub at Georgetown University found that more than half of young workers in the US don’t think they’ll be as well off financially as their folks. And not just a matter of skinny personal savings, 401(k)s, and Roth IRAs.

You’re Not “With It”

Older generations may taunt them, saying, “Nobody wants to work these days,” but many young adults are dealing with high student debt that’s about to unfreeze, ever-present inflation, and a rapidly evolving job market where the skillsets they’ve spent years building could soon be obsolete courtesy of artificial intelligence.

With all that pressure, it’s easy to see why young adults might not have the most cheery outlook when it comes to the American dream:

•

Of the survey respondents on less than $50,000, 60% said they’ll likely be worse off financially than their parents. Even when it comes to the young adults making more $100,000 a year — a salary twice the national median, by the way — roughly 35% said the same thing.

•

Buying a home is often one of the most surefire ways to create generational wealth, but that can be a pretty difficult task these days with rising home prices and unrelenting Fed rate hikes. In 2003, the average cost of a home in the US was roughly $230,000, according to Census data. Today, it’s about $520,000. Instead of saving for a down payment or emergency expenditures, the survey found that 42% of adults between the ages of 24 and 35 “generally agreed” they live paycheck-to-paycheck.

It’s Not About the Money (but it Kinda is): Despite those money woes, plenty of America’s working youth seem to be OK with it. Instead of investing in themselves, they’d prefer to contribute to solving large-scale problems like climate change, social injustice, and political division. But like those emergency pamphlets on airplanes say: Secure your own mask first before assisting others. “It is very energizing to know that the young adults do feel optimistic about taking on large global issues,” TIAA head Surya Kolluri told The Street. “Now, if we could help them also be certain and confident about their personal financial issues, I think the future is going to be in good hands.”

– Griffin Kelly

Extra Upside

•

Just don’t do it: Bots keep snatching up all the dope Nike sneakers.

•

Not very nice: Teens are cyber-bullying Snapchat’s new AI companion

•

The $1 Billion Club: Ring, iRobot, and Nest are members 一 which Smart Home startup will be next to join? How about one that pairs convenience with cost-savings, all in a plug-and-play model. That’s RYSE 一 their automated window shade tech is priced at a fraction of competitors and can cut cooling costs by up to 24%. Seamlessly activated by voice, smartphone, or schedule, RYSE offers the only retrofit design to motorize existing window shades. Plus, they’re launching in both QVC and Best Buy soon. Invest in RYSE before this groundbreaking tech hits every home and business.*

*Partner.

Just For Fun

Fixing a divot.

Having a blast.

Have a great weekend!

ADVERTISE // CAREERS

No longer want to receive these emails? Unsubscribe here.

//campaignmonitornewsletter.everestengagement.com/ea/BntD2QJCyg/?e=postie@btcnews.com.au’ width=’1′ height=’1′ style=”margin-top:0 !important;margin-bottom:0 !important;margin-right:0 !important;margin-left:0 !important;padding-top:0 !important;padding-bottom:0 !important;padding-right:0 !important;padding-left:0 !important;border-width:0 !important;height:1px !important;width:1px !important;-ms-interpolation-mode:bicubic;” />