Jeff Bezos Really Wants To Beat Elon Musk To Space, Plus The Problems With Financial Stability
Yesterday, Sammy the spam monster paid Brewers a visit, and boy was he hungry. This left many of you hanging, and all we can say is we promise to do better. Thankfully, today is National Beer Day, which can only mean good things. Here’s your refreshing Brew for April 7th.
TRIVIA QUESTION OF THE DAY
- Stocks closed slightly higher on Thursday, led once again by the energy and financial sectors, as China’s President Xi Jinping landed in Florida to meet with President Trump
- But there was more action later in the day, with the U.S. launching targeted airstrikes against Syria in retaliation for an apparent chemical attack. This put investors on edge, with Dow Jones stock futures down over 100 points overnight
Comcast: “Can I have yo numba?!”
Xfinity Mobile, Comcast’s long awaited entry into the mobile service space, is finally official. Philadelphia-based Comcast is by far the nation’s largest cable provider, with 29 million subscribers. But with over 400,000 households ditching cable last quarter alone, cable companies are frantically searching for ways to keep them on board. Cue the mobile push: Comcast’s main competitors, AT&T and Verizon, already offer similar mobile packages.
Consumers: “Cell phones…what? why?”
Cell phone plan prices have plummeted over the last four years, with carriers unleashing unlimited plans, free phones and zero contracts in an effort to grow. And grow they have. So it’s no surprise why cable companies want a piece of the action. Phone screens are getting bigger, and new options like Netflix’s offline streaming mean consumers want more than good ‘ol TV.
We have ourselves a fiesta
More competitors often mean better prices for consumers, and at $45 a month, Xfinity Mobile will easily be the cheapest unlimited wireless data plan. Meanwhile, Verizon is rapidly upgrading its network to work with more “internet of things” devices. At the same time, Connecticut-based Charter Communications is looking to offer a similar package to Comcast’s by 2018. Can you hear me now?
Spread’s the Word
Yesterday, consumer goods giant Unilever announced plans to sell its shrinking spreads division, and will soon take its mid-2000s stars “I Can’t Believe It’s Not Butter” and Country Crock brands off shelves. Looks like efforts to keep things #real have finally led to the fall of margarine. Unilever’s restructuring could fetch between $8.5 and $9.5 billion for the conglomerate—keeping investors happy as ever. Kraft Heinz failed to butter up Unilever earlier this year with its $143 billion takeover offer, but Unilever’s own smooth acquisition strategies seem to be going strong. Last year, Unilever spent $1 billion to purchase Dollar Shave Club, leaving us wondering what’s next.
Lyft Rides On
Uber’s largest competitor has raised a fresh $500 million funding round—this time at a hefty $7.5 billion valuation. While the San Francisco-based ride hailing company didn’t disclose any new investors, previous rounds have included General Motors and China’s Alibaba. Lyft currently operates exclusively in the U.S., where it controls just 15% of the market in terms of revenue. Time to play catch up.
This week wasn’t without speed bumps for both companies, however. In Massachusetts, 8,206 Uber and Lyft drivers failed criminal background checks. That’s about 11% of the roughly 71,000 drivers who had already been screened by the companies. Both Uber and Lyft have spoken out against the state’s findings, saying the requirements are too tough.
Musk, Meet Bezos
Amazon founder Jeff Bezos says he will sell $1 billion of Amazon stock each year to fund his commercial space venture, Blue Origin, as it races to beat SpaceX to private intergalactic tourism. At the Space Symposium in Colorado Springs, Bezos showed off his spacecraft, which, like SpaceX’s recently successful Falcon 9, is also reusable. Both companies agree this technology can cut costs up to 30%.
New Glenn, as the ship is known, should be ready to fly by 2020. But competitors are already in the sky: Elon Musk’s SpaceX has already reused a rocket (and blown up a few in the process). And though it hasn’t actually flown passengers, people have already reserved $250,000 worth of tickets to travel with Richard Branson’s Virgin Galactic. New Glenn is the only craft so far to have windows, if that affects your vacation plans.
What Else Is Happening…
- Twitter is suing the federal government for seeking records related to anti-Trump users
- Amazon will hire 30,000 part-time workers in warehouses to continue its expansion
- Boeing continues to struggle, while competitor Airbus says it’s found more plane buyers
- Twitter founder Ev Williams has sold roughly $4 million worth of his stake in the embattled social network
- Monday: March Auto Sales (-); PMI Manufacturing Index (-); Gallup U.S. Consumer Spending Measure (+/-)
- Tuesday: Redbook (+)
- Wednesday: Bed Bath & Beyond (+), Monsanto (+), Walgreens (-) Earnings; Fed Meeting Minutes
- Thursday: Fed Balance Sheet; Money Supply
- Friday: Cargill Earnings; March Jobs Report
The Problems With Financial Stability
Following the financial crash of 2007, lawmakers and economists worked overtime to pass the Dodd-Frank Act, aka the legislation aimed to regulate risky Wall Street behavior and protect the economy from another dangerous recession.
While it’s not easy to measure its impact so far, new research from the University of Zurich and the London Institute for Mathematical Sciences reveals some downsides associated with this kind of market regulation:
- While regulatory structures—like those imposed by Dodd-Frank—may protect individuals and single institutions, they actually could make the entire system more susceptible to huge swings.
- Using computer models, researchers found that as more connections between institutions were created, the chance of a cyclical swing taking out even more firms was greatly increased.
- President Trump has promised a “major haircut” for the Dodd-Frank Act, and banks have long bemoaned the amount of data and compliance work involved in the current process.
Interview Question of the Day
You have someone working for you for seven days and a gold bar to pay him. The gold bar is segmented into seven connected pieces. You must give him a piece of gold at the end of every day. What and where are the fewest number of cuts to the bar of gold that will allow you to pay him 1/7th each day? (Answer)
Stat of the Day
25-35%: that’s the amount of alcohol-related car crashes in NYC that ride-sharing services like Uber and Lyft have reduced, according to a new working paper from the City University of New York.
Yesterday’s Market Snapshot said the Federal Reserve’s budget sheet was $4.5 billion. It is $4.5 trillion. We should’ve known better.
Also, yesterday’s Water Cooler said McDonald’s yearly revenue was $6 billion. That’s just three months of the fast food giant’s $26 billion yearly income. We hope to make even a fraction of that in a lifetime…