Amazon's worst nightmare

MARKETS

• U.S. markets: The Dow jumped more than 150 points with bank shares leading the charge. What drove those financial stocks?
• The 10-year Treasury note yield rose to its highest level since May. Remember, rising bond yields imply an increase in the return that investors are looking for. That's a bullish sign for stocks.

BANKING

Save the Drama for Your Danske

Amid its role in what some are calling "one of Europe's biggest dirty money sagas," Danish lender Danske Bank A/S (-4.08%) is trying to come clean. The Copenhagen-based bank (Denmark's largest) said yesterday that ~$234 billion moved through a small branch in Estonia over a period of about eight years.

What's "coming clean" about that?

Well, it just so happens that the small branch in Estonia was allegedly used for years to launder funds from ex-Soviet countries with weak money laundering defenses.

• Here's the backstory

Here's the backstory

The transactions in question took place from 2007 through 2015. Danske was said to have indications of possible wrongdoing, but it didn't begin terminating business with non-Estonian clients until a whistleblower blew a whistle in 2013.

So after a yearlong investigation, Danske announced yesterday that a "large portion" of the $234 billion that flowed through the Estonian branch could be classified as "suspect."

• FYI, that $234bil is almost 9x the total GDP of Estonia. And it's much larger than earlier estimates of a measly $150 billion of questionable transactions.

Danske added that more than 6,200 client accounts have now been "deemed suspicious."

What happens next

Let's start with what happened yesterday: Danske CEO Thomas Borgen resigned (but he'll stay on until a replacement can be found).

Now, U.S., Danish, and Estonian authorities are investigating Danske.

• But the U.S. carries the biggest stick here. Per U.S. regulations, the Treasury could fine Danske or even order U.S. banks to cut off Danske's access to U.S. dollars.

Bottom line, courtesy of the Center for European Policy Studies' Karel Lannoo: "This is a scandal of enormous proportions. We are talking about a country that has the reputation of being one of the cleanest in the world. And this is their largest bank."

TECH

Amazon Faces EU Probe

Margrethe Vestager, European Union antitrust enforcer/the one person who consistently shows up in Silicon Valley CEOs' nightmares, has a new target: Amazon (-0.75%).

What's happening: Vestager and the EU are looking into Amazon's treatment of third-party sellers.

• What that actually means: The question is whether the e-commerce giant uses customer data it gathers (through billions of transactions) to boost its own sales on the platform...and put smaller merchants at a disadvantage.

Vestager's game plan? "We are gathering information on the issue and we have sent quite a number of questionnaires to market participants to understand this issue in full." Still, the probe is in its "very early days."

Remember, Amazon's faced more calls to break up than Musk + Grimes. Just this week, Citi analyst Mark May called for Amazon to spin off Amazon Web Services.

• May's reasoning: "By separating the retail and AWS businesses, Amazon could minimize or avoid the risk of increased regulatory pressure."

CANNABIS

Tilray's Wild, Wild Day

If you didn't know about Tilray before, you definitely do now.

Earlier this week, the Canadian marijuana producer earned approval from the U.S. government to import medicinal cannabis into the U.S. for clinical trials. On Tuesday night, Tilray CEO Brendan Kennedy gave a chest-thumping interview to Jim Cramer.

Then, all hell broke loose.

Yesterday, shares skyrocketed ~90% before erasing most of those gains and briefly dipping into the red. Couple notes:

• The stock was halted from trading five times by Nasdaq due to volatility.
• It ended up 38% for its best day yet as a public company.

Clearly, Tilray has the munchies

During its mega-surge, Tilray at one point yesterday had gobbled up the market cap of food conglomerate General Mills.

Bottom line: Tilray finished the trading day bigger than American Airlines and Clorox, with a market cap close to $20 billion. Look out, Apple. Someone's coming for that $1 trillion crown.

COMMODITIES

Answering Your Crude Question

You couldn't sleep. You tossed and turned. You just needed to know the answer to this one, nagging question:

"How are Iran's crude exports doing now that the U.S. is re-imposing sanctions?"

OK fine, we'll tell you: terribly. Since April, oil exports are down 35% (which is more than expected).

• Remember, in May, President Trump withdrew the U.S. from the Iran nuclear deal, which meant that tough economic sanctions on Iran would go back into effect.
• What's happened since then: Companies in Europe, Japan, India, and more seem to be backing off commitments to buy Iranian crude. That's because the U.S. threatened to cut them off from the American financial system if they continued to do business with Iran.

Zoom out: Per the IMF, close to 80% of Iran's tax revenue comes from oil. So, if the move was designed to apply pressure on Iran (hint: it was), then it's probably working...as long as prices don't spike and hurt American consumers.

CYBERSECURITY

Hey ‘Mr. Robot’ Producers—We've Got a Few Episode Pitches

Well, what else are we supposed to with two stories about hackers?

*Note: this story is fully encrypted and will self-destruct five seconds after being read.

First up, cryptos

A new report from the Cyber Threat Alliance alleges that hackers are illegally generating cryptocurrencies like bitcoin and monero using none other than...a leaked software tool from the U.S. government.

FYI, illicit cryptocurrency mining (the digital equivalent of illegally minting money) has surged 459% this year.

• A recent spike is tied to the 2017 leak of Eternal Blue code, which was allegedly stolen from the NSA by the Shadow Brokers, a post-punk duo hacker group.
• You may know Eternal Blue as the code behind massive breaches like WannaCry and NotPetya.

And next, credit cards

Security firm FireEye confirmed Click2Gov, a widely used web payment portal for local government services like utilities and permits, was targeted by hackers.

What happened: FireEye said hackers uploaded malware that allows them to siphon off payment card data (aka card numbers, expiration dates, names, etc.) over "weeks to numerous months." FYI, it's still unclear how many people could be affected.

FOOD & BEVERAGE

Before You Look at This Chart, We’ll Need to See Some ID

Each week, the Brew is partnering with the infographic wizards at Statista to visualize the most interesting stories happening in business and the economy.

What do we have in common as human beings? Yes, opposable thumbs. But also a curious fascination with a liquid known as "beer." That'll be on display this Saturday, when the Mayor of Munich kicks off Oktoberfest by tapping the festival's first keg (we're guessing it won't be the last).

Humanity's love of beer got us thinking...how much does a pint cost around the world?

WHAT ELSE IS BREWING

• Mike Jackson, the outspoken CEO of AutoNation (+1.90%), will step down in 2019.
• Google's (+0.61%) Home Mini was the bestselling smart speaker worldwide in Q2.
• Amazon is considering opening up to 3,000 cashierless stores by 2021, per Bloomberg.
• Alibaba (+3.82%) chairman Jack Ma said he no longer plans to create 1 million jobs in the U.S. in light of the country's trade war with China.
• Apple Watch Series 4, reviewed.
• The Los Angeles City Council voted unanimously to ban the sale of fur clothing and accessories in the city.

BREAKROOM

From the Crew
We asked you if you knew of any eerily similar logos like Motorola and Marmot. And? You did not disappoint. Here are some favorites...

• Orangetheory Fitness and HubSpot
• Backcountry and Peak Coolers
• Walgreens and the Washington Nationals

Also, regarding yesterday's news about WeWork leasing 5.3 million sq ft in Manhattan, one reader points out..."that's actually bigger than Vatican City" (4.74 million sq ft).

Brain Teaser
There is a five digit square number that is palindromic, and each digit is also a nonzero square number. What is it?

(Answer located at bottom of newsletter)

Breakroom Answers