📚 Student-loan forgiveness cracks

Mr. Loan-ly... President Biden campaigned on promises of student-loan forgiveness and free college — so far, they haven't panned out. Last week, first lady Jill Biden admitted that her push for free community college is over (for now). The plan’s been scrapped from the massive “Build Back Better” spending bill that Dems are struggling to pass. Broad loan forgiveness could be next.

• Biden has forgiven $15B worth of federal student loans for 675K borrowers — or 1% of the $1.7T outstanding student debt owed by 40M+ Americans. Biden’s campaign promise was at least $10K in loan forgiveness for each borrower.
• Biden has extended the pause on loan repayments — initially suspended by Trump in March 2020 — three times. Thanks to the pauses, 40M+ borrowers are saving $5B/month.
• But payments are set to resume May 1 for federal loans, which make up 90% of total student debt.

The price is not right... After a nearly two-year pause, Americans will have to start repaying $400/month, on average, in student loans, while inflation has hit a 40-year high. Rising wages have not kept up with rising prices, and loans could make it even harder to pay the bills. For context: 12% of public-college grads still owe more than $40K. And nearly half of graduates of for-profit schools have defaulted. Meanwhile, two-thirds of community-college grads leave with zero debt.

Pelosi-Tok… House Speaker Nancy Pelosi and her VC husband are TikTok-famous for beating the market with their stock trading, a practice she’s defended to voters. There’s been growing criticism of lawmakers’ freedom to trade because they literally shape the law. Last year 55 lawmakers reportedly failed to disclose their trades. Politico reported that members of Congress sold travel stocks like Royal Caribbean and bought pharma stocks like Moderna in early 2020 while downplaying Covid. So last week Pelosi OK’d a proposal to bar Congress from trading. The House is set to vote by November, but not all members support it.

Not-so-value meal... From cereal and bacon to gas and cars, prices have soared at the fastest rate in 40 years. Inflation’s starting to dent corporate profits across industries: Toyota saw earnings drop 20% last quarter on chip shortages. Yum Brands (owner of KFC, Taco Bell, and Pizza Hut) said rising ingredient costs and wages hurt its bottom line. Unilever (Ben & Jerry’s, Dove soap) is taking a hit on transportation costs. The Fed wants to rein in prices with at least three interest-rate hikes this year. Regardless, shipping giant Maersk says supply shortages aren’t easing up anytime soon.

Rainy in the metaverse… Shares of tween-favorite gaming platform Roblox (47M users) and chip maker Nvidia soared last year as they invested in building out their meta-visions. But despite booming interest in an immersive internet of the future, many meta-focused stocks are now struggling. Nvidia and Roblox have sagged amid a broader tech slump, and Meta’s stock is down 35% on stalled user growth and profit-hitting metaverse investments. We’ll get a pixelated portrait of the metaverse industry when Roblox and Nvidia report Wednesday.

Piña coladas & conference calls... Extended stays are taking the travel industry by storm as WFH turns into work from hotel. Last year, 37% of Marriott’s room sign-ups in the US and Canada were for extended-stay trips. Meanwhile, Airbnb saw half its customers book for at least seven days. Now real-estate developers like Starwood are paying billions to scoop up longer-stay hotel chains that create twice as much profit margin as regular hotels. We’ll see how the “bleisure” economy is faring when Hilton, Hyatt, Marriott, and Airbnb report this week.

• Versace: The DOJ seized a record $3.6B worth of Bitcoin and arrested a millennial couple (feat. a “financial rapper”) in connection with the 2016 Bitfinex hack, as regulators crack down on crypto crimes.
• Burst: A key pipeline that carries gas from Russia to Germany is at the center of escalating Russia-Ukraine tensions — but a trade war with Russia could hurt more than just Europe’s gas supply.
• Fees: Discount airlines Frontier and Spirit agreed to a $6.6B merger that would create the fifth-largest US airline (#FrontSpirit). But Biden’s “big is bad” regulatory stance could keep the deal from taking off.

• Icy: Beijing used 800 Olympic-size pools’ worth of water for this year’s Winter Games (hint: not for swimming). Critics say artificial snow isn't sustainable.
• Oink: Normally activist investors demand changes that boost profits. But Carl Icahn’s vegetarian daughter inspired him to push McDonald’s to treat pigs better, which underscores the scope of activist influence.
• Heirs: Trust funds are causing trouble. Half of all wealth passed down in the next 25 years will come from the richest 1.5% of families, which could worsen inequality. Inheritance-tax loopholes are playing a role.

• Monday: Valentine’s Day. Earnings expected from: Advance Auto Parts and Avis Budget Group
• Tuesday: Earnings expected from: Airbnb, Marriott, ViacomCBS, and Ecolab
• Wednesday: Earnings expected from: Roblox, Nvidia, Cisco, Shopify, Kraft Heinz, and Hilton
• Thursday: Weekly jobless claims. Earnings expected from: Walmart, Hyatt, Barclays, Dropbox, Planet Fitness, Shake Shack, and Fiverr
• Friday: Earnings expected from: Deere & Company and DraftKings
• The weekend: Beijing Winter Olympics closing ceremony on Sunday.

Authors of this Snacks own: Bitcoin, and shares of Moderna, Shopify, and Walmart

ID: 2037062