Uber Pumps The Brakes On Autonomous Cars, Plus Everyone Is Leaving The Midwest And Moving South

Enjoy your March 27th hand-crafted Brew!


“Bro, I’m going rogue” — Guy Gentile, former stock market manipulator turned FBI informant, who reveals his made-for-Hollywood story of how he double-crossed the FBI. Where’s he at now? Trying to make a movie starring himself, and getting a license plate saying “F—YOUDOJ.” Let’s see how that works out for him.

Market Snapshot

  • Markets finished mixed on Friday as investors reacted to House Republicans pulling the American Health Care Act. On one hand, the President can now focus on tax reform, but on the other hand, this does create concern around the administration’s effectiveness
  • Oil prices broke a four-day losing streak, still down 1.7% on the week as the U.S. rig count saw its 10th straight weekly rise, showing that OPEC’s supply cut may not have been enough to stabilize prices

Uber Pumps the Brakes

…On autonomous cars. Self-driving cars have proven to be a messy investment for many companies, and Uber is no exception. After one of Uber’s autonomous cars crashed in Arizona on Saturday, the company has decided to suspend its pilot program for driverless cars. Uber claims the vehicle was not at fault in the collision, so the company plans to resume the program after an investigation of the crash—but Uber isn’t taking the situation lightly. After the problematic #DeleteUber campaign, not to mention the viral video of CEO Travis Kalanick getting into a heated argument with an Uber driver, this crash is just the cherry on top of Uber’s bad luck sundae.

Oops, I Did It Again

…German bank KfW accidentally transferred hundreds of millions of dollars…again. Let’s take a quick trip down memory lane. In 2008, KfW gained notoriety after accidentally transferring more than 300 million euros to good ol’ Lehman Brothers…on the same day that Lehman filed for bankruptcy. And as if that wasn’t embarrassing enough, it was revealed last week that KfW found itself in a similar situation in February thanks to a technical glitch, mistakenly transferring $5.4 billion to four different banks. Yikes. Luckily, KfW was able to recover the money, but not before suffering the brutal reputational trauma of being called “Germany’s dumbest bank.” Better luck next time, KfW.

Blackstone Finally Unloads a Major PR Headache

…And turns a handsome profit too. After holding onto SeaWorld (+4.74%) for nearly seven years, The Blackstone Group (-0.70%) sold off its stake in the controversial company to a Chinese investment firm with a final sales tag that tripled its initial investment. The home run closed an ugly final chapter for Blackstone’s investment, primarily thanks to the documentary “Blackfish,” which uncovered the mistreatment of orcas by SeaWorld. Was the juice worth the squeeze? We’ll let you decide on that one.

Twitter’s Trying New Things

…Because it had to. You’ve heard it everywhere: the social media giant’s advertising revenue has been contracting. So far, Twitter (+1.41%) has focused on advertising to its 319 million users as its main revenue stream. But with declining user growth, it’s failed to generate a consistent profit. Cue new ideas: Twitter is now considering building a premium version of Tweetdeck interface, targeting marketers, journalists and professionals. The move would mark the company’s first foray into a subscription-based revenue model. This isn’t a new concept—LinkedIn uses a joint subscription and advertising revenue model successfully. Let’s hope Twitter can too.

What else happened this weekend…

Economic Calendar

  • Monday: Dallas Fed Manufacturing Survey
  • Tuesday: Redbook, State Street Investor Confidence Index; Carnival Corp, Dave & Buster’s, McCormick Earnings
  • Wednesday: Pending Home Sales Index; Lululemon Earnings
  • Thursday: GDP, Jobless Claims, Farm Prices, Fed Balance Sheet, Money Supply
  • Friday: Baker-Hughes Oil Rig Count, Consumer Sentiment; BlackBerry Earnings

Water Cooler

Midwesterners Are Flying South For Winter—and Not Coming Back

Recently released population estimates by the U.S. Census Bureau paint a bleak picture of the Midwest. City and county data from July 2015 to July 2016 show that talks of urban renewal projects designed to revitalize cities like St. Louis, Detroit and Baltimore haven’t had a measurable impact on population trends, CityLab reports. Here are the highlights from the study:

  • The three counties with the largest decline in population were Cook County in Illinois (Chicago), Wayne County in Michigan (Detroit) and Baltimore City in Maryland. Cook County saw by far the largest decrease, with a population loss of 21,000 over the 12-month period.
  • St. Louis experienced the largest population loss for any city, with a 1.1% decline (3,500 residents). But these cities weren’t alone: the 146 most densely populated counties in the country lost over 539,000 residents in total over the 12 months.
  • So where’s everyone going? Two places: the suburbs and the Sun Belt. The two largest-gaining counties were Orange County in Florida (Orlando) and Clark County in Nevada (Las Vegas). Disney World and Vegas? We can’t really blame them…

The Breakroom

Interview Question of the Day

How attractive is the retail sector for a growth investor? (Answer)

Video of the Day

Ever wonder what a nuclear reactor starting up and shutting down looks and sounds like? Take a look at this new video of the Breazeale Nuclear Reactor at Penn State. Warning, headphone users—the video can get a little loud.

Stat of the Day

4.3 million: that’s the number of tipped employees in the U.S., who often aren’t subject to minimum wage requirements. Andrew Puzder, the former fast food CEO who withdrew his consideration for labor secretary, has been harshly criticized by activists for opposing increases to the minimum wage. His replacement, Alexander Acosta, has also prompted outcry.

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