Hi, and welcome to today's Bay Area Times daily newsletter. Top stories today: 1) layoffs at Yahoo, Github, Gitlab, and News Corp, 2) SEC bans Kraken U.S. staking, 3) Paypal earnings, 4) China balloon tensions, 5) Pence subpoenaed, and 6) Russia to cut oil production by 5%.

0. Data and calendar

1. Layoffs: Yahoo, Github, Gitlab, News Corp

• Yahoo to lay off 20%, 1,600 positions; more than 50% of ad tech employees.

• Github lays off 10% (around 300 positions) and goes fully remote.

• Gitlab to lay off 7% (around 100 positions), was already all-remote.

• News Corp to lay off 5%, 1,250 positions.

Still not spreading to the broader economy. These layoffs are still happening primarily in tech and other white-collar sectors. After an unexpected 517K jobs were created in January, the February jobs report will certainly be very telling.

2. SEC bans Kraken U.S. staking, $30M fine

• Staking for U.S. users is immediately shut down in the US. Assets will be returned automatically, except for staked ETH, which will be unstaked after the Ethereum Shanghai upgrade. - Blog post, SEC

• SEC commissioner Peirce publicly rebukes: as she has done many times before. She argues that "the more fundamental question is whether SEC registration would have been possible. In the current climate, crypto-related offerings are not making it through the SEC’s registration pipeline." - SEC's Peirce

• Broad trend of SEC clamping on crypto in the U.S.: meaning companies and users will continue to go offshore. Many sophisticated Americans already use foreign companies and funds to invest in international crypto. Rather than just prohibiting crypto, the SEC could create rules to reduce the likelihood of frauds like FTX (e.g. mandatory proof-of-reserves).

• The IRS wants user info: it filed a court document seeking permission to get information on Kraken U.S. users from 2016 to 2020. - Coindesk

• Paxos investigated: Stablecoin issuer Paxos, which issues BUSD and USDP, is being investigated by the New York Department of Financial Services (NYDFS). - Coindesk

3. Paypal's revenue growth steady at 7%, CEO to retire

• In line with the no-recession narrative. Paypal's revenue comes from a wide range of sectors of the consumer ecnomy, and the fact that it is still growing at a healthy 7% suggests that recession fears might be overpessimistic. - Bloomberg, investor presentation

• CEO to retire at the end of 2023.

• EPS of $1.24, also in line with expectations.

4. China balloon hearings raise tensions

• U.S. is being vocal in announcing its discoveries. A State Department document said that China's balloons were clearly of a spy nature and Chinese balloons had flown over more than 40 countries on 5 continents. - NYT

• They might be using U.S. parts. The balloon had Western-made components with English-language writing on them. After a classified briefing with the DOD, the State Department, and the ODNI, Senator Josh Hawkey (R-Mo.) commented on the balloon having U.S. components: "I don't think there was any definitive answer on that, [that's] a very, very disturbing possibility. - Bloomberg, Fox

• Zoom out: global power spying is normal. History tells us that most global powers have international spy agencies, like the U.S.' CIA, to cite an obvious example. This is normal and, in an ideal world, wouldn't lead to more civilian sanctions or threats of war.

5. Pence subpoenaed by Trump special counsel, Georgia criminal charges could be imminent

• Mike Pence subpoenaed by Trump special counsel: It is not clear whether Pence will respond, as he can invoke executive privilege and kick off a legal fight. Any charges against Trump could take months or years to materialize, and are very controversial given he is the GOP frontrunner. Former national security adviser Robert O'Brien is also being subpoenaed. - ABC, CNN

• State and federal charges for Georgia interference: Trump has escaped criminal charges so far, but the first could be coming soon, from Georgia and/or the federal government, in relation to his alleged interference in the 2020 election. The State District Attorney said her decision is "imminent," and the Supreme Court has previously ruled that states and the federal government can prosecute the same unlawful conduct. - Bloomberg

• Trump is still the heavy favorite for the GOP nominee, little changed from yesterday.

DeSantis supported privatizing Medicare and SS in 2012: Which could come back to bite him, now that entitlement cuts are taboo even in the GOP, which only talks about fiscal cuts when they're out of power. - CNN

6. Russia cuts 5% oil production, escalates in Ukraine; oil up 2%

Quick Russia catchup, with breaking news:

• Russia to cut oil production by 5%, 500K barrels a day.

• Russian missiles crossed Romania/NATO skies, Ukraine says.

• Russia's attacks escalate as Zelensky asks EU for more financial aid.

7. Trump restored on Meta but refuses to use accounts

• Facebook and Instagram restored: Trump now has full access to his old accounts, but just like with Twitter, he's refusing to use them, and exclusively posts on his own Truth Social, where he "only" has 5M followers. - Semafor

8. Analysis: Google's margins are threatened by AI

• Operating margin down from 34% to 12%? That's the estimate of today's cost of putting a ChatGPT-like AI on all Google searches. Of course, Google won't do that any time soon, and compute costs are expected to continue to fall over the coming years. - Afzal Ahmad

  • Bing is playing offense. "Bing has a meager market share. Any share gains Microsoft grabs will give them tremendous top-line and bottom-line financials. "

  • Google is playing defense, with its lighter model. "They could have deployed their full-size LaMDA model or the far more capable and larger PaLM model, but instead, they went for something much skinnier. This is out of necessity. Google cannot deploy these massive models into search. It would erode their gross margins too much."

8. Other headlines

• Elon Musk fires Twitter engineer over engagement debate.

• Lyft's revenue disappoints, net loss widens from $0.3B to $0.6B.

• Cloudflare's revenue grows 42%, non-GAAP income $0.06, in line with expectations.

• Disney's restructuring gives more power to entertainment executives.

• Nelson Peltz drops proxy fight against Disney.

• 7 problems facing Bing, Bard, and the future of AI search.

• Affirm to sunset crypto program after 19% staff cut.

• NFT Manhattan trademark jury awards Hermès $133K in damages against MetaBirkins.

• Binance deploys zk-SNARKS on proof-of-reserves system.

• Disgraced 3AC founders launch "Open exchange" OPNX.

• SBF needs tighter bail restriction, federal judge says.

• Bitzlato founder released from Russian prison.

• LocalBitcoins to shut down after 10 years.

• Thiel Foundation announces 20 new Thiel fellows.

• Recession fears could be overstated.

• Santos charged with theft in 2017; charge was dismissed.

• Santos's expulsion resolution is introduced by Democrats.

• Abe book criticizes Trump's dovish stance on North Korea.

• Trump's political committees spent $1M in his properties since leaving office.

• Alec Baldwin is sued in a civil case by cinematographer's family.

• Parisland: Paris Hilton launches metaverse dating experience.

9. Interesting tweets, memes, and images

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