Siddhant Pyasi

Juul, Baldwin Pianos, Microlending in Indonesia, and an Indian Politican

Aug 23, 2019 | Read time: 4 min | 744 words

Some new, whacky stuff for y’all to read and digest here.

Juul and Philip Morris have been sued under the RICO act in Chicago. Some background about RICO first – it stands for Racketeer Influenced and Corrupt Organisations Act, and it was passed in 1970 in the US. The idea behind it was to use it to stop organized crime (like your Godfather style crime families), and it was used quite effectively to put several mafioso behind bars. However, this is a fairly complicated act, as this post explains. Lawyers try to use RICO as a catch-all law, but judges rarely let them get away with it, and for the most part, most cases filed under RICO never really make it through. Coming back to the case – it’s been filed by 19 year old named Christian Foss, who says that his asthma became worse after he started to use Juul 3 years ago. I’m curious, what exactly did Foss think would happen to him once he started inhaling a ton of smoke/vapour? Anyway, the lawsuit claims to represent all the kids in Illinois who used it, and I guess the judge won’t like the fact that the suit has been filed under RICO. But we’ll see.

There once was a piano company called Baldwin – and in the 70s, it got a CEO named Moreley Thompson. Now Moreley viewed pianos as a “dull business”, which had good cash flow. Being an ambitious (and smart) chap, he decided to expand the company further. In which direction, though? Financial services (duh). Baldwin had always financed customers’ piano purchases, and being a smart guy, Moreley figured that diversifying into other financial services was the logical next step. So he created a subsidiary, took on a ton of debt, and within a few years, owned 200 (!!!) savings and loan institutions, insurance companies, and investment firms. The debt came back to bite him in the backside because in 1983, the financial services arm went into bankruptcy. The piano company however was safe (from the bankruptcy, not from competition), and now they moved their manufacturing operations to China. Read more about it here.

When you’re in a developing country with a relatively restricted banking system, the ideal way to reach the large un-banked mass of SMEs is to set up a microfinance institution – which is what the guys running Modalku did. They took it a step further, though – they made it a P2P service. In a market with a plethora of loan sharks and illegal moneylenders, Modalku sets interest rates between 12 and 20% on its loans, takes a 3% commission on each loan made through its platform, and its bad loan percentage is 1.23%. They’ve achieved remarkable success with their platform so far – and because of the increasing number of applications, they’ve roped in an AI system to share the load.

Here’s a self-proclaimed most dangerous writing app. How does it work? Say you’re using it to write something – if you stop writing for more than 5 seconds, it erases EVERYTHING you’ve written so far. The idea behind this is to shut down the inner voice in you that tells you what you’ve written isn’t good enough, and by doing so, put you in a state of flow. Do I use it? Hell no. I like to take my time, and to me this app is the equivalent of my mom standing behind me holding a saucepan, ready to strike at a moment’s notice. Such a fraught atmosphere, I feel, isn’t really conducive to creativity.

P Chidambaram, an alumnus of Harvard Business School’s MBA Class of ‘68 AND a former Home Minister, Finance Minister, Commerce Minister, Personnel Minister and Minister for Internal Security of India (phew) was arrested on the night of the 21st of August, in a pretty eventful day for agents of our Central Bureau of Investigation which ended in them having to jump over the wall of his house to get to him because he refused to surrender himself. He’s been charged with laundering money by having had a company related to him take a bribe to approve a foreign investment in the company of someone else who was charged for murder a year (or two) ago. Predictably, observers (and Chidambaram’s party mates) call this politically motivated vendetta – the party that he harassed for the longest time is in power now. There’s never a dull moment in Indian politics.

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