There’s Trouble In Samsung’s Paradise, Plus Hurricane Harvey’s Impact On Oil Refineries
“Nothing sedates rationality like large doses of effortless money.”
Timeless words from Warren Buffett.
- The Dow and S&P got a boost from most sectors showing solid weekly gains.
- Asia stocks gained despite policy uncertainty in D.C.
- Oil ended higher as a result of Hurricane Harvey.
- Uber voted on Expedia’s Dara Khosrowshahi to be its next CEO—he has yet to accept.
Trouble in Samsung’s Paradise
Prison Guard in slow, monotone voice: “**Thank you for serving time at the South Korean Correctional Institute. Please find the burnt Samsung Galaxy Note 7 you arrived with in the manilla envelope.”
Okay…hands up…we’re not exactly sure how it’ll go down five years from now, when Lee Jae-yong (heir to the Samsung empire) finishes his prison sentence.
What we do know? This past Friday, Lee was sentenced to that time for years of bribery, and corruption.
But…I own a Samsung. Does that make me an accomplice?
Of course not, so let’s set the record straight. Samsung, the $254 billion tech conglomerate and major driver of South Korea’s economy (one-fifth of its exports), has all the makings of a Netflix original drama.
It has a de facto leader (meaning the President isn’t picked—it’s their inherited right to lead), a history of bribery and corruption, and is part of a syndicate of family-lead, multinationals that wield power over the South Korean government.
Well that sounds corrupt. So what happened this time?
Jae-yong who took the helm (by default) after his father’s heart attack in 2014, was primarily found guilty of bribing former South Korean President Park Geun-hye in order to guarantee key Samsung deals.
We’re talking $5.7 million in Samsung money thrown at the President’s close friend, Choi Soon-sil, for his daughter’s equestrian training.
Six figures and 60 horse rides later, Samsung closed a questionable merger of two affiliate companies, allowing Lee to wipe out a large inheritance tax he had to pay.
Naturally, Lee and Samsung will appeal, but for the time being, it’s a big win for a country that’s looking to place a bigger divide between business and politics.
Yellen Takes a Stand
Critics believe a repeal of Dodd-Frank and other regulations would free businesses’ access to funding. Our fearless Fed Chair begs to differ. Yellen is certain these policies have “boosted resilience [against financial crises] without limiting credit availability or economic growth.”
If you are pro-regulation, and pro-Yellen, heed her words now—with Yellen’s term expiring in February, this is likely to be one of her last hurrahs.
Watch What You Say About Harvey
When Hurricane Harvey, the Category 3-4 hurricane, made landfall this weekend, it took aim at any oil refineries in its path. And that’s a big deal.
Nearly one-third of the U.S.’ oil refining capacity is at risk, while Corpus Christi, a major port for crude export (1 million barrels a day), has been most affected by the storm. And if Harvey continues to wreak havoc, the price of oil will see a jump in the short run.
Even worse, reports place 232,721 homes in Harvey’s path of destruction, which could cause up to $40 billion in damages.
A message from the Brew Crew: what happened this weekend in Texas was a national tragedy and our hearts go out to anyone who was affected by the hurricane.
It’s Not Us, It’s You
The White House slapped a ban on all U.S. investments in newly-issued Venezuelan debt—the latest sign of American opposition to an oppressive government regime and a failing domestic economy.
The tactic limits key financing that would create unnecessary links between the U.S. and Venezuela, along with fueling the country’s “illegitimate rule.”
So what exactly is all the fuss about? Well, critics of President Nicolas Maduro say he has lead a once democratic country into a dictatorship, leaving millions without food and medicine, while allowing inflation to surge 720% (the Fed shoots for 2%).
With this executive order, Venezuela’s economy will have fewer ways to fund its oil-dependent (95% of all export revenue) economy.
Morning Brew 2017 Fall Internship Program
Brew Crew is proud to introduce Morning Brew’s inaugural Internship Program, a 10-week, invite-only experience for our community’s most passionate and ambitious college readers. Here’s the quick and dirty: if accepted, you and 49 peers in the Fall cohort will walk away from the internship with two major takeaways:
- Recruit 1,000 people from your campus to the Morning Brew community (with hands-on help from the Brew Crew, of course)
- Receive a high quality, two-part education that:
- Helps you secure the internship or job of your dreams
- Prepares you for real-world skills not taught in college
What are you waiting for?
Apply to the internship HERE
What Else Is Happening…
- It’s looking like the new iPhone 8 will retail at $999 starting September 12th—mark your calendar.
- At least 10,000 Chevy Bolts sold to date contain a battery issue.
- Vietnam is putting legislation in place to legalize Bitcoin as a form of payment.
- Google is refunding ads on sites with fake traffic.
- Friday (August 25th):
- Earnings: No Events Today
- Economic Calendar: Durable Goods Orders (-), Baker-Hughes Rig Count (-)
- Earnings: McGraw-Hill Education, SolarCity, T-Mobile
- Economic Events: No Events Today
- Earnings: Altaba, Best Buy, Dole Food, H&R Block, SoulCycle
- Economic Events: Redbook, Consumer Confidence
- Earnings: Five Below
- Economic Events: MBA Mortgage Applications, ADP Employment, GDP, Corporate Profits, Petroleum Status Report, Farm Prices
- Earnings: Campbell Soup, Lands’ End
- Economic Calendar: Chain Store Sales, Jobless Claims, Chicago PMI, Consumer Comfort Index, Pending Home Sales, Money Supply
- Earnings: No Events Today
- Economic Calendar: Motor Vehicle Sales, PMI Manufacturing Index, Construction Spending, Consumer Sentiment, Baker-Hughes Rig Count
From the Crew
ALEX: To Black Rock City
Nothing fuels my interest in community and movements more than Burning Man. Beginning Sunday, 70,000 people (ranging from artists to CEOs) will embark on the desert, for a journey through self-expression, self-reliance, community, and art. Most fascinating is the evolution of this event from a two-man show on Baker Beach in 1986 to a massive zeitgeist that brings in over $36 million in revenue (as of 2015).
LAUREN: Sandberg gets “Personal”
“Personal brand” seems to be the latest pressure plaguing young professionals. From how we conduct ourselves in a business setting to whether or not we post a picture on social media, everything is about creating a consistent and impressive perception. Or is it? In an interview with Adam Grant, Sheryl Sandberg explains her issue with personal branding and why humans are too complex to be packaged.
MICHAEL: Fantasy Football Feels
If in the last week you’ve said to yourself, “Wow, I’m vastly unprepared for this upcoming fantasy football draft,” you’re not alone. It’s been a long summer and i’ve got some money on the line. If you’re feeling anything like me right now…
JOSH: Spotify Knows All
When asked, “what music are you into?” I shrug my shoulders. Well, the data wizards over at Spotify.me have answered. Their ability to classify me as a “fitness-enthusiast” that is “high energy” is incredibly interesting (and flattering). And who knew that I listened to so much indie pop and modern rock? I didn’t even know those were genres…
Question of the Day
Steve traveled the first 2 hours of his journey at 40 mph and the last 3 hours of his journey at 80 mph. What is his average speed of travel for the entire journey?
- 60 mph
- 56.67 mph
- 53.33 mph
- 64 mph
- 66.67 mph
Who Am I?
- I launched the first iPad-only daily newspaper.
- I bought Myspace for $580 million in 2005.
- My own newspaper website, The Sun, was hacked and reported me dead of a drug overdose. Of course, I was fine.
- I starred as myself in two episodes of the Simpsons.
Stat of the Day
Feeling innovative? Coca-Cola is offering $1 million in prize money to the person who discovers the recipe for a low-calorie sweetener that tastes the same as sugar.
For all the sales that would be generated, you’d think the reward would be a little bit sweeter.
You may have noticed those shiny blue buttons at the bottom of each story. No, we’re not secretly communicating with aliens through hieroglyphics. But we have found a simple way for you to share individual stories in the Brew.
Make sure your family knows that your Amazon Prime membership will lead to discounts at Whole Foods. And get your buddies pumped for the boxing match this Saturday. All you have to do is just click on your favorite social media icon and share it far and wide.
Because the aliens are coming…👽👽👽👽👽