Basis Points – August 25, 2020

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Above the Fold

NYC 70s Flashback … And It’s Not Disco 

New York City is staring down a $9 billion deficit over the next couple years brought on by the pandemic. The Big Apple now faces some very tough financial and social decisions that could bring layoffs for tens of thousands of government workers if a fiscal solution isn’t revealed. Unfortunately, job cuts for city workers like police, fire and social workers would likely exacerbate the city’s growing problems in the near term as crime continues to rise, rents drop and apartment vacancies increase.

Governor Cuomo has appointed several allies to the New York State Financial Control Board, which was created in 1975 to save the city from bankruptcy. Many experts see similar risks today which would mean this board is likely to go from a “review” type stance to a more controlling role like it did 45 years ago. Some believe that a diverse board, consisting of members not connected to a particular political agenda, could provide real, actionable solutions to an increasingly dire situation. 

Three Things 

  1. Can GPT-3 Beat the SAT? An artificial intelligence system called Generative Pre-trained Transformer, third generation (GPT-3) continues to astonish the tech community. The software has the ability to write stories, letters and even investment memos that appear to be penned by the hand of experts. It also can solve the old SAT analogy questions better than most applicants. 
  2. TikTok Sues Trump Administration – In an ironic twist, TikTok parent ByteDance, which was founded and based in communist China, confirmed that it will file a lawsuit against the Trump administration challenging his executive order to divest TikTok’s U.S. operations by Nov. 12. The company claims the order deprives it of due process.
  3. Fannie and Freddie Tack on Another Mortgage “Junk Fee” – Perhaps the biggest saving grace for consumers has been record-low interest rates on home loans. But while consumers dash to refinance, mortgage-buying giants are working to shore up their balance sheets by adding a new 0.5% surcharge to most (refinance) mortgages starting next month. Experts say the new fee will be the equivalent of a 0.125% hike in interest rate, and several lawmakers have opposed the timing of the move.  

Did You Know?

What’s Up With That Little Pocket in Your Jeans?

While you can’t fit much of anything in that little extra pocket in many pairs of jeans, there was a very specific purpose for it back in the day. Levi Strauss & Co. developed the first pair of riveted jeans back in 1879, with just four pockets. One pocket came standard in the back, along with two regular size pockets and a small inner pouch in the front to store your pocket watch. Today, the pocket is more style than function. 

And even though denim pants were already in use by laborers, Levi realized that natural indigo coloring had less “tacky” properties that would allow the fibers and some of the color to soften and dissipate after use and washing (making them increasingly comfortable) — this is why most jeans are blue. 

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