Fill in the Blankfein

MARKETS

• U.S. markets: We’re bathing in a sea of green. Stocks shot up following a fantastic jobs report, and the Nasdaq closed at a record high.
• International markets: European markets received a lift from the strong jobs report as well.

FINANCE

Lloyd Blankfein Likely to Leave Goldman Sachs

Lloyd Blankfein, CEO of Goldman Sachs since 2006, is likely stepping as early as the end of the year (h/t WSJ). Don’t worry, he’s already locked in his spot at the Brew as writer No. 3.

The potential replacements? Two Goldman vets and Blankfein’s right and left-hand men: Harvey Schwartz, who ran Goldman’s trading division and David Solomon, who made a name for himself running Goldman’s investment banking arm.

But whoever steps in will have some big, polished shoes to fill—Blankfein ran GS for 12 years, making him the longest-serving current bulge bracket CEO behind JPMorgan’s Jamie Dimon.

And it wasn’t an easy ride

During the recession, Goldman Sachs was the face of Wall Street greed, and Blankfein, only four years into the role, was the face of that face.

Eight years ago, the TV cameras rolled while he sat across from one (rightfully) angry senator, Carl Levin, who interrogated him on why Goldman was “betting against the very securities you were selling to your clients.”

He was publicly scorned after GS’ $10 billion bailout, struggled with tightened regulations from Dodd-Frank, and was even diagnosed with lymphoma…all while working to reshape Goldman and Wall Street’s image.

And despite his work, Blankfein would be leaving with plenty left to be done

Zoom out: Big investment banks are hardly the cash cows they used to be. Banks can no longer leverage 30 times their balance sheet, offering investors eye-popping ROEs year-after-year.

Private wealth managers like BlackRock and Vanguard are hypnotizing investors with their low-cost, passively managed ETFs. And to keep up with the times, Blankfein was forced to reimagine GS as a technology company.

You’re now just as likely to see a trading floor of computers and MIT engineers as you are alpha-male Harvard MBAs.

Goldman does have a plan to add $5 billion more in annual revenue by 2020, but it’ll take some savvy footwork from a Blankfein successor to get the job done.

PHARMA

Shkreli Gets Seven Years in Prison

Martin Shkreli, the most notorious villain outside of Joffrey Baratheon, was sentenced to seven years in prison for securities fraud.

We could joke for days about Shkreli, a 34-year-old whose public persona was larger-than-life (he paid $2 million for a secret Wu-Tang Clan album). But in reality, this is a sad story of a talented business mind gone to waste.

A (really) brief history: Shkreli was always obsessed with Wall St., and dropped out of high school at age 16 to intern at Jim Cramer’s hedge fund. He became known for shorting biotech stocks and cyberbullying companies.

Then things went off the rails. Shkreli jacked up the price of life-saving drug Daraprim 5,000% overnight…but that’s not what landed him in jail. The U.S. convicted him of running a quasi-“Ponzi scheme,” defrauding investors in his two hedge funds while using his pharma company as a personal checking account.

We won’t mind seeing him out of the headlines for a while.

ECONOMY

The U.S. Economy Is Firing on All Cylinders

Do you want the good news or the good news?

The U.S. economy added 313,000 new jobs in February, the best monthly gain in almost two years. Meanwhile, the unemployment rate is still cruisin’ along at 4.1%, an eighteen-year low.

But wait, there’s more:

* Wages grew by 0.1%, calming fears of rising inflation that helped cause market chaos in February.
* Over 800,000 new workers entered the labor force—97% found jobs.
* Retail showed signs of life, adding 50,000 new jobs.

Sound like an insider: Some analysts say the economy is in a sweet spot known as “Goldilocks,” meaning strong growth with low inflation.

Bottom line: Jeremy Klein of FBN Securities told CNBC, “The bulls could not have conjured up a better scenario for the February jobs report than what the government actually printed.”

TECH

It’s the Elon Musk Show at SXSW

Elon Musk did a surprise Q&A session at the SXSW conference, and obviously we’re going to bring you the best bits.

Timeline for Mars: SpaceX should “be able to do short flights, sort of up and down flights, probably sometime in the first half of next year.” Then again, “people have told me that my timelines historically have been optimistic, so I’m trying to recalibrate to some degree here.”

He’s still afraid of AI… “Mark my words: AI is far more dangerous than nukes … I’m very close to the cutting edge of AI and it scares the hell out of me.”

…but bullish on self-driving cars: “By the end of next year, self-driving will encompass essentially all modes of driving and be at least 100-200% safer than a person. We’re talking maybe 18 months from now.”

Who inspires him? “Kanye West, obviously.”

What motivates him: “Life cannot just be about solving one miserable problem after another…there needs to be things that inspire you, that make you glad to wake up in the morning and be part of humanity. That’s why we did this.”

WHAT ELSE IS HAPPENING

• China officially removed presidential term limits, setting the stage for Xi Jinping to have power for…well, as long as he wants.
• Facebook signed a contract with the MLB to stream 25 games this year.
• Peter Thiel’s data mining startup, Palantir Technologies, won a $876 million contract with the U.S. Army.
• Reporting earnings today: Stitch Fix

A CLOSER LOOK

Having trouble staying up-to-date on the latest developments in each industry? We got your back. Today, we’re looking at the results of a new study on fake news.

BREAKING: Amazon is buying Apple and Google for $63 trillion and throwing in Martin Shkreli’s Wu-Tang Clan album.

Okay fine, none of that’s true. But admit it, you almost turned to your co-worker to share the news. It’s a tendency all human beings have. We love sharing the juiciest news with our friends…sometimes before checking to see if it’s true.

And with MIT’s latest study of fake news (the biggest one to date), we finally have some numbers to back it up.

The study: Researchers analyzed 126,000 fake news stories on Twitter over 10 years. The goal was to see just how quickly fake news spreads and if bots are truly responsible.

The result? Across all categories of news, false stories spread significantly faster than real ones, and the primary culprit was…drumroll please…human beings, not bots.

Fake news reached 1,500 people 6x as fast as real news did
Fake political news reached 20,000 people 3x faster than it took all types of real news to reach 10,000 people
Real vs. fake news in practice:

Real: In 2015, Donald Trump let a sick child ride on his plane—only 1,300 people retweeted or shared the story on Twitter.

Fake: In 2016, an elderly cousin of Donald Trump supposedly passed away. In his obituary a quote read, “Please don’t let that walking mucus bag become president.” It was shared by 38,000 users.

THE BREAKROOM

LEADERSHIP TIP
We’ve been there. You were a leader in a few clubs in college…but now in your first job, you’re stuck at the bottom of the totem pole in a large firm. How do you work your way up the ladder? Here are a couple tips from experts: 1) Look to help out on projects with co-workers 2) Ask a TON of questions of your superiors and 3) Don’t talk much about your past accomplishments. No one wants to hear them and it’ll sink your credibility.

DIGITS TO KNOW
$1 billion and counting—How much Black Panther has earned at the global box office after opening in China on Friday. It’s Disney’s 16th film to reach the three-comma mark. Juggernaut.

BRAIN TEASER
In order to encourage his son to study math, a father agrees to pay his boy 8 cents for every problem correctly solved and to fine him 5 cents for each incorrect solution. At the end of 26 problems, neither owes anything to the other. How many problems did the boy solve correctly?

(Answer located at bottom of newsletter)

Breakroom Answers

Brain Teaser
10 (See explanation)