Trying to read the economy right now is like peering through the water in Lake Havasu during spring break.

Thankfully, banks are about to give us some snorkeling goggles. Some of the biggest financial institutions in the US—including JPMorgan, Bank of America, and Citigroup—will release their earnings reports for the final quarter of 2022 this morning. And they’ll share precious insight into the risk of a recession as an uncertain 2023 kicks into gear.

Why are banks considered economic prophets? Because their tentacles touch so many aspects of the economy (from consumer spending via credit cards to business health via commercial loans), they can see into areas single-sector ponies can’t. They’re like your one extremely connected friend who chats up everyone at cocktail hour and spills the tea afterward.

So here’s what you need to know

Banks themselves are hurting. Goldman Sachs just launched its biggest cost-cutting efforts since the 2008 financial crisis, laying off 3,200 employees (or 6.5% of its entire workforce) this week. And it’s not the only one reducing headcount: Morgan Stanley and Citi are among the other global banks that have trimmed their workforce recently as business slowed due to the Fed’s rate hikes. Overall, big banks’ profits are expected to have dropped 15% in Q4 from the year before.

But it’s not the apocalypse. Rising rates can benefit banks—as lenders, they make more money when they can charge higher interest to borrowers. Of course, banks also need to pay out interest to their depositors, too, but the gap between their lending profits and their depositor payouts (known as the “net interest margin”) is expected to widen—at least for now.

Consumer watch: Pay attention to how much banks have set aside to cover defaults on mortgage, auto, and credit card loans. That’ll give us a peek into how American consumers are dealing with inflation (so far, pretty good, banks have said).

Big picture: Given the tumultuous economic environment, companies reporting earnings will face lower expectations than any college football team playing against Georgia. S&P 500 earnings are projected to have gone negative in Q4 for the first time since summer 2020.—NF

Garland appoints special counsel in Biden documents probe. Attorney General Merrick Garland tapped former senior DOJ official Robert Hur to investigate whether “any person or entity violated the law” in connection with the discovery of classified government documents at President Biden’s former office and private home. An initial batch of records was found in early November by President Biden’s lawyers in a think tank office he had used as a private citizen. The president announced yesterday, hours before Garland’s appointment of a special counsel, that more Obama administration documents were found in the garage of his Delaware home.

SBF has a Substack now. “I didn’t steal funds, and I certainly didn’t stash billions away,” wrote FTX co-founder Sam Bankman-Fried, who stands accused of stealing funds and stashing billions away, in a rare newsletter drop by a US criminal defendant. The 30-year-old decided to waive his right to remain silent and give his perspective on the collapse of FTX and crypto-focused hedge fund Alameda Research in a lengthy Substack post. SBF was released on a $250 million bond last month, and has been living under house arrest at his parents’ California home while he awaits a trial set for October.

Study says Exxon knew “precisely” about global warming. Exxon’s internal climate research, which began as early as the 1970s, accurately predicted both the speed and gravity of global warming, according to a new study that analyzed dozens of research papers produced by the company’s in-house scientists. Between 63% and 83% of Exxon-backed research accurately predicted ensuing climate events and global warming, matching and occasionally even surpassing the accuracy of academic and government projections. Although Exxon dismissed the study’s findings, lead author Geoffrey Supran summarized them as “airtight” and “unimpeachable” in an email to Axios.

It’s only January and we might already have the scam story of the year: JPMorgan is suing Frank CEO Charlie Javice and another exec at the fintech company, which it had bought, accusing them of essentially making up a client roster.

What happened: In 2021, JPMorgan paid $175 million to acquire Frank, a student financial-aid planning platform that boasted 4.25 million users. JPMorgan didn’t appear to be very interested in the platform’s services, but it did want to build a pipeline to send Frank’s young customers directly into the Jamie Dimon banking universe.

There was just one problem: Less than 10% of Frank’s user base was real, JPMorgan claims. For example, the bank said it sent a marketing email to 400,000 customers and roughly 70% of the emails bounced back. After conducting internal investigations, JPMorgan said it discovered that Javice (a Forbes “30 Under 30” honoree, btw) had hired a college professor to create a bunch of fake user data to pad Frank’s numbers for the merger, and then just bought one really big email list.

What’s next? A lengthy legal battle, probably. Javice, who was fired in November, is also suing JPMorgan for millions of dollars to recoup expenses she took on during the aforementioned investigations, and the $28 million she says she’s still owed from the merger.—MM

The Last of Us will make the treacherous transition from PlayStation game → HBO series this Sunday, and it may be the first video game adaptation that gamers and critics can agree doesn’t suck.

Set down your reishi tea before reading the plot: The beloved 2013 game is about a pandemic, but instead of a virus, a fungus takes root in people’s brains and zombifies them. The protagonists are a gruff older man and an immune teen girl (Arya and the Hound vibes).

Is this the end of an industry curse?

Hollywood is salivating over video games’ potential for adaptation. But, notoriously, a rave game review from Markiplier does not translate to a Certified Fresh rating on the Tomatometer. Starting with 1993’s Super Mario Bros., game adaptations have ranged from mildly entertaining to threw-up-a-little.

Even with low ratings some, like Lara Croft: Tomb Raider and more recently Sonic the Hedgehog (still not over his teeth), were popular enough to warrant sequels and threequels.

So instead of hitting “Quit,” Hollywood has ramped up its production schedule. Sony is working on 10 PlayStation adaptations, and even Super Mario Bros. is getting a second chance on the big screen. Hopefully, The Last of Us holds them to a new standard.

P.S. HBO Max is about to cost more—tell your parents, or whoever pays for your account.—JW

Stat: Prince Harry has cracked the code for tell-all autobiographies: telling all. His 410-page memoir, Spare, sold 1.4 million copies in its first day on shelves, setting a first-day nonfiction sales record for publisher Penguin Random House (which claims that only the Harry Potter books have logged larger first-day sales). And if the sales aren’t enough to prove that the media blitz around the book has succeeded, judge it like this: How many people don’t know where Harry got frostbite?

Quote: “The design of Starry is much more aligned with the Gen Z aesthetic.”

In a soda industry shakeup, Sierra Mist is being dumped for a younger, more lemony lemon-lime soda. Pepsi announced it’s rolling out a brand-new citrus brand, Starry, to take on the king, Sprite (by rival Coca-Cola), which nabbed 8.3% of the overall market in 2021. By comparison, Sierra Mist scored less than one tenth of 1% of market share. Starry, which is caffeine-free and apparently designed to appeal to Gen Z, is at least the fourth effort by Pepsi to come after Sprite’s crown. Slice and Storm were some previous duds.

Read: On Gwen Stefani and cultural appropriation. (Allure)

The feeling of getting a 5/5 on the Brew’s Weekly News Quiz has been compared to guessing the plot twist correctly 15 minutes into the horror movie.

It’s that satisfying. Ace the quiz.

Styling America’s highways: If you enjoyed this week’s trivia on the popular highway sign font, then you’ll also get a kick out of this comprehensive style guide to America’s highways.

Pick a theme: Here’s a new way to think about New Year’s resolutions.

A labor of love and carbs: One guy logged every slice of pizza he’s eaten in NYC since 2014 (464 of them in total).

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Picdoku: Today’s Picdoku will have you feline good. Play it here.

Friday puzzle

Place a three-letter word on the dashes to complete a word on the left and to begin another word with those letters on the right.

Example: e a r _ _ _ m e = e a r T H Y / T H Y m e

1. f e a t _ _ _ o i c = ?

2. c o u r _ _ _ n d a = ?

3. d i s p _ _ _ o v e r = ?

4. k e e _ _ _ s i s t = ?

5. r u n _ _ _ i c e = ?

Want a fresh set of business skills? No matter what industry you’re in, don’t miss the Brew’s Business Essentials Accelerator, which kicks off in February. Apply today while spots last.

On today’s Business Casual episode, Nora chats with Katie Gatti Tassin, creator of Money with Katie, about how she turned her side hustle into a lucrative full-time gig.

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Why are hospitals such big ransomware targets? Healthcare Brew dives into health systems’ biggest weakness—read more and subscribe here.

1. featHER / HERoic

2. courAGE / AGEnda

3. dispLAY / LAYover

4. keePER / PERsist

5. runOFF / OFFice

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