Insider Finance - Business - Debt ceiling showdown

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May 3, 2023

Hello, Insiders. This is Joe Ciolli, a deputy executive editor in Insider’s business division. The countdown is on towards a US-debt default that could happen as soon as June 1. If that were to transpire, a whole cascade of bad things would befall the economy.

As we break down in today’s big story, politicians have less than a month to break the gridlock, agree to raise the debt ceiling, and save the US from a completely avoidable downturn.

And here’s what else we’re covering:

An explosion of hidden “junk fees” is making every home more expensive.
Leaked documents reveal Amazon’s plan to reboot its struggling Alexa business.
An Airbnb owner put two tiny houses in his yard – and now they're his primary income.

— Joe Ciolli

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THE LATEST

Kremlin, Fed, & Alzheimer’s

Russia has accused Ukraine of trying to assassinate Vladimir Putin in an alleged drone attack on the Kremlin. Read more.
The Federal Reserve is expected to raise its benchmark interest rate by 25 basis points today. Five executives at the elite Milken investing conference warn that the markets may be ill-prepared. Read more.
An experimental drug just showed it can help slow Alzheimer's, offering new hope for patients and a major boost to the pharma giant Eli Lilly. More here.

THE BIG STORY

Debt ceiling crisis

Kent Nishimura/Los Angeles Times via Getty Images

We could be a month away from a debt ceiling-fueled economic crisis. It's entirely avoidable. But the real question is whether Congress will actually step in to stop it.

On Monday, Treasury Secretary Janet Yellen warned Speaker of the House Kevin McCarthy that the US could run out of money to pay its bills — and default on its debt — in less than a month.

The Joint Economic Committee found that a default could cost Americans $20,000 in retirement savings, monthly mortgage payments could climb, and private student-loan payments could surge. A Moody's Analytics analysis found that even a short default could lead to losing 2.6 million jobs.

Republicans see the debt ceiling as a tool for making wide-ranging spending cuts. Democrats point to years of non-contentious and procedural raises as precedent for a clean raise. And both sides are holding strong.

READ THE FULL STORY

TOP READS

Junk fees, Amazon Alexa, & more

Getty; Marianne Ayala/Insider

Real-estate agents are tacking ludicrous “junk fees” onto every home purchase. There's an under-the-radar fee that brokerages have recently been tacking on. It goes by many names: an administrative fee, a transaction fee, or even a "regulatory compliance" fee. But there's little transparency — as well as plenty of room for abuse. Read our full story.
Amazon’s big Alexa reboot. ChatGPT-like features are coming to the voice assistant, according to an internal document seen by Insider. “It feels like Alexa is thinking vs. fetching from a database,” per a memo. Peek into the future of Alexa here.
Cash App creator Bob Lee's autopsy shows he died of three stab wounds. The wounds, which damaged his heart and lung, resulted in Lee's death on April 4, according to the report released by the San Francisco Office of the Chief Medical Examiner. Read the story.
“I shake my head at what my colleagues and I put up with.” Some people may view millennial and Gen Z workers as lazy and entitled. But a retired baby boomer is cheering them on for pushing back against old corporate rules and return-to-office mandates. More here.
Tour this Airbnb owner’s two tiny homes. Ansel Troy originally bought the properties as a way to make some extra cash — but they’re now his primary income. The tiny homes are 18-feet long, and cost between $90 and $250 per night. See inside the houses here.
A dietitian’s three go-to dinners. Kirsten Jackson follows the Mediterranean diet, which is considered one of the healthiest ways to eat. Jackson often cooks in bulk to save time, and she shared her favorite go-to dinners with Insider. One of her favorites is pizza with a whole-wheat base and side salad. Check out the others here.
As China's fleet of J-20 stealth fighters grows, so do suspicions about where Beijing got the tech for it. There are reports that China stole its tech from the US’s F-22. But the rumors go back nearly 25 years, to a bombed embassy and the loss of the first US stealth jet. Read more.

TAKE A LOOK

Cats in uniform

Courtesy of US Naval Institute.

Fascinating fact: Cats once served as vital members of the US Navy. Old photos show the variety of roles these forgotten service felines had on ships – take a look.

WATCH THIS

At the Met Gala

Despite Karl Lagerfeld's controversial past, celebrities paid tribute to him and his beloved cat at the 2023 Met Gala. Watch our recap here.

CAN'T GET ENOUGH?

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This edition was curated by Joe Ciolli, and edited by Hallam Bullock, Lisa Ryan, Diamond Naga Siu, and J.R. Stacey. Get in touch: insidertoday@insider.com.

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Key phrases

elite Milken investing conference Treasury Secretary Janet Yellen The Joint Economic Committee debt ceilingfueled economic crisis first US stealth jet Realestate junk fee explosion The Federal Reserve deputy executive editor benchmark interest rate Los Angeles Times House Kevin McCarthy monthly mortgage payments private studentloan payments wideranging spending cuts chief medical examiner Gen Z workers TOP READSJunk fees ludicrous junk fees regulatory compliance fee San Francisco office US Naval Institute An Airbnb owner Cash App creator old corporate rules big Alexa reboot two tiny homes two tiny houses three stab wounds

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