__Skipping the intro…__ and the ads along with it. __[Netflix's](https://robinhood.com/stocks/NFLX/)__ new advertising-supported tier, launched early last month, accounted for only 9% of November sign-ups, according to [estimates](https://www.wsj.com/articles/netflixs-ad-supported-tier-was-its-least-popular-plan-in-launch-month-analytics-firm-estimates-11671539939). The $7-a-month plan represents the Flix's bid to diversify revenue and pull in more subscribers with a less expensive offering. It came toward the end of a roller-coaster year for the streamer, which included subscriber losses and layoffs. Now, some early results are in:

- __Press save:__ 43% of new ad-tier subscribers downgraded from an existing Netflix plan. 
- __Cord *and* cost cutting:__ The other 57% of sign-ups were a combo of brand-new subscribers and people rejoining after previously canceling subs.

__Binge-watching…__ your fave 30-second commercials. Netflix isn't the only streamer to offer an ad-supported tier, but it is arriving late to the party. As of last month, more than 20% of rival HBO Max's subscribers were estimated to be on its ad plan (which launched mid last year). That # is 57% for Hulu subscribers, and 90% for Peacock. Still, Netflix has lots of room to grow: it boasts 223M subscribers (as of September) vs. HBO Max owner __[Warner Bros. Discovery's](https://robinhood.com/stocks/WBD/)__ 95M — both of which dwarf Peacock's 18M.

*Click* (Chesnot/Getty Images)

Pause

__Ads are a vital tool in streamers' arsenals…__ if they can figure out how to wield them. Companies like Netflix are battling pervasive subscription fatigue and inflation headwinds (picture: higher prices squeezing customers' entertainment budgets). Ad-supported tiers represent a way both to woo on-the-fence viewers and to retain those looking for the exits. But as Netflix's early #s suggest, they can cut both ways: cheaper options might cannibalize existing premium customers. Meanwhile, the Flix said it's "very early days" for its ad-supported plan, suggesting the ad-based streaming surge is only just beginning.

Netflix's ad-supported plan arrived with a thud as streamers battle inflation and subscription fatigue

Netflix's ad-supported plan meets subscription fatigue as streamers bet on ads

Dow Jones

S&P 500

Nasdaq

Bitcoin

In 1965 “Jingle Bells” became the first song to be performed in space 

🍿 Netflix's ad flop

__Watch out, kids…__ there's a new demo taking over toy aisles this holiday szn. A recent [report](https://www.cnbc.com/2022/12/19/kidults-biggest-sales-driver-toy-industry.html) said "kidults" (aka people aged 12+) now make up a fourth of all US toy sales and 60% of the industry's dollar growth. FYI: People typically drop off from buying toys in their early teens, but that trend’s shifting.

- __Adult prices:__ While US toy sales fell slightly in the first nine months of this year, inflated price tags helped to drive revenue 3% higher.
- __Childhood dreams:__ Kidults account for just 5% of global toy sales, but generate $9B in annual revenue.

__Three-hour checkout line…__ for an $850 Millennium Falcon Lego set. The pandemic was a boom time for the toy biz, as home-bound adults splurged on board games and 1K piece puzzles. And the popularity looks to have stuck: last year, the global toy market had its best sales in a decade, with the US driving most of the growth. Now toy makers are creating more adult-friendly products to capture grown-ups' inner child (and their wallets).

- __Lego,__ the world’s largest toy maker, posted record sales in September as adults splurged on "Harry Potter"- and "Star Wars"-themed sets.
- __[Build-A-Bear](https://robinhood.com/stocks/BBW/)__ says 40% of its sales now come from adults and teens, up from 20% in 2012.
- __[Hasbro](https://robinhood.com/stocks/HAS/)__ and __[Mattel](https://robinhood.com/stocks/MAT/)__ ramped up marketing for __[Disney’s](https://robinhood.com/stocks/DIS/)__ Marvel superheroes figurines, and ’90s toy icons like Barbie, __Pokémon__, and Hot Wheels.

And a little somethin' for yourself (John MacDougall/Getty Images)

Play

__Toy lovers are growing up…__ and the industry's following suit. Serving kidults is becoming a winning strategy as they’re seen as willing to spend serious $$ on themselves. (Even __[McDonald’s](https://robinhood.com/stocks/MCD/)__ started selling adult happy meals.) The kidult demo could be extra important for toymakers this holiday szn, as many expect the game-lovin' grown-ups to purchase toys for the kids *and* fellow adults in their lives.

“Kidults” are driving the toy industry as older shoppers splurge on superheroes and building sets

🧸“Kidults” are driving the toy biz, as older shoppers splurge on superheroes and building sets

Global coal use is set to hit a record high by year's end

🧸 The “kidult” toy takeover

__Hot jobs eats…__ meet cool inflation treats. Last week's strong jobs report [surprised](https://www.bloomberg.com/news/articles/2022-12-15/us-jobless-claims-unexpectedly-drop-to-lowest-since-september) analysts expecting higher unemployment #s. Instead, new claims fell to their lowest level since September. That's not all: last week's inflation report showed that prices grew more slowly in November than experts had predicted (think: 7.1% in a year vs. 7.3%). Now some Wall Street analysts hope the US economy can avoid a recession with a Goldilocks-like "soft landing" (picture: a controlled economic slowdown).

- __Threading a needle…__ while doing cartwheels. Soft landings are difficult to pull off. They're rare too: the last one was in 1994.
- __Times’ve changed…__ Economists say that unlike in the ’90s, we're now facing dual supply shocks with Covid and Russia's war on Ukraine.

__The “[vibecession](https://nymag.com/intelligencer/2022/08/recession-or-vibecession.html)” will be televised…__ With wage growth lagging behind inflation and countless headline-making layoffs — 114K tech workers have been axed since March alone — the economic vibe this year has been rough. But *reality's* been mixed. Gas is cheaper than a year ago, and 72% of those laid-off tech workers found jobs within three months. What's more, over half of those rehired workers got a pay bump. More bright news: just last week Fed Chair Powell said new growth-rate projections are not in recession territory.

Practically givin' it away (Brandon Bell/Getty Images)

Mixed

__Recession worries ≠ recession reality…__ CEOs have been forecasting economic doom and gloom for months. In June, __[JPMorgan's](https://robinhood.com/stocks/JPM/)__ CEO warned of an economic "hurricane," and last week __[United Airlines'](https://robinhood.com/stocks/UAL/)__ CEO said the company was preparing for a "mild recession." A recession could still happen. But it's also possible that the Fed's ongoing rate hikes could work as intended: slowing the economy down just enough for the fabled soft landing.

Cooling inflation and a hot jobs report prompt soft-landing talk, but the “vibecession” is hard to shake

__All aboard…__ cruise szn is back on. After the pandemic forced ships to dock for nearly three years, companies like __[Carnival](https://robinhood.com/stocks/CCL/)__ have sailed back to record bookings. Last quarter, the world’s biggest cruise operator saw its revenue jump 700% to $4.3B as more travelers hit the seas. Still, Carnival shares lost over half their value this year as the biz navigated higher costs (like: oil and gas) and lingering Covid disruptions. But as the travel boom heats up again, analysts expect smoother sailing and revenue growth when Carnival reports on Wednesday.

Events

Coming up this week...

__$6 mozz sticks…__ $5 delivery fee. NYC could soon let food-delivery apps charge restaurants more. Refresher: when the pandemic hit, lawmakers limited fees to 20% in the US's largest food-delivery market. Now __[Grubhub](https://robinhood.com/stocks/GRUB/)__ and __[DoorDash](https://robinhood.com/stocks/DASH/)__ are pushing a bill that would let them charge more $$ for perks like marketing. Supporters say the bill could help small eateries get greater exposure, while critics say it favors big franchises that can afford to splurge. The clock’s ticking: delivery apps hope that extra fees can help offset the higher wages that could go into effect in Gotham early in the new year.

Zoom Out

Stories we’re watching...

- __[Bust](https://snacks.robinhood.com/newsletters/3kOsGkEHbBt1CqkaBXzvxc/articles/6NgSN4kssplfENc3RTUY6p/):__ Federal prosecutors brought criminal charges against crypto "wunderkind" Sam Bankman-Fried last week. Lawmakers and regulators could crack down on other centralized crypto players next.
- __[Power](https://snacks.robinhood.com/newsletters/7BujElyo2t6JbWrNXJ6eKK/):__ The US Department of Energy announced a [milestone](https://www.bloomberg.com/news/articles/2022-12-13/nuclear-fusion-energy-will-likely-take-decades-to-reach-commercial-viability) last week in the development of fusion energy. But commercial nuclear-fusion tech (picture: electricity, heating homes) could be decades away.
- __[Lux](https://snacks.robinhood.com/newsletters/4Jy0RmQnV60oK4MUgx5hqa/articles/7driDwhdTnucdUECh5IdPQ/):__ More Americans are heading to Europe to splurge at designer stores, courtesy of the strong dollar. While the shopping spree is great for European retail, it could discourage tourism and spending in the US.

ICYMI

Last week's highlights...

Inflation and job numbers prompt soft-landing talk, but the “vibecession” is hard to shake

Argentina’s World Cup title victory yesterday was the first for superstar Lionel Messi and the third win for his country since 1978

💼 Cooler inflation meets hot jobs

__Airline elite status…__ just got harder to score. Yesterday, __[American Airlines](https://robinhood.com/stocks/AAL/)__ rolled out big [changes](https://www.cnbc.com/2022/12/15/american-airlines-frequent-flyer-status-becomes-harder-to-earn.html) coming to its loyalty program next year that include upping the cost of elite status. Notably, American says its loyalty program, AAdvantage, is the largest in the industry. In addition to the price bump, American plans to cut some lower-end rewards: 

- __Wave goodbye:__ American’s ditching its MileSAAver and AAnytime programs, which let passengers swap miles for tickets at a discounted rate. Instead, American said it would offer “web specials."
- __Say hello:__ In March, fliers will need 40K loyalty points to qualify for gold status, up from 30K. Gold fliers are the bottom rung of the AAdvantage status ladder, getting perks like seat changes and priority check-in.

__Free pinot in the lounge…__ better get in line. Loyalty programs were a buoy for airlines during the pandemic as companies lowered status requirements to lure customers. But as travel demand takes off again (and airfare hits record levels), more fliers are turning to travel cards for cushiony perks like lounge access. For some airlines, those perks have proved a little *too* popular: 

- __Last month,__ __[Delta](https://robinhood.com/stocks/DAL/)__ said its SkyMiles members must have elite status to buy airport-lounge memberships as its clubs fill up. Meanwhile, next year its highest-tier Diamond members will have to spend 33% more to keep status.
- __[Alaska Airlines](https://robinhood.com/stocks/ALK/)__ will start limiting lounge access for first-class passengers based on how far they’re traveling.

Lookin’ for the lounge (Andrew Caballero-Reynolds/Getty Images)

__Exclusive perks mean exclusive prices…__ The airline industry is finally expected to return to profitability next year after a three-year pandemic slump. With over a quarter of Americans signed up for travel-based credit cards, airlines could raise the bar for gaining status — and perks — even higher in the future.

American Airlines revamps its loyalty program as the travel boom prompts airlines to get pickier about perks

- 🧐 __Privacy…__ __[Coinbase](https://robinhood.com/stocks/COIN/)__ said law-enforcement requests for user data [spiked](https://www.theblock.co/post/194204/coinbase-law-enforcement-requests-jumped-66-over-the-past-year) nearly 70% from last year. The exchange said most of the requests, which came both from US and global officials, involved criminal investigations.
- 📜 __Policy…__ Sen. Elizabeth Warren [introduced](https://decrypt.co/117221/senator-warren-crypto-bill-kyc-self-custody-wallets) bipartisan legislation targeting non-custodial wallets. The bill drew intense pushback, with advocacy group Coin Center, which is funded by crypto companies and investors, calling it "unconstitutional."
- 🤖 __Techy…__ __[Microsoft](https://robinhood.com/stocks/MSFT/)__ said it's [banning](https://www.coindesk.com/tech/2022/12/15/microsoft-bans-crypto-mining-on-its-online-services-without-permission/) crypto mining on its cloud service (at least without explicit approval first). The tech behemoth follows __[Google](https://robinhood.com/stocks/GOOGL/)__ and __[Amazon](https://robinhood.com/stocks/AMZN/)__ in saying customers can't use their online services for mining.

Mined

The Crypto Catch-Up…

American Airlines is revamping its loyalty program as airlines get pickier about perks

23% of US adults recently surveyed said buying real estate is the best way to build wealth

✈️ American’s rewards revamp

__Sounds like the plot of "Iron Man"…__ actually real life. This week the US Department of Energy announced a [milestone](https://www.bloomberg.com/news/articles/2022-12-13/nuclear-fusion-energy-will-likely-take-decades-to-reach-commercial-viability) in the development of fusion energy. For the first time, scientists successfully used a nuclear-fusion reaction to generate 50% more energy than what was required for its creation — aka "net energy gain" — paving the way for sustainable clean power. Nuclear fusion (imagine: atoms fusing together) occurs naturally in the sun and releases 4M times more energy than burning oil, coal, or gas. Experts say it could unlock "virtually limitless" carbon-free power.

__The nuclear evolution…__ has been a long time coming. For decades, scientists have researched ways to harness nuclear power (like the more familiar nuclear *fission*) in hopes of producing alternatives to fossil fuels. Now, investors are on course to have put $1B+ into fusion tech this year, driven partly by growing climate-change initiatives and Russia’s war on Ukraine, which disrupted global energy supplies. That's just a fraction of the $1.4T invested this year in clean energy, but the future’s bright:

- __Atomic returns:__ The overall fusion market could be worth $40T down the road.
- __Electric possibilities:__ __[Constellation Energy](https://robinhood.com/stocks/CEG/)__, which says it's the US's largest producer of clean, carbon-free energy, said net energy gain is a “game changer” and the biggest breakthrough in 30 years.

It's powerful stuff (Olivier Douliery/Getty Images)

__It’s a small short-term step for clean energy…__ but a giant long-term leap. Even with the net energy gain breakthrough, commercial nuclear-fusion tech (picture: electricity, heating homes) could be decades away. Legislation like President Biden’s [Inflation](https://snacks.robinhood.com/newsletters/42zI4SXli5Y5q5GTnO57Hh/articles/6P1VJKtvjfjnjFHojBaGj0/) Reduction Act could help expedite the tech's development by offering tax credits for green-energy startups.

Scientists made a major breakthrough in nuclear fusion, but it'll take years to hit the grid

Scientists hit a nuclear-fusion milestone, but it'll take years to transform clean energy

Netflix said its "Harry & Meghan" docuseries set a record for hours watched in its debut week

⚛️ Fusion-energy breakthrough

__One-two punch…__ It’s a big week for markets, with back-to-back economic headliner events. Today the Fed meets on rate hikes, and its decision will likely be informed by yesterday’s inflation report. US consumer prices were up 7.1% in November from last year (vs. 7.3% expected). The pace of inflation slowed again from 7.7% in October, showing “disinflation.” 

- __Disinflation:__ Like a balloon that’s getting more inflated, but at a less noticeable pace. Prices are rising — just not as fast as they were in previous months. 
- __Deflation:__ Like a balloon that’s losing air — aka: *not* what’s happening now. Deflation is a broad drop in prices and can signal an economic downturn. 
- __Expectation:__ Investors celebrated the report because it raises the likelihood that the Fed will hike rates by 50 basis points today (vs. another 75 bps hike, as we had the past four times). 

__Potato-potahto…__ While food prices continued ticking up, price *growth* has slowed since July (potatoes led the charge, with prices falling a spudtacular 8.4% in November). Meanwhile, the energy index fell 1.6% for the month as gas and electricity prices dropped, contributing to disinflation (oil prices are actually *down* for the year). But housing and rent prices canceled out the energy cooldown, accounting for nearly half the total increase in core inflation. We’re not out of the inflated woods just yet.

#disinflation (Brandon Bell/Getty Images)

Disinflate

__Pausing ≠ reducing…__ While disinflation is happening, inflation’s still abnormally high (energy prices alone are still up 13% from last November). That’s why the Fed’s expected to keep hiking into the new year, though less aggressively. Even if Fed Chair Powell pauses hikes early next year, high interest levels could stick around until the Fed sees a meaningful cooldown in growth. And it could be a while before the Fed actually starts *cutting*.

November’s consumer prices show “disinflation,” but reaching acceptable levels could mean more pain

__Less white-sand beaches…__ more courtroom speeches. Disgraced crypto "wunderkind" Sam Bankman-Fried was [arrested](https://www.bloomberg.com/news/articles/2022-12-13/sam-bankman-fried-charged-with-fraud-by-ny-prosecutors) Monday in the Bahamas at the request of the US gov’t (see: $1B+ of customer funds missing). Instead of attending his scheduled remote testimony before Congress yesterday (with planned [remarks](https://www.forbes.com/sites/stevenehrlich/2022/12/13/exclusive-transcript-the-full-testimony-sbf-planned-to-give-to-congress/?sh=9e0014b3c474) feat. an F-bomb), the former __FTX__ CEO appeared in Bahamian court. Earlier, US federal prosecutors had charged him with numerous counts of fraud and violations of campaign-finance regulations.

- __New tech, old playbook…__ John Jay Ray III, who's overseeing FTX's bankruptcy, yesterday described the case to Congress as "old-fashioned embezzlement."
- __'Twasn't the season…__ Prosecutors accused SBF of criminal activity dating back to 2019 — long before crypto winter. 

__Everyone wants in…__ on FTX's punishment. While federal prosecutors brought *criminal* charges against SBF, the Securities and Exchange Commission filed a civil complaint charging FTX with scheming to defraud investors. Yesterday, SEC Chair Gary Gensler said SBF built a “house of cards on a foundation of deception.” Also yesterday, the Commodity Futures Trading Commission charged SBF, FTX, and __Alameda Research__ (SBF's crypto hedge fund) with fraud.

- __If convicted on all criminal charges,__ SBF could face life in prison. But he suggested in Bahamian court yesterday (notably wearing a suit instead of his trademark shorts) that he might fight extradition to the US. 
- __If he stays in the Bahamas,__ he could be sent to a prison known to be dangerously overcrowded. SBF's bail request was denied.

SBF’d

__Centralized crypto could face consequences…__ FTX was a centralized exchange (it directly held customers' funds/crypto) controlled by only a few people (vs. a decentralized exchange). The consequences it faces could set precedents for other centralized crypto players. Lawmakers and regulators like the SEC and CFTC are debating who, exactly, has crypto-oversight power. But as they consider new regulations following FTX's meltdown, they mostly now agree on at least one point: whoever has oversight, controls need to be tighter.

Sam Bankman-Fried's arrest could bring about major changes for crypto

November prices show “disinflation,” but reaching acceptable levels could mean more pain

Elon Musk is no longer the world's richest person, after Tesla shares dropped 60% this year

⛽ Disinflation nation

__Double dose of profits…__ Healthcare giants are shelling out big bucks to bolster their drug portfolios. Yesterday, biotech behemoth __[Amgen](https://robinhood.com/stocks/AMGN/)__ signed a deal to buy __[Horizon Therapeutics](https://robinhood.com/stocks/HZNP/)__ for $27.8B — in this year’s biggest healthcare merger. Horizon specializes in rare-disease treatments, and its new thyroid eye disease drug, Tepezza, helped double revenue last year. Over the past month, Tepezza’s success had fueled takeover bids from pharma titans like __[Sanofi](https://robinhood.com/stocks/SNY/)__ and __[Johnson & Johnson](https://robinhood.com/stocks/JNJ/)__. 

- __High risk:__ Amgen plans to pay $116.50/share as part of the deal — a nearly 20% premium from the stock’s pre-merger-announcement price. 
- __High reward:__ Horizon thinks Tepezza could haul in $4B+ in sales if it’s approved outside the US. It could also help Amgen offset lost revenue from its biggest drugs, whose patents are about to expire.

__Billion-dollar buying spree…__ Pharma companies frequently look for new sources of revenue to make up for lost patent protection on blockbuster drugs (patents typically last 20 years). While deal making has slowed this year, some healthcare heavyweights have used the broader sell-off to snatch up smaller drugmakers at a “discount.” Just this year: J&J struck a $16.6B deal to buy heart-device maker __[Abiomed](https://robinhood.com/stocks/ABMD/)__; __[Pfizer](https://robinhood.com/stocks/PFE/)__ agreed to buy __[Global Blood Therapeutics](https://robinhood.com/stocks/GBT/)__ for $5.4B; and __[Merck](https://robinhood.com/stocks/MRK/)__ acquired blood-cancer biotech __[Imago BioSciences](https://robinhood.com/stocks/IMGO/)__ for over $1.3B.

The year’s biggest healthcare deal (Al Seib/Getty Images)

Treat

__Rare treatments command high prices…__ Of the 7K known rare diseases, 95% have no approved treatment. Rare treatments may have a smaller addressable market, but they can lead to a treatment monopoly that can lure higher payouts from insurance companies — and patients.

Amgen strikes the year’s biggest healthcare deal as drugmakers splurge on rare treatments to boost sales

__“I could have my Gucci on”…__ That Meghan Trainor song you keep hearing in *every single* __TikTok__ video is the current soundtrack for Americans in Europe. They’re [flocking](https://www.wsj.com/articles/americans-flock-to-europe-for-holiday-shopping-binge-11670797821) to designer stores across the old continent to take advantage of holiday deals, courtesy of the strong dollar. Since the Fed began hiking rates, the USD has strengthened against other currencies. 

- __Europe’s on sale__ for Americans. Last year, a buck would get you 0.82 euro. Today, you can exchange $1 for about €0.95. (Read: one dollar buys more euros.) 
- __American tourists in Europe__ spent, on average, 1.2K euros per transaction during the week of Black Friday, up from 500 euros three years ago. 

__“I could wear my Louis Vuitton”...__ in Paris with John. Luxe retailers like __[Kering](https://robinhood.com/stocks/PPRUY/)__-owned Gucci and __[LVMH](https://robinhood.com/stocks/LVMUY/)__-owned Louis Vuitton are raking it in thanks to American splurging. That’s helping them make up for the lack of high-rolling Chinese tourists (see: China’s Covid restrictions). For Americans, it’s a triple savings whammy: 

- __Strong Washington:__ The dollar is hovering at its strongest exchange rate in two decades compared to the euro. 
- __Home advantage:__ Since many luxury goods are made in Europe, they tend to be cheaper there (no US import costs). American shoppers are paying an average of 38% *more* for the same designer clothes bought in the US (vs. 20% historically). 
- __Tax bonus:__ Tourists who spend a certain amount at an EU store can often claim a refund on the sales tax (think: saving hundreds in tax on a designer bag).

Look

__Strength is a two-sided coin…__ The strong dollar is helping inflation-battered European retailers, who are dealing with low consumer confidence at home. On the flip side, it discourages tourism (and spending) in the US. That could make an economic downturn worse.

Americans ball out in Europe as the strong US dollar puts foreign luxuries on sale

🕺 *Like "Dance Dance Revolution" when you can’t keep up…*

[Stablecoins](https://snacks.robinhood.com/newsletters/1alSYApz9fMDqEf8i3IPRi/articles/1vwhQv8VIIqij4eXh9Wsvw/) are a type of cryptocurrency whose value is pegged to another asset. For example, __[Tether’s USDT](https://robinhood.com/crypto/USDT/)__ (the biggest stablecoin) is pegged 1-to-1 to the US dollar. But stablecoins have "depegged" in the past, losing that 1-to-1 value. __Binance’s__ CEO reportedly accused __FTX__ founder Sam Bankman-Fried of trying to [depeg](https://www.wsj.com/articles/rivals-worried-sam-bankman-fried-tried-to-destabilize-crypto-on-eve-of-ftx-collapse-11670597311) USDT (which could’ve been a crypto disaster) as his exchange collapsed.

DEFI(NE)

Heard on the Block: "depeg"

Amgen strikes the year’s biggest healthcare deal as drugmakers splurge on rare treatments

Wendy's prices jumped a reported 35% this year — more than any other major fast-food chain

💊 Amgen’s $28B pharma bet

__Candy or coal…__ Student loan borrowers are holding their breath to see if they’ll actually get loan forgiveness in the new year. Refresher: a few weeks before midterms, President Biden announced that the Education Department would forgive $10K in federal loan debt for people making under $125K/year and $20K for Pell Grant recipients. 

- __The plan__ would cost the US $400B and cover most of the 45M borrowers who owe $1.6T in loan debt (with 15M getting fully absolved).
- __The hold-up:__ Six GOP-led states brought a case against the plan, and the US Supreme Court agreed to take it after the DOJ asked it to reverse an injunction that blocks the program from taking effect. 
- __The status:__ On pause. 26M borrowers have already applied for relief and some have been approved, but servicers have been blocked from canceling loans. Borrowers who haven’t yet applied currently [don’t](https://studentaid.gov/debt-relief/application) have the option. Meanwhile, loan payments have been paused since March 2020. 
- __Next steps:__ SCOTUS is set to hear arguments in February to help it decide whether the forgiveness policy is an overreach of executive power or if it causes harm to plaintiffs. Some experts [think](https://www.cnbc.com/2022/12/05/supreme-court-tackles-biden-student-loan-plan.html) the conservative-majority court will rule it as unconstitutional.

__Ball’s in your Court…__ As the final arbiter, SCOTUS’s charge is to uphold and interpret the Constitution. Historically, the court has typically ruled in line with public opinion. But in a recent Economist-YouGov poll, 51% of respondents said they support Biden’s relief plan while 40% were opposed. Critics worry it’ll exacerbate inflation and penalize those who’ve already paid off debt. Supporters say it’ll help money-strained Americans get by — while progressives want cancellation of *all* $1.6T in student debt.

Supremely high tuition problems (Saul Loeb/Getty Images)

Cancel

__Student loans are a Sisyphean struggle…__ Just as the mythical Sisyphus had to roll a boulder uphill only to have it roll down again for eternity, loans will keep piling up forever unless a key issue is resolved: college (in)affordability. One-time forgiveness would be a much-needed relief for millions, but it won’t fix the long-term problem: college tuition has jumped 5X more than inflation in the past half century.

Student loan forgiveness is in SCOTUS’s hands as Biden’s plan hits roadblocks

__Broken (rate) record…__ Investors grew antsy last week after strong labor-market data stoked fears that the Fed could continue hiking interest rates well into next year. Refresher: America’s central bank is expected to raise rates by a half percentage point on Wednesday, a slowdown from the past four “jumbo” hikes of 75 basis points. Inflation has started to ease, but a still hot jobs market coupled with resilient spending could prompt Fed Chair Powell to lengthen his rate-hiking campaign. That could boost the likelihood of financial pain next year.

__Never-ending soup and salad…__ none of the clean-up. Dining out is having a moment as uneven food inflation makes eating at restos a *relative* bargain compared to cooking at home. That could benefit Olive Garden parent __[Darden Restaurants](https://robinhood.com/stocks/DRI/)__, which also owns LongHorn Steakhouse. In its last reported quarter, the faux-Italian icon saw sales rise 6% from last year, but still disappointed expectations. We'll see whether there’s a festive light at the end of the breadstick when Darden reports Friday.

__A fresh breath…__ Zero Covid is becoming a little less zero. Last week, China started loosening strict Covid rules that had kept the country in alternating states of lockdown for nearly three years. The decision followed rare public protests and economic turmoil (think: shuttered businesses, slowing growth, and disruptions to __Foxconn's__ key iPhone-assembling factories). Now China’s scrapped most testing and quarantine requirements. But its socially distant policies may’ve contributed to low immunity, and experts fear [outbreaks](https://www.latimes.com/world-nation/story/2022-12-01/risks-for-china-of-ending-zero-covid-policy) could surge again.

__Fillin’ up the tank…__ all the way to the top. Last week, crude-oil prices hit their lowest level of the year as global demand slipped. Despite OPEC production cuts in October and Europe’s Russian-oil ban, investors have been skeptical about buying the energy dip with recession fears looming. Meanwhile, natural-gas prices are down more than 35% since August, as warmer winter weather and inflated utility bills keep people from cranking the heat. Still, if OPEC keeps extending output cuts (or China demand rebounds), it could drive prices higher down the road.

- __[Shop](https://snacks.robinhood.com/newsletters/NdAZrycsfEJxhCIGcwPD2/articles/6pToWcdBKPXG0jQ24TTTF8/):__ __[Walmart's](https://robinhood.com/stocks/WMT/)__ CEO said a rise in shoplifting could lead to price hikes and store closures. Retailers like __[Target](https://robinhood.com/stocks/TGT/)__ are bulking up security after losing hundreds of millions from organized retail theft. 
- __[CGPT](https://snacks.robinhood.com/newsletters/1tqjd2M4HaTR4MDXIMoYcr/articles/7IJUQSHnMsihoZe3E8Wbv2/):__ __OpenAI’s__ impressive new chatbot is causing shock, awe, enthusiasm, and concern (think: that it’ll replace creative labor and kill homework). Meanwhile, the “generative AI” industry is booming.
- __[Fly](https://snacks.robinhood.com/newsletters/1alSYApz9fMDqEf8i3IPRi/articles/57oSplJXqjshMECfFvOKjX/):__ __[Delta](https://robinhood.com/stocks/DAL/)__ agreed to boost pilots’ pay in a $7B+ deal that could end years of contract negotiations — and pressure rivals to hike wages. It could have consequences for airlines if travel demand sinks.

The US is the world’s largest producer, consumer, and exporter of corn

🎓 Student loan forgiveness limbo

__50-cent Big Macs…__ for *life*. As inflation bites into budgets, fast-food giants are unwrapping deals to lure customers. This week __[McDonald’s](https://robinhood.com/stocks/MCD/)__ kicked off its holiday promos, [offering](https://www.mcdonalds.com/us/en-us/deals.html) three weeks of perks for its app loyalty members. Last season, McD’s teamed up with Christmas queen Mariah Carey to promo 12 days of freebies for app users. This year the McFlurry icon is offering deals like $0.50 Big Macs and a chance to win free food for life. It’s a tasty strategy:

- __McDonald’s loyalty program__ has 25M+ US members, despite launching just last year. For reference: __[Chipotle](https://robinhood.com/stocks/CMG/)__ has 30M loyalty members and __[Starbucks](https://robinhood.com/stocks/SBUX/)__ has 28M.
- __Nearly two-thirds__ of McD’s US members had used the app in the three months leading up to September. Last quarter, digital transactions made up half of McDonald’s sales. 

__The (loyal) consumer combo…__ From IHOP to Taco Bell to Panera, fast-casual brands are turning to loyalty programs to drive app downloads and court new customers. Digital orders make up a third of total US restaurant sales, up from less than a quarter prepandemic. 57% of restaurants offer some sort of loyalty club, and 41% of consumers say those programs encourage them to spend. A sweet bonus for brands: they can use customer app data to personalize offers.

McFishing for deals (Rafael Henrique/Getty Images)

McDeal

__Rewards are guilt soothers…__ Nabbing a free drink at Starbucks makes it easier to swallow the $30 you spent on lattes that month, and hitting the McDonald’s drive-thru rather than eating in is easier when you feel like you’re getting a deal. Like many businesses, McDonald’s has hiked prices to offset rising costs. Now it’s leveraging loyalty to keep customers hungry.

McDonald's serves up beefy holiday promos to drive app traffic (and ease drive-thru guilt)

__Taking a temp check…__ when the situation's already heated. A new [survey](https://www.cnbc.com/2022/12/07/just-8percent-of-americans-have-a-positive-view-of-cryptocurrencies-now-cnbc-survey-finds.html) suggests that Americans are increasingly skeptical of crypto. Only 8% of respondents had a positive view (down from 19% in March), while 43% had a *negative* view (up from 25%). The timing of the survey, conducted late last month, may have something to do with those #s. Earlier in November __FTX__ collapsed spectacularly, and the ensuing [contagion](https://snacks.robinhood.com/newsletters/5oS3vfl3q3m34Ud64MuTOf/articles/6GVY28qbI5kcW4Y5gvzbIM/) likely made some investors crypto-phobic. But the cold symptoms started earlier: 

- __Market slap:__ A late-spring selloff, ignited by the collapse of the __terraUSD__ algo stablecoin, ended with crypto's market cap down $2T from its high last year. 
- __Blockpain:__ A [study](https://www.bloomberg.com/news/articles/2022-11-16/vast-majority-of-retail-investors-in-bitcoin-lost-money-bis-says) published last month estimated that, between 2015 and 2022, 80% of retail investors lost money on __[bitcoin](https://robinhood.com/crypto/BTC/)__. (FYI: the study used crypto app downloads, most of which happened when BTC was over $20K.)

__When the going gets tough…__ big money goes shopping. While some institutional investors (like Canada’s biggest pension fund) are said to be stepping back from crypto, others are whipping out their checkbooks. This week __[Goldman Sachs](https://robinhood.com/stocks/GS/)__ said it plans to spend tens of millions investing in, or outright buying, crypto companies. And at least one crypto exchange, __Bitstamp__, said it saw a 57% increase in November in institutional registrations over the previous month.

Coined

__It's easy to be "crypto curious" when times are good…__ Last year, more than 60% of US adults said they were planning on buying crypto or wanted to learn more. Crypto's no longer at its high, and the economy’s not doing so hot either. The performance of public crypto-first cos like __[Coinbase](https://robinhood.com/stocks/COIN/)__ — which recently said it expected annual revenue to be down 50% from last year — could provide insight into whether America’s dim view of crypto is sticking.

Americans start souring on crypto while institutional investors like Goldman go shopping

- 📸 __Flashy…__ Crypto's faithful [descended](https://www.bloomberg.com/news/features/2022-12-06/sam-bankman-fried-s-ftx-gets-trashed-at-art-basel-miami-2022-by-crypto-fans?srnd=cryptocurrencies-v2) on Miami for Art Basel, and even FTX's collapse couldn’t sour the mood (too much). Attendees collected discarded FTX swag as souvenirs (picture: T-shirts in trash bags) and partied to a Grimes DJ set. 
- 🤖 __Techy…__ The September [merge](https://snacks.robinhood.com/newsletters/1wtJg97QxjQGWOy95mSzca/articles/4PkMBBDA5ADxTIJm447Hdh/) promised to cut __[ethereum](https://robinhood.com/crypto/ETH/)__ energy usage by more than 99%. A [new study](https://gizmodo.com/ethereum-merge-crypto-carbon-emissions-study-1849857714) suggests it succeeded — reducing the blockchain's energy consumption by an Ireland-sized amount (thanks, proof of stake).
- 🪙 __Coins…__ A judge ordered bankrupt crypto lender __Celsius__ to return $44M to its customers. For now, only crypto held in custody accounts (read: not yield-bearing) falls under the order. Celsius still owes its customers billions.

Party

McDonald's serves up beefy loyalty promos to fuel sales (and ease drive-thru guilt)

Last month the median rent for a Manhattan apartment hit $4K

🍟 McDonald’s app-y holidays

__“Are you tired of feeling like a robot when you talk to your computer?...__ Well, fear not, my friend, because chatGPT is here to save the day!” These prosaic lines were written by AI chatbot ChatGPT in response to “Write a humorous article about ChatGPT.”

- __Meet CGPT:__ The futuristic AI chatbot was released to the public last week by __OpenAI__ (the company behind [generative AI](https://snacks.robinhood.com/newsletters/3WEG5SgBgeQScK91kmZwOc/articles/6gWjpZswZYcdRi0vcvZQos/) tool Dall-E). 
- __It’s causing shock, awe, fear,__ and lots of __[Twitter](https://robinhood.com/stocks/TWTR/)__ memes. OpenAI said 1M+ people signed up to test CGPT in the first five days. 
- __Bot of many trades:__ CGPT is like a search engine that provides one result, combined with a sophisticated chatbot combined with a blandly unoriginal yet at times eerily human-sounding writer. It can answer questions, compose text based on prompts, and write self-reflective [poetry](https://twitter.com/karpathy/status/1600214083206193153). 

__A trained model…__ we’re not talking Gisele. In our unexclusive interview with CGPT, the bot told us where its words came from: “As a large language model trained by OpenAI, I have been trained on a massive amount of text data.” After some prodding, CGPT explained that said data is “typically compiled from a wide variety of sources, such as books, articles, and websites.” It essentially uses those text examples to make educated guesses about how to string together an answer. Yet there are concerns about CGPT’s powers. People fear that it’ll kill:

- __Homework:__ This probably *isn’t* a fear for most students, but educators are [concerned](https://www.theatlantic.com/technology/archive/2022/12/chatgpt-ai-writing-college-student-essays/672371/) that CGPT’s essay-writing abilities will destroy take-home assignments. __Lex__, a new [tool](https://francescod.medium.com/lex-a-new-ai-writer-tool-landed-96fb6408aed3) that uses CGPT, fills in sentences for you like a __[Google](https://robinhood.com/stocks/GOOGL/)__ Docs-style collaborator, 
- __Jobs:__ Like its art-generating cousin Dall-E, CGPT is generating concerns that AI tools could replace creative jobs (think: copywriting, design).
- __Originality:__ If people start relying on AI for their writing and creating, the intellectual output of future generations could be monotonous. There are also copyright-infringement concerns (think: image generators pulling from original designs).

How can AI help you today? (Jakub Porzycki/Getty Images)

CGPT

__Generative AI is a many-pronged tool…__ It could be valuable to automate work, though dangerous if it becomes a crutch. Meanwhile, investment is booming. __Jasper__, a genAI tool largely used for marketing copy, recently hit a $1.5B valuation. (As of October, OpenAI was valued at ~$20B.) And Google is previewing apps that’ll allow people to have their text rendered to images (similar to Dall-E).

OpenAI’s impressive new chatbot causes a stir, inspiring enthusiasm and concern

__Crypto ads are in the spotlight…__ and investigators are turning up the heat. The Federal Trade Commission's reportedly [looking into](https://www.bloomberg.com/news/articles/2022-12-05/ftc-investigates-crypto-firms-over-misleading-advertising) numerous crypto companies in connection with potentially deceptive or misleading ads. Crypto firms found violating advertising laws could face large fines and be forced to refund customers. There's a *lot* for the FTC to sift through: crypto brands have shelled out $223M+ on US ads so far this year alone. 

__Fortune favors the warm…__ Big spending was the norm before crypto winter kicked off in May. Late last year, __Crypto.com__ said it would pony up $100M for a celeb-infused campaign (picture: Matt Damon [insisting](https://web.archive.org/web/20220127005704/https://www.youtube.com/watch?v=9hBC5TVdYT8) "fortune favours the brave"). It also reportedly shelled out $700M on its LA Lakers stadium-naming rights, while FTX [splurged](https://snacks.robinhood.com/newsletters/2jedAlq0iN3kyZjhRJ7QXZ/articles/1enAKmQ2NnWWzq409J1MHk/) for Miami. Meanwhile, __[Coinbase](https://robinhood.com/stocks/COIN/)__ spent $14M on a single Super Bowl ad. Now:

- __Courtside view…__ A class-action lawsuit accuses __FTX__-promoting celebs like Larry David and Tom Brady of pushing a "Ponzi scheme." 
- __Second thoughts…__ Only 8% of Americans have a positive view of crypto, down from 19% earlier this year.

Flashy

__Big spending doesn't negate big risk…__ for investors, crypto firms, *or* celeb promoters. Ad blitzes — like the $60M FTX spent on TV commercials — suggest a biz has cash aplenty and is here to stay, but brand image doesn't always = brand reality. As the FTC moves forward with its investigation, and dozens of investors file claims in bankruptcy court, expect the (more than) once bitten crypto world to be twice as skeptical about future ad splurges.

Glossy crypto ads lose their sheen as investigators probe possible misconduct

The most searched term on Google this year is “Wordle”