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Over the weekend, mainland China saw something it hasn’t seen in more than 30 years as thousands of protesters flooded the streets opposing the Communist Party.
The protests had an immediate impact on global markets, raising questions about the way forward for China’s increasingly flagging economy.
What’s happening?
The protests began Friday after 10 people were killed in a fire in China’s Xinjiang province, where Covid lockdown restrictions had 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 down for weeks at various times.
The quarantines and testing protocols have taken a psychological and economic toll. Growth has collapsed and unemployment is rising. During the lockdown, many residents complained about inhumane conditions and faced food and medicine shortages. A human rights group reported at least five suicides in Lhasa, Tibet, where some residents have been under curfew for more than 100 days.
The people are at their breaking point and their anger is directed at President Xi Jining and the party leadership. On the first night of the demonstrations in Shanghai, a crowd shouted, “Resign, Xi Jinping! Resign, Communist Party!”
Meanwhile, the prospect of social upheaval in the world’s second largest economy has rocked global markets.
On Monday, the Dow fell more than 500 points after European and Asian indices fell. Oil prices fell sharply as investors feared rising Covid cases and protests in China would weaken demand from one of the world’s biggest oil consumers. US oil hit its lowest price in almost a year, falling 2.7% to $74 a barrel.
BIG PICTURE
Officials in Beijing are in quite a bind here.
To fix its economy, China needs to ease lockdowns so its people can get back to their lives.
But doing so – in a country that has almost no natural immunity to the virus and has shunned the idea of importing Western-made boosters – could result in a deadly outbreak.
Xi, who has just started a third term and has doubled to zero-Covid, does not want to risk a public health catastrophe that would undermine his credibility. And certainly cracking down on peaceful protesters and continuing the tough-line policy is an option — an option China has long championed. But all of Xi’s options are far from ideal for a leader who has long dabbled in stability.
Related: Twitter searches of the protests in China revealed a spate of spam, pornography and gibberish that researchers said could be a deliberate attempt by the Chinese government or its allies to drown out images of the demonstrations.
The label on a mug of Velveeta’s microwaveable macaroni and cheese says the meal will be “ready in 3½ minutes.” A Florida woman objects to this statement for $5 million.
Yes, someone has filed a proposed class action lawsuit against Kraft Heinz, alleging that Velveeta Shells & Cheese is taking longer to prepare than announced, court documents show.
Her attorneys argue that the three-and-a-half-minute promise doesn’t account for the other four steps required to prepare the dish: removing the lid and sachet of sauce, adding water, microwave and stirring, according to the court documents.
Kraft Heinz dismissed the lawsuit in a statement as “nonsensical”.
Ahhhhh America.
Introducing the latest casualty of the financial contagion sparked by the collapse of Sam Bankman-Fried’s empire…
Crypto lending company BlockFi filed for bankruptcy today. Its collapse didn’t come as a huge surprise in the crypto world – the firm has basically been on death watch for three weeks – but it’s still a key player to take down in the FTX contagion.
Earlier this month, when FTX was unraveled, BlockFi (think of it as a crypto bank – it made loans with digital assets as collateral) stopped, citing a “significant exposure” to Bankman-Fried’s FTX exchange, as well as its sister – Alameda hedge fund. FTX and Alameda are now, of course, bankrupt and virtually tantamount to corporate mismanagement in the hands of the calculating oddball known as SBF.
The way the dominoes fall after FTX is somehow tragically linked. BlockFi was one of several recipients of SBF’s modern JP Morgan theatrics. Over the summer, as the value of digital assets plummeted, SBF collapsed, constructing financial lifelines for struggling companies.
For BlockFi, that meant a $400 million line of credit from FTX.
Prior to this month, SBF was felt to be The Good Crypto Guy. That despite all the internet bro-y-ness used (rightfully) to smear crypto believers, there was something sane about the motley nerds risking their own necks for the greater good.
Obviously, we now know it was all an act — a bold and admittedly effective strategy to distract investors from the reality that FTX and Alameda were built on a house of cards
(And again, I get that the crypto space in general, and FTX in particular, can seem like a confusing jumble of internet nonsense, so I’ve written some dead simple stories trying to put it all in plain English. These ones is about cryptocurrencies. This is about FTX.)
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