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Over the weekend, mainland China experienced something it hasn’t seen in more than 30 years: thousands of protesters flooded the streets, defying the Communist Party.
The protests had an immediate impact on global markets and raised questions about the way forward for China’s increasingly sluggish economy.
What is happening?
Protests began on Friday after 10 people were killed in a fire in China’s Xinjiang province, where Covid lockdown restrictions reportedly prevented first responders from reaching the blaze.
The fire catalyzed three years of frustration over the country’s zero-Covid policy, which has seen millions of people locked up for weeks at a time.
Quarantines and testing protocols have caused psychological and economic damage. Growth has fallen and unemployment is rising. Under lockdown, many residents complained of inhumane conditions, facing shortages of food and medicine. A human rights group reported at least five suicides in Lhasa, Tibet, where some residents have been living in solitary confinement for more than 100 days.
The people are at their breaking point and their anger is directly aimed at President Xi Jining and the Party leadership. During the first night of demonstrations in Shanghai, a crowd chanted “Give it up, Xi Jinping! Leave the Communist Party!”
Meanwhile, the prospect of social unrest in the world’s second-largest economy has brought a chill to global markets.
On Monday, the Dow fell more than 500 points, after European and Asian indexes fell. Oil prices fell sharply as investors feared rising Covid cases and protests in China would dampen demand from one of the world’s biggest oil consumers. US oil hit its lowest price in nearly a year, falling 2.7% to $74 a barrel.
THE BIG PICTURE
Officials in Beijing are quite sour here.
To fix its economy, China must ease lockdowns to allow its people to return to their lives.
But doing so — in a country that has almost no natural immunity to the virus and has shied away from importing Western-made boosters — could lead to a deadly outbreak.
Xi, who just began a third term and has doubled down on Covid-19, does not want to risk a public health disaster that would undermine his credibility. And of course, cracking down on peaceful protesters and continuing hardline policy is an option – one that China has a long history of deploying. But all of Xi’s options are less than ideal for a leader long preoccupied with stability.
Connected: Searches on Twitter about protests in China returned a flood of spam, pornography and slurs that researchers said could be a deliberate effort by the Chinese government or its allies to suppress images of the demonstrations.
The label on a cup of Velveeta microwaveable mac and cheese says the food will be “ready in 3½ minutes.” A Florida woman is challenging that claim, to the tune of $5 million.
Yes, someone filed a proposed lawsuit against Kraft Heinz, alleging that Velveeta Shells & Cheese takes longer than advertised to make, court documents show.
Her lawyers argue that the three-and-a-half-minute promise doesn’t include the other four steps needed to prepare the dish: removing the lid and bag of sauce, adding water, microwaving and mixing, according to court documents.
Kraft Heinz dismissed the lawsuit as “frivolous” in a statement.
Introducing the latest victim of the financial contagion unleashed by the collapse of Sam Bankman-Fried’s empire…
Crypto lending firm BlockFi filed for bankruptcy today. Its fall wasn’t a huge surprise in the crypto world – the firm has basically been on death watch for three weeks – but it’s still an important player to remove from the FTX spread.
Earlier this month, as FTX was unveiled, BlockFi (think of it as a crypto bank — it lent using digital assets as collateral) halted withdrawals, citing “significant exposure” to Bankman-Fried’s FTX exchange, as well as the fund his protective sister. Alameda. FTX and Alameda, of course, are now bankrupt and virtually synonymous with corporate mismanagement at the hands of the calculating freak known as SBF.
There is a kind of tragic interrelationship in the way dominoes are falling after FTX. BlockFi was one of several recipients of JP Morgan’s SBF state-of-the-art theaters. Over the summer, as the value of digital assets sank, SBF stepped in, creating financial lifelines for struggling enterprises.
For BlockFi, it secured a $400 million credit line from FTX.
There was a feeling, before this month, that SBF was the Good Guy of Cryptos. That despite all the bro-internet being used (rightly) to malign the crypto faithful, there was something healthy about fake nerds risking their necks for the greater good.
Of course, we now know it was all an act – a bold and undoubtedly effective strategy to distract investors from the reality that FTX and Alameda were built on a house of cards
(And again, I understand the crypto space in general and FTX in particular can seem like a confusing mess of internet nonsense, so I’ve written some dead simple stories that try to put it all in plain English simple. This is about cryptocurrencies. This is about FTX.)
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