Together With
"Important to admit when Iām wrong & firing them was truly one of my biggest mistakes." ā Elon Musk (after "rehiring" Rahul Ligma and Daniel Johnson)
Good Morning! Former President Donald Trump officially announced a White House bid for 2024. Michael Lewis, author of Moneyball, says his next book is about Sam Bankman-Fried. It definitely wonāt be a gushing write-up, but SBF once claimed to be skeptical of books so we doubt heāll read it anyways.
FTX could owe more than 1 million creditors in its upcoming bankruptcy case. SBF is running out of ideas, posting cryptic tweets and attempting to raise fresh cash despite "failing."
A major Google investor called on the company to cut costs. Apollo will buy Credit Suisseās securitized products group. Prices of coffee futures are plunging, but $10 lattes in NYC probably arenāt going away any time soon.
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1. Story of the Day: Bummer for Banker Bonuses
A down year for Wall Street is expected to get even worse. Year-end bonuses are expected to be significantly lower than last yearās.
Investment banks havenāt had a great year. With interest rates rising, IPOs and M&A activity have dried up. Last year was a record one, and some banks foresee a 50% decline in investment banking revenue in 2022.
Thanks to the slowing economy, investment bankers can expect drastically smaller bonuses this year. Bonus reductions are expected to reach 40% to 45% for some.
Just last year nearly every bank felt understaffed in light of record deal flow, and many went on hiring sprees. But the pendulum has swung amidst deal-flow drying up. This year, many banks have even started laying off employees.
Investment bankers arenāt thrilled with the low bonuses. Investment banking morale isnāt very high even in lucrative years. Few bankers are likely to be satisfied with the same long hours yet lower pay. But it's not just investment bankers that have seen a decrease in their bonuses - hedge fund and private equity bonuses are down over 10%, too.
Takeaway: Investment banking bonuses have always known to be choppy. We are coming off a decade long bull market so many Wall Street-ers have forgotten what it's like to receive a smaller check than the prior year. Folks at smaller banks will likely face more volatile bonuses than their larger counterparts who can stomach the risk in a bear market.Ā With the Fed poised to keep interest rates high, 2023 could be another rough year for bankers.
2. Markets Rundown
If you want access to Wall Street insider interviews, industry deep-dives, and investment ideas, check out our Insiders newsletter.
Stocks rose on the PPI inflation report and China-U.S. relations data.
Movers & Shakers
(+) Taiwan Semiconductor ($TSM)Ā +11% after Warren Buffett's company bought a $4 billion stake in the company.
(+) Walmart ($WMT)Ā +7% after the company beat revenue expectations and announced a $20b share buyback.
(ā) Getty Images ($GETY)Ā -16% because the company missed revenue expectations.
Private Dealmaking
Weka, a data platform provider, raised $135 millionĀ
Lentra, a loans-as-a-service platform, raised $60 million
Brightside, a financial well-being platform, raised $33 million
GoFreight, a logistics startup, raised $23 million
Berkshire Hathaway disclosed a $4.1 billion stake in Taiwan Semiconductor
Bain Capital bought Mash, a Japanese apparel maker, for $1.4 billion
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Top Reads
CEOs and investors reckon with end of cheap money (CNBC)
Chinaās plan to support housing lifts stocks (Axios)
Goldman pushing back on notion tech layoffs are recession signal (YF)
How to reframe and solve a tricky life problem (Vox)
Tech layoffs are soaring this month (Axios)
Munger calls Muskās Tesla success a āminor miracleā in the car business (CNBC)
Fed could pivot sooner than what people think (YF)
Muskās all-nighters at Twitter worry Tesla investors (Reuters)
The ROI of hiring an investment banker (Forbes)
The power of focusing on one task at a time (Ness)
Musk, SBF, and the myth of the smug, castle-building nerds (Atlantic)
What Else to Read: TheFutureParty Newsletter
Want to receive the latest in business, entertainment, and internet culture right to your inbox every single morning? Not just the stuff everyone else is covering -- these are the stories that drive the future, all in a quick and witty package. Thatās what TheFuturePartyĀ newsletter is all about.
With every email you open, every story you read, youāre going to have the jump on the rest of the crowd. Join over 170,000 driven professionals who read the newsletter every day.
4. Book of the Day: You've Been Played
Warehouse workers pack boxes while a virtual dragon races across their screen. If they beat their colleagues, they get an award. If not, they can be fired. Uber presents exhausted drivers with challenges to keep them driving. China scores its citizens so they behave well, and games with in-app purchases use achievements to empty your wallet.
Points, badges, and leaderboards are creeping into every aspect of modern life. In Youāve Been Played, game designer Adrian Hon delivers a blistering takedown of how corporations, schools, and governments use games and gamification as tools for profit and coercion.
These are games that we often have no choice but to play, where losing has heavy penalties. Youāve Been Played is a scathing indictment of a tech-driven world that wants to convince us that misery is fun, and a call to arms for anyone who hopes to preserve their dignity and autonomy.
āGames are being harnessed as instruments of exploitation.ā
6. Daily Visual: Tech Layoffs Soaring this Month
US tech employees laid off
Source: Axios
7. Daily Acumen
"Most problems come from our internal state.
When we are internally calm, we reason and then respond; we donāt just react. When someone slights us, we donāt lash out with angry words or angry fists. We turn the other cheek.
When someone cuts us off, we give them the benefit of the doubt. When things go slower than we want, we wait patiently.
When someone is passive-aggressive, we refuse to take the bait. At our best, we put behavior in perspectiveāboth other peopleās and our own.
We do the right thing, not the easy thing, regardless of influence or pressure.
A calm mind is not the absence of conflict or stress, but the ability to cope with it."
Source: Farnam Street
8. Crypto Corner
Crypto is in crisis - but itās not just because of FTX
Web3 is in FTXās blast radius
Whoās really to blame for the FTX crypto collapse?
ARK Invest thinks FTX collapse could delay crypto adoption by years
Crypto billionaires with huge losses spurn SBF
How the crypto fallout could affect you
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9. Memes of the Day
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