March 22, 2022

89 years ago today, the US took a huge step to ending prohibition. On March 22, 1933, FDR legalized beer and wine with an alcohol content around 3.2%. After signing the bill, FDR made the famous remark, "I think this would be a good time for a beer." We'll never know if it ended up being a White Claw.

Today's Wrap looks at Elon Musk's relationship with China. He says the country "rocks," but the US government says otherwise. Let's ride. 

― Key Stories

Miss the Wheat
Overview

• The war in Ukraine is causing wheat prices to soar. Wheat is a key ingredient in bread, pasta, and more
• Russia is the world's largest producer of wheat; Ukraine is also a major producer. The countries combine to supply 26% of global wheat exports
• A bushel of wheat now costs about $11, up from $8 before the war. The spike has left buyers unable to afford wheat, throwing the market into disarray
• In countries where diets depend on wheat, people are struggling to afford food. Egypt fixed the price of bread after it jumped 70%; bread prices are up ~70% elsewhere in the Middle East, too

Another Boeing Crash

• A Boeing 737-800 jet crashed in China on Monday with 132 people on board. No survivors have been found
• The jet was operated by China Eastern Airlines. It was at cruising altitude (29,100 feet/8,870m) before plummeting to the ground over 2 minutes
• The cause of the crash is unknown. It's rare for planes to crash from cruising altitude; most crashes occur during take-off or landing
• The jet was not a 737 MAX, the Boeing jet that crashed twice in 2019 and was then grounded for 2 nearly years. The 737-800 has been one of the safest and most popular jets in the world

US Declared Genocide in Myanmar

• On Monday, the US declared Myanmar’s persecution of the Rohingya a genocide
• Myanmar is situated between India and Thailand in Southeast Asia
• Myanmar's military has long been accused of trying to eliminate the country's Rohingya minority. The Rohingya are a Muslim ethnic group; most people in Myanmar are Buddhist
• Attacks on the Rohingya have turned 700,000+ people into refugees. Persecution of the Rohingya had been ongoing for years, but intensified in 2017

US Sours on Cohabitation
Overview

• Increasing numbers of Americans disapprove of single motherhood and unmarried cohabitation, according to a new study by Pew Research
• 47% of Americans say “single women raising children on their own” is bad, up from 40% in 2018. 24% say “couples living together without being married” is bad, up from 19% in 2018
• Young Americans (aged 18 to 29) have the most favorable opinions of both: 42% say single motherhood is bad while 14% say it's good; 13% say cohabitation is bad and 28% say it's good

See yesterday's results below the Wrap!

 Popcorn

Culture & Sports 

• An Andy Warhol "Marilyn" could fetch $200M at a Christie's auction in May, which would make it one of the most expensive artworks ever
• Lefty left behind: Phil Mickelson won't compete in the Masters for the first time since 1994. He's recovering from remarks about Saudi Arabia
• All the single Oscars: Beyoncé is reportedly being courted to perform at the Oscars on Sunday. She is nominated for Best Original Song

• iOutage: Apple experienced major outages on Monday with widespread reports of the App Store, Apple Music, and Podcast app being down
• Nike shares jumped 5% in after-hours trading after its quarterly earnings beat expectations. Boeing stock fell about 5%
• Social Disney-ing: Shanghai Disney is closing again due to rising Covid cases. China is facing its worst outbreak of the pandemic

• Return of the Szechuan: Later this month, McDonald's is bringing back its Szechuan dipping sauce for a limited time
• "Who's this 99 guy?" Urban Meyer allegedly asked this about superstar Aaron Donald in a scathing new report from The Athletic
• Free-range eggs are no longer available in the UK! The supposed-to-be free-range eggs will now be labeled "barn eggs," due to bird flu keeping the hens indoors
• Moisturize or mercur-ize? A new study found mercury contamination in many popular skin lightening and anti-aging creams 

― Roca Wrap

A Newsletter Exclusive

Elon Musk – the world’s richest person and CEO of both SpaceX and Tesla –wants a good relationship with China. As his companies pioneer some of the world’s most valuable and strategically important technology, though, will it be possible?

Elon was born in South Africa to a Canadian mother and now lives in the US. While he holds citizenship for all 3 countries, his companies are all based in the US.

Last weekend, the Wall Street Journal reported that US officials and representatives are worried he is too reliant on China’s manufacturing and market. In a statement apparently directed toward Elon, the US’ commerce secretary said that “any businessperson doing business with China should be extremely wary. And I hope would never engage in any behavior that puts our national security at risk.”

Elon has long sought good relations with China. In 2017, Chinese Big Tech company Tencent announced that it owned 5% of Tesla. “Glad to have Tencent as an investor and advisor to Tesla,” he tweeted at the time. 

In 2020, Elon said that “China rocks.” “People there—there’s a lot of smart, hardworking people…whereas I see in the United States increasingly much more complacency and entitlement.”

Then last summer, when the Chinese Communist Party celebrated its 100th anniversary, Musk tweeted, “The economic prosperity that China has achieved is truly amazing, especially in infrastructure!”

Elon’s warmth has been well-received. In 2019, one of China’s top officials offered Elon a “Chinese green card.” Earlier this month, China’s ambassador to the US said that he had an “inspiring talk” with Elon after a visit to a Tesla factory in California. Elon is a celebrity within China, where 270+ companies – from clothing boutiques to restaurants – have registered to use his name.  

Yet the US is more concerned with Elon’s actions than his words: Tesla likely produces over half of its vehicles in China, which is also an increasingly large buyer of Teslas. Last month, Tesla announced it would build a new car plant to double its production within China. SpaceX’s links with China are unclear, but some in the US are concerned it sources parts from Chinese manufacturers and may have taken Chinese investment, per the WSJ.

To address these concerns, influential Republican Senator Marco Rubio introduced a bill in December that would require greater disclosure of Chinese investments in US space companies, and block NASA and other government agencies from giving contracts to companies with suppliers in China. 

Besides becoming reliant on Chinese parts or purchasers, officials are concerned about intellectual property theft – which China is often accused of – of valuable technology. One automotive software developer told Roca that on a work trip to a Chinese electric vehicle company, he saw a Tesla in the room next to the Chinese vehicle. He said his hosts weren’t shy about trying to rip off Tesla’s tech.

Underscoring concerns about Elon’s China links is the war in Ukraine: Major US companies quickly shut down their operations in Russia, apparently without suffering major consequences. The US likely wants companies to be able to do so with China, although that’s a vastly bigger ask given the greater ties between the economies. 

Either way, Elon has excelled at using China to build up his companies around the world. In the future, it may prove harder for him to do so.  

 Games

1. Homer, Marge, Bart, Lisa, Maggie
2. Hank, Peggy, Bobby
3. Fred, Wilma, Pebbles, Dino
4. Peter, Lois, Meg, Chris, Stewie, Brian

 Roca Clubhouse

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20 Questions: 6-10

― Final Thoughts