Welcome to this week’s edition of the Myth of Money, a weekly newsletter on all things money, economics and technology read by 10,000+ subscribers, curated by Tatiana Koffman.
Disclaimer: The following is not intended as investment advice. Do your own research.
I spent this week in Dubai, the beating heart of the UAE. Home to some of the wealthiest family offices in the world, the United Arab Emirates have three major industries:
Construction & Real Estate
And of course, Financial Services
Built from modest beginnings in less than 30 years, Dubai is considered the business hub of Western Asia with towering sky scrapers and hotels, many of which are rumored to be purchased with Bitcoin. It is no surprise, that with increasing global volatility, UAE investors are looking to digital assets to diversify their vast portfolios.
UAE was also the first country in the Middle East to announce an official peace with Israel last month, followed by the Kingdom of Bahrain and Sudan.
Israel–United Arab Emirates Normalization Agreement
The treaty was officially signed at the White House on September 15, 2020, ratified by the Israeli Knesset on October 15th and by UAE Parliament, making it the third Arab country to normalize relations with Israel after Egypt in 1979 and Jordan in 1994, and the first Persian Gulf country to do so. This agreement unblocked phone calls from Israel, created direct flights and cargo ship routes from Israel to the UAE, as well as military cooperation amid rising tensions in Iran.
Where Sudan is concerned, the team at the Economist provides an unfiltered take:
For Sudan’s decision, most of the though, one must credit President Donald Trump’s cynical style of diplomacy. In 1993 America labelled Sudan a state sponsor of terrorism and imposed sanctions. In recent years, as Sudan sought to improve ties with the West, many in Washington argued that it was time to reverse the decision. Their case grew stronger after last year’s popular coup against Omar al-Bashir, the longtime despot. Sanctions seemed to punish the new government for the sins of the old.
But the Trump administration insisted that Sudan must recognise Israel in exchange. In public it has tried to make the quid pro quo less explicit. Sudan agreed to pay $335m into a fund for American victims of terrorism to win removal from the state-sponsors list; the deal with Israel was presented as separate. In private, though, one was a demand for the other. And Sudan had little choice: it desperately needs foreign aid and investment.
Attending the Ritossa Dubai Summit this week felt like an unforgettable moment in history. More than 50 Israeli delegates arrived by chartered jet, the first time many of them were able to visit the UAE, and actively open business collaboration with UAE residents. Discussions ranged from new biotech, imports & exports (Kosher bagels are coming to Dubai!), to digital assets.
With so much suffering in 2020, I couldn’t help but feel a glimmer of hope witnessing the long-awaited peace in the Middle East become a reality.
This Week By the Numbers
In another great week for Bitcoin, the digital asset finally broke the $14,000 USD price target before a modest retreat. Stock markets continue to experience volatility across the board, closing out their worst week since March, as we get closer to Tuesday’s election. Investors continue to seek safety in alternative investments.
Big Tech Continues Its Surge Ahead of the Rest of the Economy
Amazon, Apple, Facebook and Alphabet reported the latest in a string of enormous quarterly profits on Thursday. While the rest of the U.S. economy languished earlier this year, the tech industry’s biggest companies seemed immune to the downturn, surging as the country worked, learned and shopped from home. On Thursday, as the economy is showing signs of improvement, Amazon, Apple, Alphabet and Facebook reported profits that highlighted how a recovery may provide another catalyst to help them generate a level of wealth that hasn’t been seen in a single industry in generations.
Amazon sales were $96.1 billion, up 37 percent from a year earlier, and profits rose to $6.3 billion.
Facebook’s revenue for the third quarter rose 22 percent from a year earlier, to $21.2 billion, while profits jumped 29 percent to $7.84 billion.
The delay in the iPhone 12’s release meant Apple would face a tough comparison with the same quarter last year, which included sales of the iPhone 11. As a result, iPhone sales dropped more than 20 percent in the quarter.
After its first-ever decline in quarterly revenue in the second quarter, Alphabet rebounded with its highest-ever profit. The strength came from across Google, with search advertising revenue growing 6 percent and YouTube ad spending rising 32 percent. Google’s cloud computing business grew 45 percent. Real Full Story.
U.S. Economy Grows At Record Pace But Still Has A Long Way To Go
The economy grew about 7.4% during July, August and September from the previous quarter, after shrinking 1.2% in the first three months of the year and another 9% in the second quarter. Much of the GDP growth attributed to the third quarter actually came late in the second quarter. Analysts note the economy is still about 3.5% smaller than it was at the end of last year, before the once-in-a-lifetime pandemic. Job gains peaked in June and have declined in each of the three months since. Read Full Story.
Bank of Canada Governor Says Digital Dollar Project Moving Past Trial Stage
Bank of Canada (BoC) Governor Tiff Macklem said his institution is working with G7 member states on its plans for a central bank digital currency (CBDC). The digital dollar project, he said, is now moving beyond the proof-of-concept stage and closer to being ready for launch. However, the governor deflated expectations, saying he thought there isn’t a need for one “right now.” Real Full Story.
FTX Launches Bitcoin Pairs for Top Stocks Like Amazon, Apple and Tesla
Crypto derivatives exchange FTX has launched a novel way to trade the world’s most popular stocks. Announced Thursday, users of the exchange are now able to register to trade on over 12 equity and cryptocurrency pairs via the platform’s fractional stocks offering in what FTX is calling a “first of its kind” product. To facilitate liquidity, the tokens represent a fraction of one share, meaning traders will be able to trade half of a share at a time if they want. Real Full Story.
Thank you for reading this week’s edition of the Myth of Money.🚀
Until next week,
By Tatiana Koffman
Hi there and thanks for reading. If you stumble upon my newsletter, you will notice that I write about money, economics and technology. I hold a JD/MBA and spent my career in Capital Markets working across Mergers & Acquisitions, Derivatives, Venture Capital and Cryptocurrencies. I believe in empowerment through closing the financial education gap and creating equality of opportunity for the next generation. Check out my articles in Forbes here.
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