British Workers Strike Back

Plus: Goldman isn’t done with crypto yet ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌

December 7, 2022

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Good morning.

Most Wall Street CEOs have been known to lay people off when times get tough, but Bank Of America chieftain Brian Moynihan isn’t most CEOs. He’d never lay his people off at the holidays, he’ll just reshape their job away.

While competitors Goldman Sachs and Morgan Stanley are already sending out pink slips ahead of the widely expected recession, Moynihan vowed in a speech Tuesday that BofA would avoid layoffs and he would instead, get this, “reshape our headcount” — a strategy that involves freezing most hirings and the usual pace of employee attrition run its course. Then again, hoping for voluntary employee departures ahead of said widely expected recession feels like a bit of bank shot.

Morning Brief

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It’s beginning to look a lot like strike-mas in the UK.

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FTX’s downfall doesn’t scare Goldman Sachs.

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Chocolate has a new alternative.

Industrial Action

UK Rail Union Plans Extra December Strikes

(Photo Credit: Joshua Brown/Flickr)

The Biden Administration is breathing a sigh of relief after managing to avert railway strikes last week, but on a parallel track, the UK is on a runaway strike train.

The UK’s biggest rail union, the National Union of Rail, Maritime and Transport Workers (RMT for short), announced a planned strike action from Christmas Eve until December 27, continuing a long-running battle between the union and an alliance of the rail companies and the UK government. With healthcare and postal workers also planning strikes this yuletide, Prime Minister Rishi Sunak is probably dreading a visit from a trio of festive ghosts.

Do They Know It’s Christmas?

To weary UK travelers, rail strikes are not a Christmas phenomenon. RMT members first staged walkouts in June this year (two whole prime ministers ago) and they have cropped up periodically since with workers demanding better pay to keep pace with inflation as well as job security. The RMT already had two 48-hour strikes scheduled for December, and it added the Christmas Eve action after rejecting a Sunday offer of an 8% pay rise over two years.

Both sides have blamed each other for holding up negotiations (quelle surprise) but the UK government is under increasing public pressure to resolve disputes as RMT members aren’t the only workers rebelling this Christmas:

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The nurse’s union is due to go on strike for the first time in its 106-year history this month, and ambulance workers are also set to let go of the wheel across England and Wales on December 21st and 28th. Conservative party chairman Nadhim Zahawi told Sky News on Sunday workers should call off the strikes to “send a very clear message to Putin” — guess how well that went down.

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The Royal Mail, which was privatized in 2013, has also seen a smattering of strikes and has six more planned for December, meaning Brits would be better off relying on Santa Claus (or possibly Santa Bezos) for present delivery this year.

Humbug: While rail workers, nurses, and postal workers are fed up, British households will be a little less full on Christmas day. Data released last week by market research group Kantar showed the average Christmas dinner will cost 10% more than last year. With bird flu also ravaging 50% of the UK’s free-range turkeys and geese, the country’s really going to need some Tiny Tim-level optimism.

–Isobel Asher Hamilton

Crypto

Goldman Sachs to Invest Millions into Crypto

The Death Star of global finance is starting to have a good feeling about crypto…even if no one else does.

Goldman Sachs plans to spend tens of millions buying or investing in crypto companies, Reuters reported Tuesday. The FTX implosion didn’t flatten the crypto market, but it definitely made it significantly less crowded, which is just the way Goldman likes it.

How the Mighty Have Fallen

Wall Street’s biggest banks have been playing their own interpretation of Hamlet for almost a decade when it came time to be, or not to be, involved with crypto. Goldman has been, on average, less afraid than its peers of whatever spirits lurk in the blockchain, with CEO David Solomon telling CNBC last year that while he’s not a huge fan of Bitcoin, “The key thing is how can blockchain or other technologies that are not developed yet accelerate the pace of the digitization of the way financial services are delivered.” The mega-firm has even had a digital assets group since 2018. Those investments were all made before armageddon struck the $2 billion crypto exchange FTX and its once-seemingly competent if incredibly awkward CEO Sam Bankman-Fried

FTX, of course, filed for bankruptcy after it was revealed SBF allegedly used billions worth of FTX customer funds to bail out his tanking crypto trading company Alameda Research. The monumental meltdown has torpedoed the value of cryptocurrencies, spurred more fervor for Congress to implement stricter crypto regulations, and left a bad taste in many investors’ digital mouths.

But, as the saying goes; “Forget it, Jake. It’s Goldman.” Populist panic is where the lords of 200 West Street see real opportunity:

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While a few million is a drop in the bucket to the legacy investment bank, which earned $21.6 billion last year, it’s a signal of Goldman’s bullishness on the crypto market. Details are scarce, but digital asset head Mathew McDermott told Reuters Goldman plans on investing in crypto opportunities “priced much more sensibly.”

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Goldman has invested in 11 digital asset companies that provide services such as compliance, cryptocurrency data, and blockchain management, and last week, it launched a digital asset platform and issued a $104 million digital bond for the European Investment Bank.

“FTX was a poster child in many parts of the ecosystem,” McDermott said. “But to reiterate, the underlying technology continues to perform.”

Solid as a Pet Rock?: Goldman’s good vibes on crypto are not being felt by its rivals. HSBC CEO Noel Quin said he has no plans to expand to crypto. Morgan Stanley CEO James Gorman said crypto isn’t a fad, but it is highly speculative. JP Morgan CEO Jamie Dimon had the least diplomatic words in an interview with CNBC, calling crypto “a complete sideshow” and as ridiculous an investment as pet rocks. But are those rocks on the blockchain?

–Griffin Kelly

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Chocolate

British Startup is Breaking the Cocoa Supply Chain

Much like Wu-Tang, one new chocolate startup is for the children.

A new venture is hoping to break the industry’s dark history of agricultural exploitation by turning to a 21st-century solution. You’ve heard of lab-made meat. Now get ready for lab-made chocolate.

Charlie and the Chocolate Laboratory

The world’s largest candy makers Hershey, Nestle, and Mars have long relied on — and periodically vowed to eliminate — brutal child labor in their cocoa bean supply chains. Still, some 1.5 million children are at work for chocolatiers, according to data from the US Department of Labor. While critics argue the candy corporations simply need to pay farmers fairer prices, startup WNWN (pronounced “win-win”, and also, according to Bloomberg, based on the apt phrase “waste not, want not”) is opting to circumvent cocoa altogether.

Crucially, WNWN is replicating the cocoa bean’s critical multi-day fermentation stage in a lab while also using fancy tech to identify chocolate’s distinct flavors and aromas, right down to the “molecular level.” After launching in 2021 and scoring a $1 million fundraising round from Berlin-based VC fund FoodLabs, WNWN is looking to massively expand in 2023:

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The startup already released two limited edition faux-chocolate bars this year, with plans next year to open a Portugal-based factory capable of producing over 330,000 pounds of fake chocolate a month.

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WNWN currently plans to place one product in UK grocery stores in 2023 and aims to eventually expand its technologies to create other agricultural goods that suffer from ethically compromised supply chains, such as coffee and vanilla beans.

“We call ourselves an alternative ingredients company,” co-founder and CEO Ahrum Pak told Bloomberg, adding that WNWN’s methods could also significantly reduce the greenhouse gas emissions and water usage necessary for the typical chocolate bar. It may sound intense, but if it looks like chocolate, and it tastes like chocolate, then who’s to say it isn’t chocolate?

–Brian Boyle

Extra Upside

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Off with his egg! A man has been arrested for allegedly throwing an egg at King Charles.

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Dinner’s ready: Just give it two hours to thaw then dig in.

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The 18th-century Russian city of Königsberg, with seven bridges connecting two river islands in the middle of the city, led to a fascinating question: “Could you start anywhere in the city and cross every bridge exactly once?” On Brilliant, you can solve this riddle yourself—and see how it illuminates a key concept in computer science. Try Brilliant now for free and join 10M+ people sharpening their math and science skills with thousands of fun, hands-on lessons.

Just For Fun

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Disclaimer

*Returns as of Dec. 5, 2022.

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