🍋 West Coast Banking Sunset

Together With

Good Morning! Biden and McCarthy say they struck a debt ceiling deal over the long weekend - and the specifics should come to light today. Turns out the situation has gotten so bad that a new study found 31 billionaires now have more cash on hand than the U.S. Treasury.

This Memorial Day marks the first summer that a majority of Americans agree the pandemic is in the past. But that Memorial Day barbecue might cost you more with the CPI up almost 8% year-over-year (see Daily Visual below). And more and more corporate venture arms are turning their focus this summer towards ways to invest in generative AI.

Summer is here, which means it’s time to clean house and set some new travel plans. With Babbel, you can start speaking in as little as three weeks!

1. Story of the Day: West Coast’s Banking Sunset

East Coast finance bros definitely have a superiority complex towards their West Coast counterparts. And it’s turning out for good reason - with three of the four banks that collapsed headquartered in California, those West Coast banking failures might not have been a coincidence, after all.

Investors are uncovering a sneaky pattern from the banking turmoil - why does the chaos seem to be mostly contained to West Coast banks? And posted up in their Hamptons homes and Manhattan penthouses, some investors are putting regional California banks on notice.

And investors are worried there could still be more to come. But what’s the deal with the West Coast?

The unique wrinkle regional West Coast banks face, investors argue, is the larger portion of deposits coming from uninsured investors. Think SVB and First Republic lending to individuals and investors when the tech business thrived.

And it’s been a rough year or so for Silicon Valley. Startups are slashing their own valuations and having a difficult time getting funding or refinancing. As a result, regional banks, the lifeblood of these startups, are feeling the downturn too.

Takeaway: Investors are keeping their eyes out. Some are completely pulling out of the West Coast regional bank sphere. Others are quick to point out that it’s case-by-case, after-all; New York’s Signature Bank struggled, too. But one thing’s for sure - amidst high interest rates and recession concerns, we’re not totally out of the woods yet.

2. Markets Rundown

Stocks closed higher as debt ceiling talks progressed.

Movers & Shakers

• (+) Marvell Technology ($MRVL) +32% after the AI-focused company’s earnings beat expectations.

• (+) Ford ($F) +6% after the company announced a partnership with Tesla.

• (–) Ulta ($ULTA) -13% after poor earnings and slowing growth.

Private Dealmaking

• Tools for Humanity, a crypto startup, raised $115 million 

• eFishery, a software and financing provider for fish farmers, raised $108 million

• BenchSci, an AI solutions provider for science companies, raised $95 million

• Episode Six, a payment processing provider, raised $48 million 

• ClearMotion, a software car chassis company, raised $32 million 

• Together, an open-source generative AI model developer, raised $20 million

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3. Top Reads

• Employers are learning Gen-Z isn’t the easiest generation to work with (CNBC)

• Top hedge fund index strategy is so popular it might be falling apart (BB)

• What the credit rating agencies are saying about the U.S. (Axios)

• The top 10 best cities for new graduates (CNBC)

• Quiet quitting is getting a run for its money with inflation (YF)

• What Ford’s backing of Tesla chargers means for the future of EVs (Axios)

• Don’t expect the stock markets to rejoice about a debt ceiling deal (CNN)

• Downtown real estate is struggling - why won’t landlords lower the rent? (Slate)

• Chinese consumers won’t return to pre-pandemic spending soon (CNBC)

4. Book of the Day: Eli The Octopus

At 8 a.m. on February 3, 1975, Eli Black leapt to his death from the 44th floor of Manhattan’s Pan Am building. The immigrant-turned-CEO of United Brands―formerly United Fruit, now Chiquita―Black seemed an embodiment of the American dream.

United Brands was transformed under his leadership―from the “octopus,” a nickname that captured the corrupt power the company had held over Latin American governments, to “the most socially conscious company in the hemisphere,” according to a well-placed commentator. How did it all go wrong?

Eli and the Octopus traces the rise and fall of an enigmatic business leader and his influence on the nascent project of corporate social responsibility. Born Menashe Elihu Blachowitz in Lublin, Poland, Black arrived in New York at the age of three and became a rabbi before entering the business world.

Driven by the moral tenets of his faith, he charted a new course in industries known for poor treatment of workers, partnering with labor leaders like Cesar Chavez to improve conditions. But risky investments, economic recession, and a costly wave of natural disasters led Black away from the path of reform and toward corrupt backroom dealing.

“The poignant rise and fall of an idealistic immigrant who, as CEO of a major conglomerate, tried to change the way America did business before he himself was swallowed up by corporate corruption.”

5. Short Squeez Picks

• Highly successful people master these 3 soft skills

• 3 interview questions recruiters are asking right now about the future of work

• Top 10 things to know about Lisbon

• 6 ways successful people manage their time

• Inside the prison where Elizabeth Holmes could be sentenced

• Warren Buffett’s one choice that separates successful people from everyone else

What Else to Read

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6. Daily Visual: Memorial Day Feeling the Effects of Inflation

Change in price of select consumer staples, year-over-year change, as of April 2023

_{Source: Axios}

7. Daily Acumen

While external factors may seem enticing as solutions to our challenges, true improvement starts from within.

Vacations, job changes, recognition, or even substances may provide temporary relief, but they won't fundamentally transform our lives.

The key to genuine and lasting improvement lies in nurturing a healthy relationship with ourselves.

Investing in self-care, self-reflection, and self-development opens the doors to true happiness and fulfillment.

Remember, the most powerful agent of change resides within you.

8. Memes of the Day

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