This podcast first appeared and was originally published at https://www.bbc.co.uk/sounds/play/w172ydpfbz0vnx1 on June 30, 2022.
As markets tumble, users are left unable to withdraw from some exchanges, and a leading hedge fund prepares to enter liquidation. Is crypto in terminal decline? Scott Chipolina, correspondent for the Financial Times, says investors are well used to challenging conditions.
Sri Lanka is among the countries to be worst hit by inflation, and living standards are falling. Joseph Stalin of the Ceylon Teachers’ Union, and Steve Hanke from Johns Hopkins University, tell us why a solution may be some way off.
It’s a host’s worst nightmare: an out-of-control party in your Airbnb. As the platform cracks down on gatherings, we hear the story of a rental gone wrong in the Bahamas.
Also on the programme, a boss at H&M explains why leaving Russia was a tough decision; and it’s happy 15th birthday to Apple’s iPhone.
We’re joined throughout Business Matters by financial consultant Jessica Khine in Malaysia, and economist Tony Nash in Texas.
BBC: Tony Nash, the CEO at the finance forecasting platform, complete intelligence in the US. State of Texas. How’s your day been, Tony?
TN: Great, thanks very much.
BBC: Good to hear. All right, well, thank you for joining us too. Tony Nash in Texas. I wonder what’s your overview of all this? I mean, it’s obviously bad news for crypto investors, but is it also a warning for other people who might have been entertaining the idea of getting into the crypto market?
TN: Yes, it is. The whole kind of crypto fallout that’s happening right now, it’s not the funds that I worry about. It’s the individual investors who have been investing in crypto that really worry me. And that’s the really kind of sad part of this crypto kind of drama is you have crypto assets that have fallen by 70%. People have put their savings and their hard earned money into crypto. And so I do worry about those guys because there are a lot of people, individuals who have lost a lot of money because they believed the narrative about crypto.
BBC: And I think during the pandemic, we saw a lot of people sitting at home starting to think, oh, maybe I’ll give this a go. They’re the most recent entrance into the market. I guess they’re the biggest losers.
TN: They are. So I did have a crypto journey where I invested in something called dogecoin, and I bought it at like four cents, and I ended up selling it at like 68 or $0.70, something like that. So it was just a small amount of money I didn’t want to put very much at risk, but I did, I wanted to understand what that was like, so I put like $50 into it or something like that and then just saw it go up to $70 or something and then sold it. But I think a lot of people thought that it would continue going up not just dogecoin, but a lot of the cryptos. So it’s not like your guest said, I don’t think this is the end of crypto. It is what they call crypto winter, and it’s probably going to last a couple of years. I don’t think we’re going to see crypto bouncing back immediately.
BBC: Presumably that experiment was enough for you. You’re not tempted to get back in, given the latest news?
TN: I don’t like volatility that much. At least with those assets, like your guests said, there’s nothing underlying those assets. There’s not a company, there’s not a physical commodity. There’s nothing underlying them. It’s just trust. And so I can sell sales in my excel workbook and have the same amount of assets underlying as any crypto asset does.
BBC: Listening to that in Texas, do you agree? Did governments like the US. Government make a mistake with all those support programs?
TN: I think they did, but I respect Steve. Thank you a lot. I follow him on twitter. I think they did make a mistake, but I honestly think that governments at the time were just afraid. I don’t think it was necessarily intentional that they overstimulated. I think they were not aware of what was going to happen around the corner, and I think they panicked. They were just afraid. It’s easy to look back from this point in time and say what they did was wrong and other stuff, but I actually think giving them the benefit of the doubt and saying they just panic, they were afraid and they didn’t want people to starve or suffer or lose jobs or whatever, and they stimulated way too much in hindsight.
BBC: Tony is this enforceable from Airbnb, do you think? Can they really stop people having parties? What if they just clean up really well the next day?
TN: Well, I think part of what happened through the pandemic is a lot of Airbnb hosts started charging exorbitant cleaning fees. And no matter how clean or dirty you left the place, the cleaning fee was applied to your Airbnb fee. I stay in Airbnb, or did stay in Airbnbs pretty regularly, but the cleaning fees became so large that I won’t stay in them anymore.
BBC: I didn’t realize the cleaning fee was at the prerogative of the host. I imagine it was like a blanket 10% or something.
TN: No, they’re huge. And so I have no issue with Airbnb enforcing a no party’s rule, but they really have to have a trade off and put a cap on the cleaning fee for Airbnb hosts because they in some cases are as much as the nightly rental.
BBC: Oh, wow.
TN: And these are things that you don’t see when you do a search in Airbnb and you see a nightly price, it does not include the cleaning fee. So if Airbnb is to put on this ban on parties, they really need to put some pressure on their hosts to reduce the cleaning fees.
BBC: It is a kind of fine line, though, isn’t it? I mean, I’ve had friends rent Airbnb and there’s been a few of us and there’s been drinking, but I guess what they’re talking about is when you invite strangers, or not necessarily strangers, but people who are not staying the night or booked in to stay, that’s when it becomes a party. Is that how they’re going to define it, do you think? Tony
TN: Yeah, I don’t know. If I’m staying in an Airbnb and I want to have some people over for dinner, is that a party if I want to cook for some friends and have them over? I don’t know. I think it could be, obviously loud music, drunk people, that sort of thing. Of course that’s a party, right? So they have to define it. I’m not a lawyer. I’m sure they can find a way to define it legally so that fees can be kept or whatever.
BBC: Tony you’re in Texas, not far from California. Have you heard of this issue before of land being seized from African American owners? I must admit it’s the first time I’ve heard of it.
TN: I’ve probably seen it in movies. I’ve seen it elsewhere. I think I’ve run across it, but I don’t remember it. But when I read this story today, it was great. It was great to hear and really interesting to dig into the story. And it was terrible that people had to suffer with that for 80 years.
BBC: It does say a lot, though, doesn’t it? If neither you nor I, you’re there in the States, have heard of this issue, I mean, from what Alison was saying, this wasn’t the only case. Has it been underreported, do you think?
TN: I don’t know. I don’t know how much property African Americans were allowed to hold before a certain point in time. I’m just not really sure. My family that settled in New Amsterdam when the Dutch still ruled America, had some property that was seized by the British in 1671. So it happened.
BBC: How did you find that out?
TN: We know our family history pretty well, but this was land in lower Manhattan, right around where Wall Street is, and so it was seized. These things happen. I’m not in any way trying to take away from the racial injustice that was done in California, not at all. But these things happen occasionally, and I’m just glad that these guys could get their land back and benefit from it eventually.
BBC: Tony, you’ve been looking at hmmm. We’ve been hearing there about its planned expansion into Latin America, but at the moment you’ve been looking at where their product is sourced. And we were just speaking about Myanmar. It’s Myanmar, sure.
TN: Yeah. Asian sources quite a lot in Myanmar. And part of the problem they’re facing is a lot of the manufacturers in Myanmar are being driven to insolvency because of energy prices. And so H and M doesn’t only have a problem generating revenue to replace Russia, but they do have a supply chain sustainability problem with matching the costs they can get in Myanmar, but also replacing that manufacturing pretty quickly as those manufacturers are driven to insolvency.
BBC: Tony, listening to that, how much has the iPhone changed your life, do you think?
TN: I have never owned an iPhone.
BBC: Smartphone. Do you own a smartphone?
TN: I do. Yeah. Of course I do.
BBC: So do you think iPhone opened the door to that?
TN: Of course it did. But I just never got into the Apple ecosystem. And I just haven’t owned an iPhone anti Apple. I just haven’t been I’m just waiting for it to get a little better. But of course, it’s influenced phones and it’s influenced the way we engage with technology. And it was a great product at the time. It was revolutionary. I remember I was using a Nokia phone at the time. Keep in mind, this is 2007, and you could play your music on that phone and have conversations, and I thought that was pretty cool. But that was before the iPhone came out. The navigation the interface. Everything just really changed the way people interact with phones. It’s great.
BBC: I think that’s all we have time for on this edition of business matters. Thank you so much to Tony in Texas and Jessica in Malaysia. And thanks to Joanna Stern from the Wall Street journal, who brought us up to date on iPhone’s 15th birthday as well. This has been business matters with me, Vivian Nunes. Thanks for listening. Bye.