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Welcome back to a marvelous Monday from horrific holiday Hell, N2K reader!

Erika Ettin won last week’s world-famous news haiku competition™ with 341 votes for this poem, based on news that lower-than expected inflation sent markets soaring:

Congratulations, Erika! John Travolta is here with your congratulatory gif:

And here’s the rest of the pretty decisive voting…

🟨⬜️⬜️⬜️⬜️⬜️ Inflation is down, just in time for Christmas day, wait until New Year — Steve (72)

⬜️⬜️⬜️⬜️⬜️⬜️ Santa Clause rally…In relation to markets… Belly inflation 👍 — Jon Daigle (21)

🟩🟩🟩🟩🟩🟩 Numbers were low; Now, The one thing still inflated: President’s ego. — Erika Ettin (341)

⬜️⬜️⬜️⬜️⬜️⬜️ inflation wasn't | as bad as we thought. Let's en-| joy the weed I bought! — Kevin Cross (35)

⬜️⬜️⬜️⬜️⬜️⬜️ Inflation is down | We can afford our own gifts | Santa, take a break — Mary Sexton (32)

501 Votes via @beehiiv polls

Congrats again, Erika!

This week’s world-famous news haiku competition™ is about how your AI companion is not your friend. I believe you — yes, you, dear reader! — can craft an incredible haiku on the subject. Send me your entry — to our spiffy new email address, haiku at cheddar dot com — by noon ET Thursday for consideration by your Cheddar peers!

And now for something totally December 29…

—Matt Davis, Need2Know Chedditor

News You Need2Know

• Why your AI companion is not your friend

• More student loan borrowers turn to bankruptcy to …

• Move over, Tokyo — Jakarta is the world’s new bigg …

• OpenAI apparently cares about risk now

• Holiday shopping trends: More thrifting, fewer ret …

• Poll of the day: Where’s the robot lurve?

What’s the stock market up to, eh?

$SPX ( ▼ 0.03% ) $DJI ( ▼ 0.04% ) $NDX ( ▼ 0.09% )

Companies mentioned in today’s newsletter

OpenAI

Why your AI companion is not your friend

I love to make new friends. The main criterion for a Matt Davis Friend™ is that I interact with them often. That’s it. Sure, it helps if you have provocative opinions, a colorful background, and unusual experiences. But I’ll make friends with most people. In an era of low expectations, I’m going as low as possible. If I’d been in prison, I reckon I’d have made friends with some unsavory characters — without, of course, condoning their horrific crimes. I can’t think of any specific examples right now, but you know what I mean. How about you?

Still, I ask, because Martin Sandbu wrote a fantastic Financial Times column this weekend about the value of AI companions, and, perhaps, their lack of value, because they’re less like friends and more like mirrors. He argues that they don’t have any capacities or qualities of their own, and that, apparently, does not make them your friend. It makes them servants. Here’s the crux:

Fascinating. Let us know what you think in today’s poll.

Song of the Day: Blood Orange, ‘Vivid Light’

"Vivid Light" by Blood Orange (Dev Hynes) from the album Essex Honey features hauntingly beautiful melodies and an introspective vocal about grief and creativity by (who else?) Zadie Smith. Just like this newsletter!

More student loan borrowers turn to bankruptcy to shed debts as wage garnishing looms

For decades, discharging student loans through bankruptcy seemed unattainable. Borrowers were required to navigate a grueling legal process and prove "undue hardship."

But recent changes have helped many borrowers find relief. According to Jason Iuliano, a law professor at the University of Utah, 87% of those who pursue bankruptcy now succeed in having most or all of their loans dismissed. “That’s strikingly high when you think about the narrative being it’s impossible to discharge,” Iuliano noted in his research published in The American Bankruptcy Law Journal, and featured in a story on the subject by the New York Times.

The Biden administration streamlined the process in 2022, introducing a simplified attestation form that reduced costs and complexities. Despite these gains, challenges remain — especially for borrowers on the brink of financial collapse. Millions of student loan borrowers are now at risk of wage garnishment in 2026, as the federal government reinstates aggressive collection efforts. According to the Department of Education, notices will begin going out in January to about 1,000 borrowers, with more to follow.

Happy New Year.

Persis Yu, deputy executive director of the Student Borrower Protection Center, criticized the return to garnishment, calling it “cruel, unnecessary, and irresponsible." (Just like this newsletter!) She expressed concern for families “struggling with stagnant wages and an affordability crisis,” talking to the AP.

For borrowers like Amy “Boy!” Howdyshell, bankruptcy was a lifeline. “Now I have the financial freedom to pursue my dreams of homeownership,” she said, after using the process to get $78,000 worth of Federal Student Loans dismissed.

Quote of the Day

Move over, Tokyo — Jakarta is the world’s new biggest city

For decades, Tokyo has held the title of the world’s largest city. But a recent update by the United Nations, which widened the criteria to include surrounding urban areas, has placed Jakarta at the top with an estimated 42 million residents — overtaking greater Tokyo, and making fans of “The Hitchhiker’s Guide to the Galaxy” go ape like a middle schooler reading the numbers “six” and “seven” in sequence, anywhere.

Despite its new status, Jakarta faces mounting challenges as it struggles to keep up with its rapid growth. Known as the “Big Durian” (just like my cousin — oh, and this newsletter), the Indonesian capital is plagued by congestion, pollution, and severe infrastructure shortfalls. “This is a wake-up call for the government to seriously address the problems of Jakarta,” Azis Muslim, a public policy expert at the University of Indonesia, told the Financial Times. Jakarta’s governor, Pramono Anung, aims to allocate 30% of the city’s $4.9 billion 2024 budget toward improving public transport and connectivity for its 3.5 million to 4 million daily commuters — but federal funding cuts tied to President Prabowo Subianto’s welfare programs have tightened city finances.

Meanwhile, millions like Alfiyan Elfatah endure multi-hour commutes, with limited viable alternatives. “Development is uneven,” he told the FT. Without significant intervention, Jakarta risks becoming increasingly unaffordable and overburdened — just like every other major city! If only we could all just move to the Catskills and work remote.

Should you check your 401(k) today?

👍️ 

Sure. It didn’t really do anything on Friday, and it’s higher than it’s ever been. Or you could roll the dice and check it tomorrow. Do you feel lucky?

OpenAI apparently cares about risk now

OpenAI, the company that threw ChatGPT into the world like a toddler launching spaghetti at the dog, is now hiring a “Head of Preparedness” to manage “emerging AI-related risks” like its products computer security, mental health, and, presumably, doomsday scenarios. In a post on X, CEO Sam Altman admitted, more than three years after debuting ChatGPT to the public, that AI is “starting to present some real challenges”…

These include AI models “so good at computer security they are beginning to find critical vulnerabilities” and those wreaking havoc on mental health. The job listing promises exciting responsibilities, like executing OpenAI’s “Preparedness Framework” — a fancy term for fixing existential crises the firm arguably created.

“This will be a stressful job and you'll jump into the deep end pretty much immediately,” Altman’s post concludes. If you click through, you’ll find the salary is $555,000, plus equity, ever so slightly higher than the compensation one receives as a Matt Davis Friend™. But is that enough to make up for the stress?

Awkwardly, OpenAI formed an earlier preparedness team back in 2023, but within a year, its leader, Aleksander Madry, and others either jumped ship or were reassigned. Meanwhile, lawsuits are piling up over ChatGPT allegedly fueling delusions, isolation, and worse.

Holiday shopping trends: More thrifting, fewer returns

As the holiday shopping season wraps up, emerging trends reveal a shift in consumer behavior amid economic uncertainty. Americans navigated higher prices and lingering inflation by turning to thrift stores and discount chains while tightening their spending habits.

In the week before Christmas, traffic to thrift stores surged 11% compared to last year. “Whether hunting for a designer deal or uncovering a one-of-a-kind vintage piece, consumers increasingly favored discovery-driven experiences over standardized assortments of traditional retail,” researcher Shira Petrack told the Associated Press.

This shift reflects broader economic concerns as tariffs on imported goods impacted traditional goods like clothing and electronics, which struggled to expand holiday sales.

At the same time, Adobe Analytics observed a 2.5% drop in holiday return rates. Vivek Pandya with Adobe attributed this to more conscientious shopping habits: “Many consumers are being very specific with how they spend their budget,” he said, evidently not ever having met my wife.

Poll of the day: Where’s the robot lurve?

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