I feel this tweet really captures the moment:
The invasion of Ukraine is this weird war of both cruelty and perception. I have been deeply affected, I think, because it touches on all these issues that were festering on some level before, now amplified with war: bullying/sheer aggression, pandemic impact on mental health, disinformation/propaganda, racism, crypto, the efficiency of charitable donations, armchair expertise, weaponized social media, influencers, global warming and its discontents, national/global security, international relations which itself covers all these things, expectations of allyship, whataboutism, humanitarian engagement vs escalation, game theory, the effectiveness of sanctions, trust in media at all levels, ESG/corporate social responsibility, defense investments/alliances. I will continue to add to this list.
For nearly every item on that list, it's some version of the trolley problem. To do something for the greater good, someone suffers disproportionately. It's like the pandemic primed us to internalize tradeoffs, but nothing prepared us for this level of human consequence.
My friend had a good analogy for how we're approaching this war right now. There's this bully, and we've chosen to steal his lunch money to get him to stop. It's an exaggerated statement, as the US/NATO/Rest of World is doing plenty with defense and humanitarian aid. But it captures what it feels like to be able to not punch back. I'm currently running a poll on my Instagram now to get a sense of sentiment regarding US military intervention. I'll share results and some thoughts on my next post.
Real-time ESG/CSR reversals
Weโre watching, real-time, companies fight their own instincts and profit incentives on the right thing to do.
Shell: originally said some fluff stuff about reining in Russian operations, pledged to end its JV with Gazprom, and then quietly bought a bunch of discount Russian oil on the spot market. The public found out, and Shell came back with, "Sorry, we were wrong. We're exiting for real now."
The Shell CEO was right about this part, though: โThese societal challenges highlight the dilemma between putting pressure on the Russian government over its atrocities in Ukraine and ensuring stable, secure energy supplies across Europe." Like I will continue to overemphasize: energy is a different animal from every other consumer goods boycott.
https://www.pbs.org/newshour/world/shell-says-it-will-no-longer-purchase-russian-oil-and-natural-gas-shuts-down-russian-operations
Disney: originally refused to take on stand on Florida's "Don't Say Gay" bill. Employees/the public were repulsed. The CEO apologized and pledged $5M to various charities including the Human Rights Campaign.
โOur employees see the power of this great company as an opportunity to do good. I agree. Yes, we need to use our influence to promote that good by telling inclusive stories, but also by standing up for the rights of all.โ
It's a good move, but I'm still thinking we could just tax these mega corporations more, so that they don't struggle with a social conundrum. Let the government take the wheel on some of this. Then again, in Florida, it's the government that is the problem.
Uniqlo: originally said they were going to say in Russia because Russians need clothes, too. They walked that back when they realized they can't supply clothes when their suppliers/logistics are leaving Russia. They pulled back not because of ethics, but because of yet another supply chain issue, essentially.
Goldman, JP Morgan Chase exited. Deutsche Bank said they weren't and then said they are. Morgan Stanley will surely follow. Citi remains a question mark. And then we have our friends at Credit Suisse.
This Fortune headline is something to behold:
This on top of news that was buried the week that the war in Ukraine broke out: Credit Suisse allegedly was still in the money laundering business, well after Swiss banks pledged to stop doing that stuff years ago. 180,000 accounts and more than $100 billion (not $1.7B in the above headline). In addition:
In 2014, Credit Suisse pleaded guilty to conspiring to help Americans file false tax returns and agreed to pay fines, penalties and restitution totaling $2.6 billion.
Three years later, the bank paid the Justice Department $5.3 billion to settle allegations about its marketing of mortgage-backed securities. Last fall, it agreed to pay $475 million to U.S. and British authorities to resolve an investigation into a kickback and bribery scheme in Mozambique. And this month, a trial got underway in Switzerland in which Credit Suisse is accused of allowing drug traffickers to launder millions of euros through the bank.
โฆ
โThe pretext of protecting financial privacy is merely a fig leaf covering the shameful role of Swiss banks as collaborators of tax evaders,โ the whistle-blower said.
Source: NYT
On that note...
Swiss neutrality was always a sham.
Neutrality is a quiet declaration of different priorities, usually tied to profit.
First, as just noted, Switzerland continues to house hundreds of billions of dirty money (including an estimated 30% of Russian oligarchsโ ill gotten gains) even after transparency/privacy reforms. Banking is 10% of Swiss GDP.
Second, a referee is โneutral,โ but still has the power to yellow or red card or sanction at any time to keep the game clean, fair. It is a choice, not a mandate to stay silent. Switzerland, if it had not sanctioned, would have enabled Russia and effectively taken Putinโs side. Thatโs the real break in neutrality.
The same argument, put differently to Big Tech:
โPutinโs Price Hikeโ
Just a week or so after I praised the Biden administrationโs superb war time communications, Iโve gotta walk it back, because we now have this:
Todayโs inflation report is a reminder that Americansโ budgets are being stretched by price increases and families are starting to feel the impacts of Putinโs price hike.ย A large contributor to inflation this month was an increase in gas and energy prices as markets reacted to Putinโs aggressive actions.ย As I have said from the start, there will be costs at home as we impose crippling sanctions in response to Putinโs unprovoked war, but Americans can know this:ย the costs we are imposing on Putin and his cronies are far more devastating than the costs we are facing.ย ย
This is so disingenuous. Todayโs inflation numbers barely reflect the war yet. Weโve filled up the tank a maximum of one time since the invasion began, and the Biden administration is already trying to pin inflation levels on Putin, that guy we already hate. Jen Psaki made similar comments earlier this week, so I guess this was just an executive marketing decision, perhaps made even before the sanctions were put in place.
Biden is telling us inflation is the price we have to pay to fight Putin. The moral framing right now is wrong. For future inflation, sure. Current inflation, absolutely not. Theyโre just hoping we forgot the entire last year of steadily rising prices.
We live in the Golden Age of Takes
If you click that tweet, youโll see a whole collection of some of the worst takes. Itโs amusing to scoff, but obviously, I canโt stop myself from opining either.
Ryan Broderick at Garbage Day has a good piece on this:
There are a lot of internet users who, after a decade of exposure to viral media, have had their minds so thoroughly warped by trending content that they believe that reacting to popular internet culture is not just a replacement for a personality, but some kind of moral duty.
The bird site demands content - by Ryan Broderick (garbageday.email)
Itโs sort of absurd that we pan individuals' ridiculous takes now, but we also pressure corporations to make theirs and make it perfectly the first time. In our defense, corporations have full-on PR teams with this one objective to say the right thing. Itโs hard now, though, because weโre all a little rusty on the Rules of Social Engagement: War Edition.
Speaking of bad takes.
Bill Ackman needs to take a seat.
Heโs the hedge fund manager, perhaps best known for crying on CNBC multiple times. First time was when he seemed personally offended that Herbalife might be a predatory pyramid scheme. Second time was March 2020 when he was talking coronavirus panic, famously declared, โHell is coming,โ tanking the markets that day. We subsequently learned that he profited brilliantly from the declining markets, raking in more than two billion from credit hedges.
Given this history, we have to wonder what his incentives are when he offers these hot takes ยฌ_ยฌ
That was by far the most offensive whining, but wait, thereโs more.
This thread went on for like twenty more tweets, ending with this weirdly specific line:
And more:
I get that he feels helpless. We all do. But he, like us, has zero expertise here. All I wonder is how much of his portfolio is comprised of defense stocks right now. I think he feels comfortable telling people what to do in areas where he knows nothing, because thatโs literally the job description of an activist investor. He would be the last one to enlist, and heโs absolutely the type to find some faux medical exemption like childhood exercised-induced asthma. Someone get this man Call of Duty, and maybe heโll pipe down.
As a final note: Iโm often putting these posts together at the end of the work day, and by the time I finish Iโm too lazy to proofread even once. So there are typos, fragments, and sloppy CTRL C + CTRL V. I see it all after I publish, and Iโm often too lazy to fix. ยฏ\_(ใ)_/ยฏ