Welcome back to Sunday bites folks! We’re out here trying to get some indictment clout, and help you learn some stuff to help you level up your current events game.

Here’s the run-down for this week:

Go Fitch Yourself: A U.S Ratings Downgrade

The U.S. was downgraded from a AAA to a AA+ borrower. Here’s what happened and what it means:

• When a country gets downgraded, the money it borrows has a higher interest rate because it has a higher risk of default

• BUT WHAT DOES THIS MEAN FOR ME? Not a lot. But big pension funds can only hold investments with great credit - if a country gets downgraded, that means the fund has to sell the bonds of that country.

• This means the country has to issue bonds with a higher interest rate in order to attract investors to invest in those bonds

  • Immigrants: Remember your moms and dads investing in their home country’s bonds? And those interest rates were like 20-25%? Yeah, that’s what a downgrade could mean for the US (not that it’ll get that bad).

• This isn’t the first time this has happened. S&P downgraded the U.S. in 2011 (we were just wee lads torrenting shit back then)

How to look great when someone tries to talk finance in the morning meeting:

If you look at Fitch’s reasoning, the downgrade is primarily political, not financial. They even go out of their way to say that the U.S. debt situation has actually improved.

Despite arguments that America's ability to print dollars secures its debt repayment capability, the downgrade reflects heightened policy risk in a polarized political environment.

Got examples? We do. Congressional disputes over the debt ceiling and lack of bipartisan initiatives to address fiscal challenges contributed directly to Fitch’s downgrade.

Trump got indicted on the same day. CONSPIRACY?!

NO, IT’S NOT. BUT His potential resurgence and populist tendencies could exacerbate policy uncertainty, viewing America more as an emerging market than a developed country.

Uber finally cracks a profit

The company posted an operating profit for the first time ever.

• Uber stock is down (~5-6%) and missed its revenue targets this quarter (short of $100 mill)

• Regardless of this numbers bullshit, the company cracked an operating profit of about 326 million

LOOK! A CHART! (screenshot from Bloomberg)

But first…

We just want to re-iterate that it took YEARS for the Uber CEO to get behind the wheel and actually try out the product.

It absolutely tickles us that there was another incident of ignorance when he found out how much a 3-mile ride in NYC actually cost for riders.

You can’t make this stuff up.

On the other hand, Uber is the first major company to crack any kind of profit in the ride-share/delivery space, proving that the business model can actually be feasible, but at the expense of a lot of things.

Again, none of this is investment advice.

What AI made this week

Have a great week!

Ahmed and Peter