Twitter is recruiting! New user signups are at an all-time high! But is this indicative of user growth or is it just that Elon got rid of too many employees, including the people that used to monitor fake accounts?

The lowdown

• 🇨🇳 Commodity prices sink as Covid threatens to derail economic activity in China.

• 💰 Twitter signups at an all-time high but the company has lost 50 of its top 100 advertisers.

• ⚽️ Manchester United sale would require a ‘landmark valuation’.

Flex your finance muscle 💸💪

Just like a mongoose can take care of your snake problem (if you’re unfortunate enough to have such a problem, that is), today, we’ll be looking at another pretty useful PEST.

What is PEST Analysis, and how do I use it?

As the picture above says, PEST stands for Political, Economic, Social and Tech. If you’re from the UK, you might be familiar with PESTLE, which includes Legal and Environmental factors. It’s a handy tool that can be used used to analyse the market for a business or organizational unit, and determine whether we should be prepared to hide from a bear, or grab a bull by the horns.

Using PEST Analysis, financial decision-makers can identify effective strategies that will aid in resource allocation for their business, as well as road mapping and controlling a variety of mechanisms within the company, including spending.

The acronyms speak for themselves, but the benefits of using such a simple Analysis tool may not be so clear, so let’s break it down. PEST Analysis:

• Provides an understanding of the wider business environment.

• Encourages the development of strategic thinking.

• Straightforward and only costs time to do.

• May raise awareness of threats to a project.

• Can help an organisation to anticipate future difficulties and take action to avoid or minimise their effect.

• Can help an organisation to identify and exploit opportunities.

Let’s use a very basic example of a COO at a traditional insurance firm using PEST Analysis to analyse threats to their business model, in this case, artificial intelligence. So, said COO is looking at Technology.

The first threat is that competitors can suddenly adopt more streamlined account management systems that younger consumers are more likely to opt for. Then, there’s the question of competing on price – perhaps AI is driving costs down, thus forcing the COO to lower their own margins. Finally, what of the threats involved if the COO decides to adopt AI themselves? Are they equipped to deal with potential program bias and the lawsuits that may follow? Can they adopt software effectively without driving the business into a financial hole?

It may seem like a very basic model but sometimes, the simple solutions are the best place to start, and perhaps adopting a PEST Analysis model as a first-look process could save a lot of wasted time down the line.

If you want to know more, you can read even more about PEST Analysis from every economics student’s best friend: Investopedia.

Featured stories

A decade on from the LIBOR rate rigging scandal

LIBOR – the London Interbank Offered Rate – is an interest rate calculated from estimates submitted by leading London banks. The rate was once used to price hundreds of trillions of dollars in financial contracts, though is now much less ubiquitous and will be phased out entirely by the middle of 2023.

The principal reason for the replacement of LIBOR is the rate rigging scandal that came to light in 2012. Participating banks were supposed to submit the actual interest rate they would expect to pay for borrowing from other banks so that an average could be calculated. Instead, member banks colluded to influence the LIBOR rate by falsely inflating or deflating their estimated rates. The banks then made hundreds of millions of dollars through trades based on the movement of LIBOR.

The alleged ringleader of the scheme, and its most successful participant, was UBS trader Tom Hayes, who singlehandedly made more than $260 million for his employer using this method. Hayes was initially sentenced to 14 years in prison for his role in the scheme though was released after five and a half years.

Ten years on, all US trial convictions relating to Libor “rigging” have now been reversed ($). 

Hayes contends that, while he may have been the LIBOR scheme GOAT, he has also been the LIBOR scheme scapegoat, and plans to submit a fresh appeal to overturn his conviction in the UK.

The content we're consuming today

• FT: EY attempts to smooth path to vote on radical break-up ($).

Off-balance sheet items

• If you want to go deeper into the LIBOR rate rigging scandal, check out David Enrich’s book ‘The Spider Network: The Wild Story of a Math Genius, a Gang of Backstabbing Bankers, and One of the Greatest Scams in Financial History.’

The bottom line