February 17, 2023

Top stories today: 1) Fed members suggest 50 bps, 2) Snap reaches 750M MAUs, 3) Youtube CEO resigns, 4) SEC charges fugitive Do Kwon, and 5) consumer debt reaches $16.9T.

Hi, and welcome to today's Bay Area Times daily newsletter. Top stories today: 1) Fed members suggest 50 bps, 2) Snap reaches 750M MAUs, 3) Youtube CEO resigns, 4) SEC charges fugitive Do Kwon, and 5) consumer debt reaches $16.9T.

0. Data and calendar

All values as of 3 AM PT / 6 AM ET, other than S&P500 close (1 PM PT / 4 PM ET).

All times are ET.

1. Non-voting FOMC members suggest support of 50 bps hike

  • Saw compelling case for 50bps: "Setting aside what financial market participants expected us to do, I saw a compelling economic case for a 50 basis-point increase. It’s not always going to be, you know, 25." - Loretta Mester.

  • Long battle against inflation: "My overall judgment is it will be a long battle against inflation, and we’ll probably have to continue to show inflation-fighting resolve as we go through 2023." - James Bullard. - Bloomberg

Markets now give an 18% chance of a 50 bps hike

2. Snap reaches 750M MAUs

  • Still much lower than Facebook's 3B and Instagram's 2B MAUs, both owned by Meta.

  • The social media industry has been trending towards oligopoly. Some predicted a monopoly due to network effects, but that's clearly not happening. It's notable the speed at which the big boys copied TikTok: Instagram with Reels, Youtube with Shorts. And Snap's version, Spotlight, now has 300M MAUs.

  • Snap+ has 2.5M subscribers, $100M ARR. - Techcrunch, Bloomberg

3. Youtube CEO out after 25 years

  • Susan Wojcicki was Google's 16th employee, started as a marketing manager.

  • She suggested Google buy Youtube in 2006; the deal closed for $1.65B. Became Youtube CEO in 2014.

  • Led Youtube to $28B in ad revenue in 2022, plus an announced 80M Youtube premium subscribers, which could be generating around $11B in ARR.

  • Probably nothing changes, but it could be another sign of Google's downfall. - Techcrunch

4. SEC charges fugitive Do Kwon with fraud

  • SEC calls even UST a security. Clearly, Gary Gensler wants every part of crypto (perhaps not Bitcoin) to be reporting to him. As UST was very much tied to yield platform Anchor, it is easier to make the case that it is a security, versus, say, USDC or USDT, which have no affiliations with yield products.

  • Do Kwon's current location is unknown, although he is rumored to be in Serbia, which doesn't have an extradition treaty with the U.S.

  • Before announcing criminal charges, the DOJ is probably waiting to get him physically. Which might be impossible if he manages to find a country to hide him. - Bloomberg, SEC complaint

5. Consumer debt reaches $16.9T

  • Mortgage debt: $11.9T (71% of total): important not to forget that homes are still the majority of the consumer's assets and liabilities.

  • Student loan: $1.6T, auto loan $1.6T, credit card $1.0T, HE revolving $0.3T, and others $0.5T. - NY Fed, Bloomberg

6. Ken Griffith makes $4B in 2022, top 15 earn $14B


  • Half of returns come from fees. In line with fees going down and family offices going up.

  • Less than some CEOs. Elon Musk made $10.1B as Tesla CEO in 2021, mostly from long-term stock options. - Bloomberg

7. Tesla x BYD: Tesla losing competitive edge


  • The WSJ has a great video exposé comparing Tesla and its Chinese rival, Charlie Munger-loved BYD. - WSJ

  • In line with our view that Tesla's lead is weakening: the recent 10-20% price cuts were a great example that the market is getting more competitive.

BYD is as vertically integrated (or more) as Tesla


China concentrates lithium refining sites


8. Only 19% of London companies increasing office space


  • The trend is hybrid. Other than the first category ("Increased office space"), all others are in line with a hybrid model.

  • 5% of salary cost: that's City of London office rent as a percentage of salary costs. This number has been steady at around 5% for two decades, from a high of 41% in 1974. - Bloomberg


9. Earnings roundup

  • Paramount reaches 56M subs, will raise prices from $10 to $12/mo.

  • Doordash's revenue grows 40% to $1.8B, 32M MAUs and 15M premium members.

  • Dropbox's revenue rises 6% to $599M as it faces tough competition.

  • Hubspot's revenue grows 27% to $477M.

10. Other headlines

  • Bing Search API prices increasing by as much as 10x.

  • OpenAI says that its goal is to make future models less biased, more customizable.

  • Google asks employees to rewrite Bard's bad responses.

  • Instagram to launch Telegram-like channels in coming months.

  • ByteDance's Slack-like tool reaches $100M in revenue.

  • TikTok is testing in-app checkout.

  • New iOS may let Safari web apps send push notifications, potentially giving Safari an advantage over Chrome.

  • Apple to allow Windows 11 to run on M1/M2 Macs via Parallels. This and the above might be connected to antitrust lawsuit avoidance.

  • Tesla issuing a software recall of 363K cars, will send over-the-air update.

  • Tesla fired Buffalo workers seeking to organize, union says.

  • Docusign to lay off 10% of staff, 700 employees.

  • Tim Berners-Lee predicts we will all have our own personalized AI assistants.

  • Goldman stepping back from bidding for new credit card programs (T-Mobile, Hawaiian Airlines).

  • China tech banker goes missing, plunging bank's shares by as much as 50%.

  • Qatari royals plan £5B opening bid for Manchester United.

Crypto roundup

  • Binance moved $400M of Binance US's funds without authorization, claims Reuters.

  • SBF judge suggests sending his to jail as a fix for bail misbehaviors.

  • Crypto startups delaying token launches due to bear market, Alameda liquidity dry-out.

  • Bitcoin core developers get a WSJ profile.

Washington and more

  • Trump election fraud Georgia grand jury cites possible perjury; charging recommendations kept under seal, charges decision "imminent."

  • Fox News hosts knew that election fraud claims were false, text messages show.

  • Trump lawyer hires its own attorney as grand juries proceed.

  • Russian spies are being hunted down by the U.S. and Ukraine.

  • Section 230 decision by the Supreme Court could affect AI.

  • Biden: no evidence of sudden increase in Chinese spy balloons.

  • Nikki Haley calls Don Lemon "sexist middle-aged" after "woman's prime" comment.

  • Sen. Fetterman enters hospital for severe depression treatment.

  • Portugal ends golden visas, bans new Airbnb licenses.

11. Interesting tweets, memes, and images

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