No. 263 – The Federal Reserve Hasn’t Emptied Its Clip

Fed Chair Jerome Powell’s 60 Minutes interview on economic recovery from the coronavirus pandemic – Federal Reserve chair Jerome Powell gave an interview on 60 Minutes this past Sunday and the conversation was quite interesting. Early in the conversation, when the question of unemployment came up, Chair Powell talked about how heartbreaking it was and then immediately pointed to how African American unemployment had been at its lowest point and how the US economy was benefiting from a tight labor market where there was lots of opportunity. I couldn’t help but notice that the report the Federal Reserve released on the economic health of U.S. households didn’t break out the data by race, though it did account for race in its sampling. I wonder what data the Federal Reserve has seen on the impact this pandemic is having on the black community. It can’t be good. 

The other interesting thing was his response to whether we’re entering a second Great Depression. He highlighted how the financial system is strong due to the 10 years of work that has gone into strengthening our financial system. Dodd-Frank and other regulations helped ensure that financial institutions were more sound. It’s refreshing to have a government official acknowledge that the strength of this country doesn’t happen in a vacuum but on a continuum.  

Chair Powell’s conversation on the path forward was fascinating as well. His statement on the scale of the tools the Federal Reserve has to keep the economy moving was kind of jaw dropping:

Well, there’s a lot more we can do. We’ve done what we can as we go. But I will say that we’re not out of ammunition by a long shot. No, there’s really no limit to what we can do with these lending programs that we have. So there’s a lot more we can do to support the economy, and we’re committed to doing everything we can as long as we need to.

Look at the line on Federal Reserve Treasury purchases in the chart above. It’s incredible to consider the Fed can do more.

The last thing that caught my eye was how he stressed the importance of building a more inclusive economy on the other side of this pandemic. Earlier, he said the economy was fine before this pandemic. The reality is that it wasn’t. While unemployment in the black community was decreasing, income inequality was surging. As we come out of this pandemic, we need as many people as possible maximizing their abilities, not just being employed. 

Softbank Group Earnings Results – Softbank, the holding company controlled by billionaire Masayoshi Son, reported earnings yesterday morning and they were tough. The company lost nearly $18B from losses in its Softbank Vision Fund 1. Over the past several years, the company invested $88 billion in tech companies like WeWork, Uber, and Doordash. WeWork and Uber, in particular, have not done well due in large part to the behavior of their founders. Son has this vision of building an altruistic future full of artificial intelligence. These losses are forcing him to pump the brakes on pushing towards that vision. The company had been working on raising a second fund, but he announced this morning that they had failed in that effort so will be making future investments off of Softbank’s balance sheet for the time being. Masayoshi Son has been going big since 1995 and this isn’t the first time he’s had blood in the mouth from taking a hit. Let’s see if he’s able to fight his way back from these losses. It would be a shame for Softbank Vision Fund 1 to be known as Softbank Vision Fund Only.

Black doesn’t mean criminal. Conservatives should know that by now. – Imagine a world where the minority and majority leaders in the Senate and House are all black. That would be a healthy thing for this country. Last week there was debate within the black Republican community around Ahmaud Arbery and provocateur Candace Owen trying to smear him. You had Candace trying to paint him as a criminal, insinuating that he deserved death. Darrell Scott, Shermichael Singleton, and others went after her for doing that. 

Hopefully, that conversation within the black Republican community continues. This thread of black Republicans who see themselves as free-minded just for being Republican makes no sense, and I’m not really seeing their influence in the party. 

Across the political spectrum of where black folks are, we see how important it is for black folks to ensure the way we’re playing this political game is tight. Joe Biden wouldn’t be the Democratic nominee were it not for the black vote, yet black candidates for that job somehow don’t come up in too many conversations. More comfortable names come up like Klobuchar and Warren. Comfortable can’t happen.

COVID-19 and ‘Locust-19’ threaten perfect storm for Africa – African Development Bank president Akinwumi Adesina gave an interview to the Financial Times last week where he talked through the economic impacts of the COVID-19 pandemic across Africa. The bank is estimating that GDP declines countries are seeing total anywhere between $150B-$212B. In order to work its way out of this, President Adesina estimated the continent will need $115B-$154B in financial assistance. The AfDB has a $10B facility to contribute to closing that gap. Further, he pointed out that if G20 countries cancelled debt owed by least developed countries that would free up $130B-$150B across Africa. 

He also talked about locust swarms across East Africa. It hasn’t gotten a lot of coverage in U.S. media, but the devastation is real bad. President Adesina worries that 30 million people could be pushed to hunger due to the invasions.

African leaders have their hands full in navigating the COVID-19 pandemic, and several have the added burden of locust swarms. More vim to them navigating this situation well.

China injects US$2.25b into local chip firm – My post on Sunday highlighted how there’s this race going on in the world of chip development. China is putting serious money into quickly ramping up its domestic chip development now that the U.S. is putting restrictions on Huawei’s ability to source from U.S. companies.  It’s going to be interesting to see what kind of chips come out of China after this investment and the extent to which they push artificial intelligence development and other technologies. 

No. 257 – A Return to Normal Post-COVID Does Nothing for Black Folks

Source: amfAR

COVID-19 Racial Disparities in U.S. Counties – The way COVID-19 is a perfect storm for the systemic issues that make it harder for black people to keep healthy is disturbing. A group of researchers who are in the process of publishing a paper looking at the impact of COVID-19 put out some frustrating data. They weren’t able to get granular data because the race of 78% of individuals with cases of COVID-19 are unknown, as of April 15. Is that normal? To get around that, the researchers looked at COVID-19 cases by county. Essentially, nearly 22 percent of the counties in the US are disproportionally black. Yet, nearly half of COVID-19 cases and 58% of deaths across the country are in these counties. There cannot be a return to normal as we emerge from this. We have to reimagine this society we live in.

U.S. International Trade in Goods and Services, March 2020 – The extent to which trade put on the brakes in March is pretty stark. Exports fell $20B and imports $15.4B. Around $20.7B of the total drop in exports and imports came from travel and transport slowing to a trickle. That’s over half of the decline in exports and imports. This brings more color to why Warren Buffett decided to shed all his airline holdings. It’s going to be really interesting to see what travel looks like coming out of this pandemic. People aren’t going to be traveling for quite some time, and when we do start moving around again, how much of these losses will be reversed?

A Message from Co-Founder and CEO Brian Chesky – This letter from Airbnb’s CEO to employees explaining the company’s pending layoffs is very thoughtful and one to file away in case you may have to layoff employees soon. Notable parts of the letter include his outlining the framework the company used to determine who to layoff, the explanation of the 14-week severance, and the elimination of the one-year to make everyone leaving the company a shareholder for whenever Airbnb goes public. These are hard times that are amplifying who people and what companies really are, sometimes in disappointing ways. It’s nice to see people and companies show what good leadership looks like.

One billion people will live in insufferable heat within 50 years – It was incredibly hot in Accra during the Christmas holiday, something I completed underestimated. Fortunately, my lady packed some extra handkerchiefs for me. According to a set of researchers, parts of the world are going to be experiencing increasingly Sahara-like weather over the next several decades. What impact will this have on migration? Will coastal cities like Lagos and Accra see big influxes of people from the northern parts of their countries? How will they ensure everyone has space to live and get along? Considering how dense these cities are and the rates at which they are already growing, urban planners and policymakers have their work cut out for them in finding new design technologies to create space for folks in such a way that keeps them as cool as possible.

Malaria ‘completely stopped’ by microbe – Researchers in Kenya and the UK have found a microbe that prevents mosquitoes from carrying malaria. This could be a real boon for malaria eradication across Africa if the researchers are able to understand the microbe better and figure out how to propagate it across other parts of the continent. They may find themselves in a race with Alphabet’s Verily which has found its own microbe that sterilizes male mosquitoes and causes pretty rapid mosquito population declines. I guess the question for both of these research teams is, what are we trading for eradicating malaria? It’s definitely exciting to be finding a path forward on ridding ourselves of malaria. We just don’t want to find another disease blocking the way.

No. 253 – Tuesday Reads

Low Covid-19 death toll raises hopes Africa may be spared worst – So far, African countries have avoided the devastation the US and Europe have experienced from Covid-19. The nervousness in my chest won’t leave for some time, and I pray that Africa countries continue to navigate this virus as best they can. It’s been encouraging to see several African leaders take aggressive measures to contain the virus. Hopefully, this amplifies the sense of urgency in developing infrastructure that furthers the resilience of Africa’s people. If Africa gets through this pandemic relatively safely, that doesn’t mean its countries will get through the next one in the same shape.

Ghana government to invest in healthcare infrastructure – President Akufo-Addo announced that the country will be building 88 100-bed hospitals across the country. This is good news, though you have to wonder where the money is coming from. China has put untold amounts of money into projects across Africa, and will leverage that diplomatically. As African countries make their way toward a post COVID-19 world, it’s imperative China isn’t able to make incursions on their independence because it has put billions of dollars into shaping their economies.

Covid-19 has blown apart the myth of Silicon Valley innovation – One of my favorite lines in scripture is “do not think too highly of yourself, but think with sober judgement.” I’m very curious to see how how Silicon valley culture evolves post COVID-19. Hopefully, it finds a path forward in it’s foundation in early Silicon Valley like Genentech that shifted science and life.

Why You’re Not One of the World’s Great Investors – There’s a great book on hedge fund manager Jim Simons called The Man Who Solved the Market. In it, you’ll see how this man used algorithms and math I’ll probably never understand to find trading opportunities. There’s a benefit to creating your own lane and not trying to find your fortune in someone else’s. Simons did that. He was a math professor before getting into the hedge fund world, and built a completely different way of approaching trading. As I continue this journey towards venture investing, reminders like these to keep doing me are helpful.

Antitrust After the Coronavirus – Matt Stoller put together an interesting piece here laying out the dangers potentially ahead of us in big corporations consolidating their industries with the help of the financial world. He calls for pause on merger activity and an act that would outline a path for breaking up companies that gain power due to pandemic. He also calls for a systematic process of working through that disappear due to pandemic situations situation. I’m with him. Corporations don’t have all the answers, just like governments don’t. They’ve got their own respective roles in making this thing work.

Perhaps a random aside, but has anyone heard from Haven? Amazon, JP Morgan, and Berkshire Hathaway made a big splash last year announcing this new business that was supposed to reimagine health care. Why have we heard nothing from them?

No. 252 – Monday Reads

Source: First Republic Bank

COVID-19 Edition: What is venture sentiment today? – First Republic Bank published interesting results from a survey they conducted of 427 venture capital firms. Over the past month or so, there have been a lot of VCs posting on Twitter that they’re open for business. The data here tell a different story.

Internet Speech Will Never Go Back to Normal – The Arab Spring and the role technology played in helping folks connect over their desire to restructure their societies feels like ages ago. This piece feels like a complete 180-degree turn from the sentiment around technology as liberator during that time. Now, we live in a world where in the matter of a month or so, Apple and Google have partnered to roll out contact tracing capabilities. Daily, we walk through a web of data points technology companies gather on us. Following this COVID-19 situation, to what extent will we give companies more ability to keep tabs on us?

Martin, Malcolm and the Fight for EqualityThe Sword and the Shield by Peniel Joseph is a fantastic read. The side-by-side treatment of their respective evolutions as readers was so illuminating. I highly recommend the book. This review does it justice as well.

On Fortnite’s Travis Scott Concert – My gaming days were pretty much over after I couldn’t get past the second stages of Sonic the Hedgehog or Shinobi. Gaming today is an entirely different experience I know next to nothing about. While I was in Ghana over the Christmas holiday, I walked up to a TV thinking I was joining cousins in watching a soccer match. It took me more than a few seconds to realize I was watching a video game, not real life. Anyway, over 12 million people watched this concert Travis Scott and Fortnite partnered on last Thursday. That’s wild. What’s even more incredible is that Matthew Ball argues in his analysis that this was part of Epic Games culture of testing to figure out new things the company can build. I’m very curious to see where tests like this lead them.

How China Shut Down African Protests Over Racial Discrimination in Guangzhou – This is a rather discouraging piece, displaying China’s effectiveness in shifting its narrative across Africa. The mix of money, coordination, and speed helped China address the rising anger over how African nationals were being treated in Guangzhou. Not encouraging at all. Not encouraging.

No. 249 – Thursday Reads

Source: Bessemer Ventures

State of the Cloud 2020 – Watching the rollout of Zoom at the office was fascinating. One day, I get a an email that we were testing Zoom. A month later, leadership started communicating that they prefer it to Skype. It wasn’t that long ago when someone from the IT team would have to take my laptop to install new software. None of that with this Zoom rollout. The automagic nature of the cloud is pretty incredible and the analysis Bessemer Ventures did here on where the cloud industry is now is quite fascinating. I mean, Slack went from $1M to $100M in revenue in two years! As cloud infrastructure continues to be part of all of our technology, it would probably be good for executives to read Nassim Nicholas Taleb’s Antifragile. Cloud technology will need to have ever stronger fail-safes as global conflict continues its shift to the internet. We saw the coordinated Zoom-bombing that took place in the early weeks of social distancing. We don’t want to see worse.

Cuomo Partners with Startup for NYCHA Coronavirus Testing Pilot – Governor Cuomo highlights concentrated populations being most susceptible to COVID-19 and that public housing is where New York has its highest concentrations of people. Yet, the state doesn’t know how many cases of COVID-19 there are in public housing. That tells me someone made the decision not to prioritize testing in public housing. Someone should ask Gregory Russ and Vito Mustaciuolo who made that decision once this is all over. I’m glad the state has found a partner to start testing now. It’s infuriating it’s just now starting.

Amid Ongoing COVID-19 Pandemic, Governor Cuomo and Mayor Mike Bloomberg Launch Nation-Leading COVID-19 Contact Tracing Program to Control Infection Rate – It took a lot for Mike Bloomberg to acknowledge the negative impact of stop and frisk on black and brown people in NYC. Why would the city want him involved with contact tracing? I’ve written about my concerns with immunity certifications leading us to minority groups bearing the brunt of isolation. That concern is heightened in a situation like New York rolling out testing in public housing areas last minute like this.

COVID-19: Governors opt for 2-wk inter-state lockdown – All 36 governors of Nigeria have agreed to implement a 2 week lockdown in order to mitigate the spread of the coronavirus. It’s great to see their coordination. Here in the US, we’ve got a certain governor acting like Leeroy Jenkins (sorry for the language).

Steve McNair went third in the NFL draft 25 years ago. We may never see another HBCU player go as high. – In the 25 years since Steve McNair heard his name called, only 142 other HBCU players have heard their name called. That’s wild.

No. 245 – Africa Can Build Too

Source: Marvel Studios

I was so excited to see the announcement last week that 54gene had raised $15M in additional funding for their work sequencing the genome of African folks. That type of work – building technology, research, and infrastructure is what Africa’s going to need as soon as possible. The wave of nationalism that has continued to rise in the US and Europe will only increase on the backs of anger at China and Dr. Adhanom, an African man running the World Health Organization as we emerge from this Covid-19 situation. African countries investing in building for themselves will prove key to building the resilience the continent will need moving forward.

For several years there has been this hope that African countries would build their manufacturing capacity to the point where they could compete with Asia for manufacturing contracts because the labor costs were rising in Asian markets, and the labor costs in African markets like Ethiopia would remain relatively lower. Well, that hope is probably not something African leaders should bank on coming out of this Covid-19 situation. The COVID-19 situation has exposed global supply chain issues that clearly have left the U.S. in poor shape trying to fight the virus. 

More voices in the U.S. are calling for manufacturing and technology development to be reshored to the U.S. I worry the nationalist wave that has been growing in the West over the past several years will hit fever fever pictures as we continue through this COVID-19 situation and even further when we come out of it. I worry that this wave could leave African leaders with fewer friendly voices as they try to move African nations forward in their economic development. I I think the best way for it is for African countries to really think and identify where and but they can build for themselves. We could see a world where countries don’t want to buy from Africa wherever possible and may not want to sell to us on favorable terms. I’m not here for that kind of world.

Marc Andreessen’s post “It’s Time to Build” struck a nerve for a good bit of Silicon Valley and I imagine will be the rallying cry for the U.S. supply chain to be less globally-connected. I think it’s a signal for African countries to push extra hard to figure out what they can build and do that as soon as possible. 

I firmly believe that African countries have all they need to thrive even in a more balkanized global economy. I already mentioned 54gene. Cellulant is doing big things in powering payments. MainOne is providing the connectivity Nigeria needs and I’m sure there are others out there building in incognito. Let’s get behind them to help build the world Africa needs for its future.

No. 241 – Wednesday Reads

Source: McKinsey & Co

For Black America, COVID-19 Is The Bullet. America Is The Gun – “This is how the coronavirus kills Black people. This is how half of the related deaths in Mississippi are Black. This is how 70 percent of the deaths in Louisiana are Black. Sixty-two percent in D.C. And so on. And so on. Not by Black negligence. Not by Black irresponsibility. But because this is how America has been designed since the very first Black footsteps touched down on this country’s soil. The virus and all of its terror is simply one of the many ways weaponized America-ness kills. And kills. And kills.”

COVID-19: Investing in black lives and livelihoods – “While this article was in development, one of the authors’ family members, a healthcare worker in Brooklyn, passed away from complications related to COVID-19.” 

Mozambique: ExxonMobil’s delayed LNG investment decision is disappointing-INP – “The development is valued at between $20 billion and $25 billion (€18.3 billion to €23 billion) and is one of the largest planned for Africa.”

How Democrats Won Big in Wisconsin – “There is a concept in psychology called “moral injury,” which refers to seeing something happen—or feeling like one failed to prevent something from happening—that is so fundamentally wrong that it tears at the fabric of your moral expectations of the world.”

The Midas List: The World’s Best Venture Capital Investors In 2020 – “To qualify, investors are ranked by their portfolio companies that have gone public or been acquired for at least $200 million over the past five years, or that have at least doubled their private valuation since initial investment to $400 million or more over the same period.” 

No. 234 – Wednesday Reads

Source: Fraym

Calibrating – “All great investments begin in discomfort.”

Issa Rae on the Return of “Insecure” and her Growing Empire – “That craving to tell the stories she’s not seeing anywhere is what’s getting her through this moment of uncertainty.”

A Game Plan to Help the Most Vulnerable – “We share the need to look out for one another. And when this global pandemic ends, our children and grandchildren will share the legacy we leave and the results of the choices we make today.”

The Far-Right Helped Create The World’s Most Powerful Facial Recognition Technology – “Thiel gave me all the money I need…[W]rote me a check on the spot.”

How data can help fight a health crisis like the coronavirus – “The right information in the hands of the right people can save lives in a time of crisis. It will be essential to ensure that such health surveillance measures will not prevail beyond the extreme circumstances we are facing today, so that people do not feel they are losing their privacy in a new world order.”

No. 233 – Tuesday Reads

Address To The Nation By President Akufo-Addo On Updates To Ghana’s Enhanced Response To The Coronavirus Pandemic – “The cynics question our capacity for the maintenance of discipline in this period, and in its aftermath; however, I am confident that we will prove them wrong.”

Masayoshi Son Talks WeWork, Vision Fund And SoftBank Under Siege – “Look at a shadow. Even within 24 hours, the length of your shadow differs dramatically, even though your height in 24 hours is unchanged. People get scared or overconfident looking at the length of the shadow.”

The Truth About Isaac Newton’s Productive Plague – “Doing the work was what mattered, and Newton did it as a student in Cambridge before the plague, he persisted at Woolsthorpe, and he kept going upon his return to college.”

Jamie Dimon Letter to Shareholders – “We know that too many people are being left behind – particularly in the black community. The Civil War ended more than 150 years ago, and we still have not come even close to parity. We need to do more as a nation, and we have more to do as a firm.”

New data methods are helping the Government of Ghana fight COVID-19 – “Understanding changes in mobility patterns is important for the government in order to establish whether the current restrictions are likely to contain the spread of the disease, and whether more, or different, interventions should be put in place in the coming days or weeks. This work shows the power of data and is a good example of how it can benefit everyone.”

No. 232 – Monday Reads

A Prime Minister Tries to Storm-Proof Her Island’s Finances – “We wanted to come up with something that was conducive to bolstering resilience to rising climatic risks,” Espinosa says. “Adverse-weather clauses provide vulnerable sovereign debtors with a degree of flexibility by creating built-in buffers that can help them absorb some of the financial impact.”

Stakeholder capitalism is urgently needed – and the COVID-19 crisis shows us why – “What’s interesting about this crisis is it’s really revealed so many problems that we have in our current way of doing capitalism. There’s different ways to do capitalism.”

Axios-Ipsos Coronavirus Index: Rich sheltered, poor shafted amid virus – “47% of respondents designated as coming from the upper socioeconomic status and 45% of those from the upper-middle status said their emotional well-being declined. That was the case for just 34% of the lower and lower-middle groups and 36% of the middle group.”

Post Corona: Higher Ed “SARS was huge for e-commerce in Asia, and it helped Alibaba break out into the consumer space. COVID-19 could be to education in the United States what SARS was to e-commerce in Asia.”

Early Data Shows African Americans Have Contracted and Died of Coronavirus at an Alarming Rate – “When COVID-19 passes and we see the losses … it will be deeply tied to the story of post-World War II policies that left communities marginalized,” Sprague said. “Its impact is going to be tied to our history and legacy of racial inequities. It’s going to be tied to the fact that we live in two very different worlds.”