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The economic impact of abortion access...
May 11, 2022 View Online | Sign Up | Shop

Morning Brew

The Ascent

Good morning. We got a ton of questions about yesterday's state border trivia, so let's set the record straight: Rhode Island does in fact border three states: Massachusetts, Connecticut, and technically New York through a maritime boundary.

If you still don't believe us, we suggest a trip on the Block Island to Montauk ferry this summer.

Max Knoblauch, Jamie Wilde, Matty Merritt, Neal Freyman

MARKETS

Nasdaq

11,737.67

S&P

4,001.05

Dow

32,160.74

10-Year

2.987%

Bitcoin

$30,909.47

Nvidia

$175.95

*Stock data as of market close, cryptocurrency data as of 11:00pm ET. Here's what these numbers mean.

  • Markets: Stocks don't always go up, but thankfully most did yesterday to put an end to the Nasdaq's worst three-day stretch in two decades. Oil has dropped nearly 10% in two days over concerns that a recession will dampen demand for fuel.
  • Economy: What are you doing at 8:30am ET today? That's when the crucial Consumer Price Index report will drop and give us inflation data for April. Economists expect price growth to have dipped slightly from its roaring 8.5% pace in March.

GOVERNMENT

Yellen: Abortion restrictions could damage economy

US Treasury Secretary Janet Yellen ELIZABETH FRANTZ/POOL/AFP via Getty Images

Fallout from a leaked draft of a Supreme Court ruling that would overturn Roe v. Wade continued yesterday when, during a Senate Banking Committee hearing, Treasury Secretary Janet Yellen spoke about the impact that restricting abortion access would have on the economy.

"I believe that eliminating the rights of women to make decisions about when and whether to have children would have very damaging effects on the economy and would set women back decades," Secretary Yellen told lawmakers yesterday. Republican Senator Tim Scott of South Carolina pushed back on Secretary Yellen's comments, calling her framing of the issue in economic terms callous and harsh.

"One aspect of a satisfying life is being able to feel that you have the financial resources to raise a child," Yellen responded. "This is not harsh. This is the truth," she later added.

How did economics end up as part of the debate?

The economic impact of abortions has been investigated for decades, but most recently it was cited in arguments around the Mississippi law that directly challenges Roe v. Wade (which the leaked SCOTUS opinion is in reference to). Officials supporting that law have argued that Roe v. Wade is no longer necessary as, in the 49 years since the ruling, women have reached the "highest echelons of economic and social life."

Yellen's comments—and a number of studies supporting them—challenge that argument.

  • The Turnaway Study followed groups of women who wanted abortions for five years. Two-thirds of the group that was unable to get abortions were living in poverty within six months, compared to 45% of the group that was able to receive the procedure.
  • In 1970, prior to Roe v. Wade, women's labor force participation rate was about 43%. Scholars argue that abortion access was an important factor in raising that rate to 57.4% by 2019.
  • A 2020 paper published by the National Bureau of Economic Research found that being denied abortion access causes bankruptcies and evictions experienced by women to rise by 81%, and increases the amount of debt women hold that is 30+ days past due by 78%.

Looking ahead…the Senate is expected to vote today on advancing a bill that would codify Roe v. Wade into law, though it's likely to fail due to Republican opposition.—MK

        

TOGETHER WITH THE ASCENT

Major cash-back alert

The Ascent

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Bonus time: You get that 0% intro APR until 2023, and you could earn a hefty cash rewards bonus (aka even more $$$).

It's cold, hard cash all the way down, people. Apply for this card here.

WORLD

Tour de headlines

Elon Musk pointing with a bird on his finger Photo Illustration: Dianna "Mick" McDougall, Photo: Getty Images/Frederic J. Brown

One Twitter power user invites another back on. Elon Musk said that permanently banning former President Trump from the platform was "morally wrong and flat-out stupid" at a Financial Times conference yesterday. When/if his deal to acquire Twitter goes through, Musk pledged to reverse the decision. Trump, for his part, had said prior to Musk's comment that he wouldn't return to Twitter and would continue to hang out on his own app, Truth Social.

Peloton's CEO: "Turnarounds are hard." Especially on a stationary bike. In his first earnings call as Peloton captain, Barry McCarthy told investors that he's trying to plug a number of leaks left behind by previous management, including dwindling cash flow, an inventory glut, and being "weaker on everything supply chain" than expected. After an epic stock market tumble, the fitness company is now worth just over $4 billion, down from a peak of more than $50 billion.

Electronic Arts and FIFA are calling it quits. The video game company and the soccer organization will not be renewing their lucrative partnership after more than twenty years of helping college students procrastinate: Once the Women's World Cup is over next summer, EA's soccer game will be called EA Sports FC. The game brought in $20 billion in sales over the past 20 years.

TECH

They're taking the iPod to a farm upstate

Apple iPods in an evolution line that ends in gravesite Francis Scialabba

Apple is finally sending the iPod out to pasture after 20+ years of making it easier to listen to explicit versions of Lil Wayne songs without our parents knowing. The tech giant said yesterday that it will discontinue its iconic iPod Touch, the final remaining product of its music-player-only lineup, marking the official end of the era that revolutionized digital music.

A quick obit: The original iPod—born on October 23, 2001—was the first portable MP3 player that could hold 1,000 songs with a whopping 10-hour battery life. The product was considered a risk for Apple, which almost went bankrupt a couple of years prior and was still primarily known as a computer company. In 2006, it released the iPod Nano that came in colors we were begging to infiltrate the tech world (lime green and hot pink). And in 2007, the very first iPod that you could smudge up with your greasy fingers arrived.

  • At its peak in 2006 (a year before the first iPhone was released), the iPod accounted for 40% of Apple's entire revenue.

Looking ahead…Apple said it will keep selling its iPod Touch inventory until all that remains is an empty Best Buy backroom shelf.—MM

        

CRYPTO

Algorithmic stablecoins looking like

Plane struggles with its takeoff Flugsnug via Giphy

TerraUSD is a type of cryptocurrency known as an algorithmic stablecoin, and its whole schtick is that it's always supposed to be worth $1. But on Monday, amid a broader crash in crypto prices, it plummeted below $0.70.

Even as terra clawed back some of its value on Tuesday, its plunge sent shockwaves through the crypto industry, raising existential questions around the stability—and viability—of stablecoins.

What's an algorithmic stablecoin?

A stablecoin is a crypto that is tied to the value of government-backed currency, and the most popular ones right now are all pegged to $1. Tether, USDCoin, and others are backed by cash and assets to maintain their value.

Algorithmic stablecoins, on the other hand, don't have any collateral behind them. Here's how terra works:

  • A cryptocurrency called luna works in conjunction with terra.
  • When terra's price fluctuates, a financial algorithm kicks in to adjust luna's price so that terra is always equivalent to $1 worth of luna.
  • That incentivizes terra owners to trade back and forth between the two currencies to make a profit, aka arbitrage.

The crypto community losing faith in terra's $1 value has triggered what some have compared to a bank run. To keep the coin from crashing completely, the organization behind terra is dipping into its stockpile of $3.5 billion worth of bitcoin to lend to trading platforms.

Zoom out: In a Senate hearing on Tuesday, Secretary Yellen cited terra's tumble as an example of the "significant risks" of crypto and the urgent need for stablecoin regulation.—JW

        

GRAB BAG

Key performance indicators

Tom Brady entering the Tampa Bay stadium on a golf cart Photo Illustration: Dianna "Mick" McDougall, Photos: Getty Images

Stat: The Fox has hunted down the GOAT. Once Tom Brady retires, he'll join Fox Sports to call football games for a reported $375 million over 10 years. That's the biggest contract in sports TV history—and more than double what Troy Aikman and Tony "I'm going to try to predict every play before it happens" Romo make.

Quote: "It is among the most insipid, vacuous statements in recent pop history."

Pitchfork did not enjoy Jack Harlow's new album. At least we still have "Sundown."

Read: Three days with an NFT consultant making mutant ape rolling papers. (BuzzFeed News)

BREW'S BETS

Fresh podcast episodes:

Weird, but useful: 12 steps that'll help you find a lost object.

Trending on YouTube: The first Avatar 2 trailer and Kendrick Lamar's new music video ft. deepfakes of OJ Simpson, Will Smith, and Kanye West.

Rx AI: NowRx is using proprietary software and robotics to upgrade the pharmacy experience, reducing costs, mitigating errors—oh, and disrupting a $480B industry. Rx-cited about this investment opportunity? It ends 5/20/22, so get in here.* 

*This is sponsored advertising content.

WHAT ELSE IS BREWING

  • Coinbase shares fell 15% after hours when it reported 27% lower revenue in Q1 than a year ago.
  • US gun homicides rose 35% in 2020 to their highest level in more than 25 years, according to the CDC.
  • Celebrity chef Mario Batali was acquitted of sexual misconduct at the end of a speedy trial.
  • Los Angeles told residents they can't water their lawn more than two days a week (down from the current cap of three) due to the drought.
  • Hedge fund billionaire Ken Griffin paid $8 million for a seat on a Blue Origin flight to space at a charity auction. He's donating the seat to an NYC teacher.

FROM THE CREW

Watch celebs get schooled on personal finance

Cash Confessions promo

Tiffany Aliche, aka The Budgetnista, is getting all up in the financial business of your favorite athletes, influencers, and celebrities in Cash Confessions, a brand-new series by Morning Brew. Tiffany uses her experience as a financial coach to help your favorite celebrities overcome their hangups with money.

Watch the episodes here

GAMES

The puzzle section

Word search: Today, the word search is the bird search. Grab your binoculars and identify the bird species here.

Rhode Island trivia

Had to, right? To make up for the confusion, here's an entire trivia section dedicated to the Ocean State.

  1. This company HQ'd in Woonsocket was No. 4 on the Fortune 500 in 2021.
  2. What does RISD stand for?
  3. In terms of area, where does it rank among the 50 US states?
  4. Two sports Hall of Fames are located in Newport. Which ones?
  5. This is the state's official shellfish (it's also the name of a town).
  6. How many states does Rhode Island border? (JK.)
  7. On a scale of 1–10, rate Narragansett beer

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ANSWER

  1. CVS Health
  2. Rhode Island School of Design
  3. It's the smallest
  4. Tennis and sailing
  5. The quahog
  6. Still 3
  7. 3
         

Written by Neal Freyman, Matty Merritt, Max Knoblauch, and Jamie Wilde

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