️Wage against the machine

MARKETS

  • Economy: New York Fed President John Williams came in hot with the rate cut metaphor of the year. “It’s better to deal with the short-term pain of a shot than to take the risk that they’ll contract a disease later on,” he said of the Fed’s not-so-secret plan to cut interest rates later this month.
  • Geopolitics: President Trump said the U.S. “immediately destroyed” an Iranian drone near a U.S. ship in the Strait of Hormuz—a critical oil checkpoint.

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LABOR

Wage Against the Machine

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The Democrat-led House passed a bill to raise the U.S. minimum wage to $15/hour by 2025. Bill proponents say the boost will help the working class benefit more from the current gangbusters economy.

A quick timeline: The federal minimum wage was last raised in 2009 to $7.25/hour, though 29 states and Washington, D.C. have higher pay floors than that. Activists turned up the pressure on the federal government in 2012, when a group of striking fast-food workers launched the “Fight for $15.” We hope we don’t have to explain their objective.

For now, the bill is more of a symbolic gesture

The bill has a snowball’s chance on a subway platform of making it through the Republican-controlled Senate.

  • Majority Leader Mitch McConnell said that he opposes the legislation and doesn’t plan to bring it up in his neck of the Capitol.
  • President Trump also said he would veto it.

Still, this may be a sign of things to come

With high-profile supporters like Rep. Alexandria Ocasio-Cortez and endorsements from several candidates for the Democratic presidential nomination, a $15/hour federal minimum wage may not be far off. So it’s worth considering the potential impact on both employees and employers.

A recent report from the nonpartisan Congressional Budget Office said a $15 federal minimum wage would…

  • Give an income boost to the 17 million U.S. workers who would make less than $15/hour without the bill
  • Possibly give a raise to another 10 million workers who would otherwise make slightly more than $15/hour
  • Put 1.3 million people out of work by straining employers
  • Lift 1.3 million Americans’ income above the federal poverty line

Bottom line: Given the current occupants of the Senate and the White House, a $15 minimum wage will have to wait. Next fall’s elections will tell us just how long.

REAL ESTATE

Headlines That Make You Go..."Wow"

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The WSJ reports that WeWork cofounder Adam Neumann isn’t waiting for his company's IPO to bolster his finances before the next Netflix price hike.

More than $700 million is an “unusually large sum” to cash out pre-IPO, according to the Journal. And Axios’s Dan Primack called the move “in general, a pretty terrible look” since it may suggest a loss of confidence in the company.

However, WSJ sources say that Neumann has borrowed hundreds of millions against his WeWork shares. With most of his wealth still tied up in WeWork, Neumann is probably still bullish on his company’s prospects.

Looking ahead...WeWork, last valued at $47 billion, is expected to go public later this year or in early 2020.

ENTERTAINMENT

Hakuna Ma$$$$

The Lion King launches in North America this weekend, and analysts project moviegoers will flock to theaters like a herd of antelope. The high-tech remake is anticipated to rake in more than $170 million in ticket sales through Sunday in the U.S. and Canada.

Expectations are high. The original Lion King was nominated for four Oscars and won two, while the stage production is still the highest-grossing Broadway show ever. Thus far, critics are lukewarm on the hyper-realist reboot, but that hasn’t mattered much to overseas audiences. The film has already surpassed $100 million at the international box office.

And this year, everything the light touches is Disney’s.

  • The company’s Avengers: Endgame is the second-highest grossing movie in history.
  • Disney (+0.23%) movies account for 35% of domestic ticket sales in 2019, more than the next two studios combined.
  • Disney has released four of the top five films globally this year. Do you think you can name them? (Answer at the bottom.)

Bottom line: Disney’s savvy acquisitions and reuse of iconic IP has the U.S. movie market pinned.

QUIZ

Houston, We Have a Quiz

Coming back stronger than Chipotle. Hydrating before this heat wave hits. Wondering what it’ll look like in 40 years. It’s the Brew’s Weekly News Quiz: Giant Leap Edition.

1. If the device you're using to read this encodes information in bits...what is the equivalent in a quantum computer?

2. About how many nanometers wide is a strand of human hair?

  • 5
  • 7,000
  • 100,000
  • 3 million
  • 3. What is the term for creating a digital replica of your brain and uploading and downloading it like a piece of software?

    4. Rank the following in terms of metric tons of global output in 2018: sheep, fish, bovine, pig, chicken.

    5. Here’s a final moon question on the 1969 moon landing: There was a third astronaut who accompanied Neil Armstrong and Buzz Aldrin on the Apollo 11 mission. Do you know his name?

    Answers: 1) qubit 2) about 100,000 nm 3) whole brain emulation 4) in descending order: fish, chicken, pig, bovine, sheep 5) Michael Collins

    FUSION

    Catch a Falling Star and Put It in Your Fusion Reactor

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    Nuclear power plants use fission, the splitting of uranium atoms, to generate energy. Fusion combines hydrogen nuclei to release helium and energy in the process. Well-known practitioners include our very own sun and Matthew McConaughey in Interstellar.

    Scientists are trying to “basically take a star and put it in a bottle,” according to fusion expert and Chief Science Officer of Commonwealth Fusion Systems Brandon Sorbom.

    • Engineering hurdles include heating plasma up to 100 million °C (which we can do), sustaining these temperatures for extended periods of time (still working on this), and building a device capable of withstanding the pummeling of a million Arizona summers all at once (also a work in progress).
    • Don’t try this at home.

    There are two main approaches to fusion, according to the World Nuclear Association: 1) magnetic confinement, which uses magnetic fields to contain plasma, and 2) inertial confinement, a less popular approach which uses lasers or particle beams.

    Why fusion matters: Transitioning the world’s current energy production to renewables is a massive undertaking, and fusion power will help not only clean up energy production, but scale it tenfold worldwide, according to Sorbom. It will be “almost like solar energy, but you control the light switch on the sun, and you also have the dimmer switch.”

    • Nuclear energy has a rocky reputation. And as much as we want another season of Chernobyl to binge, some people are scared of that happening in their backyard. But with fusion, “there is no risk for a meltdown accident,” says Danas Ridikas, head of the physics section at the International Atomic Energy Agency.

    Let’s fuse it all together

    The promise: Carbon-free energy with a theoretically limitless source of fuel, capable of higher yields than existing fission energy.

    The roadblocks: Scientists can heat plasma up to 100 million °C, but they’re still working on sustaining these temperatures for extended periods of time and building fusion devices that can withstand the heat.

    The timeline: Experts believe we’ll see working fusion energy in our lifetime. They’re still trying to build better reactors today, but recent breakthroughs have many optimistic.

    The players: Governments (U.S., EU, Russia, Japan, China, Brazil, Canada, South Korea), companies (Lockheed Martin, Commonwealth Fusion Systems, General Fusion, Tokamak Energy), academia (MIT, Princeton), and billionaires (Jeff Bezos, Bill Gates, Peter Thiel).

    FUSION

    The Current State of Fusion

    Picture
    Until recently, fusion energy was dominated by work in plasma physics, which kept it a pretty niche field. But it takes a village to raise a reactor:

    • Technologies such as supercomputing, big data analysis, 3D printing, and quantum computing could accelerate the field.
    • Fusion companies also need business people who can scale, commercialize, and get it onto the grid.

    What’s underway

    In the South of France, Speedo-clad scientists from 35 countries are working on ITER, an international fusion project. They’re hoping to create the world’s largest tokamak, a donut-shaped containment chamber that could be the first fusion device to generate net energy.

    But smaller players are also contributing in big ways. Brandon Sorbom of Commonwealth Fusion Systems (CFS) was recently recognized for a breakthrough in tokamak electromagnetic systems that could make fusion devices smaller (and cheaper) to build.

    • By 2025, CFS and MIT are trying to build a power plant prototype called Sparc using the new electromagnetic system.
    • Five to 10 years after Sparc is working, they hope to complete Arc, a demonstration power plant that can put electricity on the grid.

    FUSION

    Take the Leap

    Ready to leave nuclear power plants behind? First, read the Brew’s in-depth article on nuclear fusion. Then, check out these resources:

    • Take six minutes to watch this colorful cartoon explaining fusion power. We made sure to find you one with a British narrator.
    • Watch Let There Be Light, a 2017 documentary about the ITER project in southern France and its aim to solve the global energy crisis.
    • Six years ago, Richard Dinan, who rose to fame as a “playboy entrepreneur” on Made in Chelsea, set out to build a smaller, more compact fusion reactor. His company, Pulsar Fusion, broke ground on a fusion facility in the U.K. earlier this week.
    • According to ITER, the 2013 movie Oblivion was the first time in film fusion was "treated as the energy source it is, whose main vocation is to produce electricity.” The movie featured a space station, the “Tet,” that invaded Earth and turned the oceans into fusion energy. Note: ITER is NOT building that kind of fusion reactor.

    WHAT ELSE IS BREWING

    • Boeing (+2.18% after hours) will book a $4.9 billion charge this quarter related to the grounded 737 Max.
    • Microsoft (+1.31% after hours) beat expectations on the top and bottom lines last quarter as it continued its march toward cloud services.
    • Morgan Stanley (+1.44%) wins the award for the biggest equities trading revenue decline among the big banks this earnings season.
    • GOP senators introduced a bill yesterday aimed at barring Huawei from buying or selling U.S. patents.

    BREAKROOM

    Friday Puzzle
    This puzzle from Braingle is fun because it tests your ability to weave different types of knowledge together.

    There are many four–letter words that can be formed by combining two U.S. state abbreviations. For example: Journey on horseback = RIDE, which is RI (Rhode Island) + DE (Delaware). See if you can figure these out:
    1. Single sheet of glass
    2. Large number of
    3. Mount Vesuvius output
    4. Diamond in the rough
    5. Lacking moisture
    6. Walk through water

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    Breakroom Answers


    Friday Puzzle
    1. PANE = Pennsylvania + Nebraska
    2. MANY = Massachusetts + New York
    3. LAVA = Louisiana + Virginia
    4. COAL = Colorado + Alabama
    5. ARID = Arkansas + Idaho
    6. WADE = Washington + Delaware

     

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