🐤 Don't bank on it

SVB has gone bust ... so what does that mean for its customers and the economy?

Monday | March 13th, 2023
Early Chirp

Happy Monday, chirpers! Whatever you’ve got going on today, I hope you can start your week off with some good vibes.

Early Chirp strives to be a positive way to set off each morning (and the chance to win an Amazon gift card by completing our daily crossword puzzle is a cool bonus), but if you need some more motivation, take it from 103-year-old Teresa Moore, who still visits the gym — her “happy place” — regularly.

She has some simple advice for everyone: “Try to think of good things — to think everything is beautiful, to think beautiful things."

-Chris Agee

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*Market data for this issue is from March 12th, 2023 at 4:48pm EST

🏦 Markets: Wall Street spent the weekend reeling from the collapse of Silicon Valley Bank (more on that story later on in the newsletter), and the stock market will likely continue to take a beating as economic uncertainty remains the norm.

Not only did SVB mark the biggest bank failure since the Great Recession nearly 15 years ago, but it highlighted widespread vulnerabilities within the industry. According to reports, U.S. banks have a combined $620 billion in lost value of assets that they still hold as of the end of 2022 — and rising interest rates have only made things worse.

World

The Breakdown

A quick look around the world.

The Breakdown Giphy

📺 To the max: In the era of seemingly endless streaming platform options, it’s easy for even major players to get lost in the mix. For HBO Max, executives apparently think a name change will help remind customers that it’s still a thing. If you’ve been paying attention, you’ll know that the platform is already on its third name (after HBO Go and HBO Now), and as it plans a merger with Discovery+ later this year, it might be dropping the “HBO” altogether. Reports indicate parent company Warner Bros. Discovery is leaning toward simply calling the streaming service “Max” based on the belief that would-be subscribers would be more likely to shell out a few bucks each month if it didn’t include an HBO reference. Of course, it could be that there are dozens of other platforms out there and people are being more selective about how they spend their money these days — but time will tell whether yet another name change is a profitable strategy.

🚀 Making a splash: A group of astronauts from the U.S., Russia, and Japan returned home over the weekend after a five-month stay on the International Space Station. A SpaceX craft that replaced the Russian capsule that sprung a leak after docking with the ISS headed back toward Earth early on Saturday and landed safely in the Gulf of Mexico a mere 19 hours later. The four crew members had been expected to return days earlier, but strong winds in the area off Florida’s coast resulted in a delay. After such an extended stay, the returning astronauts shared some of the things they couldn’t wait to do upon returning home — including Nicole Mann, the first Native American woman to fly in space, who said that she was looking forward to feeling the wind, smelling the grass, and tasting real food.

🍪 A tough cookie: It’s Girl Scout cookie season, and if you’ve ordered a few boxes of your favorite flavors you might be anxiously waiting for their arrival. Last week, however, the production company responsible for sending out the tasty treats confirmed that deliveries will be delayed due to multiple factors. Little Brownie Bakers broke the news in a Facebook post, asserting that it is experiencing the same “frustration” that Girls Scout troops and cookie lovers everywhere are feeling. Although employees are “working overtime” to get boxes out as quickly as possible, the bakery noted: “Global supply chain issues, local labor shortages, and even unforeseen severe weather have all impacted the selling season.”

✈️ Up in the air: Earlier this month, passengers aboard a Lufthansa flight experienced a terrifying drop of nearly 4,000 feet after the jet encountered some serious turbulence that forced an emergency landing in D.C. Fears of a possible crash ran rampant and a number of people were seriously injured in the process. Photos and video of the aftermath revealed a chaotic scene — and new reports indicate that airline staff attempted to prevent people from sharing that evidence publicly. Witnesses say a flight attendant made two separate announcements calling on everyone to delete any images of the plane from their phones, suggesting at one point that the motivation was to protect the privacy of others on board. Of course, not everyone heeded that request and social media posts showcased the result of this frightening flight.

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finance

Lessons To Learn From The Silicon Valley Bank Collapse

It's leading to some troubling comparisons to the Great Recession.

Lessons To Learn From The Silicon Valley Bank Collapse Justin Sullivan/Getty Images

It’s the biggest bank failure since the 2008 financial crisis and experts everywhere are wondering what the fallout will be after Silicon Valley Bank’s spectacular collapse.

Let’s take a brief journey of the institution’s past, present, and uncertain future.

A 40-year mission

Co-founders Bill Biggerstaff and Robert Medearis came up with the idea for SVB while playing a poker game and opened their first office in 1983. The goal was to provide financial services to venture-backed startup companies — and it has stuck to that model ever since.

Promising upstarts and established companies alike were among its customers.

What went wrong

Early indicators suggest that some unwise investments led to huge losses for SVB. The issue was clearly exacerbated by rising interest rates that the Federal Reserve has implemented in its continued effort to ease inflation.

At the first sign of trouble, investors and customers alike started to pull out their money. This intensified throughout the day Thursday, prompting a bank run that ultimately led to its demise.

Where do we go from here?

In the wake of the 2008 crisis, new regulations were put on banks that included so-called stress tests to ensure that they remain solvent. While this will hopefully help us escape a similar economic meltdown, the SVB collapse proves that even major institutions can fail.

The CEO’s decision to sell millions of dollars in stock just days earlier adds another wrinkle to the story.

Although the FDIC will help recover some of the losses and the UK government is working to help some investors in that country, many people and businesses are left in the lurch.

As in the Great Recession — and the Great Depression that came decades earlier — we’re all re-learning the tough lesson that your money isn’t always safe just because it’s in a bank.

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sports

Inside The WWE’s Push To Allow Betting On Scripted Matches

Pro wrestling wants a piece of the growing sports betting market.

Inside The WWE’s Push To Allow Betting On Scripted Matches Giphy

There’s an age-old debate over whether professional wrestling is actually a sport.

Wrestlers are clearly risking injury with some of their moves and many states regulate exhibitions like they do other sports — but there’s also a theatrical element to each match and the outcomes are generally foretold before the competition even starts.

This debate is at the center of World Wrestling Entertainment’s push to allow gambling on scripted events using the same regulations that apply to traditional athletic events.

The league makes its case

According to recent reports, the WWE has already reached out to regulators in a handful of states where sports betting is legal and offered a multi-pronged argument in favor of adding wrestling to the list of approved events.

Here are some of the league’s major points:

  • Betting is sometimes allowed on the outcome of other predetermined events, such as awards ceremonies.
  • The result of scripted wrestling matches can be kept under wraps through the use of an accounting firm.
  • Wrestlers and crewmembers won’t find out the results until a few hours before the event, at which time bets will be called off.

A few wrinkles to iron out

With an audience that numbers in the millions, there’s a clear financial incentive for the WWE and gambling entities if betting is permitted. Thus far, the company has reportedly been in talks with officials in Colorado, Indiana, and Michigan.

Colorado already has a rule on the books that bans bets on the Oscars and other scripted events and Michigan said it had only been contacted by a third party — not the WWE itself.

There are still plenty of questions surrounding the plan, but as sports gambling is legalized in more states and the number of bets continues to increase, wrestling will keep fighting for a piece of the action.

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entertainment

Will The Oscars Be Able To Plot A Path Back Toward Cultural Relevance?

After years of decline, this might be the year for a comeback.

Will The Oscars Be Able To Plot A Path Back Toward Cultural Relevance? Giphy

Years after the “Oscars So White” backlash surrounding a perceived lack of diversity among nominees and winners, the Academy Awards is still struggling to find its place in modern society.

After all, aside from the infamous Will Smith slap, most people probably can’t cite anything specific that happened in last year’s ceremony. Audience numbers have tanked in recent years — but some industry insiders say last night’s Oscars presented a unique opportunity to revive its once-heralded relevance.

Reigniting last year’s buzz

It was the slap heard ‘round the world when Will Smith stormed the stage and walloped presenter Chris Rock over a joke about Smith’s wife. In a recent stand-up special, Rock added fuel to the fire by dedicating the last portion of the show to the widely publicized beef.

Although Academy Award organizers said they were putting new safeguards in place to prevent a similar disruption this year, at least some of those who tuned in likely did so out of curiosity about how the Smith slap would be addressed.

If these folks liked what they saw, it’s possible that they’d consider becoming loyal Oscars viewers in the future, thus helping elevate the beleaguered ceremony to new cultural heights.

It’s all about the movies

While the jokes, commentary, commercials, and red-carpet interviews are all part of what has made the event a Hollywood mainstay in recent years, the central component for its nearly century-long run has been recognizing the previous year’s best movies.

This year, the films up for “Best Picture” represent the highest combined box office take in more than a dozen years. Sequels to “Avatar” and “Top Gun” were the year’s two top-grossing movies.

If enough people are talking about the event on social media this week, it could reinvigorate the Oscars for the next 100 years.

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Early Chirp

Written by Chris Agee

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