Jack and Sheryl went up the Hill

MARKETS

• U.S. markets: The Nasdaq and S&P 500 both finished lower. What's up? A deep tech sell-off weighed down stocks.
• Trade: Canada and the U.S. had a "constructive" meeting on NAFTA...but no deal just yet. Keep an eye out.

TECH

Tech in Washington: A Full Course Meal

What did you eat for lunch yesterday? The Senate Intelligence Committee dined on Twitter CEO Jack Dorsey, Facebook COO Sheryl Sandberg...and an empty chair for a no-show, high-level Google exec.

Seriously.

Zoom out: The hearing was another opportunity for tech leaders to show they've learned from past mistakes, like lethargic responses to foreign interference during elections.

The senators started off with a Google antipasto: "I'm deeply disappointed that Google—one of the most influential digital platforms in the world—chose not to send its own top corporate leadership to engage this committee," said Sen. Mark Warner.

So what was the main course?

Mostly comfort food, with a few spicy sides. Overall, Congress and the tech firms appear to be on better terms.

• Sandberg and Dorsey apologized for their platforms' slow responses to Russian meddling during the 2016 elections. But, per Sandberg, Facebook (-2.33%) is getting better at combating "adversaries from financially motivated troll farms to sophisticated military intelligence operations."
• Lawmakers seem committed to imposing some kind of regulation in the future, whether on grounds of data privacy or national security. As Warner said, "The era of the Wild West in social media is coming to an end."

For dessert, Dorsey faced the House Energy and Commerce Committee later in the day: Republican reps expressed concerns that Twitter was intentionally burying conservative voices.

• Dorsey responded that Twitter (-6.06%) "observed that there is no statistically significant difference between the number of times a tweet by a Democrat is viewed versus a tweet by a Republican."
• He also admitted that Twitter needed to do a better (and quicker) job of removing fake or violent posts.

Got room for one more?

Good. Because the DOJ announced that AG Jeff Sessions will be meeting with a few state attorneys to discuss whether tech platforms "may be hurting competition and intentionally stifling the free exchange of ideas."

• Why that's a big deal, per the WaPo: "Legal experts said the agency's announcement ‘clearly suggests' a willingness to intervene on behalf of conservative critics who say they are victims of discrimination by the companies."

ECON

Headline of the Day

Via CNBC
What's the trade deficit again? It's the amount by which the value of a country's imports exceeds the value of its exports.

And thanks to new data from the Commerce Dept., we know that the deficit in July ballooned to $50.1 billion (up 9.5% from June).

What's driving the jump in the deficit?

• Imports rose 0.9% as the U.S. brought in more of, well...just about everything, from vehicles to oil to computers.
• Exports dropped 1% thanks to much lower shipments of soybeans (now subject to Chinese tariffs) and aircraft.

Bottom line: Economists generally agree that a trade deficit isn't bad in and of itself because it reflects a strong economy, coupled with a strong dollar (making foreign goods cheaper to buy).

But...if it continues to widen, it could negatively impact GDP in Q3. We'll see if President Trump's tariffs rein in the deficit. So far, no dice.

CRYPTO

Bitcoin Plummets as Goldman Rethinks Crypto Plans

Y2K, Google Glass, a Goldman Sachs cryptocurrency trading desk—not everything that's expected to be huge pans out.

Bitcoin prices fell ~5% in a single hour yesterday after Business Insider reported Goldman Sachs (-0.05%) is putting plans to open a crypto trading desk on hold.

• Remember, Goldman has debated launching digital currency operations all year. Many thought that would be the institutional stamp of approval the nascent crypto-sphere needed.

But now, Goldman execs reportedly say the regulatory environment is just too messy.

Some background: U.S. regulators have increased scrutiny of cryptocurrencies—especially when it comes to initial coin offerings (ICOs). The SEC warned last year that some coins issued in ICOs *could* be considered securities...which would require them to comply with federal securities laws.

Bottom line: It's unclear where crypto regulation goes from here. Until there's more direction, big banks like Goldman will likely continue to warm the bench.

REGULATION

Today in Crazy Legislative Acronyms

We present...the "Stop BEZOS Act" from Vermont Senator Bernie Sanders. Clearly, Bernie's been doing his acrostics.

(Stop)
Bad

Employers by

Zeroing

Out

Subsidies

Remember, we told you Monday that Sanders has been taking on Amazon (-2.19%) and its CEO, Jeff Bezos (no caps necessary), for years—targeting the way it pays and treats its warehouse workers.

Now, the Stop BEZOS Act, which Sanders introduced with Rep. Ro Khanna (D-CA), aims to tax corporations for every dollar that low-wage workers receive in public assistance programs like food stamps or government healthcare benefits.

• Translation: Call out mega-rich CEOs of companies like Amazon and Walmart, whose employees rely heavily on government assistance to get by.

Sanders's own words: "Our legislation gives large, profitable employers a choice: Pay workers a living wage or pay for the public assistance programs their low-wage employees are forced to depend upon."

But some critics say the tax will disincentivize companies from hiring workers who need government assistance.

RIDE-SHARING

Uber’s Axing Some Riders With Bad Ratings

Stop asking to turn up the radio, quit canceling your rides, and never leave your garbage. Uber's going to start banning riders with ratings lower than four out of five stars in Australia and New Zealand.

The specs: Uber's new policy (beginning Sept. 19) will ban low-rated riders for six months. Aussies and Kiwis, if you're toeing the line, you'll get a notification when your rating falls below four stars. Then, you'll have an opportunity to bump it back up (aka say your "thank yous" and tip 50%).

• FWIW, the average Australian Uber rider has a 4.5-star rating or higher (what do you think it is in NYC?)

Now, if you're starting to sweat thinking this could come to a country near you (that's still unclear), keep this in mind: "You don't need to be chatty, but be respectful," Uber GM Susan Anderson said. "Take your rubbish with you and don't make a mess in the car."

ENTERTAINMENT

Down, Set, NYFW

Behind-the-scenes brawls. Smudgy eyeblack and special diets. Shots of Tom Brady and Gisele. Are you ready for some...New York Fashion Week?

The semiannual swanky fashion marathon returns to NYC today (bringing with it $887 million in total economic impact for NYC, according to the city).

• Per NYT fashion critic Vanessa Friedman, NYFW comes "amid the turmoil of midterm elections in which more women are running for office than ever before." The "undercurrent of the season"? How to dress future female leaders, with just 61 days to midterm elections.

Plus, tonight's the start of the NFL regular season...

...an enormous opportunity for Big Media.

• Fox, NBC, and CBS each spend ~$1 billion annually in NFL rights fees. And ESPN forks over ~$1.9 billion for Monday Night Football alone.

Zoom out: NFL viewership last season dipped ~10%...but some context per The LA Times: "Ratings for the National Football League are smaller than they were three years ago. But they are still a lot bigger than everything else on TV."

+ During the Eagles vs. Falcons game tonight, Nike will debut a "Just Do It" ad, featuring Colin Kaepernick, LeBron James, Serena Williams, and other high-profile athletes.

WHAT ELSE IS BREWING

• At least 10 passengers fell ill on an Emirates flight from Dubai to JFK.
• The FBI has opened a probe into pricing practices in AmEx's (-1.26% after hours) foreign exchange business, per a WSJ report.
• Toyota (-1.22%) will recall ~1 million hybrid vehicles over a wiring issue that could pose a fire risk.
• 21st Century Fox (-0.15%) invested $100 million in social live-streaming startup Caffeine, adding to a funding round that also included Andreessen Horowitz and Greylock.
• J. Crew has started selling some of its clothing through a dedicated Amazon online storefront.
• NBC ordered a new Dick Wolf "Law & Order" series focused on hate crimes.

BREAKROOM

LISTEN UP
Two podcast episodes we're digging recently...

• Our very own CEO, Alex Lieberman, talks about what it was like starting (and now running) the next big thing in business news on "Entrepreneur Before 25."
• Tim Ferriss interviews Coach George Raveling, a sports business legend whose story about Dr. Martin Luther King Jr.'s "I Have a Dream" speech is straight out of a movie.

BRAIN TEASER
A group of doctors attended a conference. All but 40 were cardiologists. All but 50 were pediatricians. All but 60 were surgeons. These were the only types of doctors in attendance. How many in all attended the conference?

(Answer located at bottom of newsletter)

Breakroom Answers