Give us your face

Quote of the Day

There is a tsunami of Congressional and grassroots support to overturn the FCC’s partisan and misguided decision on net neutrality.”

Market Snapshot

• The Dow closed above 26,000 for the first time.
• European markets finished lower, dragged down by the media sector.
• IBM jumped 3% after Barclays upgraded its stock from “underweight” to “overweight.”
• The Bank of Canada raised interest rates.

Bitcoin: A Buying Opportunity or the Beginning of the End?

“I lost my college fund to this price drop. I will not be able to pay next semester if the price doesn’t recover but I am confident it will.” —A concerned, but steadfast crypto investor on Reddit.

Sure, it’s not the most ringing endorsement we've heard for investing in crypto, but for good reason: in the last two days, Bitcoin dropped 30% to below $10,000. And it brought some friends (Ripple, Iota, etc.) along for the ride. In all, the crypto bloodbath slashed over $200 billion in market value.

Interestingly enough, we released our Case Against Bitcoin the day before the crash. Just something to consider...

But if it wasn’t the Brew’s staggering influence on the market that caused the drop, what did?

We’d be lying if we called these ideas more than pure speculation. That said, let’s speculate:

1. Increased regulation

• South Korea: The justice minister initially floated banning all exchanges, but he misspoke. Instead, South Korea will be bringing the hammer down on market manipulation and other unlawful crypto trading practices.
• China: Authorities are ramping up their attack on all crypto exchanges in the country.
• France: The Finance Minister directed a former central banker to draft new policies regulating crypto.

2. Or, you might choose to believe the dip was caused by a higher power...the moon.

Well, the Lunar New Year to be more precise. As the legend goes, retail investors from countries in the Far East—including China and South Korea—cash out crypto holdings this time of year to buy plane tickets and gifts for the holiday. It's known as the “world’s largest human migration.”

And the data checks out. Each of the last four years followed the same pattern: a massive pullback in Bitcoin market value.

• 7 January 2014: Bitcoin dropped ~23%
• 15 January 2015: Bitcoin dropped ~32%
• 16 January 2016: Bitcoin dropped ~27%
• 12 January 2017: Bitcoin dropped ~35%

Did you just get the chills too?

Here’s the thing—what goes down, must come up. Maybe. The cryptocurrency has remained resilient through each of these downturns. And if you scooped up a handful of Bitcoins when it dropped below $1,000 last year, you would have made 20x your return.

Happy Lunar New Year!

Apple Is Bringing Nearly All Its Cash Back to the U.S.

“There’s no place like home”— Dorothy Tim Cook

Apple (+1.65%) is stuffing its suitcase with Benjamins and heading home, announcing it’ll bring nearly all of its $250 billion in overseas cash back to the U.S.

For a firm that’s taken flack for neglecting to include its home country in its sprawling supply chain, Apple is making amends with a massive investment in the States.

So what do you do with $250 billion?

• First, pay $38 billion in taxes in accordance with the new law.
• Create 20,000 jobs and open a second campus (because Cook can’t let Bezos take all the HQ2s for himself).
• Spend $30 billion in capital expenditures, 33% of which will go to data centers.
• And here’s the kicker: make a “direct contribution” of $350 billion to the economy.

Apple’s move is just the latest shoe to drop in what’s been a flurry of announcements by corporations reacting (positively, of course) to the new tax code. But based on the size of its cash pile, Apple will likely have the biggest impact of them all.

Google Thinks Your Face Is a Work of Art

Are you a Mona Lisa or an American Gothic?

If you’re one of the 12.8 million people (as of Monday) using the Google Arts & Culture app, then you know exactly which piece of classic art is your doppelganger.

The app—which works via machine learning and isn’t building a database of all your faces, allegedly—matches users’ selfies to a gallery of famous portraits curated from more than 1,200 museums around the world. It was built by 30 Google employees in Paris who were undoubtedly surprised when it sacré bleu up over the weekend with users taking 450,000 selfies an hour.

Why the uptick when the app has been available since mid-December? A jump in social media shares, which follow the principle of “See Something, Do the Exact Same Something.”

But if you’re reading this in Illinois, Texas, or anywhere outside the U.S., you may notice the selfie feature missing. Laws in those places ban the collection of biometric data (like facial, fingerprint, or iris scans) without a user’s consent. Congratulations, your face will remain in the private collection—for now.

YouTube “Prefer”s Its Content Reviewed

Looking to get extra eyeballs on your YouTube videos? Well, you don’t have a choice if you’re trying to earn those sweet, sweet ad dollars on the platform.

In an effort to win back big advertisers—AT&T, Verizon, McDonald’s, and L’Oreal have all clicked “unsubscribe” in the last year—the Google-owned company has upped the ante on which channels can make money on the video site. To qualify, your channel must have at least 1,000 subscribers and 4,000 hours of videos watched in the past 12 months. So many conditions to meet before you can monetize that time you blew up a jellyfish on camera.

And for those eligible for Google Preferred—a curated lineup of top content that brands pay a premium to advertise on—every single second of video must be watched by a human reviewer before it’s cleared for an ad-run.

Looks like one rotten Paul spoils the whole bunch...

What Else Is Happening…

• Tech executives testified in front of Congress to answer questions about how they intend to handle content from terrorists.
• Ex-Cisco CEO John Chambers is becoming a full-time venture capitalist.
• The FTC is investigating Broadcom (+0.97%) for “anticompetitive conduct.”
• A popular crypto exchange accused of running a Ponzi scheme, Bitconnect, is shutting down.

Economic Calendar

• Monday     Earnings: No Events (Markets Closed)

                    Economic Events: No Events (Markets Closed)

• Tuesday    Earnings: Citigroup (+), CSX (-), UnitedHealth (+)

                  Economic Events: Empire State Mfg Survey (-)

• Wednesday    Earnings: Alcoa (-), Bank of America (+), Goldman Sachs (+)

                        Economic Events: Industrial Production (+), Housing Market Index (+)

• Thursday   Earnings: American Express, Morgan Stanley

                   Economic Events: Jobless Claims, Philadelphia Fed Business Outlook

• Friday       Earnings: SunTrust

                 Economic Events: Consumer Sentiment

The Bigger Picture: Major U.S. Banks Come Off a Solid Year

Not even three weeks in, and it’s already been a whirlwind 2018 for the big U.S. banks. Wall St.’s largest players are getting ready to cash in from the new tax code, which dramatically lowers the corporate rate.

But in the meantime, the legislation has delivered a few punches to Wall St.—specifically, its treatment of overseas profits and the devaluing of deferred-tax assets (losses carried over to reduce your tax obligation in subsequent years).

Let’s survey some of the damage:

• JPMorgan booked a $2.4 billion charge.
• Goldman Sachs took a $4.4 billion hit.
• Bank of America reported a $2.9 billion expense.
• With a Q4 loss of $18.3 billion, Citigroup posted its biggest quarterly drop...ever.

That said, things are looking bright for financial services, and the past year wasn’t too shabby, either.

The Breakroom

Question of the Day

In order to win a free laptop computer, students had to guess the exact numbers of gumballs in a jar. The students guessed 45, 41, 55, 50, and 43, but nobody won. The guesses were off by 3, 7, 5, 7, and 2 (given in no particular order). From this information, can you determine the number of gumballs in the jar?

(Answer located at the bottom of newsletter)

Business Trivia

What was the best-selling vehicle in the U.S. in 2017? Hint: It’s topped the list for 36 straight years.

(Answer located at the bottom of newsletter)

Stat of the Day

$44 billion—How much Ripple co-founder Chris Larsen lost (on paper) since January 4. The popular altcoin fell to $1 from highs of $3.84. At its peak, Ripple made Larsen one of the five wealthiest people in the U.S.

Breakroom Answers

Question of the Day: 48 (Explannation)

Business Trivia: Ford F-Series