Good Morning! It’s beginning to feel a lot like 2021 again on Wall Street. Banks started reporting Q2 earnings, and Wall Street giants are finally seeing their capital markets business come back to life. And Morgan Stanley thinks the worst of the banking deal-flow lull has bottomed out.

And it’s not just bank stocks that are on fire - Wall Street’s also feeling pretty bullish on Big Tech heading into earnings season. American consumers kept spending in June, and Goldman Sachs and Bank of America are both scaling back recession expectations. And it turns out Oppenheimer is coming out at a convenient time - Christopher Nolan says he wants the movie to be a warning for Silicon Valley’s AI ambitions.

If you are interested in getting in front of a smart, young audience of business leaders, bankers, investment professionals, policy influencers of over 500,000 people, then fill out this form, we’ll be in touch.

_{SQUEEZ OF THE DAY}

Lawyer vs. Banker Cage Fight

It’s been a great year to be a Wall Street lawyer. Investment banking deal flow is drying up, but not legal fees - M&A lawyers can finally say they make more than bankers for the first time in decades.

But are they making too much? Twitter hired Wachtell Lipton, Rosen & Katz, one of the most legendary Wall Street law firms, when Musk went zero dark thirty and threatened to back out of the deal. Musk wanted to buy Twitter at the market price of $30 billion. But Wachtell successfully ensured Musk paid the full $44 billion, adding $14 billion to the company's valuation.

But now Musk himself is suing Wachtell, saying the firm's $90 million in fees were too excessive. But Wall Street lawyers would argue they're compensated more than fairly. The $90 million fee Twitter paid to Wachtell represents merely 0.6% of the increase in value the firm ensured.

But it’s not just M&A lawyers raking in some serious dough. Bankruptcy lawyers for FTX and Bed Bath & Beyond bill over $2000/hour and have already charged eight-figure fees.

Takeaway: Maybe the real question isn’t whether lawyers or bankers should be paid more, but rather who creates more value in a given deal. It’s looking like Wall Street’s top lawyers aren’t content with being relegated as paper-pushers by Patagonia-vest-wearing bankers. But you gotta admit - an almost $100 million fee for defending Twitter looks like a weird flex.

_{CAPITAL PULSE}

Markets Rundown

Stocks closed higher after better-than-expected banking earnings.

Movers & Shakers

• (+) Schwab ($SCHW) +13% after beating Wall Street earnings estimates.

• (+) Morgan Stanley ($MS) +6% after beating earnings on record wealth management revenue.

• (–) Masimo ($MASI) -20% after the medical device maker forecasts weak quarterly sales.

Private Dealmaking

• THL agreed to $1.6 billion deal for fund administrator Standish Management

• Lambda Labs, a cloud infrastructure provider, raised $300 million 

• Netcraft, a cybersecurity company, raised $100 million

• Rocsys, an EV charging automation startup, raised $36 million

• Arkon Energy, a data center infrastructure provider, raised $26 million

• Yellow, a home solar system company, raised $14 million

_{EXCEL COURSE}

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_HEADLINES

Top Reads

• What China’s slump means for the world (Axios)

• Giant banks paid more for deposits in Q2 - bad news for small lenders (YF)

• The war against inflation is a long way away from being won (CNBC)

• Being a financial influencer is fun until you’re fired (BB)

• Will Microsoft-Activision hit pause on merger? (YF)

• SEC is worried chatbots could fuel a market panic (Verge)

• Streaming’s doomsday clock (Axios)

• Buffett cut Activision stake before judge approved Microsoft merger (Reuters)

• Renters are getting squeezed (Axios)

• People have begun to love Apple’s most-hated product (WSJ)

_{BOOK OF THE DAY}

The Paradox of Debt

When we talk about debt and its impact on our economy, we almost always mean “government debt.” However, this is only a small part of the picture: individuals, private firms, and households owe trillions, and these private debts are vital to understanding the economy.

In this iconoclastic book, Richard Vague examines the assets, liabilities, and incomes of the entire country, private and public sector, to reveal its net worth. His holistic analysis shows that the real factor that drives both financial crises and spiraling inequality―but also, paradoxically, economic growth―is ever rising private debt.

The paradox is that while debt is essential and our economy relies on it, it also brings instability unless it is periodically deleveraged―and that is very hard to do. It can, however, be carefully managed, and Vague ends the book by showing how to do so in policy areas ranging from trade and housing to financial policy and student debt.

“Essential for anyone who wants to understand the deep, underlying dynamics of the American economy.”

_{ENLIGHTENMENT}

Short Squeez Picks

• A typology of unwanted Manhattan office buildings

• 10 components of executive presence

• 4 neuroscience habits that will drastically improve your memory brain function

• 15 good habits to have in your life

• How 5 longevity experts drink their coffee

_{DAILY VISUAL}

Consumer Spending Moderates

Change in US Retail Sales

_{SPONSORED BY RYSE}

Window to Invest in the Future of Smart Shades is Closing

Ring 一 Acquired by Amazon for $1.2B

Nest 一 Acquired by Google for $3.2B

If you missed out on these spectacular early investments in the Smart Home space, you may still be able to grab hold of the next one.

RYSE is the tech firm poised to dominate the Smart Shades market (growing at an astonishing 55% annually), and their exclusive public offering of shares priced at $1 is closing next week.

They’ve had hundreds of investors join since the launch of their Series A round, and are preparing for what will likely be one of their biggest milestones: a retail launch in over 100 Best Buy Stores.

The window to invest closes next week - don’t miss it.

_{DAILY ACUMEN}

Hofstadter’s Law

Ever run into Hofstadter's Law?

It's this quirky concept that says everything will always take longer than you expect, even when you account for Hofstadter's Law itself! Wild, right?

So, when your tasks are stretching out longer than planned, don't beat yourself up. Just chuckle and remember that sometimes, life likes to dance to its own rhythm.

No stress, no worries, just Hofstadter doing its thing. Stay cool, and keep going at your own pace.

_{MEME-A-PALOOZA}

Memes of the Day