Bernie, Telemedicine and Force Majeure | Learning by Proxy

Last week I had published the first of these blogs where I cover a large number of things that I read each week. I am now changing the name of the segment to 'Learning by Proxy'.

Learning by Proxy

Deconstructing the uniqueness of SARS-COV-2. This virus has spread unlike any in recent history. This tweet chain explains what makes the virus so unique and dangerous for humans. It is certainly technical in bits but very interesting read for those into this kind of thing.

While not technically alive, there's an evil genius to viruses that never ceases to amaze me. It's one reason I became a virologist. A recent Nature paper reveal a remarkable trick SARS-Cov-2 learned that makes it nastier than the first SARS. Both viruses…

— Peter Kolchinsky (@PeterKolchinsky) April 6, 2020

--

Not only people US is losing something else as well

The United States was not always this strong. Not even after the second world war and the unnecessary explosions in Japan. In fact, the Saudi’s issued an embargo against the US in 1973 and crippled the economy. Why? Because the US was supporting Israel in the war for the Sinai and they wanted it to stop. Not having oil was one thing, having to beg Russia for oil during the cold war would have been another thing!

Seeing how they were helpless, US started mediation talks which eventually led to Henry Kissinger promising the Saudi king military protection of their oil field so long as Oil was pegged against the USD. The Saudis, now reassured that Israel would not come for them, agreed. This was further resolved by the OPEC in 1975 and the USD has ever since been considered the reserve currency. That dynamic has been slowly shifting.

China has been making its moves with the Yuan and now has been turned it into a reserve currency by IMF. We all know they have been giving away loans to all the African nations. Now, which currency do you think all those loans would be made in.

Bernie out

They also lost the only guy who could have realistically won the presidential race against Donald Trump. A testament to how corrupt the DNC is and why someone like Donald Trump is the president. The only difference between Donald Trump and the Democratic nominee Joe Biden is that Joe Biden is not as transparent. Bernie Sanders represented a chance to change things in America, a chance to say that rich do not keep getting richer. That dream shall now remain a dream.

Bernie announced that he cannot continue his campaign in good conscience knowing the state of the country. Containing the Virus and getting America back up is more important than continuing this fight. With that, he suspended his campaign. The voting may continue but he will no longer campaign.

Supporting small businesses in the US

The legislation for the Paycheck Protection Program was written quickly and got off on to a rocky start on Friday: The CEO of small business lender Fountainhead said he still had a number of unanswered questions about it and that his company didn’t have a way to submit applications to the Small Business Administration, which is guaranteeing the loans.

Bank of America, the first big bank to get up and running, received more than $22 billion of loan requests from 85,000 small enterprises, according to CNBC. Wells Fargo said yesterday that it has already received $10 billion of requests from small businesses, which is enough to exhaust its lending capacity under program.

The request to cover the gap arising out of the shutdown is coming in thick and fast. The US government put in place a loan program to help such businesses cover the gap and it looks like they will run out of money sooner than they had expected!

Telemedicine

Telemedicine is getting boost the world over. I had written an entire post about this elsewhere and I am not able to find it! Telemedicine is not new and yes it was being practised in villages. But the modus operandi was, having a doctor [not specialist] available 'in situ' who would finally write the prescription based on the inputs provided by the specialist available over video conference. While there was no law that forbade tele consulting, the Medical Council of India used to frown upon telemedicine.

In the current circumstances, they have cut the leash and issued a circular stating that they will allow companies to provide telemedicine. This has left existing hospitals and large healthcare institutions scrambling to add Zoom to their site so doctors can consult online. At the same time, it has opened up an opportunity for companies like Practo and Cure.fit to walk in and disrupt the space. I feel quite happy about this.

The US also did not have any law against it but I am sure insurance and other such issues may have been there. Now the tide is turning as even the government is endorsing the use of telemedicine rather than visiting the doctor.

“Our challenge has always been that we haven’t had wide-scale adoption because there just hasn’t been wide-scale awareness,” Hill Ferguson, the CEO of the telemedicine provider Doctor on Demand, told Recode. “In the last month, we’ve had everyone from the president of the United States down to local governors to CEOs of health care companies all saying use telemedicine as a first line of defense.”

I do not know what this would mean for the rapacious healthcare business in the US. They have fleeced the customers to date. Can they continue to do that online?

Force Majeure

Contracts are meant to ensure that people live up to their obligations. Sometimes it becomes impossible to live up to it when the external event intervenes. For such situations, there is a clause called ‘Force Majeure’. Literally translated from French it means ‘Superior Force’. These clauses are meant to protect the business from unforeseen circumstances such as war, riots and “acts of god”; referring earthquakes and other acts that aren’t the making of man.

Insurance companies in India have been told not to use this clause to escape their obligation especially in the event of death.

According to a press release from the Life Insurance Council, "The Council also confirmed that the clause of ‘Force Majeure’ will not apply in case of COVID-19 death claims. This step was taken to reassure customers who had reached out to individual life insurance companies seeking clarity on this clause in their contract as well as to dispel rumours to the contrary. All life insurance companies have also communicated to their customers individually in this regard."

Others are begging for Force Majeure to be allowed. Especially and particularly those in the retail business. For them, rentals are their biggest expense followed by everything else. Theatres rent an entire floor of the mall, although, at lower rentals, they are still quite expensive. PVR, the largest multiplex operator by screens in India, Inox and several others have called for rent to be waivered. Given that most of the theatres are anchor tenants at these malls, the mall owners might not have too much of a choice.

Theatre chains are not alone, even restaurant owners have been writing to them. Tata Starbucks, yes that chain which runs co-working spaces in the guise of coffee shops and manages to extract Rs. 1000 per seat per day, more than WeWork can ever imagine (those suckers), has also written to all of its landlords asking for a waiver. So have McDonald's, Dominos and others. Although they continue to deliver food through Swiggy and others. This is not called unprecedented circumstances, its called leverage and the real estate owners are screwed.

In France last week, multiple power suppliers attempted to invoke force majeure clauses to get out of contracts which allow them to buy nuclear power at a fixed price, after the crisis sent French electricity prices tumbling far beyond those prices. The country’s energy market regulator, CRE, rejected the request, on the grounds that the buyers had not demonstrated that the economic situation had made it impossible to fulfill their contractual obligations. Months earlier, China National Offshore Oil Corp. had attempted unsuccessfully to invoke a similar clause to allow it to get out of liquefied natural gas contracts with European energy companies.

While Force Majeure is needed. There is an insidious side to this where many businesses will attempt to use this to wriggle their way out of their obligations. I am sure there will be no shortage of such people in India, the land of the shortcut. Many will attempt to escape their obligations. What happens remains to be seen.

Zooming along… Screeech… Bang!

When news of CoronaVirus broke one of the stocks that shot up from USD 2 to USD 20 was Zoom which trades under the stock ticker ZM. Zoom was so much in demand that, another company whose stock ticker conveniently happens to be ZOOM, shot up 600%. Anyway, long story short, there is no other product that comes close to ease of use and speed as Zoom does. It is remarkable the degree to which they have been able to scale. There are other solutions such by CISCO but they tend to be far more expensive.

A couple of weeks ago news broke that Zoom had several security holes. Not only that, as security researchers dug in they found that traffic was being routed through China and also that there was this thing going on called ZoomBombing. While this sent the stock price down by 50% it also sent a lot of others away. Chief amongst them the Taiwanese government, Google, Nasa and several others.

So the CEO made a speech and pushed some updates. But what happens next remains to be seen. Credit Suisse seems to think the stock has priced in all upside at the current levels.

Change

The problem with the shut-down and the current economic situation is not the drop in sales right now. It is what comes thereafter. China has been through it and you can see what is coming there. Fearing what may come is worse than having something bad happening now.

Chloe Ni used to go to coffee shops every two days before the coronavirus outbreak. Now, she makes coffee at home, and even decided against getting an expensive Moka stove-top pot to make her daily brew.

India

There are several daily wage earners in India, which includes several who work in transportation and allied industries. A lot of them who serve as manual labour for a lot of odd jobs in the supply chain as well as retail and the likes and people who serve at construction sites. This article has some mind-blowing stats on the state of affairs and the challenges that they are facing. The lockdown has been the most painful for these people and I don’t know how they will reach the other side of this problem.

On the flip side, it might be a huge opportunity for Social Impact Enterprises to show these people returning to their villages that opportunities exist at home. They may never have to return to the cities.

Since the rest of the country is experiencing what J&K has for months, we could possibly learn to live there as well. Fresh changes introduced by the Modi government this week will allow Indians from across the country to apply for local government jobs in Jammu & Kashmir, including its police force. This has sent shivers up the spines of those living in J&K, remains to be seen what reaction we get to this.

Also, not all techies are working from home. Especially those who work for the large IT and ITeS companies like Infosys, Wipro and TCS. The reasons sighted include data privacy of the client, not enough laptops and improper internet connections. These techies are also getting stigmatised and some of them have moved into the campus guest houses to live there! Flipkart, on the other hand, is asking the government to provide permits to be able to deliver those very laptops.

Also, Pornhub is asking India to reconsider the porn ban given that traffic has already surged 95%.

Frack it

For the last decade or so the USA has been using Fracking to produce oil on US Shore to reduce their dependence on Saudi oil. Fracking is the process of pumping in water, sand and chemical into the earth that is not very rich in oil (called Shale) and then pumping out a mixture that contains oil and gas amongst other things in it. This then separated. Explained in this video. Now, its costly to do this. In order to profitable, on average, oil prices have to be above $50 a barrel.

As CoronaVirus started out in China and China went into lockdown, oil demand started to fall precipitously. This sent alarm bells ringing in the Saudi kingdom since the country is completely financed by oil. To protect themselves, the Saudis along with Russia dropped oil prices from prevailing $60 per barrel to $20 per barrel. Oil well started to shut down really fast in the US. Now that the demand from China is back up, they are slowly raising the price again.

Mission accomplished.

WhatsApp to reduce misinformation

With the global pandemic underway, WhatsApp has finally decided to reduce misinformation. For years now, as one country after the other saw the rise of Right-Wing governments on the back of such misinformation campaigns, they did not care. But today, when it has got to point where it can threaten lives, they blink. Looks like they need to stare death right in the eye to change.

The social media messaging app is deploying changes to its settings that limit how easily messages can be forwarded: once a message has now been forwarded more than five times, users will only be able to forward it to one chat at a time. It’s an update of previous changes which saw message forwarding limited to only five chats at a time.

It’s a tactic that had some success: after dropping forwarding limits to five chats, WhatsApp says it saw a 25% drop in messaging forwarding globally. Essentially, WhatsApp is hoping the extra effort required to forward messages becomes a deterrent for users.

Moving people, moving stuff, same difference

Uber is not operational in any of the cities in India. But Uber was always conceived as a demand-supply engine. If it can be done for people, so can it be done for goods. A couple of weeks ago BigBasket had a melt-down when the Prime Minister sent everyone running to the stores with another one of his signature 8 P.M. announcements. Uber has since partnered with BigBasket to deliver essential goods. If they are not allowed to carry people around that is not going to stop them from being on the move. They have struck a similar partnership with Flipkart as well.

Overseas Uber is making a push into grocery delivery through UberEats.

Even the nimblest of ride-hail companies won’t be able to make to the switch to delivery overnight, despite demand from global consumers. But companies like Uber that specialize in logistics and have experience adapting rapidly to changing demand—moving fast and breaking things, in Silicon Valley parlance—might have the best shot. For Uber to overhaul its operations to help keep the economy moving in our current crisis isn’t just the right thing to do; it may also be a win for workers and for Uber’s business.

Also, since we are on the subject; Uber is being a good citizen. It just transferred 25 Crores to driver-partners.

The Uber Care Driver Fund is directly transferring small grants into the accounts of thousands of driver-partners every day to help them meet their immediate and essential family needs. Over the next few days, Uber is also rolling out a Hospital Cash Insurance policy which will benefit driver-partners, and cover COVID-19 and other illnesses which require hospitalisation for up to 14 days.

Now if Uber can do it then so can anybody with two bike or a car and a boy.

Every startup that was in the logistics space wants to deliver groceries - Zoomcar, Zomato, Flipkart. Domino’s has partnered with ITC to deliver their goods.

And finally I want to leave you with something light. Do you know no two pieces of a jigsaw puzzle are the same. This is done to ensure that no piece fits in a place where it is not supposed to. This wonderful NYT story explains the whole process.

Signing off.