Stacy’s Goodbye Cocktails

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S1: Hello and welcome to the Stacy. Good bye cocktails episode of Sleep Money, your guide to the business and finance news of what is an extremely bittersweet week here. Shave Slate Money I am Felix Salmon of Axios and the good news is that I am joined by Emily Peck of Axios. Dun dun dun Emily. You’ve come on board. You’re going to be writing the market’s newsletter that comes out every weekday with another new hire, Matt Phillips, who’s also amazing. How’s it going?

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S2: Well, today was my fifth day. It’s been going great so far. I’ve written a few things. I can put the links in the show notes, or we can wait, and you can just subscribe to Axios Markets, which is Felix side comes out every day and I’m co-writing it with Matt Phillips starting probably in another week. We need to do a lot of training at Axios Felix. I don’t know about that.

S1: Yeah, you have to. You have to learn how to use bullet points.

S2: Yes, I have to learn how to be smart.

S3: That’s a skill, but smart, probably exciting.

S2: So I hope everyone will keep following me.

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S1: So that’s the good news. The terrible news is that this is our very last week with Stacy-Marie Ishmael Stacy what is going on?

S3: I have a job that I do, and the crypto is it’s very busy and all consuming, and I am unfortunately not going to be able to hang out with two of my favorite people and talk about the biggest markets and finance news of the day.

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S1: So, yeah, this is this is terrible news and I am still kind of in denial and I’m not happy about this, but we are going to try and squeeze you for whatever value we get in this last week. We’re going to talk about cocktails because we’re all going to go off and get drunk after this to drown our thoughts about Stacy leaving, we’re going to talk about cocktails and whether it’s a good idea for restaurants to be able to sell them to go. We are going to talk about Covid tests and how much they cost band to kick us off. We are going to because it’s been a little while since we’ve had a proper newsy episode. We’re going to talk about the Elizabeth Holmes verdict and what that says about Silicon Valley. We also, of course, because this is a podcast full of journalists are going to talk about the New York Times buying The Athletic in Slate Plus. So all of that is coming up on slate money. Stacy, this is your show, you get you get to just see what you’re talking about and we just go along, we go along with the ride. What do you want to talk about first?

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S3: I think we should do Theranos source Theranos first.

S1: OK, so Theranos first Elizabeth Holmes is going to jail. This seems almost certain, although the guilty verdict will certainly be appealed. There were 11 counts against Elizabeth Holmes and she was convicted on merely four of them. Does that mean she’s mostly innocent?

S2: While each separate count is a 20 year max sentence, so no. But it is interesting the difference between the counts that counted and the counts that didn’t count.

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S3: A lot of counting their one one.

S2: When people talk about why fairness was worse than other start ups that exaggerate, everyone would always say because real people were involved and patients got ripped off. They got blood test, the results that were incorrect and all that. But when it came time for the jury to decide the verdict, the counts regarding patients getting and fraud. Those are the ones she was found not guilty. And it was the investor counts.

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S1: Yeah, there was one woman who was told that she had HIV and they were like, Yeah, that was bad. But we couldn’t really see beyond a reasonable doubt that that was specifically Elizabeth Holmes whose fault rather than the system. We’re not going to visit the sins of the entire company on the CEO, even though she clearly ran the company. Very sort of micromanage you, really. If that’s the word, the counts against the patients were thrown out and then there was a hung jury, so there were three different classes of count. I guess you would say the ones against the ones about defrauding the patients, those who was found not guilty of. Then there was a second class of charges of defrauding investors and roughly half of those she was found guilty and half of those. There was a hung jury. And this was fascinating to me that basically the early stage investors there was a hung jury, the jury, there were a few people in the jury minority, but some who said, Look, this is what early stage investors do is they take bets on crazy, risky companies. And this turns out to be a crazy, risky company. And their money went to zero. And I’m not going to speak for the jurors, but I can speak for myself and say, like on some level, those investors were, you know, fueling the company rather than being defrauded by the company. They were they were accomplices in some way. I’m not saying they knew that they were doing anything bad, but the much more seemingly slam dunk case against her, which she was found guilty of, was the later stage investors who poured hundreds of millions of dollars into the company based on financials and documents that they were given. That was simply false. And at that point, they were like, Yeah, you’re just like taking poor Betsy DeVos money and you’re going to jail.

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S2: That’s the thing, right? It’s like, Oh, Betsy DeVos is the person who gets justice in all this that is like it doesn’t.

S1: Well, I don’t know. This is a criminal trial, right? So this isn’t a trial where Betsy DeVos gets her money back.

S2: She doesn’t get her money back. But still, it just I think what it is is everyone agrees that this Theranos fraud was really bad because at the end of the day, it was patients who were ripped off. But it’s harder to prove that, and the damages there are are kind of smaller, even though it’s life and death money is what counts in a case like this. So even though the reason it was bad was because of the real people involved, at the end of the day, it’s like the investors. It’s the accounts of fraud against investors that are sort of like easier to get through. You know what I mean? The reason they were those charges she was found guilty on those charges is just because those are the ones that could stick.

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S1: I guess the question is like if she had been running a SAS company, you know, if she had been running a company that claimed to be making lots of money by selling software to enterprises. And it turned out she was making up those those numbers and then the whole thing implodes. And then like, at that point, does the government even bother to go ahead with a criminal prosecution? And if they do, does the jury find find that person guilty or do you need this human element to even get the criminal prosecution in the first place?

S2: Exactly that is what I’m saying. You needed the human element to get the criminal prosecution right.

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S3: Stacy, I think I mean, I think the whole point of having a jury trial is the human element, right? You’re trying to argue for people being affected here. We could talk about another jury trial that involves a lot of human elements, but I think this is this is the one that is material

S2: the bigger picture. I’m curious, Stacy and Felix what you think the bigger picture on like tech companies aren’t going to exact start ups aren’t going to exaggerate anymore. And this is a lesson. Investors will have learned a lesson from this. I feel like they’re not going to learn a lesson from this.

S1: Silicon Valley, Twitter Insofar as, you know, there’s any kind of consensus on Twitter, it’s very much taking the side of this was never a Silicon Valley company.

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S3: Yeah. This fight, despite the fact that if you are blocked by certain VCs, it is because you ever in your life said anything vaguely critical about either of Elizabeth Holmes or Theranos. Like, come on, it’s just the Stanford Mafia closed ranks. Around homes and Theranos very early on, whether it was a Silicon Valley company or not.

S1: And there were definitely, you know, Tim Draper and there were definitely Silicon Valley investors on the cap table. And the way the you know, Inc magazine put her on the cover, calling her the next Steve Jobs, I don’t think they were the only person to do that. She had that black turtleneck. The whole thing quite like a Silicon Valley look like a Silicon Valley. She was really, you know, trying to make those comparisons as salient as she possibly could. So it was the Silicon Valley company. And it is part of the culture of Silicon Valley to be how to put this leg.

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S3: Move fast and

S1: always be saying that you are crushing it even when you are not crushing it, because apparently you can never say, Oh yeah, we’re going through a hard time right now. That’s it’s it’s. That culture, I don’t think is going to change anytime soon. Guilty verdicts or no guilty verdict.

S2: Yeah, and Matt Levine pointed this out to maybe other people. Like he said, Theranos raised a lot of money from investors who didn’t do too much due diligence because the world was awash in money and investors got careless. And this was before now, which you could say the same thing. The world is awash in money. And in fact,

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S1: when was the last time the world was not awash with money? I mean, like, it’s been a while. It’s been a minute.

S2: There’s a lot of money, a lot of money investments right now. So like this isn’t. I think that’s totally right. Like, nothing has changed. Like this was this changes nothing. This verdict? I mean, in a

S1: weird way, in a weird way. I think that she kind of hit at exactly the wrong time. Like, right now, the world is so awash with money that she wouldn’t even need to learn to read.

S3: You would just be like making it rain.

S1: She would just be like, I can. I’m going to change the world. I’m pre-revenue, but I’m going to change the world. And she would say back with a $100 billion valuation and everyone be like, Wow, this is amazing. Now you don’t need to lie. Back then, there was slightly less money sloshing around. So if you wanted to get the devices to to to, you know, invest with you, you needed to lie and then you go to prison.

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S2: And also now there’s this trend and Felix, you’ll cut me off, I’m sure if I’m saying something uninformed. But there’s this trend in V.S.. I think it’s the Tiger Capital model where they just like, move really fast with investments like they’re looking less at companies than ever before, and the money is just flowing, like the trend is in the opposite direction. Not more. Yeah, yeah, totally.

S1: I’m I’m, I’m I’m I don’t know. Like, there’s the fact that tiger moves so much faster mean that they are doing less due diligence, or does it just mean they’re moving faster? They’re like they have a hedge fund metabolism rather than the VC method. This is, the VCs have this kind of multi-decade time horizon, so they

S3: say unless you’re a media company. But I want to. I want to. That’s I think that’s such a super interesting point, because time spent does not always correlate with intelligent analysis as it were. Right. And like, I think about this in the context of job interviews, like it’s not at all the case. The being dragged through 50 hours of interviews over four months is necessarily going to give you a slam dunk candidate versus somebody being like, You seem great, start tomorrow. And I do wonder in this environment where there’s so much money and there’s so much complexity, like what is useful due diligence actually look like anymore?

S1: Yeah, especially when you’re talking, you know, tiger style investments where it’s basically like, we see the product, we see the potential, we see the founder, there’s no revenue here. So are we going to take a punt on this or will we not like, you know, suddenly with with later stage stuff like we was like, we saw with Theranos, you had various of the family offices and investors who put money into Theranos saying, like, we did actually ask for more information and Elizabeth Holmes refused to give it to us. And that is them trying to do due diligence, but ultimately saying, Well, I guess we want to make this investment. So we’re going to make the investment even if you don’t give us the information. But yeah, I think the later and the more mature the company is, you know, like once it’s post revenue, then you probably do want to go in there and make sure those revenues are real. Get some kind of third party accountant, something, you know?

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S2: I mean, with in terms of due diligence, there was one woman, I think, who testified at the trial who was like, We didn’t ask more questions because we didn’t want to make Elizabeth angry at us, which just seems like I don’t I don’t do due diligence for a living. So I mean, I kind of do, but because reporting. But that’s that seems like bad due diligence. We don’t want to ask a question because it’s going to.

S3: It also goes back to the point about the Silicon Valley. Nobody likes negativity, right? There is a sort of fetishization of uplifting, positive support constructive. That is the reason that Silicon Valley is so adversarial to any kind of nonprofit. Inc magazine is the merely the fact of asking a question about like how on what basis are you making? This claim is interpreted as a personal attack in a way that I have. When I was working there, I just found wild.

S2: It’s a very much

S3: a passive aggressive West Coast drawl.

S2: How dare you question us?

S1: But but it’s also like to be clear about this. This is also the mentality that has driven the entire SPAC market right. Like, no one is really able to properly diligence the companies that are going public via SPAC, the detailed accounting that you. You only have to get in the this one when a company goes public just isn’t there in this bag. Most of the time sometimes is, most of the time it isn’t. And this kind of like, I’m just going to take a punt on a story. Is something the you know, the FCC, I think arrogance has come out quite explicitly and said like, no, there shouldn’t be a double standard here that if we hold companies to a high standard when they go public by our IPO, we should hold companies to the same standard if they go public by a SPAC. And then this SPAC loophole is, you know, especially post this Theranos verdict. Like the Theranos Fed, it reminds us of how dangerous it is to invest in a story.

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S2: Yeah, I have one more thing I wanted to say about Theranos and Elizabeth Holmes. She has made it bad out there for women, especially to

S3: wear black turtlenecks down

S2: startups and raise money. Well, black turtlenecks or not, there was a good piece in the Times’ months ago. I think where you know, women who are trying to raise money out there in Silicon Valley are sort of tainted with the Elizabeth Holmes stink now. I think she has made it a little bit harder for women to raise money because there’s an association. And also she had on the flip side, she’s kind of destroyed.

S3: OK, the two things girl bosses destroyed the notion of the girl boss. You know, if we go back to the reporting about what happened at AWI and, you know, the luggage company and various other things like that. But I do want to comment on something. The new woman in Silicon Valley have always had a harder time raising money like just as a baseline. I remember when we talked about this several episodes ago, somebody was like, Is it really true? I was like, My dude. Yes, it is very true that if you look at both the amount of attempted rape, you know, amount of attempted investments that folks have to make and the size of the rounds, they end up raising the profile of the investors that tend to finally put money into a woman. It’s a whole different ballgame out there. But over and above that, I don’t know if the Elizabeth Holmes effect will be to be people like writing off woman completely or if they’re just like, See, we told you she was an outlier anyway, we’re just going to continue not investing in women, right? I don’t know if there was this moment in which she flipped the narrative in the other direction in a way that suddenly made it easier for blonde black turtleneck wearing woman to raise money. And so I’m not sure that it’s flipping back the other way where it’s suddenly more difficult again, as opposed to just like status quo has been maintained because she was always exceptional. Like, you don’t have like a casual adviser in the form of Kissinger in terms of your average startup up trying to raise money this way.

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S2: I would think it’s a little worse, probably

S1: worse, worse than like homes at a height or worse than pre homes,

S2: worse than free homes. Maybe homes at our height made things incrementally a little bit better and that there was more attention like, Oh look, women can do it too. And like benefit of the doubt just for a smidge more. And now I think it’s gone a smidge under where it started. If that makes any sense, I

S3: have no faith in humanity. So I don’t I don’t think it

S2: has been terrible all along, says

S3: Stacy. As you can see, by the way, the 2022 is going so far. So also, maybe not.

S2: I mean, maybe I’m wrong. Also, because she did have her homies come to the trial like you, you saw that she still

S1: has a fan base for sure.

S2: She has fans like there are there is TikToks, of course, and Instagram posts where people are still kind of a few a few people. And maybe it’s a joke I don’t know are fangirling this. I mean,

S3: good, you know, people and people need role models, and I hope eventually Silicon Valley gives them like a better range to choose from. It’s just like, that’s the problem with these exceptional examples.

S1: If you’re going to pick a Silicon Valley CEO, if you’re a role model like that’s never a great

S3: business, it’s not an amazing pool. That’s what I would say from a humanity perspective.

S1: What’s up next, Stacy?

S3: So continuing the carnival of grimness, let’s talk about rapid test pricing.

S1: Oh yes. This, by the way, is a global thing I can say as someone who’s in, you know, on the other side of the Atlantic Ocean right now. Right now, I’m in Ireland. Up until a few days ago, I was in England. This whole, there’s this sort of meme that has been going around Twitter, which basically says, I can’t believe how expensive and difficult it is to get rapid tests in America, given how in England you can get a pack of seven for free just by pressing a button on the internet. Yeah, in theory, in practice, I can tell you, as someone who is desperately running around London trying to get a pack of something for free, it is pretty hard even in London or even in England. But yes, in principle you can. Whereas for reasons, I do not understand the American government for all that, it’s willing to pour huge numbers of billions of dollars into trying to deal with this Covid pandemic abroad. Like everyone, just test yourself all the time strategy, which seems like a really smart thing to do, has never been on the list. And on top of that, they’ve only approved two different tests, even though there are lots that work. And so it’s incredibly hard for Americans to get tests and they’re changing hands for what, like 75 80 dollars for two.

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S3: Yes, they’re being sold on like the secondary black market for rapid tests via people who are getting them for free and, you know, from their employers. And it’s just. But the thing is the idea that you could have ever gotten a rapid test for $14 an idea it cents or whatever the agreed number was was wild to me. Like, I have never seen a rapid test either in stock in Walmart for that price or available from CVS or elsewhere for anything less than 20 bucks.

S2: I got one online for that.

S3: 14 OK. Emily bragging.

S2: OK, I have probably a horrendous take, but here I go. What if?

S1: What’s your bad take? Emily.

S2: OK, well, so Dr. Fauci, I think this week said it’s like time to stop focusing on case counts like Omicron is just out there. Everyone’s getting sick. It’s move on from counting cases. What if it’s also time to just like if you’re very sick, you go to the doctor and you get a test, and if you’re not very sick, you just like, do what you do if you would get a cold or the flu. You just stay home until you feel better. Like, and don’t worry, the

S3: people don’t stay home. People like the I every year that I have worked in the U.S. every flu season, it’s always like somebody like, Oh, I just have the flu hacking cough in their throats or. And people don’t have paid sick leave. And you know, and the thing with rapid tests is, even if you can get a rapid test, there are employers out there that are like, we’re not going to allow you to take time off paid or unpaid unless you have official documentation in the form of PCR from that doctor, assuming you have a primary care doctor in the first place. So it’s like if we had the infrastructure and the kind of the cultural sensibility towards work that people would in fact stay home,

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S2: that would be, yeah, we don’t. I mean, I just feel like we don’t. Walmart just cut sick days. Covid. It’s Covid sick day policy. They they have it. I expect other companies will soon follow suit. It’s the U.S. We don’t have paid sick leave. We have crazy work culture and we have something that’s moving from being a pandemic to being an endemic thing. So like, I don’t know, I feel like why even fight it? I don’t feel where the worst take out.

S1: But you seeing this, I feel like this definitely counts as a bad take. I mean, I would put that out there. I mean,

S3: because just like, you know, are

S1: you basically saying that we should? Stop having a public health mindset about Covid and just and just no longer care about, might I be infectious to others and just that should not be part of how we think.

S2: I mean, the U.S. went all in on a vaccine strategy. We have good vaccines. If you’re mustard and you get this illness right now, this variant, you’re probably going to be OK.

S1: I probably meaning like more than 50 percent, yes. But like given the numbers of people who are getting Covid right now, you know, even if it’s five percent of boosted people having having to get hospitalized, that’s still a lot of people. And there are definitely boosted people who are having very, very hard, hard times of things and going to hospital.

S2: Yeah, maybe I’m saying like, it’s kind of too late to fix this testing issue. By the time, like the Biden administration said, they’re sending out 500000 to 500 million sorry tests. I mean, by the time Omicron Macron, I just think it’s too late to do the testing. The testing way, like the US is not going to be able to pull it off, like just do something else.

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S3: Here’s the thing, though one of the things that I have become obsessed with is the notion that Omicron is the last variant. Because all of these policies, all of these like you can go back after five days, et cetera, et cetera, is sort of predicated on the idea that because Omicron is quote unquote mild, which we could talk about two Felix this point, this is this is this is the policy. Henceforth, we don’t know if we’re going to get like totally Delta ESC screwed again, where the next variant that comes out is like a deficit both highly transmissible and contagious, even if you are boosted and has really severe outcomes. And I think to your point, Emily like the big challenge for me is the notion of and the Mississippi I can’t pronounce that word is being based on a current set of circumstances rather than us thinking about if actually we were looking worst case scenario of this thing, what would we have to be doing? And again, I have no faith in humanity. So, you know, I’m like, I’m prepared for for whatever. But I’m also as a person with a slew of chronic illnesses, aware that the definition of mild is really variable, right? And like we, we’re kind of setting up one we don’t know enough about long Covid for people who are dealing with it. And two, I with my complete lack of an upper respiratory system. If I even if I get a mild case of Covid, my outcomes might still be way worse than somebody else’s. And to Felix this point, extrapolating that over millions is is high.

S1: And let’s let’s not forget that there is still a really bad pandemic of the Delta variant happening in America right now. If you get Covid, you cannot be sure that you’re getting Omicron. There’s a lot of Delta still going around.

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S2: Maybe it was a bad take. Yeah, I mean, like the good take is like flood, the flood the market with tests, make sure they’re cheap and readily available. That’s not the world we’re living in right now. There is a shortage, but that

S1: that is that is the that is the world that many people do live in. You know, the UK government is highly incompetent, but it’s more or less the world that the UK lives in and various other countries. And it’s an entirely possible world and it’s a world that, you know, the Biden administration has been in power for a year now. They’ve had a year to get up on this. People have been saying for a year, Can you guys just? Make tests free and readily available. Couldn’t you make them available in packs of seven rather than packs of two, which is like an obvious thing? Just basically have make them be things that are lying around in everyone’s house at all times and. They’ve had a year to get there, and they’ve managed to get basically zero percent of the way there, and that seems insane to me. And that is the root cause of why we are now seeing all of this profiteering and everything else that they’re just, you know, plus a soup son of FDA incompetence in the way that the FDA is just like something terrible and approving new tests because they like to test, must read, must take a million different boxes. No, it must. There has to just, you know. Detect Covid, although, you know, if if I wanted to do a bad take, my bad take would be with Omicron. In particular, tests are much less useful than they have been here unto the people testing. People are testing negative long after they’ve developed symptoms, long after they’ve been infectious on the rapid test. And you’re like the only the only utility at some. For many, many people getting Covid right now, the only utility of a rapid test is to test out. It’s like once you’ve had Covid. How do you know that you’re no longer infectious? Well, that if you test negative on a rapid test, that’s a very good sign. You’re no longer infectious, but like to test whether you’re infectious or whether you have Covid. Like people have like half recovered from their symptoms by the time they finally test positive.

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S2: So can the market solve this problem? Like, remember when we couldn’t find hand sanitizer and now I can’t sneeze without finding hand sanitizer? Like, can I mean, there’s there’s big demand for these tests like this is America, shouldn’t we? Shouldn’t this happen quicker? What’s the hold?

S1: What I think is a good question why Abbott in particular hasn’t been making 10, 20, 50 times as many tests as it has defeats me. I don’t understand it.

S2: Oh, I thought you would explain it.

S1: No, Stacy will. Stacy is your last episode. Explain it to us.

S3: A couple of things. One is I remember reading a New York Times story a couple of months ago and being absolutely incensed by the reporting that Abbott had made a bunch of tests. And then because there was insufficient demand for them, they destroyed a bunch of them and laid off, you know, a slew of people who are making those tests. And then those people were like, OK, cool, we’re out of a job. Abbott didn’t give them any kind of reasonable severance or anything else. They went and they worked at other places. And so now they’re having to like, rehire a ton of people into these places in a much more competitive wage environment than had been true when they were making those decisions. So and then you just have like pure production constraints, right? Which is like even if you hire all of those people up, can you even if you’re running your your people and your machines and your factories, 24-7 actually get to the states of output from zero versus if we had been stockpiling over time. Plus, what you already mentioned about the lack of FDA approvals for alternatives like I don’t think you can bottleneck one.

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S1: I mean, I have to say the the tests that everyone takes when you take a test in the UK are not made in the UK, they’re all made in China, right? There’s nothing wrong with the test, the made in China. It just seems to be that the FDA has, you know, difficulties approving tests that are made in China.

S2: So if I’m Joe Biden, I’m calling the FDA and I’m like, Let’s go, let’s get these Chinese tests over here. Yeah.

S1: If you’re Joe Biden, you’re also like, Buy American.

S3: That’s just is that would provide.

S2: Right? Joe Biden impression

S3: while I was rendered speechless. Can we talk about the fact that New York might once again have to go cocktails because this is extremely relevant tonight?

S1: I was advised by a buy one of the world’s foremost nurses once and I’m not even joking about this really is one of the world’s foremost nurses that if you do have a sore throat, then drinking brown liquor or some kind of late, you know, Manhattan or old fashioned or something like that is a really good idea because it opens up the capillaries. And yeah, it’s it’s good for you.

S3: Look, every Caribbean grandmother is convinced that if you are unwell, you should drink like a shot of scotch or whiskey, or maybe even some rum. Exactly. Hot rum, you know, splash of ginger ale. Ginger ale is the also the thing that solves everything. But I have not been able to figure out other than the, you know. Classic puritanical regulate alcohol out of existence, which there are public health merits to, why don’t more states embrace to go cocktails like?

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S1: I mean, it’s like, isn’t lobby group what New Orleans is based on?

S2: That is. Yeah, yeah. Rollins runs on South Beach cocktails, and I feel it. I mean, in if you live somewhere where there’s a lot of driving and to go cocktails are a thing, I just feel like it’s a recipe for disaster. Like, people are driving around New Orleans with like alcohol splashes and cup.

S3: Well, most people are walking around New Orleans

S2: or in Louisiana anyway. I don’t know. I’m a little

S3: Louisiana. Yes. Love to go. But they sell. They sell alcohol at a gas. Yeah, like

S1: drunk driving, going cocktails to go cocktails probably feel like a bad idea to me.

S2: Nuts? Yeah, it’s really bad.

S3: And you’re not supposed to have open containers in your car, even if the container is available. So there is some nod in the direction of your breaking laws that exist. But what is the, you know, who is the group that’s like? No, if you want a cocktail, you have to go into a bar.

S1: The retailers, the alcohol retailers, is the people, right? It’s always a fight between the restaurants and the retailers,

S3: but it’s a good cocktail. It’s so much more expensive than making it. This is true as a person who spends, you know, my my pandemic hobby was not salad or baking. It was like pretentious cocktail.

S1: It’s a good it’s a good pandemic hobby. I have to admit,

S2: I feel like I mean, it’s a good pandemic policy to have to go cocktails so people don’t sit in bars. But like more broadly pulling out, I don’t know if it’s such a great policy. I mean, people, when people are drunk, they do so many dumb things like, I don’t think you can have it to go retail policy. And in an area where you have like lax gun regulations like that’s just

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S3: a cop, a cop,

S2: basically.

S3: All right. Texas has to go alcohol policy during the pandemic and also a little thing known as mostly the Chili’s gun regulations. Oh, it’s like, here’s the margarita.

S2: But I had a handgun.

S1: So, so in the Lower East Side, we have these things now which are ex throwing bars where you can like drink cocktails recently. Know these are two things that should get done.

S3: No, no, no, no, no. But I mean, one of the reasons I’ve been thinking about this Emily, it actually relates to the idea of what’s the difference in culture and legislation is if you exist in a binge drinking culture or you exist in a culture where like drinking and driving is normalized or throwing freaking axes while Felix is go out, drinking is normalized, you know, then anything you do that makes the accessibility of alcohol easier is like net negative, right? Versus if you are somewhere where you are assuming that people are, you know, kind of outside of the range of, say, alcohol disorder like able to make better decisions than sure. And it’s exactly the same set of policy considerations about like the legalization of marijuana and other types of drugs. Where I remember when I was in high school, I was writing an essay. It was about like, what are the pros and cons of of legal marijuana and all of the people on the con side, it was like everybody’s suddenly going to be smoking joints all day. The only thing that they’re going to be doing and for perhaps a percentage of people, that might be true. But in general, greater accessibility does not always mean like widespread vice and death and destruction. If the rest of your society is functioning at a in a reasonably normal, I am.

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S2: You know, what’s weird is that I don’t quite agree when it comes to alcohol. I think regulations around alcohol are really important and and tend to save lives like I guess everyone always points to France and the like. France is totally chill and everyone drinks wine and it’s fine. But like I think when they banned alcohol ads on TV there or something along those lines, like deaths went down, like drinking is like people can smoke pot all day and it’s probably fine. Like they’re not going to kill anyone else. But like, alcohol is like alcohol

S3: is objectively bad for you.

S2: It’s it’s a public health risk in a way that other things aren’t.

S1: I think I don’t know why. So maybe that’s maybe that’s the public health reasons they’re not allowed to go cocktails. If they’re to go, then that it’s that much easier to imbibe a cocktail, which as to Stacy’s point, is now hard. You either need to make it at home, which is hard, or you need to, you know, go through the whole rigmarole of ordering it and sitting down and having it served to you. And that is quite expensive if you want more than one

S3: and possibly fatal if you’re unvaccinated. Yeah, and

S2: in the pandemic, the public health risk of sitting in a bar outweighs the public health risk of like having to go cocktails, but only in the pandemic.

S1: But OK, so here’s my here’s my sort of synthesis here of. Of how we managed to combine the testing public health conversation is that the reason it makes sense to do this in New York to allow to go cocktails in New York is precisely because New York is one of the few places in America where a majority of the population is still uncomfortable. Walking does not drive and ordering a cocktail. If you’re OK with walking into a bar and ordering a cocktail, then the public health calculus says that’s bad. You don’t want to make it too easy, but if you’re in this weird poverty situation where most people are not OK walking into a bar and ordering a cocktail, then on some level, you know, we have a right to cocktails and we can’t be expected to make them at home. And so this is the only way we’re going to get our cocktails.

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S3: Yes, we have a lot of this. This is like Felix a political position. We have a way of

S1: life, liberty. And what was the third one cocktails

S3: the the pursuits of spirits. That’s. Fantastic.

S1: OK. Numbers round people. Stacy is going last, so I’ll go first. Seven percent is the amount that the Grayscale Bitcoin Trust rose in 2021. This is this thing has been around for many years. It was created by my good friend Barry Silbert of Grayscale.

S3: He’s your good friend. We need to talk offline.

S1: We’ve had we’ve had a few. We’ve had multiple bitcoin debates over the years. But anyway, Barry started this place called Grayscale, and he basically was the very first person to create a way of being able to buy bitcoin on the stock exchange. And it’s a bit of a kludge and you have to pay him a whopping great management fee. And no, it doesn’t make a huge amount of sense. But anyway, it’s listed on the stock exchange under the ticker symbol GBTC. And you basically buy effectively an open ended mutual fund. You know where he holds a bunch of bitcoin and you buy into his fund and it’s in his fund gained seven percent in 2021. It’s meant to be a way to get bitcoin exposure for people who don’t trust themselves to be able to hold bitcoin on their computer or whatever. The price of bitcoin. Contrariwise, rose 60 percent in 2021. This is a massive, massive delta and and the way in which the crypto world has. Not been able to. Yeah, the the the law of one price, the efficient markets hypothesis, the, you know, all of this kind of stuff, even in 2021, we’re so far away from that. It’s bizarre anchors.

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S2: Why would anyone invest with this guy when they think I don’t understand

S3: such a good cause?

S1: He does have how many billions under management.

S3: It’s very it’s a tremendous amount of money that is, he is single handedly and through his various and you can make

S2: seven percent on like inflation protected Treasury bonds right now, I think.

S3: I mean, you can make seven percent on your average like crypto staking your product.

S2: So since

S3: there’s a lot of other ways to get that level of exposure,

S1: Emily was a no.

S2: My number is 80 million. That is the approximate number of workers in the U.S. who would fall under the Biden administration’s test or vacs mandate. Talking about it because the Supreme Court, as we record right now on Friday, is considering if it will uphold this mandate or not. And it’s really anyone’s guess. It’s not. I shouldn’t even say mandate because the rule is you either employ employees, a company. Large companies either get vaccinated or submit to a weekly testing and wear masks. And if you work at home, you don’t have to do it. If you work outside, you don’t have to do it. If you work alone, you don’t have to do it. So I mean, to call it a mandate, that’s like a very that’s how the Republicans like to call.

S1: Well, there’s a mandate in New York, right? And Citigroup has said they’re going to start firing people next week who haven’t been vaccinated.

S2: Uh huh.. And the Mayo Clinic also said it was getting rid of like one percent of its staff that aren’t vaccinated yet. So, I mean, some companies and employers are doing it. Some, but some cities and states are doing this. But yeah, there’s this big federal rule that would probably move the needle for a lot of people who aren’t vaccinated yet. And yet its fate is in the hands of essentially three Supreme Court judges.

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S1: So the idea is that the sort of it goes on left right grounds like the most Supreme Court cases that the Liberals are like, Yeah, we believe in society and libertarians like, no, it’s got to be an individual choice. Is that how it’s going to get done?

S2: I think so. I mean, from what the people I spoke to, the three liberals will uphold the mandates. The three super and the rest of the people on the Supreme Court are conservative right wing types. The three most that Thomas, Alito and Gorsuch probably vote against the mandates, for sure. Then there’s this like they’re not moderate, but like the middle people who aren’t like, totally right is the Chief Justice Amy Coney Barrett.

S1: It’s all down to you.

S2: Yeah, exactly. And who’s the third? Barrett Kavanaugh. Oh, Kavanaugh another. He’s apparently the fate of the vaccine mandate isn’t Judge Kavanaugh’s hands.

S3: If we, I suppose the thing with the, you know, so-called vaccine mandates is if you do have large individual employers deciding they’re going to do this anyway, independent of what the the federal government might require. I’m fascinated when they get challenged on the basis of like, well, no, you’re not allowed because it’s, you know, there’s no federal mandate to do that. I’m like, Are you for individual rights? And in states rights and employers rights, are you just ask what

S1: if the federal mandate gets knocked down? Where does that leave the state mandates?

S2: It doesn’t affect the state. It shouldn’t affect the state mandates because the case at the court is all about federal and executive overreach, and the

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S1: Cuomo ready already

S2: has already upheld mandates at the state level. So and what they’re arguing or should be arguing, I haven’t been watching because I’ve been talking to y’all, but they should be arguing, does you know, does OSHA, the federal agency who made this rule, have the authority because, you know, they didn’t get Congress to explicitly say they had the authority to do this, even though it’s in the statute authorizing OSHA, it says, like if there is an emergency and a health risk, like you guys can do a rule real quick.

S3: We are truly so doomed for the next pandemic.

S2: It’s just so

S1: present one, for that matter.

S3: I mean, I mean, I’ve already decided that we’re doomed in this pandemic, but for future generations. Good luck to you. All of humanity. I mean, the Biden

S2: administration said when it made the rule, this could save a quarter million lives and that was in November. Pre Omicron just and I think just when Delta was kind of getting like revved up so probably could have saved a lot more lives.

S1: Vaccines save lives, people, especially with Omicron. If you’re vaccinated, it’s a good, good way of saving your life. Stacy what’s your number?

S3: My number is 10 million, which is the prize money that will be available to the golfers of the next U.S. Women’s Open, which is like the biggest ever purse available to women golfers. Because like all other athletes who compete in women’s sports, they tend to be better but still somehow paid less so compared to the athletes who competes in the men’s sports. So this this is happening because there’s a new sponsor, Pro Medco Health System, who’s like, Yeah, no, we’re just going to we’re going to pay more. We’re going to hopefully make this a more attractive purse. Golf is a sport, and I say this is the perspective of somebody who on the island that I grew up in. If you played golf, you are 100 percent one of the one percent in the country because to have access to golf courts, to have access to equipment, to fly around the tournament. It was just it was off limits to most people. And I know that there are folks in the U.S. who have been long trying to change the perception of golfers like. A purely elitist sports and frankly, just having bigger purses at the obviously at the open level, but all the way on down is a really helpful way to do that because when generally the higher, higher prize money tends to correlate with more sponsor interest. So you are able to get better sponsors because they’re like, oh, people are taking women’s sport seriously now. I can take women’s sports more seriously, too. It’s going to be easier for you to get sponsors. I always think about this the very again at the very local context. When I was in high school, I played for my high school’s football soccer team. We were terrible, but we were like it was. It was not a good team, but it was impossible for us to ever get sponsors. Whereas the equally average men’s football team at adjacent high schools just had local businesses like throwing money and stuff at them constantly. And it was just a source of endless perception

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S1: that, like high school golf teams, I know nothing about golf.

S3: You know, that surprises me. I feel like you’d be a person who has a lot of friends who play golf. I don’t know if they’re high school.

S1: Yeah, no. I have one friend who plays golf a lot, but he is. He is definitely part of the 0.1 percent.

S3: Yes, there are certain. I remember a couple of years ago looking at something golf related. It was around like when Tiger Woods was the person we talked about more regularly. And some people choose their private schools based on how good the golf team. They have

S1: teams,

S3: private schools for their children.

S1: Mm-Hmm. You see, this is great. This is why we need you on this show, Stacy, because you educate us about the most unexpected things like private school golf teams. You know, I did not know that you were an expert in such things, but I know I feel like I’m very sad because you’re leaving and it’s a bad way to start off 2022. But I’m happy that you made it through at least this first episode of the year. Do we are going to keep you on the email alias for a little bit while everyone writes in and says, Come back, Stacy, please come back, quit your job at Bloomberg just so you can stay on slate money. And yeah, do that right in, say, say, thanks to Stacy, who’s been the best host the slate money has ever had. And thanks as well to Jane Arraf for producing this international show. And yeah, we will be back next week with even more sleet money. We should have a sleepless about media gossip because we love to. We need to put it somewhere or put it in the sleep last right?

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S2: We talk about it too much, but too much, OK? Don’t you think we talk about media gossip a lot? I feel like or am I wrong? It’s OK. We can have this place now.

S3: Is it OK? Yeah, no, it’s fine. This is not a sport. It’s a habit. We’re not talking about this really well or

S1: a half billion. A half billion. It’s like a half billion slide the amount you need to get late money and attention these days.

S3: It’s true. It’s true.

S2: But even yes, the New York Times paid five hundred and fifty million dollars reportedly for the website, the sports website The Athletic, which I have never read, and I assume Felix has never read it either. But we will talk about it, right?

S1: It it’s it’s it’s a place to follow your favorite sports ball team.

S3: Isn’t it like Axios, but for sports, it’s pay?

S1: Well, there was so, so the the backstory here, apparently, and I’m this, I have no inside information about this whatsoever, but this has been reported. Is there? Apparently there was this brief period where Axios Non-athletic were talking about merging as part of a SPAC. And then Meredith Carpien, who’s the CEO of the New York Times, looked at that and said, Wait, hang on a sec. We were kind of like the only athletic and so started talks to them, and then the SPAC thing fell through and they actually weirdly, the talks between the New York Times and The Athletic fell it because The Athletic was like, We want half a billion dollars, and the New York Times was like, Look, you write good articles. We’re not worth half a billion dollars go away. And then The Athletic said, Great. We can easily get half a billion dollars from any of these gaming companies because they’re flush with cash. Turns out none of the gaming companies were actually interested. So The Athletic went back with its tail between its legs to the New York Times and said, Woops, actually, maybe we can’t sell ourselves to a gaming company. Are you still interested? The New York Times said, Well, we’re still interested, but as we said, we’re not going to pay half a billion dollars for you. And so they agreed on paying $550 million. That’s the bit which I don’t understand.

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S3: I was really confused. They paid more. Like, there’s a $50 million premium in there. They were like the other price was too expensive. This price, that’s more this is

S2: actually I think this is quite on trend with another media story which has been publicly reported. So I’m not saying any insider information, which is that Axios is going local, is doing local news. And The Athletic is actually a local news play as well. Because their strength is in local markets, they they scoop up the best reporters to report on, right, because

S3: they redid the best reporters that all the local news organizations were like working

S1: mostly in England. I mean, that’s where they really seem to be doing the best. Yeah, it turns out that if you’re really good soccer reporter in like Leicester, you weren’t getting paid very well. And then The Athletic comes in and starts paying like top U.S. media salaries for a good soccer reporter in Leicester and everyone in Leicester was like, That’s awesome. So, so it’s got it’s really got a, you know, a stranglehold. If you want good reporting on the English Premier League, which you know many people do. You go to The Athletic and it’s probably worth $60 a year, £60 a year, whatever it costs.

S3: It’s the same for baseball here, right? And you know, just if we do want to get into kind of media economics for a second, sports and weather are two of the things that still very consistently drive audience to local sites like especially in an era of climate change, especially in an era when people are looking for any kinds of distractions. And the fact that once again, media is so broken that we sort of couldn’t figure out how to incentivize the people who are responsible for a majority of the audience to stay. And now, you know, these local what are these local sites going to do? Like now they’re competing again with the New York Times and not just a, you know, a bundled a premium offering. It’s just like,

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S1: well, it’s still a bundle premium offering, like you’re not going to be able to get the athletic free with your New York Times subscription. This is this is the New York Times basically saying, We are we we don’t want.

S3: This is the Wirecutter strategy,

S1: the average New York Times subscriber to have a New York Times subscription. We want the average Neo Times’ subscriber to have a subscription to the Times and also to New York Times cooking and also to the crosswords, and also to Wirecutter and also to The Athletic. And we going just sell subscription as a subscription. As a subscription, there are going to be bundles and we can make, you know, we can keep all we can have. What’s that wonderful term you have in Silicon Valley? Are who growth?

S3: Yeah, average revenue per user. Mm hmm. So a lot of

S1: what it means, what it means is that you can increase the amount of money you get from each customer without raising your prices, which is a kind of neat trick.

S2: It’s great. I think it sounds great. I think journalists should get paid more money. And if local news outlets, they had, like, what, 20 years to figure that out, the internet and they didn’t. I don’t want to talk about really local news that much, but like, OK, the New York Times is figuring it out and these guys won’t get laid off or fired or whatever. So it’s fine. Although five fifty, there are

S3: some very good reporters there at The Athletic. Yeah, great.

S2: That’s a win, right?

S3: It’s a win. Hopefully a place win for, I’m

S1: sure, until they had, you know, they get, you know, some of them are going to become millionaires by being journalists. That’s always nice.

S3: Things implied. This is the kind of equity that the New York Times won’t theoretically tell you. You have to sell, but then you don’t and you just leave instead.

S1: Oh oh, Stacy-Marie Stacy with the subway. Oh wow. I can’t believe we managed to get this far without talking about Smith.

S2: And are we

S3: going to talk?

S1: No, we’re not. We’re just going to leave. Stacy sub tweet hanging there in the air by.