Big Tobacco Finds A Way | Give Vaccines A Shot | Money Mania

MARCH 7, 2019  /   SUBSCRIBE
 
 
 

PNUT GALLERY

 

This past week at a conference we heard two individuals who are close to consumer data (one is an accountant who does work for consumer facing companies and the other is the CEO of essentially a data company) say they think the market is indicating weakening consumer sentiment and spending. They predicted a correction or at least a significant tightening of consumer spending in the next 12 months. This of course is awful sampling error and we are generally pessimists but this is a viewpoint we share. If there is a downtown, then we hope it doesn’t affect main street America too much as many Americans can’t absorb another major recession.

There was also unanimous consensus at this conference that valuations of technology startup companies are frothy as they are trading at incredibly high multiples and valuations.

 
 
 

SEASONED NUTS: QUOTABLE

 

“Obesity is a double victory for consumerism. Instead of eating little, which will lead to economic contraction, people eat too much and then buy diet products – contributing to economic growth twice over.”

“We do not become satisfied by leading a peaceful and prosperous existence. Rather, we become satisfied when reality matches our expectations. The bad news is that as conditions improve, expectations balloon.”

– Yuval Noah Harari

 
 
 

IN A NUTSHELL: MUST READ

 

How India Became Philip Morris’ Ashtray: Yesterday the Pnut wrote on devastating air pollution in Dakar, Senegal, where a third of the population has some kind of lung ailment, and children are increasingly becoming asthmatic. But at least Dakar isn’t New Delhi, India, the capital city with the world’s most polluted air, in the country with the planet’s most polluted air. India has 106 million smokers, second only to China; it is an attractive market for tobacco companies. In 2010, with a goal to curb smoking, India’s government banned foreign direct investment (FDI) in cigarette manufacturing, although it still allowed tobacco companies to invest through technology collaboration and licensing agreements. Investments could also be made by forming a trading company. Cigarette manufacturing was supposed to be left largely to domestic players, without the aid of foreign funded expansion. A year after the government’s decision, Japan Tobacco exited India, citing an “unsustainable business model.”

Philip Morris, a huge international tobacco company, remained in India, and found a way around the ban through the built-in loophole in the regulations. In 2009, a year prior to the FDI ban becoming law, Philip Morris struck an exclusive deal with India’s Godfrey Phillips to locally manufacture the world-famous Marlboro cigarettes. First, a new wholesale trading company, headquartered in New Delhi, was formed with Godfrey. Thereafter Godfrey sent invoices to its partner for machinery and equipment to manufacture the cigarettes. A review of internal company documents showed that between 2009 and 2018 Philip Morris International paid its Indian partner hundreds of thousands of dollars in costs associated with manufacturing its Marlboro cigarettes.

A former official of India’s main financial crime-fighting agency said that paying for machines to manufacture cigarettes essentially resulted in the promotion of cigarettes, which the ban was meant to deter. The cigarette companies would face staggering financial penalties if found guilty. But a spokesperson who advises global companies on foreign investment rules said because the Indian regulations only restricted direct foreign investments into a company, and were silent on such indirect payments for machines, “The company can argue in its defense that it is only funding the equipment purchases and not investing directly in an Indian cigarette manufacturing company, and they would be technically correct.”
Additional read: 
FDA chief Gottlieb resigns as agency battles teen vaping, opioid crisis (CNBC)

 
 
 

MIXED NUTS: QUICK TAKES ON WORLD NEWS

 

You Don’t Have To Go Home And You Can Stay Here: The European Commission’s latest progress report strikes back at Hungarian prime minister Viktor Orbán’s attempts to turn migration into an election issue. Last month Orbán’s government launched a poster campaign based on misleading claims about migration, featuring the European commission president, Jean-Claude Juncker, and the Hungarian-American philanthropist George Soros. On Wednesday the EU declared the migration crisis over, and stepped up its attack on “fake news” and “misinformation” about the issue. Using unusually combative language, the commission issued a factsheet debunking 15 “myths” about migration. It also took apart demagogic stereotypes that migrants carry disease or burden economies. Brussels did acknowledge, however, that “key problems in Greece” remain unsolved. (Guardian)

The Spy Who Raised Me: The Kremlin is claiming the UK is violating an international treaty by refusing access to a former Russian spy and his daughter, both found poisoned in the British city of Salisbury one year ago. Sergei Skripal and his daughter Yulia were found collapsed on a park bench near a shopping mall on March 4, 2018. Lab tests showed the pair had been poisoned with the Novichok nerve agent developed by the Soviet Union during the Cold War. Russia has denied any involvement, and Monday its embassy in the UK released a 52-page report citing what it calls “inconsistencies in the British narrative.” A British diplomat said the Skirpals are “free citizens” who don’t want to meet anyone from the Russian Embassy. (NPR)

Ghosn’s Finances Are A Lemon: A Tokyo district court finally set bail, in the amount of $9 million, for former Nissan CEO Carlos Ghosn. The auto executive spent the last four months in jail awaiting trial on charges of underreporting his income by about half, and improperly transferring his personal investment losses to Nissan. Ghosn took over the helm nearly 20 years ago; he was credited with reviving Nissan and saving the company from bankruptcy. Ghosn was arrested last November after a whistleblower triggered an internal investigation. Another member of the board of the directors, Greg Kelly, was also accused of misconduct; Kelly was released on bail in December. Ghosn had been denied bail twice before, but this time his new defense team’s request was granted. His family had also been drumming up international attention for what they called “harsh treatment” in the Japanese jail. Ghosn must remain in Japan and not tamper with evidence. Prosecutors are appealing the bail decision. (NPR)

 
 
 

NUTS AND BOLTS: SHOULD READ

 

Give It A Shot: In many parts of the world health care workers risk their lives to deliver vaccines to vulnerable communities. In northern Nigeria in 2013 health workers were winding down an immunization drive to vaccinate children against the polio virus when armed gunmen appeared and opened fire, killing nine of them. Medical staff have been attacked and killed in Pakistan while delivering polio vaccines to rural areas or conflict zones. Outside of high-risk areas or conflict zones, delivering vaccines in developing countries can pose serious logistical challenges. An emergency operations manager at Doctors Without Borders said that in parts of Congo, where a measles outbreak is ongoing, medical staff must travel for days by motorbike or canoe to access isolated villages. Without these efforts outbreaks of a highly contagious viruses can quickly balloon to crisis levels. Three cases of measles confirmed in the capital city of Madagascar last October had escalated to thousands of cases by November.

In the US vaccines that can prevent the spread of measles and other deadly viruses are readily available. Unfortunately, conspiracy theories that vaccines are ineffective or can cause certain disabilities and medical conditions have led a number of American parents to resist vaccinating their children. This year the World Health Organization named “vaccine hesitancy” one of the top threats to global health. According to the report, measles has increased by 30 percent globally and “some countries that were close to eliminating the disease have seen a resurgence.” It is extremely frustrating to those in the medical field. One expert remarked: “You have at your disposal all the benefits of modern life that are supposed to make your life healthy and strong and long. And then a segment of the population rejects that. It’s exasperating.”

 
 
 

SPONSORED NUTS: GROVE.CO

 

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NUTS IN AMERICA

 

Southern Hostility: President Trump’s homeland security secretary Kirstjen Nielsen testified before the House Homeland Security Committee Wednesday, vehemently defending the administration’s treatment of migrant families at the border, including its decision last summer to separate children from their parents. She called on members to support Trump’s border wall and to pass legislation that would allow the indefinite detention of families, and also restrict asylum claims by migrants from Central America, who have been arriving in record numbers at the southern border. “Our capacity is already severely strained, but the increases will overwhelm the system entirely,” Nielsen told committee members. “This is not a manufactured crisis. This is truly an emergency” (NYT)

 
 
 

LOOSE NUTS: FASCINATING NEWS

 

Money ManiaWinner of $1.5 Billion Lottery Comes Forward (Well, Sort of. Through a Lawyer.) (NYT, $) How badly are we being ripped off on eyewear? Former industry execs tell all (LA Times) My Year of Living Like My Rich Friend (The Cut) And if thinking about money makes one take antidepressants: How to Quit Antidepressants: Very Slowly, Doctors Say: Mustering solid evidence, two researchers have denounced the standard psychiatric guidelines for how best to wean patients from depression medications. (NYT, $)

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