- Houston Rockets’ General Manager Daryl Morey tweeted in support of Hong Kong protesters, which upset Chinese fans.
- The NBA is a major business in China, prompting leaders in the NBA to address the situation and apologize for any offense the tweet, which Morey soon deleted, may have caused.
- The damage of the tweet was already done, however. The Chinese Government, Chinese Basketball Association, China-based sponsors for the team, and a platform that streams NBA games to 500 million Chinese viewers cut ties with the Rockets.
- U.S. politicians are criticizing China for exercising its economic hold on the NBA. They are also upset that the NBA is catering to this hold, instead of showing support for pro-democracy protests.
Morey’s Tweet Stirs Controversy
The NBA is receiving bipartisan backlash from American politicians after apologizing for a tweet in support of Hong Kong’s protesters sent by the Houston Rockets’ General Manager.
While in Japan for pre-season games on Friday, GM Daryl Morey expressed support for the ongoing pro-Democracy protests in Hong Kong. He tweeted a photo that said, “Fight for freedom, stand with Hong Kong.”
His tweet received backlash before he quickly deleted it, as China—which has condemned these protests in an effort to expand their influence over the city-state—did not like its message. The NBA has a lot of money to make in China, the Houston Rockets in particular.
Yao Ming, one of the most popular Chinese basketball stars, played on the Rockets. His tenure on the team helped make the game as popular as it is in China today and cemented the Rockets as a fan favorite in the country. He is retired from the sport and is now currently the President of the Chinese Basketball Association.
The team’s leaders and the NBA quickly moved to the damage control front after Morey deleted the tweet. The Rockets’ owner, Tilman Fertitta, sent a tweet noting that Morey’s tweet was a reflection of his personal beliefs and not any political beliefs of the team itself.
Morey posted a series of tweets on his own addressing the situation. He said he did not intend to offend fans in China.
“I have had a lot of opportunity since that tweet to hear and consider other perspectives,” he added.
The NBA took a similar approach in their statement and also worked to downplay Morey’s remarks.
“While Daryl has made it clear that his tweet does not represent the Rockets or the NBA, the values of the league support individuals’ educating themselves and sharing their views on matters important to them,” the statement read. “We have great respect for the history and culture of China and hope that sports and the N.B.A. can be used as a unifying force to bridge cultural divides and bring people together.”
China Reacts to Tweet
Their efforts, however, could not stop the impact the tweet already had on China. The Chinese government cut ties with the Houston Rockets, as did several businesses, including the team’s Chinese sponsors. The CBA, along with Tencent, which streams NBA games in China to almost 500 million viewers cut their ties as well.
The owner of the Brooklyn Nets, Joe Tsai, who also co-founded Chinese media company Alibaba also condemned the remarks in a statement.
“I don’t know Daryl personally. I am sure he’s a fine NBA general manager, and I will take at face value his subsequent apology that he was not as well informed as he should have been,” he said. “But the hurt that this incident has caused will take a long time to repair.”
On top of this, a report from The Ringer alleges that Houston Rockets and NBA ownership is debating whether or not to replace Morey as the team’s GM.
This series of events has also stirred up its own controversy among American politicians, who are criticizing the NBA on both sides of the aisle. Democrats and Republicans alike are upset that China has an economic hold on the NBA, and that the NBA is catering to that hold. Many would rather have seen the organization support the sentiment behind Morey’s original tweet instead of China, which has been largely seen as suppressing the pro-democracy protests.
Presidential candidate Julian Castro said that “China is using its economic power to silence critics—even those in the U.S..
Sen. Chuck Schumer (D-NY) called the situation “Unacceptable.”
Sen. Rick Scott (R-FL) accused the NBA of “kowtowing” to China. He also called out Adam Silver, the NBA’s commissioner, to criticize the organization’s response.
Sen. Ted Cruz (R-TX) called the NBA’s retreat shameful.
Silver will be in China this week as various teams play preseason games. He is expected to speak during his trip and touch on the matter.
See what others are saying: (The Ringer) (Axios) (NPR)
SEC Releases Long-Awaited Report on January Memestock Frenzy, Pokes Hole in “Short Squeeze” Narrative
Among other findings, the SEC said hedge funds weren’t broadly damaged by January’s unprecedented trading event.
SEC Publishes Findings
The Securities and Exchange Commission released a long-awaited, 44-page report on Monday detailing its findings regarding this year’s “Memestock Frenzy,” which involved companies such as GameStop and AMC.
During the frenzy in late January, the share prices of those companies soared exponentially. According to one of the key narratives of the situation, smaller investors piled onto GameStop as a way to directly attack hedge funds that were actively betting against GameStop’s success and future. As CNBC reported at the time, those “hedge funds and other players had to rush in to cover their bets against the stock.”
What followed were reports that hedge funds had lost billions of dollars all at once. In fact, one notable hedge fund, Melvin Capital, received what many described as a nearly $3 billion bailout. Meanwhile, in June, it was reported that the London-based White Square Capital had shut down its main fund due to the losses it suffered in January.
However, now, the SEC has said there is no real evidence to support some of the key pillars of this narrative, including that hedge funds were substantially hurt in the long run.
“Staff believes that hedge funds broadly were not significantly affected by investments in GME and other meme stocks,” the agency said in its report. “Staff did not observe that any advisers to private funds and registered funds experienced liquidity issues or difficulties with counterparties.”
On the whole, hedge funds even saw a 1.2% increase in profits in January, according to data from the HFRI Fund Weighted Composite index.
The agency also noted that GameStop purchases to cover bets were just “a small fraction of overall buy volume,” adding that “GME share prices continued to be high after the direct effects of covering short positions would have waned.”
“The underlying motivation of such buy volume cannot be determined,” the agency concluded. “Perhaps it was motivated by the desire to maintain a short squeeze. Whether driven by [that] desire… or by belief in the fundamentals of GameStop, it was the positive sentiment, not the buying-to-cover, that sustained the weeks-long price appreciation of GameStop stock.”
SEC Not Currently Issuing Any Recommendation
The agency did not offer any policy recommendations with this report, though it did stress that a number of small-time investors who either initially bet against GameStop’s success or tried to ride the wave of gains saw significant losses.
Given that the number of investors trading GameStop rapidly jumped from 10,000 at the beginning of January to 900,000 by the end of the month, it’s not surprising that the FTC confirmed heavy losses for many.
With that in mind, the SEC aligned its next focus on commission-free trading apps and the way in which they promote potentially excessive trading. Notably, that includes apps such as Robinhood and Webull, both of which faced controversy during the frenzy for severely restricting users’ ability to trade so-called memestocks.
“Consideration should be given to whether game-like features and celebratory animations that are likely intended to create positive feedback from trading lead investors to trade more than they would otherwise,” the SEC said in its report.
SEC Chair Gary Gensler said Tuesday that by April, the agency could propose rules limiting how those apps make money from each trade, which is known as “payment for order flow.”
See what others are saying: (The LA Times) (The Washington Post) (The Wall Street Journal)
Supply Chain Issues Trigger Price Hikes, School Lunch Shortages, and More
Many news outlets have cited experts warning of supply chain issues affecting holiday spending, but the consequences of ongoing bottlenecks are already being felt across the country.
Schools Struggle for Food
A host of supply chain bottlenecks are affecting products and businesses throughout the U.S., forcing prices of goods and services to rise.
In Colorado, the Denver Public Schools system said it’s struggling to make sure it has enough milk for students on a daily basis, Insider reported Sunday. In fact, the schools are so short on milk cartons they’ve now resorted to asking students to bring refillable water bottles instead.
“When the milk is available, we are prioritizing serving milk at breakfast at all schools and at our elementary schools for lunch,” Theresa Hafner, DPS executive director of Food Services, told Insider in an email.
Meanwhile, other schools are struggling to find additional lunch-related supplies including meats, orange juice, meal trays, and plastic cutlery.
According to NBC News, Shonia Hall, director of school nutrition services for Oklahoma City Public Schools, even found herself needing to make a run to a local Sam’s Club to purchase 60,000 spoons and forks each just “to get us through for a few days in hopes the truck would show up.”
“It’s an additional cost to your budget, to your program,” she added.
Zillow Pauses House Buying
The issues also extend to the housing market, as both labor and supply shortages have led to operational backlogs for renovations and closings.
Zillow cited those issues Sunday when announcing that it would stop buying homes at least through December. Instead, the company said it plans to first prioritize the selling of its current catalog of homes.
“We’re operating within a labor- and supply-constrained economy inside a competitive real estate market, especially in the construction, renovation and closing spaces,” Jeremy Wacksman, Zillow’s chief operating officer, said in a statement cited by Yahoo! Finance.
Zillow’s share price fell as much as 11% from around $94 to around $84 early Monday as investors pulled out of the company.
What’s Causing the Issues?
U.S. companies are having a hard time stocking their shelves with certain products and keeping prices from rising largely because of factors induced by the pandemic.
The first and most basic issue is that last year, most consumer spending halted amid COVID-19 lockdowns in March. Around that same time, many companies were forced to scale back production and lay off workers.
However, more people are now returning to the outside world, and with that comes a boost in shopping. Still, several businesses have found themselves unable to ramp up production to meet the increased and arguably unprecedented demand.
In addition to production issues, there are numerous transportation challenges. For example, a large wave of businesses have struggled for months to fill open positions. One such industry where that’s being acutely felt is trucking.
In fact, the country is so stressed for drivers to haul freight that at least one high school in California has now launched a program to train seniors to drive big rigs.
Meanwhile, Walmart, UPS, and FedEx all made 24/7 transportation commitments last week.
The supply chains problems don’t stop with ground transportation. One of the most pressing situations seen so far involves the problems at the Ports of Los Angeles and Long Beach in California, where container ships are backed up.
Pre-pandemic, it was fairly unusual for any cargo ship to be seen waiting off the coast to get into one of the two ports, which process 40% of all shipping containers entering the U.S. Now, dozens of ships have been waiting weeks to get in.
Even once they unload, there’s another major backlog involving shipping containers at the ports. Because of those combined issues, Long Beach extended its operational hours in September.
President Joe Biden later announced on Oct. 13 that L.A.’s port will “operat[e] around the clock 24/7” as part of a “90-day sprint” to clear a path for cargo.
Supply chain issues are expected to impact holiday shoppers, but many analysts expect the problems to extend well into 2022. Transportation Secretary Pete Buttigieg echoed that prediction on Sunday during an appearance on CNN.
See what others are saying: (NBC News) (Insider) (Wall Street Journal)
Facebook Is Reviewing More Than 2,200 Hours of Footage for Next-Gen AI
The project, which could prove to be revolutionary, is already raising some big privacy concerns.
Facebook’s Next-Gen AI
Facebook announced Thursday that it has captured more than 2,200 hours of first-person video that it will use to train next-gen AI models.
The company said it aims to make the AI, called Ego4D, capable of understanding and identifying both real and virtual objects through a first-person perspective using smart glasses or VR headsets. In effect, that could potentially help users do everything from remembering where they placed forgotten items to recording others in secret.
Facebook listed five key scenarios the project aims to tackle and gave real-world examples of how each may look for people who will eventually use the AI.
- “What happened when?” With that scenario, Facebook gave the example, “Where did I leave my keys?”
- “What am I likely to do next?” There, Facebook gave the example, “Wait, you’ve already added salt to this recipe.”
- “What am I doing?” For example, “What was the main topic during class?”
- “Who said what when?” For example, “What was the main topic during class?”
- “Who is interacting with whom?” For example, “Help me better hear the person talking to me at this noisy restaurant.”
Facebook said the amount of footage it has collected is 20 times greater than any other data set used by the company.
In the wake of recent controversy surrounding Facebook, it’s important to note that the footage wasn’t reaped from users. Instead, the company said it, and 13 university partners, compiled the footage from more than 700 participants around the world.
Still, that hasn’t alleviated all privacy concerns.
In an article titled, “Facebook is researching AI systems that see, hear, and remember everything you do,” The Verge writer James Vincent said that although the project’s guidelines seem practical, “the company’s interest in this area will worry many.”
Vincent pointe out that the AI announcement doesn’t mention anything in the way of privacy or removing data for people who may not want to be recorded.
A Facebook spokesperson later assured Vincent that privacy safeguards will be introduced to the public in the future.
“For example, before AR glasses can enhance someone’s voice, there could be a protocol in place that they follow to ask someone else’s glasses for permission, or they could limit the range of the device so it can only pick up sounds from the people with whom I am already having a conversation or who are in my immediate vicinity,” the spokesperson said.
Among positive reception, some believe the tech could be revolutionary for helping people around the house, as well as for teaching robots to more rapidly learn about their surroundings.