Bye-VIE - China has become a sort of "promised land" to investors, there is a lot of skepticism around putting dollars to work in the nation, but if their bet happens to work out, the payout would be immaculate. This year, however, investing in China has only grown more opaque. The clampdown on tech companies (shoutout DiDi), Evergrande triggering property market reforms, and highly public people like Jack Ma disappearing all show signs of some big plan China has to onshore as much innovation as possible and concentrate the spoils of that innovation in the hands of Chinese citizens.
Now, the nation has taken it yet another step further. Reports indicate China is banning their VIE, or Variable Interest Entity structure, that was commonly used by foreigners to invest in the nation. Basically, they are a super complex way for foreign investors to get ownership in startups that may or may not be linked to key technological assets for China. Most would domicile somewhere like the Cayman Islands and act as holding companies of a China-focused investment portfolio.
Alibaba, Pinduoduo, JD.com, and a host of other top dawgs in China tech were born out of the VIE. Now, as China looks to either outright ban or restrict the sh*t out of VIE rules even more, homegrown startups will have a much smaller capital pool to raise from, but with 1.4bn people and a $14.7tn GDP, finding investors shouldn't be too hard.
JOLTS - Not some electricity sh*t or something. No, the JOLTs we mean here is the Job Openings and Labor Turnover Survey issued by the U.S Labor Departments. Yesterday, the October report dropped, and it was not exactly ideal.
Have you had to wait a lot longer for your Dunks iced coffee or Chipotle burrito lately? Yeah, me too, and we're not alone. Job openings spiked to 11mm in October, the second-highest number of job openings ever in U.S. history. Normally, this wouldn't be bad - job openings means people have options and would normally suggest the opportunity for a lower unemployment rate. But, with unemployment at 4.2% and labor force participation at 61.8%, that doesn't really apply today. There's a stark difference between open jobs and people actually looking for jobs. In an already tight labor market, this could hurt.
One cohort it won't hurt, though, is low-wage earners. Competition for workers heats up as labor market dynamics constrain employer's ability to find new workers. This means that workers on the floors of retail stores and restaurant staff are gonna be rolling in it soon.
So, to all those who work lower-wage jobs, what options play are you yoloing your new earnings on? Be sure to let us know…my uh…friend…needs money for rent this month so don't be shy!