Good Morning! Hunter Biden is looking to cash in on his recent podcasts and interviews and launching a meme coin named $LAPTOP on September 9 on Coinbase's Base blockchain. Women accounted for 98% of all job gains in August. And we’re entering "fallcations” season as wealthy travelers flee the summer crowds.

One of Martha's Vineyard's private beaches now requires a $400,000 key to get in. AI wealth is creating a mansion shortage in San Francisco. And Anthropic is close to awarding Morgan Stanley and Goldman Sachs top roles in its $2 trillion IPO.

Plus: UBS is requiring junior bankers to demonstrate AI proficiency before they get hired, and how to reclaim your flow state.

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SQUEEZ OF THE DAY

Goldman’s Secret Weapon

The conventional wisdom on Wall Street is that college isn't always about what you know; it's about who you know. Getting into a top undergraduate university can open doors, but the network you build once you're there is what keeps them open.

Take Matt Kennedy. He was a 6'2" walk-on at Villanova and barely played, but he won a national championship with the program in 2018. And more importantly, walked away with a decade of relationships that turned out to be worth a lot more than playing time. Kennedy also won the NCAA Elite 90 Award, given to the player with the highest GPA at the Final Four, so he definitely came to Villanova to play school. 

The relationships Kennedy made playing basketball were real, and Mikal Bridges was the best man at Kennedy's wedding last year. Kennedy reportedly convinced several of the Knicks to move their money to Goldman Sachs Private Wealth Management. While Jalen Brunson was unable to confirm or deny, Kennedy has a standing pass to Knicks games and has parlayed the loyalty he built up in the Villanova locker room into success after college.

And Kennedy ending up at Goldman isn’t an accident; it turns out he’s running a tried-and-true playbook. In 2018, Goldman launched a unit called Sports and Entertainment Solutions, built specifically to capture athlete wealth, and that same year it hired Justin Tuck, the two-time Super Bowl champion and former Giants captain, as a private wealth advisor. Kennedy is a great fit because Goldman gets a Villanova insider who was in the huddle with three future Knicks, and the players get an advisor who feels like family. Kennedy also paid his dues inside the bank first, interning at Goldman before working in fixed income on debt products like CLOs, and moved into wealth management about two years ago.

Ultimately, trust is the real competitive advantage in wealth management. Every big firm can offer a client roughly the same funds and the same tax strategies, so the product itself is nearly identical everywhere. What Goldman was actually buying was a decade of trust Kennedy had already banked with three players about to make more money than their parents made in a lifetime. When you're 28 and suddenly responsible for that kind of wealth, you don't want the most credentialed stranger in the room; you want the person you already trust. Goldman figured out that the fastest way to be that person is to simply hire someone who already was.

Takeaway: Winning a championship creates real money in motion, and a wave of financial decisions players suddenly have to make. Goldman didn't just want to be positioned to catch that money; in 2018 the firm built an entire unit designed to make sure someone on the inside had genuine, years-deep trust with players before they ever needed an advisor.

The Knicks players who have confirmed the move appear to have done it the right way, at a real firm with real oversight, rather than handing their money to an unsupervised friend. The lesson for every other young athlete watching this play out is simple: the trusted friend should still be the most watched person in your financial life, not the least.

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HEADLINES

Top Reads

• Hunter Biden (and his laptop) enter the cryptosphere with new meme coin (WSJ)

• Women accounted for 98% of August payroll gains (CNBC)

• Labor Day marks the start of 'fallcations' as wealthy travelers avoid summer crowds (CNBC)

• The $400,000 keys that get you into Martha's Vineyard's private beaches (WSJ)

• AI wealth is creating a mansion shortage in San Francisco (NY Post)

• Anthropic close to awarding Morgan Stanley and Goldman Sachs top roles in $2tn IPO (FT)

• UBS demands new junior bankers show AI proficiency (FT)

• Lutnick to review Pentagon deals involving Cerberus firms (BB)

• Commerce Secretary Howard Lutnick disclosed at least $250 million in income last year, mostly from his prior ownership of Cantor Fitzgerald (WSJ)

• U.S. labor market booms, with 162,000 jobs added in August (Axios)

• This vintage printing press has become a darling of Silicon Valley (WSJ)

• KKR's global private credit fund redemptions ease to about 2.5% (BB)

• The big business of personal protection: how private security became a $50 billion industry (CNBC)

• Private equity faces existential crisis in US as unsold companies pile up (Guardian)

• Musk's Boring Co. pushes investors for recruiting business help (WSJ)

• New Zealand approves MDMA to treat severe PTSD (Guardian)

• EQT to buy insurance broker McGill in $2 billion deal (WSJ)

• A 'shakeout' in early-stage AI may be coming as VC money gets pickier on valuations (CNBC)

• Blue Owl is said to plan public company for data center roll-up (BB)

• Young workers move to Appalachia for affordable housing, lower costs (BB)

• Corporate America is axing the micro-team boss (WSJ)

• Houlihan Lokey pushes into capital solutions amid private equity logjam (FN London)

• Private equity confirms a timeless principle: purchase price matters (McKinsey)

• Why the relationship between stocks and bonds broke down (Axios)

CAPITAL PULSE

Markets Rundown

Market Update

• Stocks fell as a strong jobs report lifted September rate-hike odds to about 58%, from 50% the prior day.

• The 2-year Treasury yield rose to about 4.37% while the 10-year was little changed near 4.78%.

• Asian and European equities advanced; the U.S. dollar strengthened against most major currencies.

Economic Data

• Nonfarm payrolls grew 162,000 in August, well above the 65,000 forecast, with June and July revised up a combined 55,000.

• Unemployment held at 4.1%, versus expectations for a rise to 4.2%; average hourly earnings rose 3.1% year over year.

• Core PCE inflation stands at 3.7%, well above the Fed's 2% target, keeping a rate hike in play.

Movers & Shakers

• (+) Samsara ($IOT) +4% after the IoT and fleet management software company posted Q2 revenue up nearly 30% year-over-year.

• (–) Tesla ($TSLA) -6% because the NHTSA opened a safety probe into nearly 1,000 Cybercabs over their self-certification.

• (–) Lululemon ($LULU) -17% after the athletic apparel retailer’s Q2 revenue of $2.42 billion missed the $2.46 billion consensus.

Prediction Markets

• Wall Street unite. In Ben Shelton we trust.

• Trade on real-world events with Kalshi. Use code OWS to get a $10 bonus when you trade $10.

Private Dealmaking

• Flex agreed to acquire EPC Power, a power conversion systems maker, for $4.4 billion

• EQT agreed to buy a majority stake in McGill and Partners, a U.K. insurance broker, for $2 billion from Warburg Pincus

• Gimlet Labs, a developer of AI inference software, raised $300 million

• Thyme Care, a cancer care company, raised $125 million

• HiddenLayer, an enterprise AI security startup, raised $100 million

• Town, a personal AI assistant, is in talks to raise $90 million

For more PE, VC & M&A deals, subscribe to our Buysiders newsletter.

BOOK OF THE DAY

Dark Pools

Description:
Scott Patterson takes readers inside the hidden world of electronic trading and the transformation of U.S. financial markets. The book traces the rise of computerized trading through figures such as Josh Levine and the creation of Island, eventually leading to dark pools, high-frequency trading, and increasingly sophisticated trading algorithms. Patterson shows how technology fundamentally changed the structure of the stock market, and how the machines designed to make markets more efficient ultimately created a new set of advantages, risks, and vulnerabilities.

Book Length: 384 pages
Release Date: June 12, 2012

Ideal For:
Investors, traders, finance professionals, entrepreneurs, and anyone interested in algorithmic trading, market structure, high-frequency trading, and the evolution of Wall Street.

The stock market didn't just become faster, it became a different game, increasingly dominated by machines.

DAILY VISUAL

A Missed Opportunity: The Treasury Did Not Term Out Its Debt When Interest Rates Were Near Zero

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DAILY ACUMEN

Backfire Effect

Show someone hard evidence that contradicts a belief they hold strongly, and a strange thing sometimes happens. Instead of updating, they believe it more, not less, than before you showed them anything. The corrective evidence gets processed as an attack, and the response to an attack is to defend harder, not to update.

This shows up constantly around a broken investment thesis. Present the data showing the call was wrong, and a surprising number of people tighten their position instead of softening it, generating new reasons on the spot the original thesis never mentioned, because admitting the evidence was right would mean admitting something more painful about their own judgment.

Watch your own reaction next time you are shown something that contradicts a position you have publicly defended. If the instinct is to argue harder rather than sit with the possibility you were wrong, that instinct is the bias working exactly as designed.

ENLIGHTENMENT

Short Squeez Picks

• Get spending insights to help your budgeting*

• How to reclaim your flow state

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