🍋 SVB Wrecked Cali

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Good Morning! Another day, another Hindenburg Research report. Jack Dorsey’s Block was the victim this time, with Hindenburg claiming Block’s Cash App facilitates crime. Block fell 15% on the news.

According to a new study, Americans' IQ scores are on the decline compared to previous years. Meanwhile, TikTok's CEO was put through the wringer during his recent testimony to Congress, as calls to ban the app grow louder.

Apple announced it will spend up to $1 billion annually producing movies. Ford is making a bold bet on electric vehicles, despite suffering a staggering $3 billion loss on its EV unit last year. The company is confident it will turn a profit on its electric car lineup within the next four years.

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1. Story of the Day: SVB Wrecked Cali

California’s economy has been in a slowdown for the past year or so. Tax collections from high earners are plummeting, and the stock market is floundering, resulting in a budget deficit of $22.5 billion in the coming fiscal year. And experts think SVB contagion will add to the state’s woes.

The San Francisco area has been hit particularly hard by tech layoffs and the slow return of workers and tourists to its downtown after the Covid-19 pandemic. SVB’s collapse will exacerbate some of the city’s woes. With the real estate market already feeling the squeeze from falling demand and property values, the loss of SVB's letters of credit as substitutes for renters' deposits could be the straw that breaks the camel's back.

The damage is already being felt beyond Silicon Valley. SVB catered to California-based cleantech companies and wineries, and now these companies are scrambling to make payroll and keep their businesses afloat.

This is a broad correction to the over-exuberance of the free-money era that fueled explosive growth in Silicon Valley, the tech sector, and speculative investments like cryptocurrency. Some see a humbling of the move-fast-and-break-things spirit that drove growth at companies like Facebook.

Takeaway: SVB didn’t just cater to Silicon Valley startups - the bank was a lifeline to other industries like wineries, and served as crucial collateral in real estate deals. The fallout from this situation is sure to bring a reckoning to the Bay Area, and it's time for the tech industry to take a good, hard look at itself and start preparing for the future.

2. Markets Rundown

_{For access to Wall Street insider interviews, industry deep-dives, premium research/resources and weekly Knowledge Drop newsletter, check out our Insiders membership.}

Stocks closed higher after a volatile trading day.

Movers & Shakers

• (+) Meta ($META) +2% as a TikTok ban gains steam.

• (–) Coinbase ($COIN) -14% after potential SEC legal action over securities law.

• (–) Block ($SQ) -15% after Hindenburg accused the crypto company of fraud.

Private Dealmaking

• Japan Industrial Partners bought Toshiba, a Japanese conglomerate, for $15 billion

• Krevido, a Southeast Asian provider of credit to underbanked consumers, raised $270 million

• JPMorgan bought Aumni, an investment analytics firm, for $230 million 

• Character.ai, an AI chatbot developer, raised $150 million 

• Flare Therapeutics, a biotech focused on transcription factors, raised $123 million

• Macro, a TV and film studio, raised $90 million

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3. Top Reads

• The Fed believes its work is now nearly done (YF)

• TikTok’s as business is growing around live sports as platform faces possible US ban (CNBC)

• Why some retailers are using security bots (YF)

• Gen-Z yearns for stability (WSJ)

• Twitter will kill legacy blue checks on April 1 (TC)

• Accenture to cut 19,000 jobs as IT spending slows (WSJ)

• Crypto rebounds from post-Fed sell-off as investors shake off regulatory concerns (CNBC)

• JPMorgan, Citi, BofA tell staff not to poach clients from stressed banks (Reuters)

• Wall Street expects Fed to cut raises - that isn’t a good sign (BB)

4. Shortform Book of the Day: Superintelligence

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"Superintelligence" by Nick Bostrom is a thought-provoking exploration of what could happen if machines surpass humans in general intelligence. Bostrom lays out the foundation for understanding the potential implications and impact of a superintelligence on our society and the world as we know it.

The book raises important questions about the fate of humankind, and whether artificial agents will save or destroy us.

Bostrom highlights the distinctive capabilities of the human brain that have given our species its dominant position, but if machine brains surpassed our own, they could become extremely powerful—possibly beyond our control.

It’s a must-read for anyone interested in exploring the big questions of our future.

“The gap between a dumb and a clever person may appear large from an anthropocentric perspective, yet in a less parochial view the two have nearly indistinguishable minds.”

5. Short Squeez Picks

• Is working from home really work?

• Coffee’s impact on your health may be different than you think

• How to overcome the fear of getting started

• 7 secrets that will make you emotionally intelligent

• Your brain might not be private for much longer

6. Daily Visual: Block Stock Price in Free Fall after Hindenburg Report

_{Source: Axios}

7. Daily Acumen

Picture this: our brains have a secret clubhouse called the Default Mode Network (DMN). The bouncer only lets our thoughts in when we're NOT busy with a task.

So, when we're enjoying a warm shower or walking through the park, the brain's creative juices start flowing!

But wait, there's more! Our brains have a little helper called dopamine. This neurotransmitter is like a creative fairy, sprinkling its magic all over our thoughts.

Guess what? Showers and walks can increase dopamine levels, giving our ideas an extra sparkle!

And let's not forget the power of a distraction-free zone. In the shower or on a walk, we're free from pesky interruptions, allowing our subconscious mind to dive deep into problem-solving.

It's like giving our inner genius some much-needed alone time!

8. Memes of the Day

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