The Hustle

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Today, China has created its own spy gear emporium, and weather derivatives are one of today’s symposiums, but first…
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America’s weirdest trade secret theft cases

Most of the trade secret theft cases we read about relate to high-profile tech suits: Uber stealing from Waymo, Apple screwing over Qualcomm, or Huawei pilfering T-Mobile.

But here’s a new one: As the Chicago Tribune reports, popcorn maker CaramelCrisp has filed a federal suit claiming that one of its ex-employees heisted 5k top-secret files that “[put] its secret recipes at risk.”

It’s a reminder that even the nichest of niche businesses must go to battle to defend their trade secrets.

What is a trade secret, anyway?

In sweeping terms, a trade secret is any information (be it a “formula, pattern, compilation, program, device, method, technique, or process”) that gives a company a competitive edge, and derives financial value from not being known to the public.

The classic example is Coca-Cola’s secret recipe, which is known to only 2 living people and is supposedly locked in a multimillion-dollar vault

But popcorn companies have trade secrets too

According to CaramelCrisp (more commonly known as Garrett Popcorn), its popcorn recipes were available to only 3 employees, each of whom had to verify her identity with a biometric thumbprint for access.

Allegedly, one of these 3, former employee Aisha Putnam, got her salty little hands on “information about recipes, batch pricing, product weights, [and] production processes,” and shared them via email with competitors — an offense that can come with hefty restitution fees and jail time.

It gets weirder

Believe it or not, a popcorn trade secret doesn’t even crack the list of strangest trade secret theft allegations we’ve read about:

As they say, the greatest secrets are usually hidden in the most unlikely places.

Or, 3 can keep a secret if 2 are dead

Made in China: The surveillance giant thinks every country should use its technology

Fun fact: Today, over 18 countries — including Ecuador, Zimbabwe, Uzbekistan, Pakistan, Kenya, and Germany — use intelligent surveillance systems to monitor their citizens. Funnest fact: Those systems are all made in China.

That’s because in the last decade, the Chinese government has become the surveillance capital of the world (see “social credit” system), watching citizens from tens of millions of cameras and billions of travel, internet, and business records. 

Now, the government has found a way to make the technology more “affordable” to market toward other countries. But, is citizen surveillance really keeping danger on the streets further away? Or is tech-driven authoritarianism even closer than it appears?

Oh, how far we’ve come

“They’re selling this as the future of governance,” Adrian Shahbaz, research director at Freedom House, said of China’s new surveillance exports. “The future will be about controlling the masses through technology.”

He’s not wrong: According to The New York Times, even countries that couldn’t afford the technology at least signed up to receive training in topics like “public opinion guidance” (AKA censorship).

But don’t worry, Beijing now offers loans to governments that can’t afford surveillance systems — so no country ever has to suffer the hardships of an under-surveilled state.

Never take the loan

In 2011, Ecuador received a Chinese-designed surveillance system in exchange for oil — one of its main exports — but that was only the beginning.

Ecuador has since taken out around $19B in Chinese loans to finance Chinese-built infrastructure projects like dams, bridges, and highways. To settle the bill, China gets to keep 80% of Ecuador’s oil.

» China’s gettin’ paid

Weather is a hot commodity… no, literally

Weather is an unpredictable beast: It directly determines the fate of ~30% of U.S. businesses, and it still sometimes wreaks havoc, albeit indirectly, on all other industries. 

Extreme rainfall, drought, unusual temps, and monster winds have very real financial implications for companies in the agriculture, energy, construction, sports, travel and tourism industries. 

It’s snow joking matter 

Traditional insurance only covers low-probability, catastrophic events like earthquakes — not high-probability, less-dramatic-but-still-detrimental acts of nature like a crazy-warm winter. 

But, in 1996, along came a financial umbrella in the form of weather derivatives — instruments that provide indexes for hedging risks and (whoa) turning weather into a tradable commodity with monetary value. 

CME, a derivatives marketplace, allows companies to enter into insurance-like contracts, paying premiums to sellers to assume the risk of certain indexes related to temps, precip levels, etc. 

Depending on whether the specified index threshold occurs within a given window (e.g., “If local temps fall below freezing at least 15 days in October”), either the seller keeps the profit or pays out — without requiring proof of damage. 

Don’t rain on my trade

In 1999, CME introduced weather futures and options — exchange-traded derivatives. Unlike CME’s other, privately negotiated contracts, these futures are standardized and traded publicly on the open market via online auction and negotiation. 

These derivatives are attractive portfolio additions to some investors due to their low correlation with traditional financial markets. 

Since its introduction, the futures exchange has seen steady growth. CME currently lists derivative contracts for nearly 50 cities globally, and trading continues to increase.

» Make it rain

Walgreens to stop selling tobacco products to customers under 21

Walgreens has announced it will require customers who want to buy tobacco products to be at least 21 years old.

But don’t endorse a Walgreens presidential run just yet — the announcement comes weeks after the FDA accused the drugstore chain of repeatedly selling tobacco products to minors.

Nailed by the undercover boss

During his time as FDA commissioner, Dr. Scott Gottlieb took aim at teenage vaping, intent on keeping vape pushers like Juul and Altria from selling to minors. 

In the midst of his crusade, Walgreens was hit by undercover inspections and reportedly “racked up almost 1.8k violations” related to the sale of tobacco products to minors. And that was just last month.

After the investigation, Gottlieb concluded that Walgreens — one of the largest drugstore chains in the US — was the “top violator” among the pharmacies the agency had inspected. 

Nicotine profits: the most addictive of all

In order to save face, Walgreens has suddenly leaned into its new “Tobacco 21” policy, saying in a press release, “‘Tobacco 21’ reinforces other recent steps the company has taken.” Apparently the company still has some inventory to clear out, as the 21-year-old restriction won’t go into effect until September.

Walgreens’ efforts are a far cry from its rivals’: This month, Rite Aid announced it would stop selling all e-cigarettes and vaping products, while CVS has been off tobacco since 2014. 

So, why doesn’t Walgreens quit altogether? According to Forbes, Walgreens believes its tobacco sales are a business decision designed to address “customer choice.” In other words, they’re making wayyy too much money to quit cold turkey.

» Cash withdrawals are the devil
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You asked, the experts answered

Two weeks ago, many of you shared your burning style questions. After a consultation with the stylists at Stitch Fix, the answers are in.

Q: I have a pair of cute, bright red flats. What can I wear with them?
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If you’re seeking a casual-but-chic look, pair the flats with your favorite jeans, a striped tee, and a sleek leather jacket.

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