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Good morning readers. The New York Stock Exchange (NYSE) faced a bizarre hiccup on Monday, causing trading chaos for major stocks like Berkshire Hathaway, which briefly plummeted to a jaw-dropping 99.97% loss. NYSE quickly resolved the problem, blaming industry-wide price band issues that “triggered trading halts on up to 40 symbols listed on NYSE Group exchanges.” Despite reassurances from the exchange and regulatory bodies, market experts remained a tad bit skeptical, pointing out inconsistencies in the explanation. While the incident rattled a few stocks, broader market impact remained limited.

Let’s jump into today’s storylines.

In today’s digest:

• Are we heading for another crisis?

• Headline Hustle: Paramount and Skydance are merging, Anthony Fauci gets grilled on U.S. response to Covid-19, Toyota apologizes for cheating on vehicle tests

• The return of Detroit’s Michigan Central Station

• Pulse Points: What’s Trending

HOUSING

A financial tool from the 2008 housing crisis is making a comeback

"Free lunch" might just be the most dangerous phrase in economics, right up there with "this time, it's different." Cue the return of the zero-down mortgage—a financial flashback that's giving market watchers a nasty case of déjà vu.

Here’s the deal

Just two weeks ago, one of the nation's largest mortgage lenders introduced a "new" zero-down program aimed at first-time homebuyers. No down payment? No problem. Borrowers can snag a home with nothing up front, financing 97% of the purchase and getting an interest-free loan for the remaining 3% (up to $15,000). Sound too good to be true? That's because it might just be.

But this shiny new loan package comes with a catch:

• A $15,000 balloon payment waiting at the end of your homeownership journey, payable in full when you sell, refinance, or pay off your mortgage.

• And if the market dips? You're underwater, with more owed on your house than it's worth, potentially triggering a financial nightmare reminiscent of the 2008 crisis.

Critics aren't mincing words, warning that we've seen this horror show before—over-leveraged homeowners and a market teetering on the brink. The "holy crap" moments aren't just limited to unexpected home repairs; they extend to the very foundations of financial stability for low-income buyers tempted by these too-good-to-be-true deals.

Proceed with caution: UWM, the company behind this latest offer, insists that strict underwriting standards will keep the loan portfolio healthy. But with the housing market already squeezed by low inventory and high rates, creative solutions like "assumable mortgages" are gaining traction, offering buyers a way to dodge the high-interest bullet by taking over existing loans with more favorable terms.

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IN THE KNOW

Headline Hustle

📽️ Paramount and Skydance agree to a merger deal. Paramount and Skydance, backed by RedBird Capital and KKR, have agreed to a merger, with terms under review by controlling shareholder Shari Redstone. The $8 billion deal would see Redstone receive $2 billion for National Amusements, and Skydance buying out nearly 50% of class B Paramount shares. Post-deal, Skydance and RedBird would own two-thirds of Paramount. The deal follows a competing offer from Apollo Global Management and Sony Pictures.

😷 Anthony Fauci testifies before the House subcommittee on U.S. response to Covid-19. Dr. Anthony Fauci testified before a House subcommittee on the U.S. Covid-19 response and the virus's origins, marking his first public appearance on Capitol Hill since retiring. The hearing saw contentious exchanges, with Republicans questioning his public health recommendations and email practices. Fauci emphasized the need for better communication between federal and local health officials for future pandemics. He also addressed false claims about influencing scientists regarding the virus's origins and detailed severe threats received during the pandemic, which he fears may deter future public health professionals.

🚗 Toyota apologizes for cheating on vehicle tests and halts production of three models. Toyota Chairman Akio Toyoda apologized for cheating on certification tests for seven vehicle models, leading to the suspension of production for three models. The fraudulent testing involved outdated data and falsified collision and airbag tests. The safety of existing vehicles, including Corolla and Lexus, is not compromised. Similar issues were reported by Mazda and Honda. Toyoda acknowledged the problem stemmed from a push to expedite testing amid increasing model varieties, emphasizing Toyota's commitment to correcting its mistakes and improving its processes.

AUTO

Detroit's iconic Michigan Central Station springs back to life

If Michigan Central Station were a movie, it would be the ultimate comeback kid of the year. Once a relic of decay, this architectural giant is now gearing up to reclaim its spot as Detroit's crown jewel, heralding a new chapter for a city all too familiar with hard knocks.

For over 35 years, Michigan Central Station stood as a stark reminder of Detroit's economic woes—its grand halls, once bustling with travelers, reduced to a playground for graffiti and decay. But that was then. Thanks to a nearly $1 billion lifeline from the Ford Motor Company, this 18-story monolith is poised to dazzle again, starting with a grand reopening that promises to be more than just a ribbon-cutting.

A catalyst for change

The station's rebirth is a metaphor for Detroit's own resurgence.

• Emerging from the largest municipal bankruptcy in U.S. history in 2013, the city has slowly but steadily reversed its fortunes.

• The unemployment rate has dipped to 3.8%, signaling a robust economic turnaround fueled by an invigorated automotive industry and a surge in tech innovation.

This week, Michigan Central will open its doors as a mixed-use behemoth, complete with offices, retail spaces, and a high-tech innovation hub. The nearby Book Depository, now a vibrant tech center, and the station itself are poised to become the heart of a promising innovation district, pushing Detroit back into the spotlight.

Looking ahead…as Michigan Central Station readies for its big reveal, complete with a sold-out concert featuring local legends like Eminem, Diana Ross, and Jack White, it's clear this isn't just a renovation—it's a profound transformation. Detroit isn't just making a comeback; it's setting the stage to once again be a world leader in innovation and culture. So, as the curtains rise on this historic landmark, Detroit watches with pride, ready for its close-up.

SNIPPETS

Pulse Points

• X (formerly Twitter) has updated its rules to formally allow users to post adult and graphic content, provided it is consensually produced and clearly labeled as NSFW. The new rules also include AI-generated videos and images.

• Alphabet is laying off employees from various teams in Google's cloud unit, including sales, consulting, strategy, operations, and engineering, affecting at least 100 positions.

• The chief financial officer of The Epoch Times has been arrested and charged with orchestrating a yearslong scheme to launder at least $67 million in illicit funds, according to federal prosecutors.

• Boeing's Starliner spacecraft is set for its inaugural crewed launch on Wednesday after a computer issue halted the countdown moments before liftoff last Saturday.

• Spotify is raising its prices again, less than a year after the last hike, with the ad-free premium plan increasing by $1 to $11.99 per month starting in July. The Duo plan will rise by $2 to $16.99, and the family plan will increase by $3 to $19.99.

• Coke remains the top soda in America, but Dr Pepper has overtaken Pepsi for the runner-up spot.

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