🤑 Milei’s dollarization play

…and Musk’s X-plicit message to advertisers   Sideburn the peso (Tomas Cuesta/Getty Images)   [Sponsored by]( Last Week’s Market Moves   Dow Jones 36,246 (+2.42%) S&P 500 4,595 (+0.77%) Nasdaq 14,305 (+0.38%) Bitcoin $38,754 (+2.68%) Dow Jones 36,246 (+2.42%) S&P 500 4,595 (+0.77%) Nasdaq 14,305 (+0.38%) Bitcoin $38,754 (+2.68%) Hey Snackers, An accident or guerilla marketing for “Wonka”? Christmas came early for an Ohio highway after a crash between two trucks [covered]( I-90 in boxes of chocolate and caramel. No injuries were reported, but the interstate had to close during sugar-rush hour. The S&P 500 notched a closing high after gaining 8% in November, its best month in over a year. Investors got more evidence that inflation’s cooling, but Fed Chair Powell warned that the central bank could hike rates again if necessary. Btw... Do you want to start getting Snacks daily? Or prefer to unsubscribe? Manage your subscription preferences [here](. DolarBlue Argentina’s newly elected president thinks dollarization will help his inflation-plagued economy Fiscal shock therapy... That’s what President-elect Javier Milei is prescribing to cure the economy of Argentina, where inflation rates are soaring over 140% and prices almost doubled last year. The peso’s losing value fast, and after decades of runaway inflation, Argentines have lost hope in their leaders’ ability to stabilize the economy. Cue: after his inauguration on Sunday, Milei plans to call in Congress to review an XL package of [fiscal reforms](. - Big promises: The self-described “anarcho-capitalist” said he’ll dissolve Argentina’s central bank (its Fed) and switch the Argentine peso to US dollars — aka “dollarization.” - Backburner: Milei, who recently appointed a moderate finance minister, likely won’t implement his spiciest reforms on Day 1. But he insists they’re still on his GCal. No pesos, no problems?… Argentina has the third-largest economy in Latin America and the 22nd biggest in the world, with major exports like oil, agricultural products, and lithium (used in EVs). Besides the US, just four sovereign countries are dollarized: Ecuador, El Salvador, Panama, and Timor-Leste. Dollarization helped steady their economies, but they’re a lot smaller than Argentina. In the country of nearly 46M people, sudden economic measures could spook citizens (think: bank runs) and rattle global markets. - Costly: Argentina’s size means it would need in the neighborhood of $30B to swap pesos for bucks — and it won’t find that under the cushions (it would likely need a loan). - Speaking of… Argentina is the IMF’s largest debtor and has missed targets on its $44B lOU. Milei’s gov’t is expected to need to borrow more, but it’s TBD if it can. THE TAKEAWAY Every fix has its catch… Dissolving its central bank and switching to USD means Argentina would lose the ability to pull economic levers like printing money and controlling rates, leaving it to the US Fed. Since America’s central bank prioritizes America’s economy, monetary policy could be misaligned, and Argentina’s recessions could actually worsen. But if Milei’s reforms succeed, they could become a playbook for other countries flirting with hyperinflation. And as the greenback softens, Argentina’s dollarization could help bolster the dollar’s status as the world’s reserve currency. Sponsored by hear․com The ultimate conversation starter A team of top German engineers has unveiled the world’s first [hearing aid with dual processing](. And with double the power comes double the clarity… It’s called [Horizon by hear.com]( and it’s a game-changer for anyone looking to hear more clearly in conversation. That means no more mumbling. No more missing things. Just effortless conversation and unparalleled speech clarity—with a device so small and discreet, it hides completely behind your ear. See why audiologists are raving about this powerful German technology and [start your 45-day no-risk trial today](. Zoom Out Stories we’re watching More Fain, more gain?… Fresh off a win against Detroit’s Big 3, the United Auto Workers are planning a union push at 13 nonunion carmakers. Last week, UAW Pres Shawn Fain outlined plans to rally employees at companies like Toyota and Honda (both of which raised wages after the most recent UAW strike, perhaps to avoid this very scenario), and EV makers like Rivian and Tesla (FYI: Elon Musk is very opposed). Unlike GM, Ford, and Stellantis, nonunion carmakers have a labor-cost advantage because they don’t have to negotiate. That’s now in jeopardy. And it’s bad timing for EV makers as growth cools. X-plicit language… X boss Musk told advertisers “go f--- yourself” (a few times) at a conference last week, while addressing an ongoing boycott. ICYMI: after he endorsed an antisemitic post, 200+ companies including Coke, Amazon, Apple, and Disney have stopped paying for X ads, or are considering it. Now the company could lose $75M by year’s end. Musk apologized for his post, calling it his “dumbest,” but his colorful responses to advertisers likely won’t help X’s slumping revenue. Meanwhile, Meta, Snap, and Google have been enjoying an ad rebound. Events Coming up this week Going, going, stayed… Two labor reports will help clarify the state of the US job market this week. On Tuesday we’ll get October job opening #s and (more interestingly) quits. The quit rate’s held steady at 2.3% (a prepandemic level) for three months, as workers U-turn on the Great Resignation, opting for the Big Stay (73% said they’ll remain at their jobs this year — up from 61%). Next, the November jobs report will show whether wage growth and job gains continued to slow. Unemployment has been ticking up, and last month hit a nearly two-year high of 3.9%. Dollar doldrums…. Dollar General’s expected to feel the pinch when it drops earnings Wednesday. The one-buck retailer’s stock sank in August after it cut its annual revenue guidance while profits fell 30% to $678M. Last week, rival Dollar Tree also slashed its annual sales forecast as shoppers cut back on nonessentials (think: apples > air fryers). Wild stat: a third of all US stores opened in the past two years were $ stores. But with 60% of Americans living check to check, thrifty shoppers are even slimming their bargain carts. What else we're Snackin' - [Swipe]( Folks are spending like there’s no tomorrow. With 70% of Americans worried about the economy (hello, record $1T in credit-card debt), many are “doom spending” to ease their anxieties. - [Stitch]( As luxury appetite grows, LVMH is eyeing the US to train a new generation of artisans to make jewelry and purses. The Louis Vuitton and Bulgari parent expects to be short 7K+ craftspeople by 2025. - [Legacy]( Sandra Day O’Connor, the first woman on the US Supreme Court, died last week at 93. During her 20+ years on SCOTUS, she tackled key issues, including affirmative action, abortion, and voting rights. Want your Snacks daily? The Daily Newsletter Get fresh takes on financial news every week day. 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