CEOs Love Their Banks Just the Way They Are

Plus: Big Tobacco might be running out of customers. ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌

December 7, 2023 Read in Browser TOGETHER WITH Good morning. In McDonald's new vision, Ronald doesn't have time to sit for a meal or wait for a new batch of fries. But he could sure use another caffeine hit. The fast-food titan unveiled on Wednesday a plan for a new restaurant concept, CosMc's, that will attempt to hitch a ride to two big consumer trends: our love of iced beverages and our love of drive-thrus. Named for one of the company's lesser-known mascots (it's some kind of orange alien), CosMc's will feature more drive-thru lanes, no dining room, and an overall smaller store footprint. The menu will feature limited food items but mostly focus on "customizable" (hello, Starbucks!) iced drinks. We'll admit, the idea of a supersized turmeric spiced latte makes us jittery. Morning Brief • Bank CEOs have thoughts on banking reforms. • Mind if Big Tobacco butts in for a moment? • When it comes to ticket sales, 2023 was the woman's year. Please do not delete this text. Please do not delete this text. Regulation Washington Wants More Rules, Bankers Have Concerns Festivus is right around the corner, and big banking executives are already holding an airing of grievances. On Wednesday, the top bosses from eight major financial institutions including JPMorgan and Goldman Sachs appeared before a Senate committee to give their opinion on looming banking reforms that were crafted in response to this spring's near-industry-wide meltdown. And you'll never guess: The executives aren't too jazzed at the prospect of more regulation. We're in the 'Basel III Endgame' Now The Silicon Valley Bank wipeout and subsequent bank runs that toppled First Republic and Citizens Bank led regulators to double down on their commitment to bring about the "Basel III endgame." That's their name for the final stage of sweeping reforms designed after the 2008 financial crash intended to fortify global banking standards. Essentially, the reform package calls for higher capital requirements based on a bank's credit, market, and operational risks. You know, just to make sure they have enough money on hand in case stuff goes wrong. Or, as in the Great Recession, really, really wrong. In "Basel"-related rules proposed in July, the Federal Reserve, the Federal Deposit Insurance Corp., and the Office of the Comptroller of the Currency called for big banks to increase their cash cushion by roughly 20% to avoid the crunch of another bank run. That's among other reforms such as lowering late fees on credit card payments and limiting debit card interchange fees. In response, JPMorgan CEO Jamie Dimon, Goldman Sachs CEO David Solomon, Citigroup CEO Jane Fraser, and the rest of the bunch on Wednesday appeared before the Senate Banking Committee and made it clear they were really just sticking up for the little guy: • Chief among the executives' arguments is that raising capital requirements will necessarily mean increasing the price or reducing the availability of loans, particularly to lower-income clients. The reforms would therefore be "punitive to economic growth," Solomon argued. • Equity Warrior Dimon, meanwhile, singled out the debit card interchange reforms, which he said would limit lower-income clients' ability to open such accounts, since much of the revenue banks derive from some debit cards comes from those interchange fees. One Democrat wasn't buying it. "[Bankers] threaten that these capital rules will mean they can't loan to small businesses and to homeowners," committee chairman and Ohio Democratic Senator Sherrod Brown said. "They're not doing it enough anyway. And they're immensely profitable stock buybacks, huge dividends, huge profits at the expense too often of working families." Crypto Crunch: Crypto also came up on Wednesday, creating an unexpected meeting of minds. "The only true use case for it is criminals, drug traffickers … money laundering, tax avoidance," Dimon argued, adding "If I was the government, I'd close it down." That prompted Senator Elizabeth Warren, ostensibly the progressive thorn in Dimon's side, to agree. Only Bitcoin bulls can bring everyone else together. - Brian Boyle Please do not delete this text. Please do not delete this text. Industries Big Tobacco's Big Problem: The US Isn't Lighting Up To be clear, the cigarette industry does not thank you for not smoking. British American Tobacco shares dropped 8.5% Wednesday to a 12-year low after the company announced a $31.5 billion write-down for some of its US tobacco brands. And the company's pivot to "healthier" smoke-free products isn't exactly driving huge profits, The Wall Street Journal reported. Sounds like investors are going cold turkey. Ain't as Kool as it Used to Be When smoking was at its peak, sometime before the US Surgeon General's report on its health effects in 1964, a pack of cigarettes cost about 30 cents. Now, the average price for a pack in the US is $7.14, with New York state the most expensive at $10.53, according to data tracker Wisevoter. Add in recent inflation, and that spells bad news for cigarette companies with consumers less inclined to pick up or keep smoking as much as they were. Hollywood stars old and new, like Humphrey Bogart or Ryan Gosling, can always make smoking look cool, but the habit just isn't as appealing as it used to be — only about 1 in 8 adults are still lighting up in the US. Following decades of anti-smoking legislation, tax hikes, and the rise of vapes, a more cigarette-free America has BAT scrambling: • At the end of its last fiscal year, BAT's US brands Pall Mall, Newport, Natural American Spirit, and Camel were worth £67 billion (about $84 billion). But now, the company is cutting the brands' value by roughly a third. US cigarette sales have declined roughly 5% each year for the last few years, but recently, that loss has accelerated to 8%, the WSJ reported. • BAT has been diversifying its non-combustible offerings with vapes and leaf-free pouches, but it's still losing ground to illegal disposal vapes made in China that account for 60% of all vape products sold in the US, the WSJ reported. BAT plans to generate half of its revenue from smoke-free products by 2035, but that type of heavy investment is spooking shareholders who fear it will limit profits and scale down buyback plans. Cold-ish Turkey: Tobacco companies like BAT could lose even more customers thanks to drugs like Wegovy and Ozempic. Though it hasn't been fully studied yet, patients have reported to their doctors that the medications — which reduce appetite cravings in obese and diabetic users — are also limiting their dependencies on alcohol, nicotine, opioids, and even compulsive behaviors like gambling, and online shopping. Not so nice for vice. - Griffin Kelly Please do not delete this text. Please do not delete this text. SPONSORED BY COINBASE The Most Trusted Name In Crypto Just Got Even Better With $114B in safeguarded assets and impeccable compliance standards, people and businesses in 100+ countries already entrust their crypto portfolios to Coinbase. New Coinbase users can now receive up to $200 in crypto simply by signing up.* While no one has a crystal ball, the price of Bitcoin has surged 156% over the last years, with some prominent analysts calling for $100,000 in 2024. New to crypto? Coinbase is the largest cryptocurrency exchange in the United States by trading volume (you might remember their barcode from the Super Bowl) with significant safeguards. A seasoned crypto vet? Coinbase has a suite of powerful tools designed for the advanced trader. Sign up for Coinbase now and get up to $200 in crypto. Please do not delete this text. Please do not delete this text. Media & Entertainment 2023 Was StubHub's Year of the Women (Photo by Lorie Shaull via CC BY 2.0)   It's not just Taylor Swift and Beyonce. StubHub's latest Year in Live Experiences report found women captivated audiences in 2023 and generated massive ticket sales. Who Runs the World? There's no escaping coverage of Swift and her still-ongoing Eras Tour, which is expected to inject nearly $6 billion into the US economy alone. Plus, there's all those Kansas City Chiefs games she attended that drove higher attendance. But it wasn't just a one-woman show: Swift, Beyoncé, Adele, and Pink accounted for nearly three-quarters of ticket sales among StubHub's top 10 artists overall. Sure, Harry Styles got a few million people to show up at his concert, but the other boys have some catching up to do. In addition to driving record-shattering concerts, women also made healthy gains in sports: • For the first time ever, demand for women's college basketball Final Four tickets on StubHub was higher than for the men's counterpart. Also, the WNBA saw its attendance rise 16% and viewership jump 21% year-over-year, making it the most-watched season in more than two decades. • Ticket sales for the National Women's Soccer League doubled from 2022, while tennis player Coco Gauff's presence alone at the US Open finals helped boost total sales to the event 20% overnight. And a University of Nebraska volleyball game set the world record for women's sports attendance with more than 92,000 fans. I Am Kenough: Of course, no news on female-led ticket sales would be complete without mentioning the biggest names in film this year: Barbie, which earned nearly $1.5 billion, even beating out The Super Mario Bros. Movie. We'd pitch the sequel as The Super Mario Sisters. - Griffin Kelly Please do not delete this text. Please do not delete this text. Extra Upside • Crime and punishment: Customer who threw food at Chipotle employee now has to work fast food job for two months. • Return to office: Fully remote work sees sharp decline in 2023. • A picture is worth a thousand words — so goes the old cliché. With Chartr, our favorite visual newsletter, it's actually true. The esteemed analysts at Chartr illustrate and illuminate the below-the-surface trends (hint: the ones that actually matter), which the "smartest" analysts on Wall Street are missing. Over 450,000 forward thinking business professionals turn to Chartr to break down complex economic trends, and you should too. Sign up for free.** **Partner. Please do not delete this text. Just For Fun Old dog, new trick. Right back at you. Disclaimer *Valid for new users who make a cryptocurrency purchase on Coinbase. Limited while supplies last or Coinbase revokes this incentive at its sole discretion. Coinbase reserves the right to change the terms, eligibility criteria, and payouts for all incentives at any time, for any reason. Void where prohibited or if Coinbase determines that the customer is not eligible for the offer. Terms apply. ADVERTISE // CAREERS No longer want to receive these emails? Unsubscribe here. Copyright © 2023 The Daily Upside, LLC., All rights reserved. 1230 York Avenue, Box 154, New York, N‌Y 1‌0‌0‌6‌5