☕ Extraordinary measures

How the US plans to avert a default...for now
January 20, 2023 View Online | Sign Up | Shop

Morning Brew

The Ascent

Good morning. It's a winter Friday, and you know what that means: Work three hours of unpaid overtime, get takeout for dinner and it's somehow $72, watch four episodes of the glass blowing reality show, and find yourself Googling "ted mosby based on real guy?" at 2am.

Only eight more weeks until spring…

Matty Merritt, Max Knoblauch, Neal Freyman

MARKETS

Nasdaq

10,852.27

S&P

3,898.85

Dow

33,044.56

10-Year

3.400%

Bitcoin

$21,064.56

Oil

$80.80

*Stock data as of market close, cryptocurrency data as of 5:00am ET. Here's what these numbers mean.

  • Markets: Remember the stock rally to start 2023? Yeah, us neither. The Dow and S&P fell for the third straight day over concerns that—what else?—the Fed will keep hiking interest rates. Fed Vice Chair Lael Brainard didn't calm any nerves by saying that central bankers "are determined to stay the course" until inflation is back at their 2% target.
 

FILM

Alec Baldwin will be charged in fatal 'Rust' shooting

Alec Baldwin Mega/Getty Images

Prosecutors announced yesterday that actor Alec Baldwin and Rust armorer Hannah Gutierrez-Reed will be charged with involuntary manslaughter for the on-set shooting that killed cinematographer Halyna Hutchins and injured director Joel Souza in 2021.

The charge, filed in New Mexico, is a fourth-degree felony, which means that Baldwin and Gutierrez-Reed could face up to 18 months behind bars and a $5,000 fine. But prosecutors also tacked on a provision that could result in five years of prison time because a gun was involved.

Baldwin's attorney responded, "This decision distorts Halyna Hutchins' tragic death and represents a terrible miscarriage of justice…we will fight these charges, and we will win." Baldwin also sued crew members including Gutierrez-Reed and Rust assistant director David Halls in November, alleging they were negligent in handing him the gun.

How we got here

During a rehearsal for the movie Rust in October 2021, Baldwin's gun—which was pointed at Hutchins—fired live ammunition and killed her. Baldwin has repeatedly denied pulling the trigger, saying that he had started to cock the gun and released the hammer. Gun experts have been hesitant to support Baldwin's claim, arguing that would be essentially impossible.

So, how did this happen? Investigators for the Santa Fe Sheriff's Department haven't released information on how live ammunition ended up on a film set, but a separate investigation by the state's Occupational Health and Safety Bureau found that firearm procedures on the set were lax. The agency fined Rust's production company the maximum amount ($137,000) for not following proper safety precautions.

  • The report also uncovered emails and texts that producers sent to Gutierrez-Reed urging her to spend less time on her gun-handling and training tasks to make time for her other props duties.
  • Two firearm misfires five days before the fatal shooting went ignored by Rust management, per the report.

Big picture: The tragedy on the Rust set renewed long-standing safety concerns in the film industry over fatal prop gun mishaps on sets, as well as the minimal training required to become a firearms specialist for film and TV.—MM

        

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WORLD

Tour de headlines

Reed Hastings Picture Alliance/Getty Images

Reed Hastings pulls a Bezos and a Gates. After more than 20 years at the helm of Netflix, Hastings is giving up his co-CEO role and becoming executive chairman, the company announced yesterday. An OG, Hastings co-founded Netflix in 1997 and grew the Blockbuster-destroying DVD rental company into an entertainment giant that disrupted Hollywood. How's that going now, you ask? In its earnings report released yesterday, Netflix revealed it smashed subscriber targets in Q4.

SCOTUS leaker remains a mystery. Eight months into its investigation, the Supreme Court said it still can't find the culprit behind the leak of its draft opinion that overturned Roe v. Wade last summer. That bombshell leak was unprecedented—never in the court's history had an opinion been made public before it issued its ruling—and rattled confidence in the institution. Investigators are still following a few loose strands, but they don't sound particularly confident their efforts will turn up anything.

France rocked by protests. More than 1 million French people protested President Emmanuel Macron's controversial plan to raise the country's minimum retirement age from 62 to 64 yesterday. Many workers also went on strike, resulting in the closing of schools and the cancellation of transit routes and flights. But the battle over the retirement age is just getting started, as major French unions announced a second day of strikes on January 31. Macron says lifting the retirement age is necessary to keep the country's pension fund from drying up.

ECONOMY

Extraordinary times call for extraordinary measures

Federal Reserve Chair Janet Yellen testifies before the House Finance Committee in the Rayburn House Office Building November 4, 2015. She is wearing a purple blazer and in the act of removing her glasses from her face. Chip Somodevilla via Getty Images

As the US crashed into the $31.4 trillion debt ceiling yesterday, the Treasury Department began taking what it called "extraordinary measures" to prevent the government from defaulting on its debts and sparking an economic crisis.

What does that actually mean? These measures are a series of deep-cut accounting moves that allow the Treasury to continue making its payments. They include:

  • Suspending reinvestments into government funds for retired federal employees, such as the Civil Service Retirement and Disability Fund.
  • Selling existing investments in those funds to free up more outstanding debt.

And while these measures definitely aren't ordinary…they probably aren't so "extra," either. The Treasury has resorted to them more than 12 times since 1985, including during the last debt-ceiling standoff in 2021.

Still, these steps amount to chugging water after eating a ghost pepper—the pain will return. Treasury Secretary Janet Yellen said her extraordinary measures will last through early June, giving lawmakers about five months to work out a deal to raise the debt ceiling.

Big picture: The US has never defaulted on its debt, but even the threat of it could be disastrous. The country's first credit downgrade in history came during a debt-ceiling showdown in 2011.—NF

        

RETAIL

Amazon isn't smiling anymore

Amazon boxes Kevin Hagen/Getty Images

With the sheepish energy of someone requesting a refund from the Girl Scouts because their Thin Mints box is dented, Amazon on Wednesday announced that it will shutter its charitable donation program, AmazonSmile, by Feb. 20.

AmazonSmile was launched in 2013 and donated 0.5% of eligible purchases to a charity of a customer's choice. As of the end of December, the program had doled out about $449 million to a wide variety of charities over its existence. Still, Amazon claims AmazonSmile hasn't been as impactful as it originally hoped. The sheer number of charities in the program (1+ million globally) spread its donations too thin, the company wrote in an email to customers.

The move is yet another entry in a string of measures the tech giant has taken in recent weeks to cut costs after a pandemic hiring spree doubled its global workforce to over 1.6 million.

Those other cost cuts: Amazon announced this month that it would lay off more than 18,000 workers in what likely is the largest workforce reduction in the company's history. Amazon has also called it quits on riskier business ventures like its telehealth service and a video chat projector for kids.—MK

        

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GRAB BAG

Key performance indicators

A basketball rim attached to the Eiffel Tower Francis Scialabba

Stat: The Chicago Bulls played an NBA game in Paris yesterday for the first time since Michael Jordan came to town in 1997. Since then, the league has seen an explosion in international players. In 1997, there were 29 international players on opening day rosters; this season there are 120 from 41 countries, accounting for about one-third of all players. And they're among the best in the NBA—two international players (Serbia's Nikola Jokić and Greece's Giannis Antetokounmpo) won the last four MVP awards.

Quote: "Everything is on the table."

Could FTX be resurrected? Maybe, according to its new CEO. John J. Ray III, in his first interview since taking over the company, told the WSJ that he created a task force to explore the possibility of reviving the bankrupt crypto exchange, and if they find that it makes sense, "we'll do it." FTX's maligned token FTT, which was at the center of its epic blow-up, spiked more than 30% after Ray's comments were published.

Read: Fake meat was supposed to save the world. It became just another fad. (Businessweek)

QUIZ

Quiz me thru the phone

Weekly news quiz

The feeling of getting a 5/5 on the Brew's Weekly News Quiz has been compared to never reading about the debt ceiling again.

It's that satisfying. Ace the quiz.

NEWS

What else is brewing

  • David Crosby, of Crosby, Stills, Nash & Young and other bands, died at 81.
  • Instagram is debuting a Quiet Mode that lets you pause notifications.
  • LIV Golf, the Saudi-backed PGA Tour competitor, inked its first broadcast rights deal with CW Network.
  • WWE Executive Chairman Vince McMahon reached a settlement with an ex-wrestling referee who accused him of rape in 1986, per the WSJ.
  • US mortgage rates fell to their lowest level since September.

BREW'S BETS

Experience leather better: This guy on TikTok reviews purses by destroying them.

New Wordle spinoff dropped: It's a great game for movie fanatics.

Cinematic locations: Here are the most filmed locations in every state.

What the smish? Phishing attacks are now invading our text messages. Here's how IT departments can fight back.

This season's hottest trend: It's tax season, and it's all about education. Learn everything you need to know about filing + maxing those refunds on The Money with Katie Show, presented by TaxAct. Listen here.*

*This is sponsored advertising content.

GAMES

The puzzle section

Jigsaw: Our virtual jigsaw has all of the puzzling with none of the cleanup. Play it here.

Friday puzzle

What row of numbers comes next?

1
11
21
1211
111221
312211

AROUND THE BREW

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On Business Casual, Zillow CEO Rich Barton offers solutions to the housing crisis and gives his POV on the future of real estate. Listen here.

What do electric vehicles, AI, and semiconductors have in common? They're all covered in the Emerging Tech Brew newsletter. Subscribe for free.

McDonald's branding is iconic, but what's in the secret sauce? The company's VP of Marketing shared the recipe at The Brief.

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ANSWER

13112221. This is a pretty diabolical set of integers known as the "Look-and-say sequence." To get the next number in the sequence, you read off the digits of the previous item.

For instance, "1" is "one one" so the next item is "11." From that comes "two ones," so you write down "21" and so on. So, to get the next term in the sequence above, it would be "one three, one one, two twos, two ones."

         

Written by Neal Freyman, Matty Merritt, and Max Knoblauch

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