Morning Brew - ☕️ Ethical questions

The big push to get members of Congress to stop trading stocks...

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Will Varner

IN THIS ISSUE

Rishi Sunak on innovation + Web3

A painful off-boarding experience

Stock trading on Capitol Hill

 
 

Editor's Note

 
 

Good morning. Don’t let them tell you romance is dead. In fact, it’s gone viral.

Software engineer Josh Wardle knew that his partner, Palak Shah, loved word games, and, bored during the pandemic, decided to create one for her as a kind gesture. You might have heard of it: Wordle. After months of playing it as a family, Wardle released the game to the public in October. It had more than 2.7 million players last Monday.

Locket is a hugely popular app with a similar origin story. The app’s creator, Matt Moss, was preparing to go long-distance with his girlfriend, and he devised a way for her to share photos on his phone’s homescreen—like a mini social network feed—to help them stay in touch. Moss started to receive interest from family and friends who also wanted to use the feature, and launched it on the App Store on New Year’s Day. Last Sunday, Locket hit No. 1.

Bottom line: Valentine’s Day is less than a month away. If you don’t gift your partner the next Facebook, you’re just not cutting it in 2022.

—Neal Freyman

 

CULTURE

 
 

Q&A

 

Icebreakers with…UK Chancellor of the Exchequer Rishi Sunak

Rishi Sunak BEN STANSALL/AFP via Getty Images

If you need some exchequing done, Rishi Sunak is your guy. The 41-year-old former banker was appointed the UK’s Chancellor of the Exchequer in February 2020, and in the two years since has orchestrated the country’s Covid economic relief efforts. Now, Sunak’s on a mission to showcase the UK as one of the most forward-thinking economies in the world.

We got on the phone with Sunak while he was visiting the Bay Area.

So what does a chancellor of the exchequer…do?

I am the finance minister of the UK and I’m also a Member of Parliament, so I have a district which I represent that is a rural constituency in the north of England. Being the finance minister, I work closely with Janet Yellen over here and other finance ministers elsewhere.

In my role I have two main bits of it: One is the fiscal side where I’m responsible for tax and spending policy, and the other side is being responsible for the economy more broadly and driving growth.

What surprised you most about the American educational experience when you went to Stanford for your MBA?

At Stanford, you’re in the heart of an ecosystem and a culture that is unlike anything else I’ve seen in the world. It’s because people’s ambitions are that much greater—that is the thing that really struck me. Everyone is interested in changing the world, and they start with the biggest of dreams and the ecosystem around here is supportive of trying to help people realize those ambitions. That desire to do things iteratively, to move quickly…those are all things that I’ve taken with me for the rest of my career and I’ve tried to bring them into government as well, which is a different animal.

What’s your hot take on NFTs?

Someone was asking me the other day which ones I looked at and follow, and I said dumb monkeys more than anything else. But I’ve been having a lot of conversations over the last few days here in the Bay Area about Web3, and I think when people think about crypto, instinctively you’re drawn to the currency bit of it. But I think what people miss potentially is that it’s just one expression of what the underlying distributed ledger and blockchain technology enables you to do. For example, in finance there’s enormous opportunity there and NFTs more broadly allow you to attach value to content creation in a decentralized way, which we haven’t been able to do before.

You don’t drink alcohol. How do you think that’s impacted your career?

I guess clearly not hugely given I’ve broadly been able to do the things that I’ve wanted to do. I have other vices—I eat a lot of dairy, I eat a lot of gluten, I eat a lot of sugar and all of these things that are far harder to find in California these days than it is to find alcohol, so on the vice spectrum one would look at me and say I do a lot of that.

Who’s going to win the Premier League this year?

Well certainly not my team, Southampton, sadly. Man City have looked very, very impressive I have to say, and actually what Thomas Tuchel has done at Chelsea has also been impressive. But yeah, because I support Southampton I focus on the other end of the table more than I do on the top.

This interview has been edited and condensed for clarity.

     
 
 

WORK LIFE

 

For off-boarding, how long is too long?

Make it work image

Each week, our workplace whisperer Shane Loughnane answers a reader-submitted question about work in 2022. Anything bothering you at work? Ask Shane here.

I tried to resign from my workplace, and they asked me to “thoughtfully off-board” over the course of three months to avoid “burning their bridge.” I agreed to a 1-month compromise, even though I don’t want to spend another day in that office. Am I being “thoughtful” or just manipulated?—Anonymous

There are less than three months between a US presidential election and Inauguration Day, during which the transition of nuclear codes hangs in the balance. When the last pope announced his intention to resign, he left the seat vacant just 17 days later. In summary, your employer is asking that your off-boarding period be equal to that of the last president and pope combined.

We’ve all grown fairly accustomed to “two weeks” as the standard notice period (heck, Sandra Bullock even made a movie about it). While expectations can vary internationally and by industry, when an employer requests a “longer than usual” offboarding period, it’s typically understood in advance and often clearly laid out in the employment agreement. Personally I tend to view two weeks as a tad brief, provided you’ve been treated well and depending on factors like seniority, but ultimately that’s more of an etiquette debate.

All that to say, I think your 1-month compromise is probably more thoughtful than it needed to be. Your employer is requesting more than the cultural norm here, essentially asking for a favor which they have no right to expect if they haven’t done their part in creating a work environment that’s warranted such generosity. Given that you “don’t want to spend another day” there, I imagine that’s not the case.

Focus on remaining professional and off-boarding the best you can for however long you decide to stick it out. If that bridge still burns, it will be your employer who is left holding the match. Meanwhile, you’ve departed in good conscience and can safely chalk up any resentment as water underneath.

For more analysis about the workplace, make sure you subscribe to HR Brew.

     
 

ANALYSIS

 

Lawmakers under pressure to close their Robinhood accounts

Nancy Pelosi speaking Drew Angerer/Getty Images

If there’s one thing that can unite liberal Democrats, MAGA hat-wearing Republicans, and everyone on Fintwit, it’s the idea that congressional lawmakers, with their insider intel and ability to create market-moving policy, shouldn’t be able to trade individual stocks.

Momentum is building. Two bills proposed this week, one from a pair of Democratic senators and the other from GOP Senator Josh Hawley, would reduce members of Congress to r/WSB lurkers like the rest of us. Biden’s top economic advisor called a stock-trading ban “sensible.” And House Minority Leader Kevin McCarthy, a Republican, said he’s considering limiting or banning congressional stock trades should his party take back the House in November.

  • These proposed bills wouldn’t ban congresspeople from holding stocks—just trading them individually while they’re in office. The Democrats’ plan, for example, would require lawmakers, their spouses, and dependent children to set up a blind trust for their portfolios.

The current Congress is unlikely to move forward with either bill. House Speaker Nancy Pelosi, who has become a meme for her and her husband’s uncanny investing skills, is against a stock-trading ban. “We are a free market economy” and members of Congress “should be able to participate in that,” she said last month.

And participate they did. Unusual Whales, a site that seeks to empower retail traders, crunched the numbers and found that, last year, members of Congress bought and sold about…

  • $290 million in stocks
  • $140 million in options contracts
  • $124 million in other securities
  • $500,000 in crypto

As a group, on average, they beat the broader market. But these trades were concentrated among a sizable minority of lawmakers; 430 out of 535 total congresspeople didn’t make any trades.

How do we know?

The Stop Trading On Congressional Knowledge (STOCK) Act, passed in 2012, made it illegal for federal lawmakers to conduct insider trades. It also required them to publicly disclose trades greater than $1,000 within 45 days of making them.

But enforcement of the STOCK Act has been less strict than a substitute teacher on a Friday. The Campaign Legal Center, an independent ethics organization, filed complaints Wednesday against seven of at least 15 lawmakers it says have failed to report investments, including one who it claims is 300 transactions behind. No lawmaker has ever been formally sanctioned as a result of the STOCK Act, though some have had to pay fines that are not disclosed to the public.

Zoom out: Why has backlash to congressional stock trading reached a frenzy…now? It’s not exactly a new problem.

One hypothesis is that the surge in retail trading during the pandemic has led to a wave of resentment against any investor with an unfair advantage—like, say, Fed officials who decide interest rates or lawmakers who receive intelligence briefings.

Basically, if Reddit isn’t your best source of information on stocks, then maybe you shouldn't be able to trade them.

JW, NF

     
 
The Economist
 

REAL ESTATE

 

Open house

Welcome to Open House, the only newsletter section that has found the perfect balance between work and play. We’ll give you a few facts about a listing and you try to guess the price.

Denver, Colorado estateZillow

For today’s home, we’re heading to Denver, Colorado, a city where the uniform is Patagonia but you have to sit in two hours of traffic to reach a single mountain. This property is over 10,000 square feet and can be used as a duplex, a fourplex, or a funplex with a full office. The 130-year-old estate was built by famed Colorado architect Robert Roeschlaub. Amenities include:

  • 4 beds, 6 baths
  • An award-winning, 10-car detached garage
  • Two courtyards
  • Countless spaces in which to pretend to work

How much for this historic home office?

     
 

RECS

 

Just click it

1. The battle over the future of Kohl’s. (Morning Brew)
2. “This is not CNN 2”: Inside the cable news giant’s streaming dreams. (Vanity Fair)
3. The trouble with Roblox, the video game empire built on child labor. (The Guardian)
4. How is Covid affecting kids’ brains? (Nature)
5. The history and origin of meditation. (PositivePsychology.com)
6. A simple plan to solve all of America’s problems. (The Atlantic)
7. How Mo Salah became the new king of football. (GQ)
8. The world’s biggest crypto fortune began with a friendly poker game. (Bloomberg)
9. The dirty work of cleaning online reputations. (The Walrus)
10. Bouncing balls, beautiful patterns. (Shinyframes)

Chillin’ on cloud nine. Lahgo’s luxury sleepwear is taking men's rest to new levels of comfort, style, and functionality. Choose from their thermoregulating Washable Silk sets or Restore blends that support your body’s natural recovery process. Cruise this way to comfort.*

*This is sponsored advertising content

 

CONTEST

 

Meme Battle

Welcome back to Morning Brew's Meme Battle, where we crown a single memelord every Sunday.

Today's winner: Morgan in Seattle, WA

Meme about wordle

This week's challenge: You can find the new template here for next Sunday. Once you're done making your meme, submit it at this link for consideration.

 

ANSWER

 

$4.9 million

 

✢ A Note From Facet Wealth

Facet Wealth is an SEC Registered Investment Advisor headquartered in Baltimore, Maryland. This is not an offer to sell securities or the solicitation of an offer to purchase securities. This is not investment, financial, legal, or tax advice.

         

Written by Neal Freyman, Jamie Wilde, Matty Merritt, Max Knoblauch, and Shane Loughnane

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