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TOGETHER WITH
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Good morning. Today, we’re pausing to reflect on two events that forever changed the world:
- It’s the 19th anniversary of the September 11 terrorist attacks, which killed nearly 3,000 Americans.
- Exactly six months ago,
on March 11, the World Health Organization declared the coronavirus
outbreak a pandemic. More than 900,000 people around the world have died
from COVID-19.
To all those who’ve suffered or lost loved ones in these tragedies, we’re thinking of you and sending strength.
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NASDAQ
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10,919.59
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- 1.99%
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S&P
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3,338.95
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- 1.77%
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DJIA
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27,534.25
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- 1.45%
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GOLD
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1,950.20
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- 0.24%
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10-YR
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0.680%
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- 2.50 bps
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OIL
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37.06
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- 2.60%
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*As of market close
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Stimulus: Senate Democrats torpedoed
a $500 billion GOP bill they said was too small to make a difference.
Chances of Congress passing another emergency aid bill before the
election are dwindling.
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Jobs: Jobless claims remain stable but at a very elevated level. Nearly 30 million people were on unemployment benefits last month.
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Francis Scialabba
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The HBO series may be delayed, but Citigroup provided its own succession story yesterday. CEO Michael Corbat announced
he’ll retire next February after eight years, and current president and
chief of the bank’s consumer arm, Jane Fraser, will slide into the CEO
spot.
It's a landmark moment for Wall Street
Fraser will
be the first female CEO of a major U.S. bank. And her resumé? Let’s just
say she looks forward to high school reunions: Goldman Sachs → Harvard
Business School → McKinsey → Citi.
- In fact, Corbat reportedly promoted her to the president position to keep her safe from other Wall Street recruiters.
But her
career challenges reflect those faced by many women working on Wall
Street, which you could call the father of all boys’ clubs. “You cannot
have it all,” Fraser said in 2012. “Many things have had to give, personally and professionally."
Fraser’s
appointment caps off a broader management refresh at Citigroup. The CFO,
previous president, and two regional heads stepped down in the last
couple years.
As for Corbat? Let’s roll the tape
He’ll be
remembered like your freshman year relationship: got you through some
challenging times, but if we’re being honest, nothing spectacular.
Corbat nursed the bank back to health after the 2008 financial crisis, but Citi’s performance has lagged a bit behind rivals.
- Citi missed the boat on
expanding its deposits via physical branches. Peers JPMorgan and Bank of
America hopped right on that yacht and sailed into significant funding
advantages.
- Shares are up 42% since Corbat took over in 2012, compared to 141% for JPMorgan during the same period.
Speaking of which...JPMorgan was expected
to become the first major U.S. bank to name a female CEO after
positioning two female execs for current boss Jamie Dimon’s job. But
Dimon doesn’t seem interested in stepping down anytime soon.
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JOSH EDELSON/AFP via Getty Images
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The August Complex, a group of 30+ fires north of Sacramento, is now the biggest wildfire event in California’s history by acres burned (at least 471,000).
These fires, which are burning throughout the West and have killed seven people, could be a warning sign of climate change-induced financial crises to come, according to a report from the Commodity Futures Trading Commission.
What they found: Rising costs of storms, floods, fires, and droughts could create “a systemic crisis in slow motion” in financial markets.
- Take California: An
estimated 25% of the state’s 12 million homes face high risk from
wildfires. That has implications for mortgages, banks, home prices, and
other financial assets.
- Insurers, already
pulling back from fire-prone areas, could leave homeowners with
uninsurable properties. Banks could limit loans to farmers after
droughts lower crop yields. Falling home values on coasts and
floodplains could cut cities’ tax revenues.
Bottom line: Freak
weather events were typically viewed by economists as localized shocks,
but as climate change makes extreme weather more severe and frequent,
that’s changing.
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Indeed
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The orange line represents new COVID-19 cases in “all other U.S. counties” while the blue line is…
College
towns. As students returned to campus in late August/early September,
college towns experienced a dramatic spike in cases compared to the rest
of the U.S.
Why it matters: College towns must balance their economic dependence
on universities with public health concerns, the NYT explains. The good
news is there’s been no uptick in deaths in these areas.
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Yichuan Cao/NurPhoto via Getty Images
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Yearning for a time before COVID? We can help—with an update to the Theranos saga.
A judge's ruling Wednesday revealed
that former Theranos CEO Elizabeth Holmes may incorporate evidence of
“mental disease or defect” in her defense against criminal charges.
The backstory:
Do you have six hours? Theranos was once a Silicon Valley darling that
wooed marquee investors with promises of revolutionizing blood testing.
But those promises didn’t hold up well to criticism or journalism. In
March 2018, the SEC charged the company, Holmes, and former president Ramesh “Sunny” Balwani with "massive fraud."
This filing shows that Holmes may plan to demonstrate that because of mental illness, she did not actually intend
to do something wrong or illegal, and she’ll have to submit to an
examination by government experts. Other experts say that’ll be tough to
prove.
Looking ahead...the trial is scheduled for March 2021.
+ Optional homework: John Carreyrou’s excellent Bad Blood and/or HBO’s mediocre The Inventor.
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Getty Images
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Get yourself
a cuppa, we’re checking in on our colourful cousins across the
Atlantic. Yesterday, the European Commission threatened legal action
against Britain unless it drops an internal bill that would breach its Brexit treaty.
- Britain is nearing the
end of its transition year out of the EU, but after weeks of trade
negotiations, PM Boris Johnson is antsy. He said both sides should move
on if an agreement isn’t reached by mid-October.
It’s not
just $1 trillion in trade with the EU at stake. The UK wants to fiddle
with the open border between Northern Ireland (part of the UK) and the
Republic of Ireland (part of the EU), which could lead it to run afoul
of the 1998 Good Friday peace deal. U.S. House Speaker Nancy Pelosi said if it does so, there’s “no chance” of a trade deal with the states.
In coronavirus news...
To stem a rise in cases, the government capped social gatherings at six starting Monday, with a few exceptions. New rules apply whether groups are outdoors or inside.
- Rising cases also complicate messages by officials trying to convince employees it's safe to return to work in an effort to boost spending.
Looking ahead...Johnson announced
an ambitious plan to conduct millions of tests daily by spring. But
some experts think his "moonshot" is “fundamentally flawed” and based on
rapid testing tech that doesn’t exist.
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When you see the weekly news quiz in the Brew, you know the weekend's almost here. That's why we like writing it.
An even better feeling? Getting a 5/5. Ace the quiz here.
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How To Steal An Election
DOJ Records Show Mueller’s Team WIPED Phones During Trump Probe
Biden Spox Melts Down Over Teleprompter, COVID Questions
Antifa activist arrested for arson in Washington state
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September 11
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| FEATURED BIOGRAPHY
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| D.H. Lawrence
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| FEATURED EVENT
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| 2001
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| World Trade Center and Pentagon attacked by terrorists
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Advertisement
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Advertisement
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| MORE EVENTS ON THIS DAY
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2008: A major fire erupted in the
Channel Tunnel, which runs under the English Channel
and connects England with France, and the Chunnel (as it was sometimes
called) did not resume full service until early the following year.
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