☕ Election leftovers

Binance doesn’t want FTX’s baggage... November 10, 2022 [View Online]( | [Sign Up]( | [Shop]( [Morning Brew]( TOGETHER WITH [Athletic Greens]( Good morning. The official starting pistol of the holiday season just went off: Linsday Lohan’s Christmas movie, Falling for Christmas, arrives on Netflix today. It’s Lohan’s first starring role in a film since 2013. And if it doesn’t end in a dramatic race through an airport on Christmas Eve to tell a guy that she met a week ago she loves him, we will riot. —Neal Freyman, Abby Rubenstein, Matty Merritt MARKETS Nasdaq 10,353.18 -2.48% S&P 3,748.57 -2.08% Dow 32,513.94 -1.95% 10-Year 4.098% -3.5 bps Bitcoin $15,728.91 -15.12% Ethereum $1,100.60 -17.04% *Stock data as of market close, cryptocurrency data as of 4:00am ET. [Here's what these numbers mean.]( - Markets: The “red wave” we were all expecting finally happened—but on Wall Street, not in DC. Stocks [snapped]( their three-day winning streak as the fate of Congress remained unclear one day after the midterms. Meanwhile, cryptocurrencies plunged and bitcoin sank to its lowest level in almost two years after one of the industry’s biggest firms imploded (more below). - Economy: It’s a big day for anyone trying to read Jerome Powell’s tea leaves, because the October consumer price index report gets released this morning. Economists expect to see the annual inflation rate come in at 7.9%, so anything higher is likely to spark fear that the Fed could get even more aggressive with its rate hikes.  CRYPTO [Binance to FTX: ‘I can’t fix you’]( [Sam Bankman-Fried]( Tom Williams/Getty Images Binance’s affair with FTX was just a one-night stand. After agreeing to take over FTX on Tuesday, Binance said it was [walking away]( from the deal yesterday, leaving its collapsed rival exchange on the brink of extinction. Facing a shortfall of up to $8 billion, FTX Chief Executive Sam Bankman-Fried (aka “SBF”) reportedly told investors that his firm needed a cash injection or it would go bankrupt. Quick recap: On Tuesday, SBF tweeted the stunning news that his company was going to be bailed out by rival Binance after FTX suffered mass withdrawals. Why was this so shocking? FTX is a giant in the space and was considered a source of stability amid the chaos of crypto winter. Recently valued at $32 billion, it was reportedly going to be bought for $1. But even $1 proved too pricey for Binance once it found the 12-foot skeletons in FTX’s closet. The company took a look at FTX’s books yesterday and saw a “[financial black hole](,” Bloomberg wrote. Plus, US regulators smelled blood and have started to investigate whether FTX mishandled customer funds. Binance had no interest in taking on that baggage. This episode is a disaster for crypto FTX’s meltdown could single-handedly wipe out whatever legitimacy the crypto industry had left. Don’t take it from us—here’s what crypto execs themselves said about it. - Binance CEO Changpeng “CZ” Zhao said the FTX calamity was not “a win” and had “severely shaken” confidence in crypto. - “That’s a not a good thing for anybody,” Coinbase’s CEO Brian Armstrong said. Why? It has to do with regulation. SBF frequently visited Washington, DC, to work with lawmakers on regulating the Wild West of crypto. But with crypto’s most trustworthy diplomat left holding the bag after an epic collapse, regulators who feel duped could try to buckle the industry. The most humiliation in this entire episode is, of course, reserved for SBF himself. When he was at the top of the crypto world, the 30-year-old billionaire discussed his grand ambition of giving away his fortune to help humanity. Now, there’s little fortune left. On Tuesday, SBF’s net worth plunged from $15.6 billion to less than $1 billion. That 94% evisceration is the worst one-day wipeout for a billionaire ever tracked by Bloomberg. We’ll be diving deeper into this story in our Incrypto newsletter later today. [Sign up here](.—NF �  �  �  mailto:?subject=Check%20out%20this%20story%20from%20Morning%20Brew%21&body=Binance%20to%20FTX%3A%20%E2%80%98I%20can%E2%80%99t%20fix%20you%E2%80%99%3A%20https%3A%2F%2Fmorningbrew.com%2Fdaily%2Fstories%2F2022%2F11%2F09%2Fcollapse-of-ftx-delivers-major-setback-to-crypto-industry%3Futm_campaign%3Dmb%26utm_medium%3Dnewsletter%26utm_source%3Dmorning_brew%0A%0AWant%20more%20great%20content%3F%20Subscribe%20to%20Daily%20Brew%20%E2%80%94%20Delivering%20the%20latest%20business%20news%20from%20Wall%20St.%20to%20Silicon%20Valley%20daily.%0Ahttps%3A%2F%2Fwww.morningbrew.com%2Fdaily%2Fr%2F%3Fkid%3D4904f90a%26utm_source%3Demail_share%0A TOGETHER WITH ATHLETIC GREENS [Start with your gut]( [Athletic Greens]( Ya know, that part of your body that gets credit for helping you avoid sticky situations, can sometimes cause tummy issues, and is also connected to every other system in your body? Sounds pretty important, right? [Athletic Greens]( gets it, which is why they created AG1—a powder that contains a whopping 75 high-quality ingredients to support full-body health, beginning with your gut. AG1 by Athletic Greens is more than just, well, greens. It supplies necessary multivitamins/minerals, pre/probiotics, immune support, digestive support, and more, all in a single scoop. Start every day with the nutrients your body needs. [Get your gut feeling good with AG1 by Athletic Greens](. WORLD [Tour de (election) headlines](#) [Georgia Senate candidates Raphael Warnock and Herschel Walker]Source: Getty Images This might take a minute…it’s unlikely we’ll get our answer on which party will control Congress any time soon—especially after yesterday’s news that the Georgia US Senate race between Raphael Warnock and Herschel Walker will be decided by a [runoff]( vote on Dec. 6. We might know about the Senate before then, depending on the outcome of close races in Arizona and Nevada that haven’t been called yet. As for the House, it’s still too early to say, but things are looking good enough for Republicans that President Biden started talking about how he plans to work with them. Voters in conservative states rejected anti-abortion measures. While victories for abortion rights in California, Vermont, and Michigan were expected, voters in more conservative states Kentucky and Montana also went the same way. In Kentucky—where abortion was banned shortly after the Supreme Court overturned Roe v. Wade—voters nixed a proposed [state constitutional amendment]( aimed at protecting the state’s ban. Montana voters, meanwhile, voted against a referendum that would have criminally penalized healthcare providers who did not provide medical care for “infants born alive after an abortion.” Election denial wasn’t popular with voters—so far. State-level secretary of state elections aren’t usually followed by anyone besides politics junkies, but they were Tuesday since several candidates who disputed the legitimacy of the 2020 presidential race were up for the job, which includes oversight of elections. In Michigan, New Mexico, and Minnesota, election-denying candidates [lost]( to Democratic opponents. But one did win in Indiana, and it’s still too soon to say what will happen in the secretary of state contests in Nevada and Arizona. BIG TECH [If you get laid off in the metaverse, you get laid off IRL]( [Mark Zuckerberg with a cloud above his head]( Illustration: Francis Scialabba, Photo: Anadolu Agency/Getty Images Meta [announced]( its largest-ever round of layoffs yesterday, letting go of 13% of its workforce (11,000 people). The parent company of Instagram, Facebook, and WhatsApp has been trying to make the jump from social media powerhouse to metaverse builder since Zuck changed its name to Meta in October 2021. To do so, it hired like crazy. In September, Meta’s headcount hit 87,314, its highest ever. But after essentially blowing raspberries in its last two quarterly earnings reports, Meta had to take drastic measures to cut costs. Zuckerberg faulted himself, [telling employees]( he takes “full responsibility for this decision.” But he also blamed external factors. He said that e-commerce dropping back to pre-pandemic levels and difficulties securing ad spending thanks to a lot more competition (i.e., TikTok) “caused our revenue to be much lower than I’d expected.” Big picture: According to Crunchbase, 50,000 American tech workers have been laid off since the start of 2022. But to put it in perspective, that number accounts for less than 1% of the 6 million tech employees in the US.—MM �  �  �  mailto:?subject=Check%20out%20this%20story%20from%20Morning%20Brew%21&body=If%20you%20get%20laid%20off%20in%20the%20metaverse%2C%20you%20get%20laid%20off%20IRL%3A%20https%3A%2F%2Fmorningbrew.com%2Fdaily%2Fstories%2Fmeta-layoffs-cut-13-percent-of-its-workforce%3Futm_campaign%3Dmb%26utm_medium%3Dnewsletter%26utm_source%3Dmorning_brew%0A%0AWant%20more%20great%20content%3F%20Subscribe%20to%20Daily%20Brew%20%E2%80%94%20Delivering%20the%20latest%20business%20news%20from%20Wall%20St.%20to%20Silicon%20Valley%20daily.%0Ahttps%3A%2F%2Fwww.morningbrew.com%2Fdaily%2Fr%2F%3Fkid%3D4904f90a%26utm_source%3Demail_share%0A CLIMATE [US gets shunned after its carbon offset proposal]( [Characters in the movie Mean Girls saying ]( Mean Girls/Paramount Pictures via Giphy A major theme of this week’s COP27 climate summit has been getting rich nations that have generated heaps of emissions to help poorer countries deal financially with the repercussions of climate change. And yesterday the US proposed its solution: getting [companies]( to cough up the cash instead. What’s the plan? The proposal laid out by US Climate Envoy John Kerry would let businesses pay to offset their own emissions by funding developing nations’ transition to clean energy. Kerry had the awkward job of launching the plan the day after the UN secretary-general criticized shady carbon offsets, but he insisted the US plan is different because the credits can only be used to phase out coal-fired plants in developing nations. Still, Kerry’s speech was briefly interrupted by a heckling climate activist, and the initiative hasn’t gotten a warmer reception from climate advocates or other countries since then. Why does everyone hate it? It’s not only that critics of carbon offsets describe them as mere greenwashing that lets companies keep polluting, but also that it sure looks to the rest of the world like the US is trying to avoid paying its fair share—even as several European countries have offered to pitch in with direct aid. One problem: The current US political environment probably makes giving billions in financial aid (which would require congressional approval) impossible, so this may be Kerry’s best offer.—AR �  �  �  mailto:?subject=Check%20out%20this%20story%20from%20Morning%20Brew%21&body=US%20gets%20shunned%20after%20its%20carbon%20offset%20proposal%3A%20https%3A%2F%2Fmorningbrew.com%2Fdaily%2Fstories%2F2022%2F11%2F09%2Fnobody-likes-the-new-us-carbon-offset-proposal%3Futm_campaign%3Dmb%26utm_medium%3Dnewsletter%26utm_source%3Dmorning_brew%0A%0AWant%20more%20great%20content%3F%20Subscribe%20to%20Daily%20Brew%20%E2%80%94%20Delivering%20the%20latest%20business%20news%20from%20Wall%20St.%20to%20Silicon%20Valley%20daily.%0Ahttps%3A%2F%2Fwww.morningbrew.com%2Fdaily%2Fr%2F%3Fkid%3D4904f90a%26utm_source%3Demail_share%0A GRAB BAG [Key performance indicators](#) [Chart of DWAC over the past 5 days]DWAC stock performance over the last five trading days. Google Stat: If you think you can make money off your political savvy, you might want to consider trading the SPAC linked to Donald Trump’s Truth Social platform. Shares in Digital World Acquisition Corp., the company planning to take Truth Social public, [rise and fall]( with the former president’s political fortunes. On Monday, when Trump hinted he would announce another presidential bid soon, shares jumped 66%, but yesterday—after several candidates he backed lost their elections—they dipped nearly 20%. Quote: “Please note that Twitter will do lots of dumb things in coming months.” We are all just guinea pigs in Elon Musk’s [Twitter laboratory](. The new owner made rapid-fire changes to features yesterday, [eliminating]( a gray “official” label for prominent accounts that was launched a few hours earlier, and officially releasing the souped up Twitter Blue subscription (for Apple users only so far). He also held a public town hall with advertisers on Twitter Spaces to try and convince them to stick with the platform. Read: How to spot the next big corporate fraud. ([The Economist]() WHAT ELSE IS BREWING - [Russia]( has ordered a withdrawal from the Ukrainian city of Kherson, the only regional capital it held and the first major city it seized in the invasion. - [Amazon]( earned the dubious distinction of becoming the first public company to lose $1 trillion in market value after its market cap sank to ~$879 billion yesterday, down from a high of almost $1.9 trillion in July 2021. - [Volvo]( plans to only sell electric cars by 2030, and it just revealed its first one: an $80,000 SUV. - [Paul Allen’s]( art collection was auctioned off for more than $1 billion, breaking records, and the proceeds will go to charity as the late Microsoft co-founder directed. - [Oculus co-founder Palmer Luckey]( has designed the first VR headset that actually kills the user if they die inside the game they’re playing—though he says it’s just “office art” for now. BREW'S BETS They can’t all be winners: Vintage license plates are back in style, but things weren’t always better in the good ol’ days. Here’s a roundup of [the biggest fails](. Bad day? [Call this number]( to get a pep talk from a kindergartner. More Brew is always better: With its coverage of drones and robotics to climate tech and AI, Emerging Tech Brew keeps you up to date on the technologies shaping business and society. [Check it out](. Take five: Investors often say, “shoulda, woulda, coulda,” but [The Motley Fool]( can help investors try to avoid regrets. They’ve got on 5 growth stocks, all under $49 a share. Peep their picks [here]( for FREE.* Do more: Explore Web3 with Valora’s [user-friendly crypto wallet](. It makes it easy to do more with dApps—like diving into DeFi, collecting NFTs, or sending crypto to anyone in your contacts. [Download the mobile app](.* Get informed: Learn about the biggest business topics on our [Business Casual podcast](, sponsored by Purple—the mattress designed for overnight success. We’ve got fresh takes + honest convos with dynamic business leaders. [Listen here](.* *This is sponsored advertising content. GAMES [The puzzle section](#) Brew Mini: Do you know what college is located in Northfield, MN? That’s just one of the clues in today’s Mini. [Play it here](. Four Headlines and a Lie We don’t know if it’s the weather or something in the Starbucks holiday drinks, but the news was especially weird this week so...there’s a bonus real headline in today’s quiz. Four of these headlines are real and one is faker than telling yourself you’re going to bake a pumpkin pie from scratch for Thanksgiving. Can you spot the odd one out? - TSA agents [find]( gun inside raw chicken at Florida airport - New study finds house cats can tell your [mood]( based on what music you’re listening to - Texas high schoolers must [retake SATs]( after tests fly off UPS truck - Nurse [accused]( of amputating man’s foot for her family’s taxidermy shop - TikTok user [entombs]( bag of Cheetos to be opened in 10,000 years If you love Three Headlines and a Lie, [play along]( on The Refresh from Insider and dive deeper into these weird headlines. AROUND THE BREW [Avoid these 4 expensive open enrollment mistakes]( [Avoid these expensive open enrollment mistakes]( 🩺 When navigating the maze that is the healthcare open enrollment season, making just one mistake can wipe out months of savings. Money with Katie will help you make the best choices. [Listen]( or [watch]( here. The founder of pizza oven brand Gozney tells Alex about how he went from being a teen struggling with substance abuse to the builder of a revolutionary business—without having a degree. [Listen here](. Want to hold your own in front of the CFO? You’ll be able to after taking our [Business Analytics course]( beginning January 23. Use code THANKFUL on the last question of the application to get $100 off. Lucky Charms lip gloss, anyone? Hear how General Mills uses ideas from anywhere to keep them not only front of shelf, but also front of mind at [The Brief](. ANSWER We made up the house cat study. � � � � � Written by [Abigail Rubenstein](, [Neal Freyman](, and [Matty Merritt]( Was this email forwarded to you? Sign up [here](. WANT MORE BREW? 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