☕ Price drop

The debt ceiling fight is just heating up... January 14, 2023 [View Online]( | [Sign Up]( | [Shop]( [Morning Brew]( TOGETHER WITH [Cariuma]( Good morning and Happy Saturday. Our fantastic design team was out at a summit yesterday, which left the inmates (us) to run the asylum (image selection for the newsletter). When discussing which images to use for each story, Jamie jokingly floated the idea of using Simpsons GIFs for all of them. At first we laughed, but then we thought…why the heck not? So, for no particular reason, we did. Thank you to Matt Groening for providing an infinite library of timeless scenes to choose from. — Sam Klebanov, Jamie Wilde, Matty Merritt, Max Knoblauch, Abby Rubenstein, Neal Freyman MARKETS Nasdaq 11,079.16 +0.71% S&P 3,999.09 +0.40% Dow 34,302.61 +0.33% 10-Year 3.505% +5.9 bps Bitcoin $20,072.00 +0.06% Amazon $98.12 +2.99% *Stock data as of market close, cryptocurrency data as of 3:00am ET. [Here's what these numbers mean.]( - Markets: Stocks ended the week with a bang yesterday, shaking off the first day of what’s expected to be a bummer of an earnings season. The S&P 500 and the Nasdaq both clinched their [best weeks]( since November. With investors believing that inflation is finally letting up, tech stocks like Amazon are creeping back up again. The e-commerce giant had its best week since April 2020.  GOVERNMENT [Yellen sounds the alarm on debt ceiling]( [Homer Simpson saying the end is near]( The Simpsons/20th Television via Giphy The sky began to slowly descend on Washington as Treasury Secretary Janet Yellen kicked off the fight over the debt ceiling yesterday. Yellen said that if lawmakers don’t raise the cap on government borrowing, the Treasury Department will start taking [“extraordinary measures,”]( like pausing contributions to federal workers’ retirement funds, on Thursday. So, what’s all the fuss about? In order for the US to keep borrowing and paying its bills, lawmakers have to agree on a new debt ceiling. Currently the US is $78 billion away from maxing out the current $31.4 trillion limit (similar to your credit card sitch after the holiday season). This is something only Congress has the power to do, but lawmakers have come to view the procedure as a bargaining chip. The negotiation is expected to be epic: - Ultraconservative Republicans only handed Rep. Kevin McCarthy the House speakership on the condition that a new borrowing limit gets coupled with deep cuts to government spending and a plan to balance the budget in the next decade. (According to the Washington Post, they’ve already prepared a plan for default.) - The White House insists that the new debt limit must be passed with no strings attached. While the government can probably scrape by on the cash it has until early June, all the drama has people thinking about what defaulting for real would be like. Well, the reputation of the US as a borrower would start to resemble that of an unemployed uncle with a gambling addiction. Financial markets would likely enter a tailspin and the US economy would tank. How do we avert the disaster? Lawmakers have to reach a compromise. It could involve negotiations between top House Republicans and the White House, or the House entering a more protracted procedure that entails convincing moderate Republicans to vote with Democrats. But if the traditional route doesn’t work, policy nerds have some workarounds...that are not Yellen-approved. One is minting a trillion-dollar [platinum coin]( to meet the Treasury’s financial obligations. Bottom line: While an unprecedented default on US government debt remains a remote possibility, some parts of the bond market (which holds government debt) are already angsty and preparing for a long congressional fight.—SK �  �  �  TOGETHER WITH CARIUMA [The wait(list) is over]( [Cariuma]( When you’re wearing kicks from Cariuma—[the cool, sustainable sneaker brand]( loved by celebs, skaters, and surfers—your fit doesn’t just look good. It does good for the planet. Each pair is handmade with Mother Nature in mind, from ethically sourced rubber to carbon-neutral shipping. And now, you can get your hands on ’em: Our fan-fave [OCA Low is finally back in stock]( after clearing a 77k waitlist. On top of their classic crowd-pleasers, Cariuma’s limited-edition collabs with Pantone, Avatar, and Peanuts offer a wide range of unique styles to choose from. Slide your feet into these sustainable staples. For a limited time, Brew readers [get an exclusive 20% off with code MBJAN20](. WORLD Tour de headlines [Bart Simpson writing not an FDIC insured bank on the blackboard]The Simpsons/20th Television via Giphy At least it’s looking like a “mild recession.” The four biggest US commercial banks kicked off [earnings season]( yesterday with a mixed bag of results. Though bank lending is looking profitable right now thanks to higher interest rates, the institutions said they were socking away more cash than analysts expected to cover loan defaults in preparation for a recession. Both JPMorgan and Bank of America indicated that they anticipate the downturn will be a “mild” one, but that they have to prepare for the worst anyway. They’re also probably psyched not to be Goldman Sachs, which hasn’t reported earnings yet but revealed that it lost $3 billion on its attempts to serve consumers since 2020. Corporate Demogorgon blinks, for now. Hasbro is retreating for the time being from introducing a new version of the Dungeons & Dragons open game [license]( that had dungeon masters insisting that the company had gone too far in its quest for gold pieces. Hasbro still plans to revamp the 23-year-old license, which allows smaller publishers and creators to make their own riffs on the game, but it’s backing down from some provisions that drove the pushback, including a royalty agreement, and has delayed the release of the new deal. Leopard lost and found. The Dallas Zoo was closed yesterday after it discovered that a clouded leopard named Nova was not in her enclosure. Luckily, Nova—who despite sounding fearsome was described by officials as only 30 pounds and no threat to humans—was located near the enclosure hours later, and preliminarily found to be unharmed. Though zoo officials had faith she’d be found close to her home, Dallas police opened an investigation into the potential involvement of a cat burglar after determining that the leopard’s enclosure was intentionally cut rather than torn. AUTO [Tesla shifts prices into reverse]( [Homer Simpson disappearing into a hedge.]( The Simpsons/20th Television via Giphy For a revolutionary tech company, Tesla is starting to act a lot like your average car manufacturer. After missing year-end delivery goals, the company [slashed]( its vehicle prices in the US and Europe Thursday. The details: Tesla fell short in getting cars into garages despite pulling out all the stops to move its vehicles in December, including $7,500 discounts and the promise of free charging. And this week it went even further and announced another round of price cuts, some as high as ~20%, to goose sales. The new lower pricing also makes more versions of its popular Model Y SUV eligible for Biden’s $7,500 EV tax credit. What does this mean? The company that once bragged about its long waitlist now has too many vehicles sitting around collecting dust. Which isn’t great when you consider the 65% nosedive Tesla’s stock took last year thanks to supply chain problems, skyrocketing interest rates, the EV market becoming more saturated, and Elon Musk’s chaotic Twitter ordeal. Bottom line: Investors are getting nervous. Tesla will report its 2022 Q4 earnings January 25.—MM �  �  �  SPACE [UFOs are stunting through our airspace]( [UFOs are stunting through our airspace]( The Simpsons/20th Television via Giphy National intelligence officials cataloged hundreds of new sightings of unidentified aerial phenomena since last year, according to the [unclassified version]( of a government report released Thursday. The report is part of a growing effort by the US government to investigate UFOs as a legit scientific and national security matter—not a conspiracy theory. Some nuggets from the report: - The number of sightings is going up: There have been 510 sightings recorded by the government since 2004 and 366 of those were added to the list in the last year. - More than half the sightings have been deemed “unremarkable” and “clutter.” (Many were just balloons and drones.) But, 171 are special and have “demonstrated unusual flight characteristics or performance capabilities,” like little Tony Hawks of the sky. Officials have said, repeatedly, that there’s no reason to suspect Kang and Kodos or any other aliens of operating the UFOs—but they also haven’t ruled it out. Zoom out: Any hostile life-forms that want to invade Earth better do it soon. Last summer, NASA said it would [form a team]( to analyze sightings of unidentified aerial phenomena. And last month, Congress [passed legislation]( that requires the Defense Department to reinvestigate UFO reports dating back to the historic New Mexico sighting of an avocado-shaped UFO in 1945 (witnesses said they saw “little creatures,” get hyped!).—JW �  �  �  TOGETHER WITH FUTURE [Future]( Hit the ground running. A New Year’s resolution waits for no one—so if yours is to get healthy or active, [Future]( personal training is for you. With 1:1 personal training and custom workout plans, you’ll crush your goals in no time. [Get a 30-day free trial here](. GRAB BAG Key performance indicators [Homer Simpson saying ]The Simpsons/20th Television via Giphy Stat: Another day, another previously human-only activity that ChatGPT proves to be unsettlingly good at: This time the chatbot wrote medical research [abstracts]( that managed to fool experts. In a recent study, medical researchers were asked to spot the fakes, and they identified 32% of the AI-generated abstracts as real and flagged 14% of the genuine abstracts as phonies. Using computers to fight computers won’t get us out of this mess—an AI output detector guessed wrong slightly more often than the researchers. Quote: “I don’t know whether SBF is guilty of a crime. I therefore reserve judgment until our legal process arrives at a conclusion.” Billionaire investor Bill Ackman took to Twitter this week to remind us all that while it sure might look like ex-FTX CEO Sam Bankman-Fried’s business strategy primarily consisted of playing League of Legends while quietly stealing customer funds, SBF hasn’t actually been [convicted]( of anything yet. Ackman said his commitment to the presumption of innocence was forged by his own experience as the target of investigations by then-New York prosecutor Eliot Spitzer and the SEC, which ultimately found no wrongdoing but still tarnished his rep. Read: Violent gang or rap label? Prosecutors say Young Thug’s YSL is both. ([New York Times]() CARTOON Saturday sketch [A man reading his tell-all memoir to a terrified audience]Max Knoblauch WHAT ELSE IS BREWING - [Donald Trump’s company](, the Trump Organization, was ordered to pay $1.6 million, the maximum possible penalty under New York state law in this case, for tax fraud. - [Apple]( is cutting CEO Tim Cook’s pay by 40% this year (to ~$49 million), a move Cook himself requested after shareholders objected to his compensation package. - [Adidas]( lost its trademark lawsuit against fashion designer Thom Browne over a four-stripe design. - [The NFL]( wild-card round kicks off today with the Seahawks up against the 49ers and the Chargers facing the Jaguars. BREW'S BETS Weekend conversation starters: - What does the world look like [to a bug](? - Do you listen to songs [sped up or at normal speed](? - What book are you [excited to read]( next? - Which celebrity would you most want to [make you dinner](? True champions: Watch prizewinning [husband callers]( do their thing. Touch grass: All US National Parks will be free on MLK Day and [these four other days]( this year. The best snacks…have a tasty crunch and clean ingredients, just like [Catalina Crunch Snack Mix](. The low-carb mixes, in delicious flavors like Cheddar and Spicy Kick, even have 8g of protein. [Get 15% off](.* *This is sponsored advertising content. GAMES The puzzle section Brew crossword: Revisit a notorious music festival from 2017 in today’s crossword. [Play it here](. Open House Welcome to Open House, the only newsletter section that is hiding all of its secrets in plain sight. We’ll give you a few facts about a listing and you try to guess the price. [Mirrored, reflective house in Joshua Tree.]The Invisible House Today’s [listing](, called the Invisible House, is very obviously the first piece of an alien Tetris game. The 5,500-square foot rectangular disco ball next to Joshua Tree National Park is perfect for anyone who wants to keep an eye on everyone and everything at all times. Amenities include: - One loooong room, but two toilets - Indoor pool - Bed with 2,500-pound glass base How much for the shiny log? AROUND THE BREW [Become a data expert]( [Become a data expert]( Has the data you’ve collected started to feel overwhelming? That’s why the Brew launched its newest one-week online course: Data Storytelling. [Learn more and reserve your spot today](. If your New Year’s resolution was to start investing this year, check out Money with Katie’s [Investing 101 series]( for everything you need to get started. Hey, CFOs, need some help with your sustainability initiatives? CFO Brew put together [this handy guide]( just for you. SHARE THE BREW [Share Morning Brew]( with your friends, acquire free Brew swag, and then acquire more friends as a result of your fresh Brew swag. We’re saying we’ll give you free stuff and more friends if you share a link. One link. Your referral count: 0 [Click to Share]( Or copy & paste your referral link to others: [morningbrew.com/daily/r/?kid=a905682a]( ANSWER $18 million � � � � � Written by [Abigail Rubenstein](, [Matty Merritt](, Sam Klebanov, [Max Knoblauch](, [Jamie Wilde](, and [Neal Freyman]( Was this email forwarded to you? Sign up [here](. Take The Brew to work - Marketers: [Marketing Brew](  [Future Social]( - Corporate: [CFO Brew](  [HR Brew]( - Tech: [IT Brew](  [Emerging Tech Brew]( - Retailers: [Retail Brew]( - Healthcare: [Healthcare Brew]( Get smarter in just 5 minutes - Money & Career: [Money Scoop](  [Money With Katie]( Business education without the BS - Programs in [Business Essentials](, [Analytics](, and [Leadership]( Interested in podcasts? - Check out ours [here]( [ADVERTISE]( // [CAREERS]( // [SHOP]( // [FAQ]( Update your email preferences or unsubscribe [here](. View our privacy policy [here](. 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