All on red. No wait...black.

Quote of the Day

Having a bump like this has virtually no consequence in my view to the economic outlook.”

Market Snapshot

• U.S. indexes finished down after another turbulent day.
• Snap popped 48% after strong Tuesday earnings.
• European markets rebounded after a tough start to the week.
• Bitcoin climbed back over $8,000.

The Rise and Fall of Steve Wynn

Steve Wynn, the billionaire casino mogul, has resigned as CEO and chairman of his company, Wynn Resorts (+8.64%). Apparently, it’s tough to do your job amid an “avalanche of negative publicity,” as Wynn called it.

Of course, there’s good reason for the outrage.

The rap sheet: A WSJ report detailed decades of sexual misconduct with female employees, including a $7.5 million settlement paid to a manicurist he allegedly forced into having sex. FWIW, Wynn denies all accusations.

It’s a remarkable downfall for a major Republican donor who was, in many ways, a revolutionary.

Wynn is responsible for Las Vegas as we know it

Through his investments and vision, a struggling desert city bloomed with roulette wheels, Blackjack tables, and other things we probably shouldn’t mention in a morning business newsletter.

What happened in Vegas:

1989—Wynn builds the Mirage, a luxury resort which began the transformation of the Strip into one of the world’s most popular tourist destinations.

1998—At a cost of $1.6 billion, Wynn opens the Bellagio. If you’ve walked along the marble floors or watched the famous fountain show, you know this resort oozes elegance.

2000—Wynn sells his company, Mirage Resorts, to MGM Grand for $4.4 billion. Two years later, he embarks on a new venture, Wynn Resorts.

Today—While its 2005 project, Wynn Las Vegas, remains the Strip’s most profitable casino, the company has focused elsewhere to fuel growth: Macau. Wynn’s two casinos in this Chinese gambling powerhouse account for more than 70% of its earnings.

So what’s next for Wynn Resorts without Wynn?

The resignation throws a wet blanket on a $2.4 billion project in Boston, as the MA Gaming Commission investigates the allegations. And some say Wynn Resorts is disgraced enough to be a takeover target à la Weinstein Co. (would Caesars be interested?). Or here’s a thought: maybe new CEO Matthew Maddox can turn the tables around himself.

But with shares down 11.6% since the WSJ report, we don’t like the odds.

Senate Plays Nice And Signs Two-Year Budget Deal

They’re not raving about it, but Senate Democrats and Republicans linked arms Wednesday to finally pass a two-year budget agreement.

And here’s what they have to show for it:

* A $300 billion budget increase for military and non-defense programs over the next two years
* $80 billion will go towards military spending in 2018, $85 billion more in 2019
* $63 billion will go towards domestic spending (think health care, infrastructure, opioid crisis) in 2018, $68 billion more in 2019
* The rest will go towards bringing back powdered wigs

In short, it’ll keep the government shutdown-free provided the House and Nancy Pelosi give it their blessing. In long? It could spell major problems for the deficit—one that’s already on pace to hit $1 trillion by 2020.

This agreement already surpasses the cap for government spending set in 2011. And then consider a new tax bill that could add $1.5 trillion to the deficit over the next decade.

Investors Tighten Grip on VICE

It’s hard out there for a digital media company. Trust us, we know. Vice Media—the U.S.’ most valuable ($5.7 billion) new media company—found out just how hard when it missed last year’s revenue target. WSJ reported Vice fell short of its $805 million goal by more than $100 million.

The trouble with betting big on video and TV? You can lose big. Trust BuzzFeed, it knows. And so does Vice, with its struggling Viceland cable channel. Its average prime-time audience hasn’t passed 55,000 viewers in the coveted 18-49 demo (vs. hundreds of thousands of viewers drawn by other cable channels).

What investors have their eyes on: even with growth in other areas (web traffic was up 16% YoY), investors—PE firms TPG and TCB, Disney, Hearst, and 21st Century Fox—are pushing Vice to focus on profits. According to the terms of TPG’s $450 million investment, its 8% stake can grow in the next few years, which would dilute other investors’ shares—giving them more of a reason to look for an exit.

Other appointment-viewing: how Vice stabilizes its C-suite after a rash of sexual harassment allegations against co-president Andrew Creighton (return TBD) and chief digital officer Mike Germano (not returning).

Chipotle Tries To Wrap Its Struggling Company in Good Earnings

Despite better than expected Q4 earnings, Chipotle’s stock price took its bowl to-go, plummeting 11%. Namely, because customers never got their bowls in the first place, i.e. customer foot traffic fell once again.

And while Chipotle did grow same-store sales 0.9%, that boost came from price increases at around 900 stores.

Oh que...so...what’s the big deal? Back in its heyday, some thought Chipotle might be the next McDonald’s—just, you know, better for your cholesterol (allegedly). Its stock ran up to $749 in August 2016. But after E. coli outbreaks, gut-wrenching 2016 sales, and a data breach, its share price has steadily fallen to $272. That's almost as much as a side of guac.

The (kinda) good part: 25-year CEO Steve Ells is stepping down as soon as the company finds a replacement—some believe it's Chipotle’s chance to reinvent itself.

The bad part: some believe it’s still overvalued (P/E is well above the industry average), its stores are located too closely together, and competition is growing.

What Else Is Happening…

• WSJ: Goldman Sachs (-0.62) is in talks with Apple (-2.14%) to finance customers’ purchases of its products (paywall).
• More info has come out about the resignation of Lululemon’s (+3.01%) CEO, Laurent Potdevin. It involves a relationship with an employee.
• Yelp fell nearly 11% after hours following its Q4 earnings report.
• Watch out Buffett—Larry Fink and BlackRock are hoping to raise more than $10 billion to replicate Berkshire’s buy and hold model.
• Tesla (+1.12% after hours) posted a net loss of $675 million for the quarter, but beat expectations. Model 3 production is (apparently) on schedule.
• Travis Kalanick testified in the Uber-Waymo trial.
• Perry Ellis’ (+16.74%) founder is attempting to take the company private.

Economic Calendar

• Monday     Earnings: Booz Allen (+), Sysco (+)

                    Economic Events: ISM Non-Mfg Index (+)

• Tuesday    Earnings: BP (+), Chipotle (+), Dunkin’ Brands (+), GM (+), Disney (+)

                  Economic Events: International Trade (-)

• Wednesday    Earnings: Hasbro (+), 21st Century Fox (+)

                        Economic Events: Consumer Credit (+)

• Thursday   Earnings: Activision Blizzard, CVS, Expedia, GrubHub, Twitter, Yum!

                   Economic Events: Chain Store Sales

• Friday       Earnings: No Events

                 Economic Events: Wholesale Trade

Bigger Picture: Budgeting for the Olympics

The lavish opening and closing ceremonies. The beautiful arenas. The less-spectacular (but just as important) transportation and lodging. They all cost a lot of money—and more than most cities expect.

Every Olympics (with available data) since the 1960 Games in Rome has been more expensive than originally projected, with the median cost overrun a whopping 90%.

This Winter Olympics’ host, Pyeongchang, South Korea, originally budgeted $7-8 billion in 2011. But costs are expected to hit the $13 billion mark, or 61.5% over budget. And get this: that number doesn’t even make it to the podium when it comes to blowing an Olympic budget. Let’s see who takes the gold.

Looking ahead to the 2028 Summer Olympics in Los Angeles, we want to hear your Brew-cents, Angelinos—and Olympic fans, at large. Is it worth the bloated bill for cities to host the world’s most prestigious sporting event?

The Breakroom

Question of the Day

We are thinking of a five-digit number in which no two of the digits are the same.

The fourth digit is three times the second; the last digit is two more than the sum of the first and second; the first digit is one less than the fourth; and the third digit is the difference between the last digit and the first.

What's the number?

(Answer located at the bottom of newsletter)

Vegas Trivia

There’s so much you can do in Vegas, it’s easy to lose sight of the stuff you can’t do. Which of the following is an illegal activity on the Strip?

Carry an open container of alcohol, prostitution, smoke in casinos, get married without a blood test or waiting period.

(Answer located at the bottom of newsletter)

Edible Stat of the Day

312—Boxes of Girl Scout cookies sold by a girl outside a San Diego pot dispensary. Brilliant strategy. She has an open position waiting for her at the Brew.

Breakroom Answers

Question of the Day: 52469

Vegas Trivia: Prostitution