Whoooops

MARKETS

• U.S. markets: You know the drill. China trade war escalation up, stocks down. Yesterday, Chinese negotiators suddenly canceled a trip to meet with U.S. farmers.
• U.S. economy: Net worth for households and nonprofits increased $1.8 trillion in the second quarter to $113.5 trillion, so it might finally be time to ditch the Fruitti Rings for Froot Loops.

E-CIG

Walmart Clears Out Its E-Cigs

Walmart (-0.10%), the U.S.’ largest retailer, said it will stop selling e-cigarettes in its U.S. stores due to “growing federal, state and local regulatory complexity and uncertainty.”

But it didn’t do that for the My Little Pony mega-collection...so what’s going on?

The Great E-Cig Crackdown of 2019

In the last few years, vapes have joined protractors as must-have school supplies. 27.5% of high school students say they use e-cigarettes, according to preliminary data from the CDC. That number was 11.7% in 2017.

The situation has gotten more serious in recent weeks. Medical authorities have counted 530 probable cases of vaping-related lung illnesses. Eight people have died.

All of that to say authorities are very much paying attention. In September, governments large, small, and halfway around the world have responded with bans.

• Earlier this month, Michigan became the first state to ban flavored e-cigarettes (the kind most popular among young people). New York has also banned them for 90 days.
• President Trump is expected to announce a ban on all flavored vaping products.
• India said Wednesday it’s banning e-cigarette products to protect young people from nicotine addiction.

Now, Walmart has become an important private sector voice on the issue.

The most popular target?

Juul, the $38 billion e-cigarette market leader. The company is under a harsh spotlight from regulators, and it’s already pulled most flavored pods from U.S. stores. But there’s a huge market overseas, right? Uh...

• Chinese e-commerce companies Alibaba and JD.com stopped selling Juul products just days after they launched in China.
• Juul was planning on entering India, a biiiig smoking country, later this year. That’s not looking likely.

Zoom out: Last year, Marlboro maker Altria invested $12.8 billion for a 35% stake in Juul. Dion Rabouin of Axios thinks that’s “at risk of becoming one of the worst corporate investments of all time.”

ENVIRONMENT

These Boots Were Made for Walking Out

The biggest “future of work” trends: coworking, remote working, and not working.

Yesterday, hundreds of thousands of people and hundreds of companies participated in the youth-led Global Climate Strike, a worldwide demonstration protesting inaction on climate change.

• More than 450 businesses gave workers the day off or closed stores, according to The American Sustainable Business Council. Some even halted manufacturing.
• Ben & Jerry’s turned the Vermont factor up to 11 and did all three.
• Over 7,000 companies participated digitally, with some pledging to devote ad space to climate change. The outdoor retailer Burton even redirected its website to the Global Climate Strike site.

Tech workers also took a break from their standing desks to stand for the environment. Over 900 Google employees and 1,500 Amazon workers were expected to scoot off the job (no, Bezos’s new plan didn’t quell their concerns).

Looking ahead...on Monday, the UN will hold a Climate Action Summit in New York to push world leaders to curb greenhouse gas emissions more aggressively.

ENTERTAINMENT

Netflix or Die

Grey’s Anatomy notwithstanding, the period 2007–2019 hasn’t been easy for entertainment properties. But the comedy website Funny or Die is hoping it cracked the media code.

Funny or Die’s first feature-length film, Between Two Ferns: The Movie, dropped on Netflix yesterday. It’s an extended version of the Zach Galifianakis-hosted talk show of the same name and represents the site’s efforts to adapt for the streaming age, the NYT writes.

A tale of two ferns: The site was founded in 2007 by San Diego-based newscaster Will Ferrell, director Adam McKay, Mark Kvamme, and Chris Henchy. Along the way, it’s spawned some of our favorite internet distractions, but it's also had to contend with big tech’s influence.

• In 2016, Facebook, YouTube, and their ilk tweaked their algorithms to disadvantage destination sites.

Looking ahead...Funny or Die has a chip in several different streaming dips, with series slotted for CBS All Access, IFC, and WarnerMedia. It also read our blog post and decided to get into podcasts.

Bottom line: Funny or Die has chosen Funny.

TRADING

A $320 Million Oopsies

Heat up fish in the company microwave? Text “Heyyyyy ” to your mom instead of your girlfriend? At least you’re not this guy.

A rogue oil trader at Mitsubishi, Japan’s largest trading house, lost $320 million in unauthorized energy bets—bets he “repeatedly” disguised to “look like hedge transactions” with customers. Shocking no one, the unnamed trader was fired and reported to the police.

The trader in question was making bold bets on oil prices. But after those prices fell this summer, huge losses ensued.

• “Adding insult to injury,” as the FT puts it, Mitsubishi closed out the trader’s derivatives positions in mid-August…
• Right before September’s drone attack in Saudi Arabia choked supply and prices surged.

The big picture: For Mitsubishi (which did over $5 billion in profit last year), $320 million is equivalent to the snack budget—but an embarrassment nonetheless. As for the oil industry in general, the rogue trader’s shenanigans join a long list of trading busts, from Metallgesellschaft's $1.2 billion blunder in 1994 to the $550 million facepalm at China Aviation Oil in 2004.

INFRASTRUCTURE

So That's How You Paint a Line

Santa, if you're reading this, one Graco LineLazer IV 250DC please.

WHAT ELSE IS BREWING

• Facebook (-0.11%) has suspended “tens of thousands” of apps as part of the continued Cambridge Analytica fallout.
• Uber (-3.61%) sued New York City over a rule capping how much time drivers can spend in busy Manhattan areas without a passenger in the Black Toyota Camry Arriving Soon.
• The New England Patriots and Nike (-1.16%) both ended their respective deals with wide receiver Antonio Brown following accusations of sexual assault.
• Canadian bank Toronto-Dominion (+0.23%) reportedly accepted accounts belonging to the late convicted pedophile and onetime financier Jeffrey Epstein after Deutsche Bank cut ties.

BREAKROOM

Saturday Headlines
It’s never too early to start thinking about Halloween costumes. In fact, the lingerie brand Yandy has already released a few for this year’s spookfest. Three of these costumes are real, one is fake. Can you spot the fake?

1. Sexy Mr. Rogers
2. Sexy tariff
3. Sexy Beyond Burger
4. Sexy antitrust congressional hearing

Breakroom Answers