A landmark moment for Wall Street
September 11, 2020 [View Online]( | [Sign Up](
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TOGETHER WITH
[Fundrise](
Good morning. Today, weâre pausing to reflect on two events that forever changed the world:Â
- Itâs the 19th anniversary of the September 11 terrorist attacks, which killed nearly 3,000 Americans. Â
- Exactly six months ago, on March 11, the World Health Organization declared the coronavirus outbreak a pandemic. More than 900,000 people around the world have died from COVID-19.
To all those whoâve suffered or lost loved ones in these tragedies, weâre thinking of you and sending strength.
MARKETS
NASDAQ
10,919.59
- 1.99%
S&P
3,338.95
- 1.77%
DJIA
27,534.25
- 1.45%
GOLD
1,950.20
- 0.24%
10-YR
0.680%
- 2.50 bps
OIL
37.06
- 2.60%
*As of market close
- Stimulus: Senate Democrats [torpedoed]( a $500 billion GOP bill they said was too small to make a difference. Chances of Congress passing another emergency aid bill before the election are dwindling.
- Jobs: Jobless claims remain [stable]( but at a very elevated level. Nearly 30 million people were on unemployment benefits last month.
BANKING
[Bad News for the Glass Ceiling Industry](
[Glass ceiling ]
Francis Scialabba
The HBO series may be delayed, but Citigroup provided its own succession story yesterday. CEO Michael Corbat [announced]( heâll retire next February after eight years, and current president and chief of the bankâs consumer arm, Jane Fraser, will slide into the CEO spot.Â
It's a landmark moment for Wall StreetÂ
Fraser will be the first female CEO of a major U.S. bank. And her resumé? Letâs just say she looks forward to high school reunions: Goldman Sachs â Harvard Business School â McKinsey â Citi.Â
- In fact, Corbat reportedly promoted her to the president position to keep her safe from other Wall Street recruiters.Â
But her career challenges reflect those faced by many women working on Wall Street, which you could call the father of all boysâ clubs. âYou cannot have it all,â Fraser [said]( in 2012. âMany things have had to give, personally and professionally."
Fraserâs appointment caps off a broader management refresh at Citigroup. The CFO, previous president, and two regional heads stepped down in the last couple years.Â
As for Corbat? Letâs roll the tape
Heâll be remembered like your freshman year relationship: got you through some challenging times, but if weâre being honest, nothing spectacular. Corbat [nursed the bank]( back to health after the 2008 financial crisis, but Citiâs performance has lagged a bit behind rivals.Â
- Citi missed the boat on expanding its deposits via physical branches. Peers JPMorgan and Bank of America hopped right on that yacht and sailed into significant funding advantages.Â
- Shares are up 42% since Corbat took over in 2012, compared to 141% for JPMorgan during the same period.Â
Speaking of which...JPMorgan [was expected]( to become the first major U.S. bank to name a female CEO after positioning two female execs for current boss Jamie Dimonâs job. But Dimon doesnât seem interested in stepping down anytime soon.
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ENVIRONMENT
[Wildfires Could Signal Coming Financial CrisisÂ](
[Wildfires in the west]
JOSH EDELSON/AFP via Getty Images
The August Complex, a group of 30+ fires north of Sacramento, is now the [biggest wildfire event]( in Californiaâs history by acres burned (at least 471,000).
These fires, which are burning throughout the West and have killed seven people, could be a warning sign of [climate change-induced financial crises]( to come, according to a report from the Commodity Futures Trading Commission.
What they found: Rising costs of storms, floods, fires, and droughts could create âa systemic crisis in slow motionâ in financial markets.
- Take California: An estimated 25% of the stateâs 12 million homes face high risk from wildfires. That has implications for mortgages, banks, home prices, and other financial assets.
- Insurers, already pulling back from fire-prone areas, could leave homeowners with uninsurable properties. Banks could limit loans to farmers after droughts lower crop yields. Falling home values on coasts and floodplains could cut citiesâ tax revenues.Â
Bottom line: Freak weather events were typically viewed by economists as localized shocks, but as climate change makes extreme weather more severe and frequent, thatâs changing.
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PUBLIC HEALTH
[What's the Blue Line?](
[COVID-19 cases in college towns]
[Indeed](
The orange line represents new COVID-19 cases in âall other U.S. countiesâ while the blue line isâ¦
College towns. As students returned to campus in late August/early September, college towns experienced a dramatic spike in cases compared to the rest of the U.S.
Why it matters: College towns must balance their [economic dependence]( on universities with public health concerns, the NYT explains. The good news is thereâs been no uptick in deaths in these areas.
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SPONSORED BY FUNDRISE
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LEGAL
[Thisâll Take You Back to 2019 Dinner Parties](
[Elizabeth Holmes]
Yichuan Cao/NurPhoto via Getty Images
Yearning for a time before COVID? We can helpâwith an update to the Theranos saga.Â
A judge's ruling Wednesday [revealed]( that former Theranos CEO Elizabeth Holmes may incorporate evidence of âmental disease or defectâ in her defense against criminal charges.Â
The backstory: Do you have six hours? Theranos was once a Silicon Valley darling that wooed marquee investors with promises of revolutionizing blood testing. But those promises didnât hold up well to criticism or journalism. In March 2018, the SEC [charged]( the company, Holmes, and former president Ramesh âSunnyâ Balwani with "massive fraud."
This filing shows that Holmes may plan to demonstrate that because of mental illness, she did not actually intend to do something wrong or illegal, and sheâll have to submit to an examination by government experts. Other experts say thatâll be tough to prove.Â
Looking ahead...the trial is scheduled for March 2021.Â
+ Optional homework: John Carreyrouâs excellent [Bad Blood]( and/or HBOâs mediocre [The Inventor](.Â
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INTERNATIONAL
[UK Plays Deal or No Deal](
[Brexit ]
Getty Images
Get yourself a cuppa, weâre checking in on our colourful cousins across the Atlantic. Yesterday, the European Commission threatened legal action against Britain unless it drops an internal bill that would [breach its Brexit treaty](.Â
- Britain is nearing the end of its transition year out of the EU, but after weeks of trade negotiations, PM Boris Johnson is antsy. He said both sides should move on if an agreement isnât reached by mid-October.
Itâs not just $1 trillion in trade with the EU at stake. The UK wants to fiddle with the open border between Northern Ireland (part of the UK) and the Republic of Ireland (part of the EU), which could lead it to run afoul of the 1998 Good Friday peace deal. U.S. House Speaker Nancy Pelosi [said]( if it does so, thereâs âno chanceâ of a trade deal with the states.
In coronavirus news...
To stem a rise in cases, the government [capped]( social gatherings at six starting Monday, with a few exceptions. New rules apply whether groups are outdoors or inside.Â
- Rising cases also complicate messages by officials trying to convince employees it's safe to [return to work]( in an effort to boost spending.Â
Looking ahead...Johnson [announced]( an ambitious plan to conduct millions of tests daily by spring. But some experts think his "moonshot" is âfundamentally flawedâ and based on rapid testing tech that doesnât exist.
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QUIZ
[Weekly news quiz](
When you see the weekly news quiz in the Brew, you know the weekend's almost here. That's why we like writing it.Â
An even better feeling? Getting a 5/5. [Ace the quiz here](.
WHAT ELSE IS BREWING
- [Esports streamer Ninja]( signed a multiyear deal with Twitch after leaving last year for the now-defunct Mixer.Â
- [Peloton]( sales grew 172% last quarter. Its biggest problem? Demand is outstripping supply, leading to supply chain issues. Â
- [Century 21](, the NY discount department store, filed for bankruptcy and will close all its stores.
- [Twitter]( said it would take down or label false tweets that aim to undermine public confidence in the election.Â
- [Hindenburg Research](, a short-seller, called electric truck maker Nikola a âfraudâ in a new report. Nikola fired back, accusing Hindenburg of manipulating the stock (which fell 11%).
- [Berghain](, the legendary nightclub in Berlin we definitely havenât gotten into, reopened as an art gallery this week.
BREW'S BETS
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A Fresh Prince clothing line? Yep, released yesterday to mark the 30th anniversary of the show's premiere. [Check it out](.Â
Remembering 9/11:Â One of our favorite pieces to revisit every year is Garrett Graff's oral history, "[We're the only plane in the sky](."Â
*This is sponsored advertising content
BREW ORIGINALS
[The Other Streaming Wars](#)
[Microsoft gaming]
Microsoft
Our Brew Originals series is back with another [longform article]( to keep you company this weekend.
Next Tuesday, Microsoft will mark a new era of gaming when it launches its "xCloud" game streaming service on Android. The Brewâs videogame expert Jamie Wilde will take you on a fascinating tour of the cloud gaming universe and explain why Big Tech is all-in on the technology.Â
[Read it here](.
FRIDAY PUZZLE
Despite what you may have learned, "i" comes before "e"...sometimes after "c."Â
How many words containing "cie" in that order can you name?Â
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FRIDAY PUZZLE ANSWER
A few our team came up with: glacier, efficient, society, and bankruptcies.Â
** A Note From Fundrise
We like to include this Fundrise [legal jargon](, if you please.
           Â
Written by [Alex Hickey](, [Eliza Carter](, and [Neal Freyman](
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