Life

The Obamas’ Next Chapter In Life Is Going To Be Very Lucrative, Plus U.S. GDP Misses

#Morning Brew
by Last Updated

Enjoy your March 1st hand-crafted Brew!

QUOTE OF THE DAY  

“Some people don’t like to take responsibility for their own shit. They blame everything in their life on somebody else. Good luck!” – Uber CEO, Travis Kalanick, gets into it with 37 year old Uber driver, Fawzi Kamal, who criticized the company’s fare cuts. Things definitely got heated, and the now-viral video of their exchange has left Uber in the limelight yet again.

Market Snapshot

  • All good things must come to an end: yesterday, the Dow finally snapped its 12-day winning streak, which was the index’s longest since 1987
  • Of course, the eyes of the nation were on President Trump’s highly-anticipated speech to Congress last night, with investors especially interested in any specifics on Trump’s economic plans—think infrastructure spending and tax reform. Unfortunately, details were light, to say the least, and the disappointment sent U.S. stock index futures lower during the speech

Commence the Cord Cutting

…YouTube reveals its own streaming TV service. Allow us to introduce YouTube TV: for $35/month, subscribers will receive access to major networks like FOX, NBC, CBS and ABC, in addition to around 30 of the biggest cable channels (including a special sports emphasis). The service allows for both live and DVR recorded content, and up to six users can access this content whenever they want. Pretty sweet. YouTube is hoping that the new streaming service, which will officially launch in the spring, will help woo younger consumers who have been known to cord cut (those darn millennials!). You can bet Netflix (-0.89%) and Hulu are taking notes.

Close, But No Cigar

…U.S. GDP misses. The second (of three) revisions for Q4 GDP came in at a 1.9% annualized rate, which not only missed expectations of 2.1% growth, but held steady with the figure released back in January. Although Q4 saw strong consumer spending (namely, a surge in healthcare spending), it wasn’t enough to offset downward revisions to business and government investment. Ya win some, ya lose some.

Location, Location, Location

…U.S. home prices had an unreal December. The December hike in home prices was the highest increase since June 2014. NBD. But before you think about moving out West, you should know that Seattle, Portland and Denver once again topped the charts with the largest year-over-year gains. There’s always next year.

The Only Thing Worse Than Bad News

…Is surprisingly bad news. Target (-12.17%) went two for two on that front yesterday after reporting pretty disastrous earnings that missed on revenue and same-store sales. To make matters worse, Target dropped earnings guidance for 2017 by over 20%, sending shares plummeting over 12% for its worst one-day performance since 2014. Yikes. Here’s the kicker: CEO Brian Cornell laid out a plan to become more price competitive going forward, which didn’t exactly sit well with Wall Street analysts. “Target should not chase Walmart on price…it is a battle that cannot be won.”

Watch Your Neighbor

…Because State Farm ain’t all there. After announcing its 2016 financial results, the ‘Farm reported an underwriting loss (the difference between premiums collected and premiums lost) of $5.5 billion, and a pre-tax loss of $1.2 billion. This is the most money State Farm has lost insuring cars in its 95-year history, undermining the change in the auto industry, particularly the insurance sector. As the economy has been strengthening, consumers have been more inclined to drive more, and to purchase cars with newer technology—bringing about an increase in vehicle repair costs and claims payouts.

Other Stories

Economic Calendar

Water Cooler

Living Large: The Obamas’ Lucrative Next Chapter

Having vacated the most powerful house in the free world, the Obamas are settling back into their lives as normal citizens. Don’t worry about their transition though—the former first family is set to come into a load of money over the next few decades. New research estimates that the former first couple stands to make as much as $242.5 million in the next 15 years. Better believe it:

  • To arrive at this calculation, researchers focused on lucrative books and speeches, while accounting for the $200,000 government pension they’ll earn as well. The Obamas were worth $1.3 million when they first entered the White House, and it’s only gone up from there.
  • Barack already has two best-selling books, the first published in 1995 and the second in 2006. Newer to the shelves will be the autobiographies both Michelle and Barack are expected to write about their lives in the White house, potentially worth up to $45 million.
  • And let’s not forget about the speaking engagements. In the 15 years since the Clintons left the White House, they earned on average $210,795 for each speaking engagement, which the Obamas could easily match. Maybe careers in public service do pay well…eventually.

The Breakroom

Interview Question of the Day

What is the next number in the following sequence: 58, 26, 16, 14, __ (Answer)

Business Term of the Day

Cord cutting refers to the process of cutting expensive cable connections in order to change to a low-cost TV channel subscription through over-the-air free broadcast through antenna, or over-the-top broadcast over the Internet. Cord cutting is a growing trend that is adversely affecting the cable industry. Netflix, Apple TV and Hulu (and now maybe YouTube) are some of the popular broadcasting services that encourage cord cutting.

Food for Thought

If you are wondering why some of your webpages were loading slower than normal yesterday, it is because Amazon’s AWS cloud computing division had a 4-hour outage, shutting down thousands of websites that use Amazon to store their content online. In fact, Amazon’s S3 system is used by 148,213 websites around the world to store videos, images or databases.
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