I decided not to focus on the seriously-never-ending TikTok saga this week because there are other coverage-worthy stories out there. But if you really need your TikTok fix, this WSJ article will get you up to speed (hint: China’s not happy).
The Business Buzz
Buzzfeed isn’t just trendy quizzes. In fact, Buzzfeed News published a massive investigative report about trillions of dollars of potential money laundering and bank fraud that took place from 1999 t0 2017. The news investigation was done in tandem with more than 100 news organizations from around the globe. And it paints a pretty damning picture of major banks like JPMorgan, HSBC, Standard Chartered, Bank of America, Citibank, and others.
Essentially, banks have to submit a kind of paperwork called a suspicious activity report (or SAR) when they see actions that could be characteristic of money laundering or other fraud, “such as large, round-number transactions or payments between companies with no discernible business relationship.” These SARs are submitted to a government database that can be accessed by law enforcement. The database is run by the Financial Crimes Enforcement Network, an agency in the Treasury Department. Buzzfeed’s investigation shows that despite millions of SARs that flagged suspicious activity, little-to-no actions were ever taken to prevent or stop illegal transactions — either by the banks themselves or by the government.
It’s a long and detailed report that I can’t even begin to fully summarize here. I really recommend you read it.
Is the Google break-up coming? The Department of Justice is continuing to prepare for an antitrust suit against Google that it wants to file this year. The DOJ is investigating both Google’s search practices and its online advertising to see if it used market dominance to elbow out competition. However, it’s possible that coordinating with state attorney generals is slowing down the DOJ’s process. States have also been looking into Google’s practices, so attorney generals and DOJ officials have been trying to work together towards their common end. But with the election approaching, some party fractures might throw a wrench in that.
It’s worth noting that the EU has already brought multiple antitrust cases up against Google and fined the tech giant more than $9 billion. And almost 10 years ago, the Federal Trade Commission found that Google abused its internet dominance — but no legal action was ever taken. We’ll see if things turn out any differently this time around.
The growing spectrum of going green. It’s Climate Week (which I absolutely knew before the week was almost over). And this year has seen many corporations making more specific and/or more ambitious climate pledges. It’s a lot to keep track of. Walmart wants to get its operations emissions to zero by 2040, BP plans to diversify away from fossil fuels, Morgan Stanley says it will reach net-zero emissions on its finance activities by 2050… The list goes on.
But just how legit are these pledges? Basically, it varies. But you can figure out whether a company’s pledge is good or not by looking at some key details. Timelines are one — the further out a company’s pledge is the harder it is to hold them to it. The use of carbon offset credits is another factor to look for. It’s not clear that carbon offsets actually work, so companies that rely on them may want better publicity more than they want to address climate change internally. The last thing to look for? Does the company deal with oil or fossil gas? If yes, there’s a good chance that the proposed actions don’t come close to actually making a difference when you compare them to what the company does on a daily basis.
The Private Market
You’ve heard about how good the housing market is, right? Well, it looks like that’s not the only place where real estate is going strong. Crowdfunded real estate also seems to be growing even in the midst of the ongoing pandemic. CrowdStreet has seen more than 30 deals opened and around $200 million invested since April, according to an interview with its CEO. Similarly, DiversyFund announced this week that it has grown its customer base past 13,350 (its earlier milestone for the year). It also added two people to its leadership cohort. And of course, Republic acquired Compound a few months back, indicating that this leading startup crowdfunding platform was looking to branch out into real estate. KingsCrowd doesn’t track real estate deals (yet), but we do have an ongoing article series about real estate investing. You can read Part 1 and Part 2 now.
It’s not just corporations going green. Venture capital investments into climate tech are growing faster than investments in any other sector according to a new report. Between 2013-2019, VCs pumped $60 billion into climate tech startups — and $16.3 billion of that is from 2019 alone. The startups that got the most? Ones that deal with transportation, heavy industry, and capturing/storing greenhouse gasses. Micromobility — think electric scooters and e-bikes — in particular has been a big winner. Those startups accounted for more than 50% of all investments made over the last six years according to the report. With indicators “that the climate tech market is starting to behave like the high-growth tech startup world,” being an early investor in climate tech may be both ecologically and financially savvy for us all.
Finding the next European unicorn. This week Daniel Ek — CEO of Spotify — pledged to put $1 billion of his own capital into European deeptech companies. He’s focusing on potential moonshot companies in particular — like those that deal in machine learning or material sciences. Ek wants to get Europe onto the US’s level when it comes to tech unicorns. He’ll have a long way to go considering that US tech stocks became more valuable than the entire European market in August. Ek’s $1 billion pledge constitutes about a third of his personal wealth, so it looks like he’s pretty serious.
The Fun Stuff
Have you heard of devil’s toothpaste? Yeah, I hadn’t either until just a couple of days ago. It’s essentially elephant’s toothpaste on steroids. And this week, Youtuber Mark Rober claimed the Guiness World Record for the World’s Largest Devil’s Toothpaste Explosion. What’s even cooler is the whole thing was a massive tribute to a boy named Fletcher who has been battling brain cancer. The video is full of mad science, colorful explosions, and an epic birthday party (seriously, where was my fire tornado when I turned 13?). It’s an awesome 20 minute feel-good moment that I think we all deserve.
