May 5, 2022

Well, it turns out that TurboTax's "Free, Free, Free" slogan was misleading. Now the last thing we want is trust issues with corporate slogans. What if America doesn't actually run on Dunkin'? Does Arby's really have the meats? Will somebody one day out-pizza the Hut? This really makes you think.

― Key Stories

Turbo Gets Taxed
Overview

• Intuit will pay $141M over deceiving claims that its TurboTax software was free
• The payment is part of a settlement Intuit reached with all the US states. Certain TurboTax customers will receive $30 payments for each year they were deceived into paying for tax services
• While Intuit didn’t admit to any wrongdoing, uncovered documents show the company knew that “customers are getting upset”
• “The website lists free, free, free and the customers are assuming their return will be free,” an internal presentation said

JD Vance Wins Ohio Primary
Overview

• JD Vance won Ohio’s Republican Senate primary. Senate elections will take place in November
• Vance is the author of the book Hillbilly Elegy, and a former venture capitalist. The race was one of the most closely watched of this spring's primaries
• Former President Trump endorsed Vance, which political analysts believe helped him pull ahead of a tight pack to win the race
• Vance was also backed by billionaire investor Peter Thiel, who co-founded PayPal and was the first major investor in Facebook. Thiel has spent millions to support populist Republican candidates

Patient Enrolled in Brain-Control Trial
Overview

• The first human was enrolled in an FDA-approved brain-computer interface trial
• The company, Synchron, is a competitor of Elon Musk’s Neuralink. Synchron’s device transmits neural signals to an implant in the chest, which then translates the signals to digital commands
• The chip is being tested in people who are paralyzed. The company claims it has already enabled people suffering from ALS to control computers
• Synchron says the device is like a “bluetooth out of your brain.” The company is enrolling 6 Americans in its trial

Adderall Cut Off
Overview

• Cerebral, a telehealth startup, will stop prescribing Adderall to new customers
• Adderall is a frequently-abused drug used to treat ADD/ADHD
• Telehealth providers couldn't prescribe Adderall until the US govt. loosened telehealth rules amid the pandemic. Since then, Cerebral has marketed itself as a provider of mail-order Adderall, bringing on 200K patients and securing a $4.8B valuation
• At least 3 major pharmacies — incl. Walmart and CVS — have been blocking Cerebral prescriptions over concerns that it is over-prescribing Adderall

See yesterday's results below the Wrap!

 Popcorn

Culture & Sports

• Goooaalll: Diego Maradona's "Hand of God" World Cup jersey sold for $9.28M at a Sotheby's auction, a new record for a game-worn jersey
• Dismissed by the bell: Peacock is canceling its "Saved by the Bell" reboot after 2 seasons. The original show was a hit 90s teen comedy
• "Was that Will Smith?" The man who attacked Dave Chappelle during his standup set in LA has been charged with felony assault

• Ding dong... or ring ring? A woman in Shanghai reportedly lived in a phone booth with her dog for a month during the city's latest lockdown
• Elon Musk teased a Twitter fee for "government and commercial" workers, while promising to keep the platform free for "casual users"
• Alaska Airlines unveiled a Star Wars-themed plane to celebrate 5/4. The Boeing 737 is emblazoned with the Millennium Falcon and TIE Fighters
• The rooster may croak: Carl the Rooster, an alleged Mississippi town celebrity, was killed. Police say a juvenile corrections officer killed him

― Roca Wrap

A Newsletter Exclusive

Inflation is at multi-decade highs across North America and Europe: In the US, prices are up 8.5% in the last year, in the UK, 7%; in Canada, 6.7%.

In Argentina – Latin America’s 3rd-largest economy – those numbers would be cause for celebration. Its current annual inflation rate is 52%

Argentina experiences more persistently high inflation than any other large economy. Since 2015, Argentina’s inflation rate has only briefly fallen below 20%, and since 2019, it’s fluctuated between 40% and 60%. A 50% inflation rate means that $100 deposited in a bank is worth $50 a year later. 

Prices are constantly increasing: Every week, gas, food, and other staples cost more. That’s led to what some have called an “inflation culture,” where people do all they can to insulate themselves. They negotiate pay raises in advance; take out loans, expecting the interest rate to be lower than the inflation rate; and pay in installments, believing future payments will be discounted relative to today. They also pay their taxes and other payments late, knowing they are effectively getting a discount with each week that passes.

And more than anything else, Argentines spend their paychecks as soon as they get them. At the supermarket, they’ll buy weeks worth of food, packing the excess into their freezers. They’ll pour excess cash into crypto, cars, or real estate – anything that won’t lose 50% of its value annually. When some people find staples that seem cheap, they horde them. 

This isn’t new for Argentina, where inflation rates have been high for decades and peaked at above 3,000% in the 1980s. “Here 40% is normal,” one store owner told the Wall Street Journal. “And when we get past 50%, it doesn’t scare us, it simply bothers us.”

The causes of inflation have differed over time. A recurring theme, though, is that investors don’t trust Argentina to pay back its debts: The government has defaulted 9 times, costing investors billions. Because lenders don’t trust the Argentine government, they won’t lend to it, so Argentina prints money to fund its spending, causing inflation. Right now, Argentina also faces supply-chain and Ukraine war-related inflation.

Classical economists say the answer is to be more responsible: The government should spend less, and the central bank should raise interest rates. Doing so would cool the economy, take cash out of it, and show lenders Argentina is serious about paying back its debt, they say. 

But those moves are politically difficult and could put the country into recession, inflicting more pain on Argentinians and causing voters to toss out the politicians seen as responsible. 
The current government, led by a left-wing populist party that has run Argentina for decades, and economists who support it, want more social spending and blame businesses and lenders.   

Last month, on news that inflation was 4.7% in February alone, the government announced a “war on inflation.” Victory won’t be easy to achieve. 

Unlock Roca's Secret Section! 

 Roca Clubhouse
Yesterday's Poll:

Yesterday's Question:

Spread the Wave!

― Final Thoughts