Pandemic of Rage

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S1: This ad free podcast is part of your Slate plus membership. Hello and welcome to the pandemic of Rage episode of Slate Money, your guide to the Business and Financial News of the Week. I’m Felix Salmon Axios. I’m here with Stacy-Marie Ishmael.

S2: Hello from Wrage.

S1: Phil Stacey is in Austin, Texas, the capital of Texas, full of very angry politicians, including Ted Cruz. I’m here also with Emily Peck a fundrise. Hello. Who’s in a comfortable New York state suburb. And we are going to talk about Delta. We haven’t talked about it nearly enough on this show. We’re going to talk about how it is changing the country and the world. We are also going to talk about Joe Biden. We haven’t talked about him much on this show since he became president, but he came out this week and wrote a letter to OPEC. So we’re going to talk about his letter to OPEC and we’re going to talk about gas prices and how and whether they matter. And we are going to talk quite a lot about buy now, pay later, which is the sexy new GenZE way of buying things on credit. That and Slate plus segment on Mr. White Hat, the person who stole 611 million dollars of crypto and then gave it back. It’s all coming up on slate money. So let’s talk about Delta, because amazingly, we haven’t really talked about Delta on this show so far, and it seems to be the main thing that everyone’s talking about. I just saw some news that Facebook is now officially putting pushing back its back to the office date to January. The that has been a lot of talk about how this is basically the second wave of covid restrictions and lockdowns and, you know, we can’t just trust in the vaccines anymore because this is so incredibly contagious. How are you feeling about this Emily?

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S3: How am I feeling? Felix feeling I’m feeling maybe I’ll get hate mail for this. I’m feeling a little smug right now because A, my job is remote only forever, so I don’t have to have the stress of you’re coming back, you’re not going back. That’s so many companies and employees have now like Amazon delaying or its return lift is delaying its return to Facebook. So I feel smug that I have I guess that I know nowhere to return to a B. I also feel good that I’m vaccinated. And I think I think everyone vaccinated should feel a little bit better, even though you can still get breakthrough infections. I’m feeling despair because, my God, it’s been 18 months. When will this and tired of it and a little bit scared that things are going to get worse. How’s that for an answer?

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S1: Felix I feel like we have a pretty good indication of how bad things can get just by looking at what happened in the UK, which was a couple of months ahead of us on this. And everyone said, look what’s happening in the UK now. This is going to be happening in the US in a couple months. And they were absolutely right. And the UK vaccination rate is not significantly different from the US vaccination rate, especially if you look at the areas where it was growing fastest is obviously the areas which have the lowest vaccination rates. It’s going to continue to get worse. I think that is a pretty safe assumption, at least for a while. And then it will stop and then it will turn around and go down. And like one of the interesting, weird unanswered questions is what caused it to stop going up and start going down in the UK? They lifted all of the restrictions when it was still like raging and that didn’t seem to stop it from going down. I think that really is a lot of stuff. We still just don’t know about this virus in general and about Delta in particular, and especially as regards unvaccinated children, we just really don’t know how much risk they are. I think that kind of epistemic void that we’re that we had back in March 20, 21, we were so scared that we just didn’t know. And I think it’s not as bad as that, but it’s still pretty bad. It’s pretty

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S2: bad. And, you know, I think for me, look, Ed Yong has been just such a voice of clarity and the appropriate amount of rage throughout throughout this pandemic. And, you know, the story that he published this week in which he made the point that an Emily, he didn’t disagree with you. He said vaccines are the way to keep individuals safe, but masking and, you know, social distancing and ventilation in schools and other places where folks need to be indoors, like those are the mechanisms through which you keep society safe. And as a person who’s currently living in a state where the governor and the attorney general are spending significant amounts of time and taxpayer resources, stopping people from requiring masks. And, you know, kind of you have Ted Cruz trying to go out and sort of make a political brand for himself on the basis of nobody should be forcing you to get vaccines. And is there really science behind this and nobody should be forcing you to wear masks. The rhetoric here is very unhelpful as it relates to what the science and the policy makers are saying about how to combat Delta.

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S3: I think the rhetoric on all sides is unhelpful. Not I mean, look, they’re on the right and the conservatives like Ted Cruz, it’s extremely unhelpful, encouraging people not to take precautions and actively not supporting vaccination or masking. But like, I feel like there has been some kind of a little bit of fear mongering and some of the coverage I’ve read that makes you think Delta is extremely, extremely unsafe. And we’re back to March twenty twenty. There has been that kind of like hysteria in the coverage.

S2: I think Delta is extremely unsafe for children and I think it’s extreme. We don’t

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S1: know we really

S2: true.

S1: And it’s also

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S3: an immunocompromised, right? Yes.

S1: It’s also confused by the fact that there is like another respiratory virus which is going around in children right now. And they’re all going filling up the hospitals and like that is just making people even more scared. But you’re right, Stacey, that the Ed Yong piece is really good, even though I think it does rely a little bit too much on the Kaiser Family Foundation figures about like how safe vaccinated people are. I think more recent data shows the Baxt people are not quite as safe as that. But the thing that Ed says, which I think is absolutely true, is the number one, vaccines are necessary, but not sufficient. We do need to do more than just vaccinate a number to that. With Delta, there is now exactly zero chance that we can. You know. Be rid of covid, that covid is going to be with us in society, on the planet, circulating around everyone forever, basically, just like the common Cold War, never going to vanquish it. And so we now need to really. Move, move to a stance where we wind up with a place where everyone has antibodies because eventually everyone’s going to have antibodies, you know, everyone’s going to get exposed to this disease and everyone’s going to either get the disease or they’re going to have antibodies because they are vaccinated and. How you get there from here in a world where getting above 90 percent vaccination is functionally impossible, is going to involve a lot of people getting sick and a lot of people dying. And one of the questions I’ve been wondering about is like, how do you do that in countries that have been much better than the US at avoiding covid? How do you do that in Vietnam? How do you do that in Australia? How do you do that in New Zealand? How do you do that in China? You know, how how do we manage to get back to any kind of a world where people can, you know, travel around the world? Are we ever going to go back? Are we just going to have, like, incredibly hard borders for like another decade as these countries try and work out how to get to a place where everyone in the country has the antibodies?

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S3: That’s the question. Well, one of the questions, I think, is the economy going to keep booming or are we going to go back to the 20, 20 state of of lockdown, of hard borders, of no one going out to restaurants or anything, because it seemed like all of that was over and things were going kind of gangbusters and the economy. So for our purposes, I am curious what you to think about what’s going to happen.

S1: One thing that we can learn from England is that they weirdly did one thing right, that the United States hasn’t even really got started on yet, which is contact tracing. And there was that period where everyone in England was complaining about the kingdom where everyone was getting pinged for, like, you know, having been in contact with someone with the disease. And that caused people to have to stay home. And it was terrible. But like the contact tracing is clearly a massive part of what you need to do in terms of over and above vaccines, like get a grip on this thing. And I just don’t see anywhere in the United States possibly mean that’s doing contact tracing remotely. Effectively. Yeah.

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S2: Texas Gqiba one contact tracing very, very early in the pandemic. Like it sort of almost didn’t start here for it to really end, but going back to New Zealand. Right. So they’re they’re cautiously optimistic. Reopening plan still has their borders closed for the rest of the year. And, you know, the reality is a lot of other countries in the world just are still not even close to having received enough vaccines to vaccinate their populations. And so there’s this fascinating tension in a lot of the discussions I’m privy to, particularly from the countries that are really reliant on tourism around how you deal with that. It’s like economically Emily zero point, like folks need people coming in and spending money, but those folks are bringing coronavirus with them in, you know, in almost all cases. So like Trinidad, which has had a pretty aggressive nobody can fly home even citizens policy for a while started opening that back up to and I think one or possibly two of the Delta cases that were identified in the past two weeks are both from returning nationals. Right. So like people who are coming back from from the U.S. and bringing Delta into the country, which is now then going to be going to be a challenge. And that’s a that’s a hard calculus because it’s like you can’t be in a position where you tell the people who need to get home, sorry, you’re stuck in another place that is not interested in having you either because you don’t have the right documentation or you’re running out of money. And if we bring you home, you know, there’s still a risk, even with quarantine and contact tracing and vaccination, that it’s going to contribute to, you know, deaths and hospitalizations in the country at hand.

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S1: One of the things that New Zealand has been doing and will be doing for at least the rest of this year is that it has very strict quarantine where you’re basically in a military facility for two weeks, you know, overseen by soldiers. You know, this is like quasi prison life, you know, and they’re talking about like if and when they start reopening this thing, they have called step three for vaccinated people. Like will they allow those vaccinated people to self isolate for two weeks? And the general consensus seems to be, yeah, we you know, we probably have to allow that. But by the same token, that will introduce Delta and there are going to be localized lockdowns and stuff. And so you do need to keep the contact tracing going. And I know some people in New Zealand who are saying, like, you know, basically we shouldn’t even allow back until. We have vaccinated all of the children, and that’s right, how long is that going to take?

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S2: Right. And so you have, you know, countries like the UK, US, Canada and others that are now talking about booster shots, you know, primarily the conversations primarily about immunocompromised people, where the research has been not super heartening on the resistance that they’re developing with with even full vaccination. But, you know, you’re like and then you have another country where there’s a tremendous amount of the population that hasn’t even had access to one shot. And there’s this challenging disparity. And I have definitely been annoyed with what some people in my networks where they’re like, we’re going on vacation to X place that I happen to know has neither the hospitalization capacity nor like the vaccine access to keep the population safe. And so I’m like, this is this is just such a frustrating dynamic that you’re seeing. You know, everything about the pandemic is just like really throwing into sharper and sharper relief how inequity perpetuates in every possible aspect of life.

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S3: It’s true. I want to add that the one area where I am not smug would be with the schools because that just seems like we’re headed back to disaster. And I think every parent in this country and probably and a lot of other countries is really on the edge of a nervous breakdown about

S2: what the kids do, like the kids

S3: like.

S1: Yeah, now the kids are bad, but I think we can be relatively assured that school is happening this coming school year that’s beginning right now. For some kids, it is happening. The teachers unions have now come out in favor of vaccine mandates for teachers, which is like one of the few unions that have said that. So that’s a positive development. And so far, you know, given what limited information we do have, it seems to a first approximation that the susceptibility of children to sars-cov-2 is more or less roughly in line with the susceptibility of vaccinated adults. If you feel like more or less vaguely safe because you’re vaccinated, then you should consider your children to be more or less maybe safe as well. Although, yeah, they should be wearing masks in school.

S2: Emily, what is your school doing about the school? Your kids go to doing a bad ventilation,

S3: keeping the windows open when it’s warm. And I think they did update their ventilation system last year, but I don’t really understand what that means, Stacey, if I’m being honest with you. But it’s it’s OK here. I’m in the suburbs and it seems OK. And they had a lot of outside classes and stuff at towards the end of the year last year. Oh, that’s cold. And there’s more acceptance here. I would say so. But I know in other areas of the country, like parents are protesting masks in school and there have already been a couple of outbreaks here and there, but I don’t know if that’s the norm or they just get reported because it’s scary. And like I said before, a lot of hysteria in the coverage.

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S1: Yeah, hard to sort. The hysteria in general is is like a real problem. And if you talk to, say, the people who work on airplanes, they’re talking about how everyone is so freaked out. They’re dealing with so much more violence than they ever used to. And you’re seeing this like on the anti muskies side and on the anti anti Maskey side, everyone is incredibly full. And we’ve been going through this for a year and a half and everyone is literally at the end of their tether and people are at breaking point. And it’s horrible for people who work for the airlines. It’s probably horrible for like a huge number of other public facing jobs as well. And whatever kind of we’re all in this together, public spiritedness, we’re all going to shut down and stop moving and prevent the spread of the disease thing that we saw in March. Twenty twenty has gone. And now there’s this kind of the claws are out and people are just they have no emotional ability to cope with this latest uptick, which was not meant to happen this summer. Right. The idea was that there might be a kind of like, oh, back in November or something like that. But come on, it’s August. Remember last August, like there’s more covid now with everyone vaccinated than there was a year ago where no one was vaccinated.

S3: There is a pandemic of rage in this country right now. And when I was just traveled for vacation, a family member works in a job that’s public facing. And she said everyone who comes in is just so angry about so many different things. To be someone who works with the public, like Felix said right now is just to be a punching bag. Essentially, there’s been a lot of reporting on this, too. You go out to restaurants and stores now. There are fewer workers and you get it’s like annoying. I could see how it happened. So it’s like kind of annoying because there are these worker shortages and you’re like a spoiled person going out in America. So you want everything right away. Can’t get it right away. You’ve been locked up for a year and a half. It’s stressful, you’ve been isolated, people forget how to deal with other humans, I think is is part of it as well. And there’s just like this just rage in this country on on really on both sides. Like Felix said, a. a. mass culture is the thing to. Right. People are mad that other people are mad about having to wear a mask. So it’s like it’s like spiraling out of control. It feels like also I might not have a clear vision of this because I’ve been kind of isolated for a year and a half to so like, what do I know?

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S1: I will say I’ve been in the office more recently and I’ve been in the office with colleagues. And there’s something incredibly amazing about being able to go into the office and just like talk to your. Colleagues about maybe not something which is directly necessarily work related, or maybe it is or you know, I had a colleague who came up from D.C. and I just like literally walked over to her desk and we had a 10 minute conversation about the infrastructure bill and who was going to vote for what. And it was a very useful thing. And it was so much easier than like anything that we could do remotely. And and it felt so good. And I am a little bit sad that being able to do that on a predictably regular basis is not going to happen until 2020 to realistically. Talking of politics, can we talk about this Joe Biden thing that he did this week,

S2: which one specify,

S1: OK, number one, like I really like that we’re not all talking about the president every day. This is the most refreshing thing about the Biden administration compared to what came before. But, yes, Joe Biden was suddenly in the news, which is not something he is a lot these days for doing something like completely weird and random, which is he wrote a letter to OPEC saying, please, can you start pumping more oil? Our gas prices are high. This is the most insane thing I’ve seen in the only. For one thing, literally no one in OPEC is listening to Joe Biden. No one no one in OPEC is like, oh, Joe Biden wants us to pump more oil, so we’ll go and buy more oil. That’s not how OPEC works, like given the geopolitics of Russia and everyone else. But number two, the connection between oil prices and gasoline prices is so incredibly tenuous that even if OPEC did start pumping more oil, it wouldn’t have any real visible effect on the gas price in America. And it’s so cleanly political. The whole idea of this letter is that Americans really some weird switch goes off when they see a three at the gas pump, that if if gasoline costs more than three dollars a gallon, then suddenly everyone gets freaked out and they’re like, oh, no, inflation is coming in. So they want their president to do something about it. And of course, that’s nothing the president can do about it. But the president must be seen to be trying to do something about it. So he writes a letter to OPEC and the whole thing coming as it did in the week when the IPCC launched its latest. The World is Burning report just seems so completely bonkers. Sorry, that was my rant.

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S3: So it’s great.

S2: One of the things that has always been confusing to me about that whole like the president has to be seen as doing something like who is following OPEC news that also has strong opinions about like three dollar gas prices, like what is the transmission mechanism for information that the president of the United States has written this letter on behalf of people driving SUVs and trucks to sort of stand up for their for their rights in order to kind of satisfy that information. Need that you are describing like what is that? Where is that multiplier coming from?

S3: OK, Stacey, do you drive a lot?

S2: No, I am one of those people

S3: I don’t drive a Superflat because like I just said in the past segment didn’t really go anywhere anymore. But I am in a place where you need a car to get places. So I feel like I am really aware of how much gas costs in a way that I never had been before when I lived in the city. Just fun fact. I didn’t have a driver’s license. I was like forty three. So anyway, so I really didn’t pay attention to gas prices or care how much gas costs. But now, you know, it’s the one product you buy that you see the price of wherever you go. It’s like right there in front of you like milk prices. I never know how much it costs.

S1: It’s by far the most salient price. You see the

S2: price, but do you see you Emily do because you’re on a little podcast about money. But like else in that situation is like and I am going to connect this to the action or failure thereof. Any of the person in the White House? I think

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S3: people do. I mean, I think maybe it’s like an older person thing. And I think we can all agree that Joe Biden’s quite old, but like the gas crisis was a very visible thing that made people hate the politicians back in the what you call it, seventies, right? I mean, that’s

S1: what you call it. So what they want

S3: is there’s this great quote in Liem Denning had a good, I thought piece in Bloomberg opinion that was sort of like pushing back against like people calling Biden like a wild hypocrite and criticizing him for this just sort of like drilling into this magic number three and like why this would happen. And there’s like a quote in there that where an an oil analyst says, like, higher gas prices tend to usher out incumbent politicians faster than they usher in new technologies like people are pretty sensitive to gas prices, like no one knows what the CPI number is outside of like Twitter, but like everyone knows pretty not everyone, but most people know what gas prices kind of look like and which way they’re going. So I could understand why a president would be like trying to do whatever he or she can to kind of change the narrative of blame.

S1: I mean, I remember I can’t remember which election well, it was when Hillary Clinton was running for president. And people are upset about high gas prices. And she came out with the most like, universally derided proposal I’ve ever seen in the presidential campaign. She’s like, I think what we should do is temporarily suspend the gasoline tax. Oh, yeah. In order to reduce gas prices and everyone was like, are you insane, do you not understand how supply and demand works and how, you know, marginal price setting works? But like, it does seem that the gas prices are the one thing where politicians will always ignore the economists and just do whatever they think is like politically the most salient thing to do. And this is a prime example.

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S3: Yeah. And also a lot of people were saying like, well, the Bush administration has been doing everything it can to decrease supply, you know, because its climate policies seem to contradict the notion that Biden would be saying pump more oil. Like, that’s super crazy. But I also feel like like you don’t want people to be paying super high gas prices. Well, sorry, let me back up. We know that we need to stop relying on oil and fossil fuels to battle the raging fire that is our planet. Yes, the heat death of the earth. But at the same time, I think if if the pain of doing that falls on the people who pay, who are price sensitive to gas prices, that’s going to be a disaster.

S2: So this we can agree on that is an interesting policy failure. And I’m going to talk about bicycles for two seconds because you see something very similar in like what people get subsidized for under, like, economic brackets that that tends to to benefit. Right. So there’s a lot of urban policy transit people who are like more people should be riding bikes. More people should be riding bikes. Anybody can run you nine thousand dollars easily. Like even if you’re like, OK, fine, like a relatively cheap one, there’s very few things worth buying. There are less than fifteen hundred two thousand dollars. Those are not subsidized at all. There is no tax credit from the IRS. Most employers who offer transit subsidies are like, well, if you drive, you can claim a gas allowance. If you take public transportation, you can claim back, you know, your trains or whatever. They will subsidize parking. They are not subsidizing bikes. And that’s a very narrow example. But I do think Emily the broader point that you’re making is so much of the incentive structure punishes people with less access to financial flexibility and rewards people who can buy a Tesla and then get free charging when they park it in their company parking lot.

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S1: I do think that in unlike her, I know two year, three year time horizon, something like that. And we’ve seen this once in the United States. The high gas prices do actually contribute to people buying smaller cars. And right now people are buying insanely large cars like we’ve actually reached the point. Yeah, I mean, yeah. I mean, these are not just destroying the planet. They’re also killing humans. And the number of vehicle deaths is going up even as the number of vehicle miles traveled is going down because the cars are so big. But we’ve reached the point now where Ford has stopped making cars. The only things they make are trucks and SUVs because there’s just no demand for cars anymore. And that’s crazy. And we need to become, you know, sorry, more European about this. And people need the need to drive smaller cars. And yes, people need to buy electric cars. And yes, people will be buying like big electric trucks and the F1 50 lightning and this kind of stuff. But but in between here and full electrification, I think it really would be helpful for people to sort of downsize their cars a bit at the only way that’s going to happen this high gas prices. So, yeah, I’m looking at California. A friend of mine just filled up his jeep in California at a gas station charging five seventy nine a gallon for gasoline. So, yeah, that you do that a few times, you start thinking yourself, maybe I shouldn’t be driving a Jeep.

S3: Yeah, that’s not going to solve it, though. I don’t know. I mean, I think I mean, you’re you’re definitely right that people start buying smaller cars if gas prices are super high. But we need more than that, I think. Well, many also people. So it’s very easily cars

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S2: that are only.

S3: Yeah. Like the people will be very angry around the country if gas prices go over five dollars. And and the downside of that, I think, is bigger than the upside of the smaller car buying. There needs to be OK.

S1: But let me just reiterate the most important point here, which is that. The driver of gasoline prices is not the price of oil, the driver of gasoline prices is entirely a function of like, you know, cracker’s and refinery capacity and a bunch of, like, really obscure supply chain things. And if you look at the gas buddy map, which you can get at the gas buddy website of gas prices across America, you can see that gas prices range wildly there like a buck ninety nine in one place and five dollars in another place. Like clearly the price of oil is the same everywhere. It’s a commodity, right. The thing that drives gas is not the price of oil. In the first instance, the thing that drives gas prices is mostly refinery capacity. And that was kind of really thrown out of whack during the crisis. And that’s what’s driving a lot of high gas prices right now. And so, you know, for all the political theater that we see right now from Biden, you know, if Americans want cheaper gas prices, ultimately what they’re saying is they want more refinery capacity. And you find me any neighborhood anywhere in America that wants a new fucking, you know, gasoline, they’ll

S2: do instead, as is always the case is they’ll just like build it in a black or brown neighborhood and be like, sorry, you said he wants cheaper gas prices. Here’s your factory

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S1: by environmental racism.

S2: Yeah, it all comes back to the IPCC report. So many things to be upset about. Emily that phrase pandemic of range is now like seared in my brain. That’s true.

S1: Emily are you upset about by now? Pay later. I feel like there’s a minor pandemic of people complaining about the new form of credit. And isn’t this terrible Felix

S2: a pandemic of one. And it’s just, you

S1: know, I’m the one person who’s not saying this like it’s it’s not really happening that much, to be fair, in the United States yet. But look at the UK press where BNP Ales everyone calls it is is much further advanced than it is in the US. And you see a lot of stories of like this is a terrible thing and young people are going into debt and it’s making it harder for them to buy houses and people don’t really know what they’re doing. And Emily share the story from I think it might even have been an American story saying like

S3: Los Angeles Times,

S1: L.A. Times, there you go. This generation already has so much debt. How, you know, we have to worry about them inadvertently going into even more debt through this. And I’m like, they do Emily you are you are you going to concern troll oil companies?

S3: I mean, OK, I hesitate to go head to head with Felix on this because I know that you’re, like, deep in the weeds by now. Just to be clear, we’re talking about buy now, pay later.

S2: These services, like for

S3: a firm Clarin with a yes, where you can buy

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S1: just for after pay for thirty nine billion dollars. This is yes. People are really saying like this is going to be a big thing. It probably will

S3: be. It probably will be, because I think this is true Felix sush that younger people, millennials and below don’t like credit cards as much as the next generation did. Yeah, the NPL allows you to buy stuff on credit without using a credit card. And it’s seems like it’s way less regulated, which. Yeah, does make me a little concerned. Trolly feeling it doesn’t. And you can explain this more Felix purchases and debt that you have with buy now pay later doesn’t show up on your credit score

S2: unless it goes into collections on which case it immediately does.

S3: Well, fine. But before that doesn’t show up on your credit score, it seems like it’s a little under regulated. And it does seem like any situation where you’re giving people who don’t have a lot of money, who need credit to buy like a couch is like not great, but at the same time. So we’re working

S1: so hard tonight. I want to I want to unpack this because because there’s two things which you’re saying which are both true. But I’m not quite sure whether that whether you’re like saying like it’s a good thing or a bad thing. The first thing is, OK, so you’re right that it doesn’t show up on your credit score like and I have no idea whether that’s good or bad. I think it’s probably good. But then the second thing you’re saying is like, what happens when you are in your early 20s and you’re moving into a new apartment and you need to buy a couch and you don’t have enough cash in your checking account to buy a couch, how are you supposed to get that couch of all the different ways of being able to get that couch? I have to say, beanpole is a hell of a lot more attractive than a credit card.

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S3: First of all, you could just garbage pick a couch off the street. You could get 100 grand, you could get bedbugs.

S2: Many of them I remember.

S3: Yeah, I lucked out in my twenties. Everything, my garbage Peck turned out OK. But anyway, I don’t know, it just it to me, I guess I’m conservative and old. I’m like, don’t buy a couch on buy now pay later credit unless you really are doing OK.

S2: Here’s the thing about there is an even older form of this Teletón layaway, which is almost the opposite of by now, it’s like a later pay now in the sense that if you and lots of retailers still offer this, like Wal-Mart and Verizon offer this where you’re like, I am going to buy that couch and I’m going to make six payments over the next 12 weeks. And at the end of those payments, I’m going to collect the couch. Right. So you’re sort of putting money down and you’re getting it. You’re getting it at the end, but it’s still allowing you, you know, a person who’s not necessarily going to have X amount of money upfront to have access to that asset that you might not also have. And and, you know, various countries in the Caribbean, there’s also something called higher purchase, which is kind of a combination of layaway. And by now appealing to where you like, you get the couch up front and you’re essentially leasing the couch like you’re continuing to pay for it or the major appliances or whatever those things are. And the risk with layaway and with higher purchase is you end up not owning is after all right. Like you don’t you don’t make the payments on time and like, they repossess that asset. The risk with buying up little in the way that folks are managing that is financial to you. So in one case, you spend the money and you don’t have the thing. In another case you have the thing, but you incur a financial penalty if for some reason you’re unable to meet your obligations. So there’s always been a punitive mechanism for people who don’t have the ability to, you know, dumpster dive or fund that purchase upfront,

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S3: who have reasonable person.

S1: And I have to say that, like the punishment, the punitive mechanism from the companies is about as weak and non punished as any credit operator anywhere has. Like these are not evil payday loan type people. They’re not even evil. Credit card people like credit card people will compound interest. And I’ve

S2: done

S1: well. But the point is that you will get charged an interest rate one month and then that will go into your total balance and then you’ll get charged interest on that interest the next month. That does not happen with the BNP is just simple interest. The other thing that happens is that the merchant actually winds up paying a bunch of the financing fee rather than the consumer. So if I’m a couch seller in Pittsburgh, I know and I’m selling a couch to someone on BNP, then effectively the way that works, they walk away with the couch, I walk away with a bunch of cash. I’m not taking any credit risk, but I walk away with maybe 92 percent or 93 percent of the great cost of the couch. And then AFIRM or whoever is financing that bad deal winds up getting paid one hundred percent of the cost of the couch. That’s how they make their money. So, you know, I can offer this headline zero percent financing, but there’s not even any interest at all. And everyone winds up being happy if it covers its credit risk with that seven percent fee that it gets from from me, the person gets the couch, can afford to pay for overtime. Very, very few AFIRM customers ever go into collections like it’s still Yong. It is possible, like if we extrapolate forwards to some world where everyone buys everything on BNP, but like people are going to be winding up with massive monthly BNP bills that they can’t afford that might be beginning to happen in the UK. But one of the things that you see certainly in the United States is that people generally use BNP for consumer durables, coffee machines, couches, really nice fashion items, something that they’re going to continue to use and like and get value out of for the amount of time that they’re paying off that deal. They’re not using BNP for, like going to a restaurant or something like that. So so psychologically, you’re like, yeah, I’m sitting on this couch every day, like, I can continue to pay for it until it’s paid off or I can continue to pay for my phone until it’s paid off. It’s something that people are more likely to pay then something like a credit card where you can’t even remember what the hell it is that you’re actually paying for.

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S3: So you’re saying BNP is actually better than credit cards,

S1: much lower interest rates, simple interest rather than compound interest, doesn’t like, you know, hit your credit utilization numbers on your credit score, you know? Yeah, definitely better.

S2: One of my main concerns with BNP is the lack of consumer protection. Right. In the sense that if you do buy something on a credit card and you don’t get it, for example, you generally have a little bit more recourse. Or if you have a direct relationship with the store and something goes wrong with that thing that you bought on layaway, you can go back to Wal-Mart and be like, hey, this isn’t working the way I thought it was going to work. And the the introduction of intermediaries that generally don’t care if that thing that you have now paid for is working or not working is, I think, a little bit more challenging. And that that is something I’m going to see if. There is any kind of resolution, these Felix, I think to your point, one of the reasons that it can be so light touch is because it’s light touch on the other end as well.

S1: Yeah, I mean, we Genex credit card users have become really accustomed to an astonishing degree of consumer protection from Visa and MasterCard that like basically doesn’t exist in any other form of payment. Certainly BNP does not have that level of consumer protection. But then again, neither the debit cards, it is cash, you know, so, you know, would I like to see sort of bells and whistles from the BNP which have similar levels of consumer protection? You know, I mean, it’s an interesting question, right? With square buying after pay, when that happens, the share price of a firm shot up by 17 percent, basically on takeover speculation. But like, oh, this is the big financing. Companies are now all going to want to get into this space. And yeah, I would say that if Visa or MasterCard or Amex were to buy a firm or Carlana, then you would start seeing possibly that kind of level of consumer protection. But also, I feel like in the current antitrust world, like no one would allow that. Talking of Kloner, though, I have to say, like if I’m going to consentual anything, I’m going to consentual. Plana Kloner has this incredibly aggressive, like influencer marketing campaign, which is it kind of just rubs me entirely the wrong way. And it seems to be aimed at persuading, you know. Very young women to spend more money than they can afford on cosmetics, mostly makeup.

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S2: Yeah, I was going to say yes, I suppose

S1: it’s mostly makeup and there’s a lot of, like, very expensive, like celebrity involvement and stuff that’s meant to be, like, cool in that head. Marketing guy at Kloner was quoted saying, like, we want a new method of payment to be as cool as a new Nike drop. I’m like, no, a new method of payment should never be as cool as a new Nike job.

S3: I also would add to that there is a Reuters story this week about the corner CEO. His name is Sebastian. I can’t pronounce the last name. Just look it up. And he is a billionaire and he wears a very Swedish looking sweater. And the story is about is Sweden the new Silicon Valley because Coryna is there and Spotify anyway in the story. Sebastian, look up. His last name credits his success to a Swedish welfare state program where people were able to get computers for free from Sweden, you know, families if they couldn’t afford one themselves. And so his family, which couldn’t afford a computer, was got a free computer. And he says that’s the secret to his success. And I’m thinking like and yet here you are. Now, you want people to now buy computers on credit and have to spend, what, months, years paying them off? Like, it just seems so sad to me.

S1: I’m sure. I’m sure I’m sure most people would prefer a free computer to when they have to pay for on credit.

S3: Yes, correct. But that’s not the world that Sebastian look up his last name once.

S1: I’m sure he’d be down for, like continuing to give computers for free to Swedes

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S2: looking at this story. And it is a very Swedish sweater. It’s a very serious looking sweater.

S3: Yes.

S1: I met Sebastian, whatever his last name is, many years ago when he first started to expand Kloner into the United States. And he’s yeah, he’s a he has a very compelling story. And one of the other things about Kloner, which you don’t actually get with the other companies quite so much, but it’s like it’s really a payments and checkout thing. Then you go to a website and there’s a clown. ABBERTON And the clown button makes it very easy for you to buy something without having to put in your address or your name or anything a bit like Apple Pay. That way. It’s like being they just automatically get sent to you and they don’t even ask you, do you have any money? How are you going to pay for it? Whatever. It’s just like the thing is in the mail, you then have basically 24 hours to pay for it however you like. You can transfer money directly from your bank if you’re European. That’s a very common way of paying for things in Europe. You can, you know, pay for it on a credit card. You can pay for it on a debit card. You can however you want to pay for it. You can pay for it. If you haven’t paid for it within twenty four hours, then it automatically becomes like a beanpole installment plan. But but like, I kind of it’s like he had that interesting thing where he married a credit facility to a payment mechanism, which is exactly the same thing that the credit card companies used to credit cards so widely used. And I can see why that’s good for Kleiner and I can see why that made him a billionaire. But on some other level, I’m always a little bit mistrustful of marrying credit and payments because I feel it makes it too easy to borrow money and well, this money,

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S2: apple pie, the apple cart. Right. You know, I actually think those kinds of companies, when you think about potential acquirers, it’s like large tech companies that are trying to win every single part of that, like check out an identity ecosystem. So that’s certainly going to be an area where I think, you know, like whenever we talk about fintech, there’s always the the technology element of this is very real. And as those big tech players get more and more into, we’re providing financial services, then these firms that would typically considered to be like on the pure finance side, become more interesting acquisition targets for them.

S1: Yeah. You know, and now that square owns after pay. You know, we can assume that any time you buy anything, a store with a square check out, there’s going to be an option to be NPL payments. Right. And on one level, I can appreciate the convenience of that and how easy it is to be able to pay for that if you can’t if you don’t have the cash. But on another level, I’m like, what I’m afraid of is a world where, like, everything goes on BNP and you start paying for like a five dollar coffee with people and you’re like, no, this is crazy. And I don’t you know, I don’t want to wind up in that world either.

S3: I have so many, OK. My first thought is and maybe Felix or, you know, the answer is like, Clonan, these other companies make it easier to pay for things online. Where was MasterCard and Visa? Why is it still so annoying?

S2: Well, they are trying, but it’s

S3: like the

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S2: user experience isn’t great. Like, I mean, I was I remember when I started. Noticing it, but it was more than a year ago where, like, every time I would do a transaction with people, they would say, do you want to pay for this now or do you want to pay for this later? And the one time I ever got Master Pass or whatever it’s called to work, where it’s like MasterCard makes you do an additional verification thing. They popped up in interstitial, which of course, made me not buy the thing that’s like, do you want to you know, do you want to put this you want to pay for this in installments? Citibank has a thing with Amazon where, you know, you can pay for certain types of things in installments on your card. I think Chase does something similar with travel. So the credit card companies are and again, like those are those are high spend luxury category type things that I’m describing. But I think the credit card companies have tried in really roundabout ways. And to Felix this point, the thing that they didn’t solve, which is typically true of credit card companies, is like that in-your-face user interface. Right. That’s what I feel really seamless and have a lot of cool people tell you you should do it.

S3: That is why it exists, because the finance company is traditional for traditional fin trad.. Fin companies are bad at user interface like this. Is the rise of fintech their fault?

S1: What’s that terrible thing, Zeil? The worst UI in the world,

S2: like no security protections. Yeah. Whatsoever.

S3: It’s just so it’s

S1: like Dell is atrocious. So yeah. Like the thing that you want is a very clean and simple button that knows who you are without you having to tell it. Yeah. And then you just press the button and it comes to you and that exists with like the little apple pay button that I’m seeing a lot more in check out thing. I might I love pressing that button because I don’t need to tell the merchant who I am. They Jessamine it knows Kloner has that in the US and somehow, like Visa and MasterCard and Amex just were incapable of inventing a button. You know, they just couldn’t do it.

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S3: So the thing with Carlana then is the convenience coupled with the BNP that doesn’t need to be and they just know exactly.

S1: Exactly. But they decided to do both, which is why Plana is now worth whatever it is. Thirty three billion dollars.

S2: And that’s that is actually the biggest, you know, cards abandonment is the thing that data scientists and retailers spend tremendous amounts of their time and energy and effort on. If you’ve ever gotten an email that’s like we noticed you were looking, they’re trying to solve the car’s abandonment problem. And the easier you make it for somebody to be right, the fewer steps that somebody has to go through, the much more likely it is that that transaction is going to go through. And to Felix this point, it’s one of the reasons why retailers are currently willing to absorb some of the costs associated with these with, you know, making these services available because they’re seeing the transaction rates go up.

S1: And that’s also why, like, for instance, Shopify has to deal with AFIRM. Right? So, like, Shopify has a really smooth checkout thing. It really does know who you are. And then they’re like, oh, dear. Like, what happens if someone wants to buy something expensive on Shopify and they don’t have the cash boom? Here’s a really nice, easy way of financing it or with the firm. And yeah, on some level, spending money shouldn’t be easy. But on another level, I do think that a world of debit cards and NPL and no one having any overdrafts or credit cards is better than the world that we’re coming from.

S2: Look, this is just an anti overdraft podcast. That’s that’s the main the main thing.

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S1: I think we should have a numbers around. Stacey, do you have a number this week?

S2: Yes, at last I do. Twelve million, which is the number of new subscribers that Disney added to Disney plus, which is just like a mind boggling amount of people. They doubled their subscriber base over the course of the pandemic so far. And I’m like, there is a lot of good stuff on Disney plus. But 12 million people in a quarter, that’s got to be a number that’s keeping Netflix up at night.

S3: Loquitur give Scarlett Johansson all the money

S1: I, I feel like, you know, very few people are choosing between Disney Plus and Netflix. I think they’re going to be like the big duopoly here. And everyone else, you know, is the Paramount pluses and the HBO Maxis and and. Oh, my God, Peacocke. Yeah. Who are going to find it impossible to compete with the mouse? So so far I feel like Netflix has carved out a very different kind of product from Disney plus and they can peacefully coexist as a sort of world spanning duopoly. But, you know, maybe

S2: not eventually all media will only be owned by those two people. So it’s great.

S3: It’s possible Disney Plus has done quite well. It’s a remarkable they’ve got a lot of talkers. It’s all about the talk. If you can get a show that everyone’s talking about, that’s really the challenge, I think.

S1: But yeah, but they have to show what I’m talking about now. Thanks. Thanks to.

S2: Is it White Lotus.

S1: Yeah, thanks to Emily is White Lotus, which is your mix. So they get at some point I will watch White Lotus. Don’t tell me who did it or who died or. These women do not know my numbers related, my number is 233 Molli million, which is the largest year on year gain I’ve ever seen in a public company quarterly report. Two hundred and thirty three million dollars was the Q2 admissions revenue for AMC movie theaters. Our favorite favorite meme stock, 233 million dollars is maybe not like massive by like historical AMC levels. But you know how much it was a year ago. It was zero point nine. They made nine hundred thousand. They made nine hundred thousand dollars in admissions revenue in Q2. Twenty twenty. And that went up to two hundred and thirty three million in Q2. Twenty twenty one.

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S3: Good for them.

S1: That’s a big jump.

S2: I did go to the movies one time. Would you say what did you leave heyday of vaccination. Halo. I would see in the Heights.

S1: Oh I went to the movies once since the pandemic and we went to see Crueller which was remember that

S2: my friends love that movie. I will check it out.

S1: It was it was fashion fabulous. It has fabulous people in it. Emily, what’s your number.

S3: My number is thirty nine percent. That is population growth in the fastest growing metro area in the country. Do you guys know what it is, New York.

S1: No, no, no. It’s called the villages in Florida.

S3: Yes. Vergis is that the retirement place? The farming community in Florida. It’s like forty five minutes from Orlando. Population grew thirty nine percent over the past ten to the latest census data continuing the trend of the villages just growing and growing astronomically.

S2: And the vaccination in the villages. Look that up.

S3: I think it’s fairly high. I mean, with older people.

S1: Oh, yeah. Is the old school

S2: of the nursing home to worry about

S3: and I recommend. So the population went from ninety three thousand to about one hundred and thirty thousand, which is a lot. It’s a very old it’s obviously very old community, very white, very conservative. Lots of video during the election from the villages of people and golf carts shaking their fists and stuff. Trump signs and I recommend listeners to watch a documentary called Some Kind of Heaven, which takes place in the villages and follows like these four retirees who live there. It’s kind of dystopian, yet also somehow hopeful. I don’t know. But go watch it and learn.

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S2: This is this is amazing.

S1: I think that I do want to make sure that those of you who have sleep just continue to listen to sleep less, because we have a little teaser this week. Emily and Stacy and I are going to talk about Mr. White Hat and what has been going on with the largest cyber theft, I think probably in history. Six hundred eleven million dollars. If it’s not the largest, it’s definitely well up there. When I talk about what happened with that as a way of leading into next week’s show, which is a spectacularly awesome show that we’re going to have with Maya Zahavi, all about crypto, you’ve been asking for a big crypto show. So we’re going to do that next week. First of all, that’s going to be Slate plus on Mr. White Hat. But otherwise, thanks for listening and thanks very much to Jessamine Molli for producing this show. And we will be back next week with more sleep money. OK, Mr. White Hat. Stole six hundred and eleven million dollars from the Polygon Network and everyone was like, wow, that’s a network, some of which was called like a polygon token. I don’t really understand much of this, Malcolm, just like then. But then what happened, as much as Harvey will explain next week, is that all of these tokens identifiable. Everyone knew exactly what tokens they were. A bunch of them with tethers and stable coins and stable condition was just like basically freeze those tokens. And so you can’t spend them anywhere. And other ones were what you to track as well. And they’re easy to track by law enforcement. And it seems that what happened is that the person who stole them gave them all back and said in

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S2: the process of giving them all that

S1: has given us already given, like nearly all of them back and sort of behind the scenes, it seems clear that what happened is that is that they did a deal. This is almost a form of ransom where they did a deal with with Molli network, basically saying, like, if I give you all of the illegally obtained coins back then, will you pay me like a legit ransom in untraceable coins? And they’re like, yeah, sure. And all’s well that ends well. Right.

S2: I have to pick an adjective. It really fascinating to me. Think about this is the way that it’s being presented is like, you know, and even down to the name Mister White Hat, which is kind of hacker nomenclature, the ones who are on the side of good one, it’s still run somewhere. And two, it’s never a good look when your network that is, you know, has access to hundreds of millions of dollars in assets is so vulnerable to being taken over by quazi nefarious actors. And yet, like everybody in this is trying to be like, look, we did a good thing. And Mr. White Hats in a Q&A on Twitter, it’s like, well, you know, we mostly did it for fun and to prove that they had some vulnerabilities. And Palis, like, ha ha, thanks so much. I’m just like, no, it is this is not OK. That one. The security infrastructure is so bad. And two, that we’re doing PR for thieves.

S3: But I mean, there is a tradition in the hacker world of breaking into systems to show secure. Sure.

S2: It’s not like that by long conquest. That is the nuance. It’s like there might be bug bounties, right? Bounty’s right. Yes. And bug bounties are you know, you tell the people, hey, we exploited the bug, Microsoft, Twitter, Google, whatever. You know, you have said you’ll pay us ten thousand dollars. Please do. So that does get a little bit shady sometimes when the companies like that technically wasn’t the bug. And then they’re like, well, we’ll tell everyone your secrets. So that does get a little bit a little bit more complex. But in general, it’s not a if you give us this money, we will return what we stole from you.

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S3: Maybe this is you know, this is like 2.0.

S2: But innovation and hacking. Yeah.

S3: I mean. Well, I mean, this reminds me of culture.

S1: This reminds me of the very early. D.A. hack of cerium launches, and then there’s this massive hack on late week three, basically, if this whole thing and and the Ethereum community was genuinely split there, like the whole point of these self fulfilling quoin contracts is there is no sort of external mechanism that can come in and say that’s legal. You have to give it back, that’s illegal, like we’re going to freeze it or whatever. There’s no difference between the feature in and exploit. It’s all just math. And there is there is definitely this kind of very strong tinge of anarcho libertarianism in the crypto world where, like, if you can find a way to program all of the coins to appear in your wallet rather than someone else’s wallet, then that’s a feature, not an exploit and good on you. And yeah, I’d say that this one. You can see you can see like echoes of that in what’s been going on with this polling network.

S3: I don’t want to keep my money in a place where there’s a culture of like see if you can get it out. Like, definitely that’s not for me, that culture.

S1: And it would be nice. It would be nice if you could if you could have like FDIC insured Bitcoin. Yeah. Oh, that’s cool. The central bank digital currency. So.

S2: Yeah, yeah. I mean, you know, and Felix the other thing about is this or is this not ransomware is it’s like super not clear. What kind of money is? I mean, it’s probably on the block, but like what kind of assets are changing hands? And if that sort of indemnifies them from future hacking, it’s just like, is this is this a one off where this thing is going to get you the six hundred eleven U.S. and thirty million dollars back? Or is this a a retainer for future exploits also?

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S3: And maybe this is a little teaser for next week. But Maya said this, this poly network is not even like it’s pretty obscure. How does an obscure crypto network has six hundred something million dollars? That’s pretty wild in itself.

S1: Yeah. I mean, it gives you an example. It gives you an indication of just how big and distributed the crypto world. Is that some random crypto exchange that no one’s ever heard of had six hundred and eleven million dollars of anything to her.

S3: Yeah. Like find twenty dollars in my dresser and it’s like a good day for me.

S1: I was riding my my city bike up 6th Avenue or Lafayette Street, one of those streets a couple of days ago and noticed a very small billboard for Molli network. They are little bit of advertising. Yeah.

S3: Maybe this is actually just a viral advertising campaign and I want to know.

S2: Yeah, exactly. Like what is what is the agency that has carved out a niche in advertising for crypto networks? I’m so interested in this matter. Business story.

S1: Yeah. Yeah. Are the crypto companies similar to the cannabis ad companies? Right. Exact questions. We need to know how my

S2: business owners get on this

S1: Colm slate. Plus the listeners send us an email and let us know if you know who’s doing the advertising for unregulated crypto companies like Molli Network.