BANKING

Goldman Gets Hit With the Bill

Yesterday, Goldman Sachs agreed to a $3.9 billion settlement with the Malaysian government to start to close the book on the massive 1MDB scandal that gripped the financial world. 

• Get your popcorn out: This is the closest thing to a summer blockbuster as we’re going to get.

The backstory

In 2012–2013, Goldman Sachs raised $6.5 billion for Malaysian sovereign wealth fund 1Malaysia Development Bhd. (1MDB). However, over the ensuing decade, much of that money was allegedly stolen, siphoned, or redirected into everything from high-end art and real estate to superyachts and Vegas parties. 

• You like irony? Some of the money was used to fund a movie depicting another episode of financial funny business, The Wolf of Wall Street. 

Those familiar with the scandal know at the center of it all was Malaysian financier Jho Low, who far from being behind bars, maintains his innocence and is still at large. 

• If you want the lowdown on Jho Low, Bradley Hope and Tom Wright’s book Billion Dollar Whale is a fantastic read. 

What is Goldman paying for?

The Wall Street investment bank is paying $2.5 billion to the Malaysian government and promised another $1.4 billion from the sale of seized assets related to the scandal. As part of the deal, the Malaysian government has agreed to drop criminal charges against the bank. 

• But Goldman isn't done—it also needs to settle up with U.S. authorities. “The DOJ settlement could wipe out most of the great 2Q they just put up,” Evercore ISI's Glenn Schorr wrote in a letter to clients.

Bottom line: Goldman Sachs says it plans to "materially increase its provisions for litigation and regulatory proceedings" for Q2. Translation: They got a big ol’ bill to pay.

SEMICONDUCTOR

We Have Good Intel—the Smaller Chip the Better

Three nanometers. A distance so small you can barely fathom it, but one that may determine the future of the chip industry. 

Yesterday, Intel's stock slid more than 16% after it said it would delay the rollout of its 7-nanometer chip technology by a year. Intel is moving forward with its 10-nanometer process...but in this highly competitive industry, tens of billions in market value go to those who can make the next generation of smaller and more efficient transistors. 

That’s where AMD comes in. Shares of the Intel rival gained nearly 15% yesterday, pushed along by Intel’s sour announcement. It’s already making 7nm chips for laptops, and eclipsed more than 17% market share in personal computer CPUs in Q1, per Mercury Research. 

• We haven’t even mentioned Taiwan Semiconductor Manufacturing Co. (TSMC), the grandaddy of semiconductors. It’s the No. 1 contract manufacturer of chips globally and will benefit from any Intel stumble.

Zoom out: At its developer conference last month, Apple said it would be ditching Intel to make its own chips for the Mac. Wise move?

METALS

Literally Everyone Rn

All that glitters actually is gold these days—yesterday, the precious metal surged to an all-time high of $1,897.50 a troy ounce, buoyed by, well you'll see…

Bullion is hot in the streets

Gold has been considered a safe harbor for investors for its ability to hold long-term value and hedge against inflation. 

• As geopolitical tensions turn up to volume 11 and central banks pump money into global financial systems, “You couldn’t create a better playbook for gold to perform,” Steven Dunn, head of a $2.2 billion gold ETF, told the WSJ.
• Meanwhile, the U.S. dollar has reversed its upward trend and decreased in value relative to other global currencies. That typically correlates to a rise in the price of precious metals. 

It's a gold rush: Investors poured $3.8 billion into precious metals funds the week to July 22—the second-largest weekly amount ever, according to data analyzed by Bank of America.  

Bottom line: If you have gold teeth fillings, your net worth is going up by the day. 

SPONSORED BY SIMPLISAFE

K.I.S.S.

Stands for: Keep It SimpliSafe, Smartypants. 

SimpliSafe are the security tech wizards who give you the power to control your home security in one easy app. Can you text? Then you can keep your home secure.

Can’t text? You could probably still figure out their easy-to-use app. Plus, SimpliSafe will outfit you with top-of-the-line gadgets like video doorbells, smart locks, HD cameras, and a stockpile of sensors.

And since you’re a smartypants who uses SimpliSafe, you can feel secure knowing that you’re protected from break-ins, fire damage, water damage, and more. 

Just to reiterate: Better security in one app. Set it up yourself in under an hour. Get cool gadgets. (Ok, the setup thing was new info, and we know you’ll call us out on it since you’re a smartypants.)  

Click here to K.I.S.S.

FOOD

For Eggs, Going Viral on Instagram Is Just the Start

The country’s largest producer of pasture-raised eggs, Vital Farms, has filed to go public on the Nasdaq. And investors could be lining up like it’s the omelette bar at a Princeton eating club. 

That’s because this omelette bar is focused on ethically produced eggs and related products, which Vital Farms claims can command up to 3x the price of commodity eggs. Right now, the company says it only has 2% household penetration for its pasture-raised shell eggs. 

More Vital signs:

• Revenue was $155 million for the 12 months ended March 31, 2020. 
• The number of stores carrying its brands has grown to more than 13,000 from around 4,200 five years ago, reports Food Dive. It sells in supermarket giants like Kroger, Target, and Whole Foods. 
• The company has raised at least $43 million from investors. 

Zoom out: Whether it’s scrambled, fried, soft boiled, hard boiled, sunny side up, sunny side down (?), over easy, over medium, poached, deviled, angeled, basted, or roasted on a spit over a campfire, Americans are eating way more eggs. We even have a chart to back that up.

United Egg Producers

SPORTS

July 2020 in a Single Picture

The mask-donning NY Mets, prior to their first game of an abbreviated season, hold a black ribbon in support of George Floyd and other Black people killed by police. They're playing in front of a largely empty stadium, outside of a few hundred cardboard cutouts fans have purchased. 

WHAT ELSE IS BREWING

• The Big Tech antitrust hearing we’ve been previewing all week has been postponed from Monday due to memorial services for the late Rep. John Lewis.  
• President Trump signed four executive orders aimed at lowering drug prices.
• Schlumberger, the world’s largest oilfield services company, is cutting more than 21,000 jobs—roughly a quarter of its workforce. 
• McDonald’s will require customers to wear face masks starting Aug. 1. It’s also delaying the reopening of dining rooms for another 30 days.
• Airbus said it took the final step in 16 years of wrangling with the U.S. and the World Trade Organization over subsidies it was granted by European governments.

SPONSORED BY DOCUSIGN

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BREW'S BETS

What to do with your coins: Yesterday, we mentioned the coin shortage facing the U.S. economy. If you have spare coins you want to turn in, here are your options:

• Some banks will reportedly give you extra cash back in exchange for your change, but you’ll need to check with your local branch to verify.
• Find a Coinstar machine to convert coins to cash, a gift card, or a charity donation. The first has a 12% fee, and the last two are free.

Conversation Starters:

• Debate the best way to sign off emails, because apparently “best” is not it
• Is there a wrong way to open a bag of bread? How about chips? 
• What’s the most [insert your city] thing you’ve seen lately?

SATURDAY HEADLINES

The media industry is loopier than ever these days, so we assembled four different headlines to test your BS sensors. Three of the headlines below are real, while one is made up. Can you spot the fake? 

1. "Four-year-old lands book deal for his 'astonishing' poetry"
2. "Gmail tops Twitter, Instagram as the most used iPhone application in the first week of July"
3. "Author loses spot in Top 10 after buying 400 copies of his own book"
4. "Doctors are posting bikini and swimsuit shots to protest a study on 'unprofessional' social media"

SATURDAY HEADLINES ANSWER

Gmail didn't top Instagram or Twitter. But email is always No. 1 in our hearts.