Seasoned Nuts Quotable


SEASONED NUTS: QUOTABLE

“The main reason nerds are unpopular is that they have other things to think about.”

“If you want to make money at some point, remember this, because this is one of the reasons startups win. Big companies want to decrease the standard deviation of design outcomes because they want to avoid disasters. But when you damp oscillations, you lose the high points as well as the low. This is not a problem for big companies, because they don’t win by making great products. Big companies win by sucking less than other big companies.”

– Paul Graham

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Interesting news updates and views


  • Microsoft is in talks with public sector firm ITI to use its large data center for its Azure cloud services and to tap the growing opportunities in government contracts in the country.
  • Big e-tailers have gone back to the drawing board to analyze their business models to make them compliant with the renewed FDI Policy. Business models are now being re-jigged at huge costs to comply with the renewed FDI Policy. E-commerce marketplace platforms continue to be permitted to provide support services, including marketing and advertising, to vendors. However, such services can only be provided at arm’s length price and in a fair, non-discriminatory manner.
  • As a sequel to this, experts feel that Flipkart and  Amazon may bring deep discounts back to e-commerce using the vendor route. . For instance, Amazon brought back one of its biggest sellers, Cloudtail, on the e-commerce portal barely a week after revised FDI rules barred e-commerce companies from selling their controlled-entity products on their own platforms. While Amazon got Cloudtail back online by reportedly restructuring the shareholding, legal experts say that e-commerce companies might look at different ways to ensure deep discounts continue. E-commerce companies might have to offer subscription service for sellers in exchange for the support offered by them in terms of logistics, payments, etc. after the revised guidelines bar them to have equity stake in sellers on their platform. Companies, much like Amazon, can fully divest their stakes in the seller organizations for them to function as independent sellers. Companies can then enter into a Best Friends alliance to continue with their support to them while attracting investors to take care of the investment part.
  • WTO world trade indicator was at  96.3, the weakest since March 2010, lower than the baseline value of 100, which may affect the global business outlook also in the first quarter of the calendar year 2019. Any figure above 100 is considered to be above trend growth.

 

INDIA UPDATES
  • The Minister for Commerce and Industry Suresh Prabhu has cleared the proposal to simplify the exemptions for start-ups under Section 56(2) (viiB) of Income Tax Act-a clause that has been a bone of contention in the start-up world since it was introduced in 2012. Now with the new notification, all investments made up to Rs.25 crore will be exempt from any form of scrutiny from the government. Also, a few other things, the government has expanded the ambit of what constitutes a start-up. An entity shall be considered a start-up up to 10 years from its date of incorporation/registration instead of the previous period of 7 years. Similarly, an entity will be a start-up if its turnover for any of the fiscal years since it got registered/incorporated was below Rs.100 crore, in place of Rs.25 crore earlier. There are some caveats also in the notification particularly relating to investments in building and land.
  • The Sensex and Nifty closed lower for the ninth consecutive session dragged by losses in information technology stocks amid mixed global stocks as Chinese and US negotiators geared up for trade talks in Washington. While the Sensex closed 145 points lower at 35,352, Nifty lost 36 points to 10,604
  • The Union cabinet yesterday increased the dearness allowance (DA) by 3 percent effective from January 1, 2019. The decision will cost the exchequer over Rs. 9,000 crores. The hike, which is based on the recommendations of the Seventh Central Pay Commission, will benefit about 48.41lakh central government employees and 62.03 lakh pensioners.
  • After the US, Australia and New Zealand governments ditched Huawei (along with ZTE) from installing its 5G gears fearing possible spying by the Chinese government, the company has been trying to defend its position. It is due to the looming threat of similar bans in other countries, including India before the toll out of its 5G equipment. Jay Chen, CEO of Huawei India says that he had interactions with various government departments such as PMO, and DoT. In all  his engagements with the Indian government, nobody told me that we are a problem. My engagements with the Indian government were positive. In India, Huawei competes with Ericsson, Nokia, Samsung, and Cisco in the network equipment market.
  • The recent announcement by the government to hike minimum support price (MSP) could improve their operating margins in the ongoing sugar season. The margins are likely to get better by 300-400 basis points (bps) following a nearly 7 per cent MSP rise to Rs.31 per kg from Rs.29 announced by the government last Thursday, rating agency ICRA said in a report.
  • Rising inflation, low liquidity and jobs scarcity has led to a fall in consumer confidence in February, a study said. Primary Consumer Sentiment Index (PCSI) saw a downward slide, a drop by 0.9 per cent, in consumer confidence this month, according to a study by Thomson Reuters-Ipsos. The fall in confidence showed subdued interest towards savings, investments, jobs and spending.

 

US UPDATES
  • Amazon’s total square footage for its physical stores fell 6 percent to 20.1 million square feet in 2018, according to its annual filing. The drop was surprising because Amazon has been opening Whole Foods locations, while also increasing the number of bookstores and Go stores. Thediscrepancy is largely because the company no longer includes “stores under development” in its total physical store footprint calculation.
  • U.S. President Donald Trump said on Tuesday he is looking forward to a good meeting with North Korean leader Kim Jong Un on Feb. 27 and 28 in Vietnam and wants Pyongyang to ultimately denuclearize but is in no particular hurry. Trump, speaking to reporters at the White House, said sanctionsagainst North Korea would remain in place in the meantime and noted that Pyongyang has not conducted nuclear or rocket tests recently.
  • Minutes from the Federal Reserve’s January meeting will be released Thursday and should garner significant market attention. Investors will be looking for more clues as to how the central bank plans to proceed with the reduction of bonds it holds on its balance sheet. Wall Street increasingly believes the Fed will end the balance sheet roll-off by the end of the year.
  • The U.S. is asking China to stabilize the value of the yuan as a part of trade deliberations between the economic powerhouses. The move would be aimed at mediating any effort by the Chinese to devalue its currency to counter the Trump administration’s tariffs. Representatives for the two countries resumed discussions on Tuesday, with follow-up sessions at a higher level scheduled for later in the week.
  • Ford will stop selling heavy trucks in South America, a region where the automaker has long struggled. The second largest U.S. automaker expects to record pretax special item charges of about $460 million as a result.
  • President Donald Trump’s words are being used against him in a slew of lawsuits challenging his declaration of a national emergency at the southern border. In at least three lawsuits filed in federal court in recent days, lawyers have seized on the president’s remark during  the recent press conference announcing the declaration that he “didn’t need to” declare a national emergency. In suits brought by the Center for Biological Diversity, Public Citizen and 16 U.S. states, the challengers have argued that the president’s comments show that his national emergency declaration is a matter of personal preference or a negotiating tactic — not a true emergency requiring the use of American armed forces, as the White House has claimed.
  • Google announces plans to acquire cloud migration company Alooma, marking its next play in the competitive space. Google said earlier this month that people could expect to see its cloud business accelerate. Alooma helps companies migrate their data from multiple sources to one data warehouse.
  • The Food and Drug Administration is discouraging people from being infused with young blood, a procedure that’s becoming increasingly common but hasn’t been proven to have medical benefits. The procedure works like it sounds. People are infused with blood plasma donated from young people. Some clinics claim the procedure works like a fountain of youth to reverse aging and memory loss or even treat diseases like dementia, Parkinson’s disease, multiple sclerosis, Alzheimer’s, heart disease or post-traumatic stress disorder. Companies typically charge thousands of dollars for the treatments. That concerns the FDA, which says these infusions are “unproven and not guided by evidence from adequate and well-controlled trials.”
  • Amazon is reportedly planning to debut about 30 original movies per year with budgets ranging from a few million dollars to over $50 million. Amazon Studios head Jennifer Salke told The New York Times the company plans to diversify its film strategy by continuing to bring some films to theaters, while bringing others straight to its streaming platform. Amazon failed to break even on several films over the past year and a half as it has pursued costly movies seeking critical acclaim.
  • Facebook announced a partnership with Intel last month, entering a stiff race to develop a more specialized and powerful artificial intelligence chip. A niche AI chip could aid in Facebook’s content moderation battle and could boost Facebook’s burgeoning hardware division.
  • The first tax filing season under the new federal tax law is proving to be surprising, confusing — and occasionally frightening — for some Americans, especially those accustomed to getting money back from the government. President Donald Trump promised a reduction in taxes with the new law. And by most measures, the majority of Americans will see one. The nonpartisan Tax Policy Center projected the tax law would reduce individual income taxes by about $1,260 on average, although it benefits higher earners more.