Banana Disruptions

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S1: This ad free podcast is part of your slate plus membership.

S2: Oh, and welcome to the banana disruptions edition of Slate Money, your guide to the business and Finance News of the Week.

S3: I’m Felix Salmon of axios. Emily Parker is here from Huff Post. Hello. And The SHYMANSKY is here from Breakingviews. Hello. We have been disrupted. What we tried to do our little disrupting thing by doing a Kovil special 15 minute show on Wednesdays. But we’ve been disrupted by the ad market, so no more Cauvin shows on Wednesdays. We’re going to talk a little bit about why that is in Slate. Plus, we are going to talk about disruption to supply chains, not just in bananas, but also much more importantly in toilet paper. That’s coming up on this show. We are going to talk about the oil market and Trump tweets. But I think we are going to start with the massive stimulus bill and the small business money that is not going out to small businesses nearly as efficiently as people had hoped that it would. All of that coming up on Slate Money.

S4: So let’s start with what is for me, the centerpiece of the two trillion dollar stimulus package, which is the three hundred and fifty billion dollars that is going to small businesses, much if not most of which is going to end up going straight to those small businesses in the form of loan forgiveness that your small business, you apply for a loan, you can get two and a half months of payroll and rent and utilities. And then as long as you keep those staff members on payroll, you can get that loan forgiven. So this is not a Fed liquidity thing. This isn’t a low interest loan thing. This is basically a grant dressed up as a loan. And it’s super important for keeping millions of small businesses in business. And Emily, how’s that going?

S5: Yes, not going great, Felix. Not going great. It was supposed to start Friday, but by Thursday, banks were going public with their complaints, saying they haven’t gotten enough guidance to know how to actually do this.

S6: They don’t understand who qualifies, what kind of paperwork they have to do. I think banks are saying basically that they’re not ready. And it seems like there’s a lot of confusion. Meanwhile, there’s a lot of pent up demand. Banks are saying, you know, thousands of businesses are going to want loans. It’s pretty crazy. So it’s just another mess. The government, you know, tried to do something quickly. Impasses, multitrillion dollar stimulus. But getting this urgent relief out is proving to be. And I want to say a disaster because it’s still early and we know things take time to kind of smooth out, but it’s kind of proving to be a mess so far.

S4: So one of my friends was like, I’m going to get on the Web site at 12:01 a.m. on Friday morning on late Thursday night and just get my application in super quickly because she assumed that it was all going to be done on a first come first serve basis. We don’t know that, but it looks like that might well be true. In the end, all of the major banks suddenly JP Morgan Chase and Citibank said they hadn’t got the information they needed to be able to implement it. There seems to be a handful of community banks who were up and running on Friday morning, but no one really knows who they are. Bank of America has a. Place where you can apply for loans. But this is super interesting, actually. If you are a small business with an account of Bank of America, that’s not enough. You know, you need to have borrowed money from Bank of America. So you need to have a small business loan from them or a credit card from them or some kind of line of credit or something like that. If you do all of your banking with Bank of America, but your credit card is from American Express, say, then they won’t give you the loan. And so then the question is, who do you go to for your loan? No one knows.

S7: And I think this is it just kind of speaks to the problem of this entire program, which is that fundamentally the government wants to give out grants, but it can’t say it’s giving out grants. So it pretends it’s giving out loans that are then going to put through private banks. But private banks are in the business of giving out grants. Banks underwrite loans. And so you now have a situation with your bank. You’re like, well, what am I supposed to do? Am I supposed to just I can’t just give out money to anyone? And then if a bunch of these these loans go bad and the people lay people off, then will I be forgiven?

S4: I don’t know if you or will tell me if your if your underwriting was good. And this is the thing which the banks are really worried about. All of these loans are backed by the government. So if the loan defaults, if it’s not forgiven and that small business goes into default, you should get your money back from Treasury because that’s a government guarantee. Maybe the problem is that the guarantee doesn’t arrive for some unknown amount of time, possibly days, possibly weeks after you give out the loan. So there’s that interregnum, as it were, like if if you if a business applies for loan, you give them the loan. And then the government, for whatever reason, doesn’t give you the guarantee, you’re then on the hook for that loan. And if the loan defaults, you you lose money on top of that. If you do get the guarantee, you still have that loan on your balance sheet. Right. And you don’t particularly want that loan on your balance sheet. And so you would love to be able to sell that loan to someone. But because the loan only has an interest rate of 1 percent, no one’s going to pay you 100 cents on the dollar for that loan. And so you’re going to lose money if you try and move that loan off your balance sheet.

S7: Yeah, exactly. And at the same time, we want banks to be giving forbearance to a lot of the clients that already have that they’ve given loans to, but that those are then loans that are still on their balance sheet and then they’re bringing these other loans onto their balance sheet. Banks have limited balance sheet, especially if you’re talking about smaller banks. That would probably be the best position to deal with small businesses because they would actually know the small businesses because they’re in their communities. They’re going to have a very hard time doing this. And I think that’s why you also have a lot of smaller community banks who aren’t taking part in this because the organization was just so mismanaged. No one knows what’s going on. And I understand what the Treasury wants to do in terms of getting this stuff out quickly. But this isn’t a simple process, even if they want it to be.

S5: Can I ask you something I don’t understand? Why wouldn’t the government just directly hand out money to people to keep their payrolls going?

S4: So that’s a good question and there is a decent answer for that. Basically, if in order to apply for the loan, you fill out a very simple form is just one page really saying this is how much I spend on payroll is so much I spend on rent. This is how much I spend on utilities. Multiply all of that by two and a half months and this is how much I want in the loan.

S8: Your bank.

S4: Knows whether those numbers are basically true because you have that bank account and use that bank account to make payroll and rent and utilities. The government doesn’t know that. So if you were applying directly to the government for the money, the government would have no way of being able to underwrite the loan at all, of being able to tell whether the numbers you putting down for rent and payroll and utilities were remotely in the same ballpark as reality. Where’s your bank? Should be able to just take one look at that and go, Yeah, that’s right. And here’s the money. In principle, they should be able to do that. In practice, it’s a lot harder. And a lot of banks, as Anna says, not really set up to be able to do this at scale. I know that in Hawaii, for just as one example, there are a lot of small businesses and there are no major banks in Hawaii and none of the major banks has has a bank branch in Hawaii and let the Hawaiian lawmakers is seriously worried that literally no Hawaiian banks are gonna be ready to disburse these loans before the 350 billion dollars is used up by people on the mainland.

S9: Doesn’t the government know rough information about businesses from tax file, from taxes?

S7: Yeah, I still don’t understand. I’m sorry.

S4: One of the one of the problems is that from what I’ve been hearing, Treasury and SBA are kind of bickering with each other on this. They’re not talking with a unanimous voice. But just to be clear. Treasury and SBA are two organizations who are deeply involved in trying to get this whole program out the door. If you wanted to implement what you were talking about, about the government knowing information about payrolls and rent and utilities, and so then you would need to include a third agency, which is the IRS. And God help you if you try and get the IRS involved, that would just be a true nightmare.

S5: But it’s it’s really embarrassing. I mean, do you sorry to keep asking open ended questions, but some of these European countries that are paying people to stay employed, how did they do it? Could we learn anything longer-term from them?

S4: Yeah, the Denmark, New Zealand and places like that are doing it right. And I think what you see in those countries, especially in countries with prime ministers rather than presidents, you know, parliamentary systems, is that you have a much more centralized government apparatus that can do this kind of thing. And New Zealand, basically. Small businesses just woke up with a few thousand dollars in their bank account that wasn’t near the previous day. They didn’t even need to apply for it. But I have no I just cannot imagine how that would even be possible in the United States.

S7: It’s also a matter of like principle in this and it to a certain extent of why the US government is doing it this way and not another way. I think the US government really wanted to. There probably is a much simpler way for them to do it. But part of it is for whatever reason, the you know, the United States kind of just tends to want to work through the private system. And while I often think that is the right thing to do, I think in this instance it is in fact not the right thing to do, because I do think it is just actually like on the one hand, arguing it myself here. I like on the one hand I can understand working through the banks because they already have, you know, a lot of these procedures in place in terms of they make loans. But on the other hand, again, these aren’t actually loans.

S10: So, I mean, they they they aren’t actually loans because you only get it forgiven if you manage to keep 90 percent of your stuff on payroll. And a lot of businesses are not going to be able to do that. But then the other thing is that just the banks away, the bank accounts are right. If you want to pay into a bank account, you need to go through the banks somehow. And and that super deep sort of relationship between the government and individual businesses, bank accounts is something which is much closer in a country like New Zealand than it is in America to a certain extent.

S7: But I honestly think it’s less about logistics and it’s more about how governments understand the relationship between the public and private sector.

S5: I agree. It seems crazy to me that they’ve structured this as a loan program when, as we’ve been saying for the past few weeks, like you just need to give everybody money so that the economy kind of hangs on while we work through a pandemic, like why make it pump? Making it this complicated is so signature. America, it’s it hurts me.

S11: It’s so I mean, I think I think I can tell you what would happen if they did it the other way.

S4: If they just gave money to small businesses, there’s a grant and the small businesses were sitting there and they were closed and they had no idea. You had the small business owners had no idea how they were going to live and or even whether they were going to reopen. Then that financially and economically rational thing for the small business owner to do is to just take that money and put it into their personal bank account, like the whole point of this program is to keep employees on payroll. So unless you can give people a really, really strong incentive to use this money to keep people on payroll, even though those people aren’t working right now, then it defeats the purpose and it just goes to the owners and it doesn’t go to the people that you want to keep on payroll. So that when this country when the country reopens, those businesses still have employees who can go straight back to work. That’s the yeah, that’s the deep purpose of the bill. And if you just gave the small businesses money, it wouldn’t achieve that purpose.

S5: Do you see this ultimately working out then? Felix?

S11: No. I mean, this is a complete disaster. And I I mean, I’m not saying I’m not saying that this is going to work out.

S4: I am saying the structuring it is it is sort of contingent forgivable loan. I 100 percent understand why they implemented that structure. I do think that even with the most competent and technocratic administration in the world trying to get us thing like this spun up in the space of one week would be an incredibly, insanely difficult ask. And no one thinks that this is the most competent and technocratic administration in the world. So I I’m not at all surprised that the rollout is proving rocky. I do think that there’s going to just be a huge amount of luck involved in who manages to get in there first to snaffle up that 350 billion. I do think a lot of people are going to wind up. Left out in the rain, as it were, waiting to be able to apply. And I do think that ultimately because of that, there is going to be another tranche of money and that Congress is going to say, well, we we ran through that 350 billion hismother, 350 billion. I’m hopeful about that. But who knows?

S12: Yeah. And just to be clear, we also already have 10 million people who are applying for unemployment that clearly are not going to be kept on payrolls because they’re already off of payrolls. Well, we have about that in their money.

S10: Either way, they’re not getting the unemployment checks.

S9: People are getting on a regular unemployment who’ve applied. But the unemployment on steroids that Congress put through in their third package, we’re still waiting on the Labor Department to write guidance for how that works. So it’s going to and that’s the unemployment payments that are an extra $600 a week for people who lost their jobs because of the pandemic.

S5: That hasn’t happened yet because they’re still writing guidance for it. So it’ll be like two, three weeks before any of those people see any money. And a lot of those people don’t get normally get UI like people like gig workers or independent contractors, part time workers. They’re all waiting for their money. Also.

S4: So just to be clear, the way that this system is set up is that if a small business did lay off a bunch of employees or furlough a bunch of employees and those employees were allowed to file for unemployment employment claims, once the business gets this small business, people learn they can go back and rehire those employees and say, you’re now back on payroll and then they will move off of unemployment and onto payroll. That is the way it is designed to work. Whether it actually winds up working that way, we will have to see. But the only way that loan gets forgiven is if you bring those employees back on to payroll. It’s okay to have fired them. You just need to be able to bring them back. So on Thursday at 10:30 2 a.m., Donald Trump put out a tweet, quote, just spoke to my friend MBBS. Of course, the Slate Money listeners know all about m.b.a.s. We had a whole episode about him, just spoke to my friend m.b.a.s, Saudi Arabia, who spoke with President Putin of Russia. And I expect and hope that they will be cutting back approximately 10 million barrels and maybe substantially more, which, if it happens, will be great for the oil and gas industry. That tweet I then retweeted saying in terms of dollar value of assets affected. Is this the most market moving tweet of all time? The markets went to Zonker is on that tweet. I mean, just completely insane, especially after Trump then followed up with a subsequent tweet saying, did I say 10 million?

S10: I mean, maybe 15 million. Like, just to put this in perspective. Saudi Arabia and Russia between them only produce about 22 million barrels a day between them and things like, yeah, they’re going to cut them by $50 billion. Fifteen million. No one really believed it or understood it very rapidly. Both Saudi Arabia and Russia said, wait, what conversation between Putin and m.b.a.s? That wasn’t a conversation between Putin and m.b.a.s. But the fact is that that tweet did end up causing the largest rise in oil prices in history.

S4: It moved trillions of dollars of the value of oil and also managed to send the stock market soaring. And so my thesis and I think this is true is that in terms of the dollar value of assets affected, this is the most market moving tweet in the history of all time.

S13: So let’s start before we get onto the question of late tweets, moving the market, which is a very kind of sexy. Question Let’s start with the basic question of like what is going on with oil because how does one tweet send the oil market going completely bonkers like this?

S5: It’s my very rudimentary understanding that everyone is at home. No one’s going anywhere. Therefore, no one needs any of the oil. But for some reason, Saudi Arabia and Russia have decided to make more oil, to do more oiling.

S11: They’re doing more waling. Yeah. So we talked about this within the entire episode.

S9: Right. And then that’s Trump at first thought that was good as he tweeted a few weeks ago. Gas prices are low and he tried to get everyone excited about that, which was absurd because like I said, no one’s going anywhere. And now Trump has decided to make up other stuff because I think Pompeo, his secretary of state, his administration has been trying to work on Saudi Arabia and Russia and try and get them to stop doing more oil and do less oil. And Saudi Arabia wants to do less oil because there have boats going around the world now filled with oil that no one wants is my very, very crude understanding of the situation.

S10: I like what you did.

S9: But Trump also seems to be reverting to his old playbook, where he and his dad used to, like, make up stuff about various companies they were going to buy or takeover deals that were about to happen. And then they had like play the stock market to make some money. It kind of feels like he that’s what he did yesterday with that tweet. I don’t know. Maybe that’s a conspiracy theory in my head. So, yeah, just making stuff up.

S7: I don’t think this was a I’ll I’m going to like have insider trading on the stock market. I think that’s unlikely. But I think that it is interesting that he is meeting with people from the oil industry on Friday, you know. So it isn’t anything personal, by the way. Yeah.

S11: They’re not bothering. Not presumably, because if something doesn’t happen on television, then in this White House, it doesn’t happen.

S13: So he needs to get them all to turn up to the White House in person. Yeah, you’re right that the the main thing he seems to be worried about now is the oil and gas industry in the United States where that has been wiped out basically by the low oil price.

S7: It’s just not economic to produce American oil at these prices, although to be clear, like this is actually part of the issue that Trump is going to continue to have at both Russia and Saudi Arabia is that I think there’s gonna be the understanding that’s going to look okay if we’re going to cut production. What about your shale guys? But that’s a lot harder. A, because the U.S. government has has control over shale. And also, yes, right now it essentially is economically like they’re losing money by pumping oil. However, if I’m a shale producer and I have a tremendous amount of debt that I need to service, I need liquidity, which means I will keep pumping so I can get cash so I can pay that debt even if I’m actually losing money long term.

S13: It’s not even when they also point that there’s actually an even more fundamental reason why American producers are not cutting production, which is that it is very expensive to cap a well, it costs a lot of money to stop producing oil and you damage the well when you do that. And the amount of oil that you wind up getting out of the well goes down significantly if you stop production. It’s not like a water well where you can just stop taking water out of the well and then like the water is sitting there in the ground and you can just wait for the price of oil to go back up and then start taking it out of the ground. And it doesn’t work like that. Once a well is pumping you what you really want to keep that well pumping no matter what, because stopping it from pumping is extremely expensive. So that’s one of the reasons why global oil production is not going down as a result of the slump in demand. And the slump in demand is massive. It’s like on the order of 20 million barrels a day. Here’s a really cool way of thinking about it. I hadn’t thought about the way that we are fighting the virus is by stopping moving. We are all just staying at home and the number one job of oil is to move people. You know, you put it in your car, you put it in your planes, you put it in your trains and it moves people around. So the first thing that gets hit when the global economy stops moving is oil, because that is the job of oil is to move people. That’s why demand for oil has plunged so much.

S5: Yeah. Ivan Buc asin over a month. I don’t think.

S9: I don’t know if this is gas prices. What are they?

S14: How much a price of a gallon know how much crude is? I don’t I don’t drive. I don’t have a license.

S15: Like even if I wanted to get a bargain on gas, I don’t have any room in my car to put the gas in.

S4: So but let’s talk but let’s talk about the conspiracy theory here, because a few months ago, Bill Cohen at Vanity Fair had this whole elaborate conspiracy theory that he that Trump’s friends were front running.

S13: His tweets and the futures market. And we’re making millions of dollars by knowing what he was about to tweet. And everyone kind of looked at it and laughed. This was, you know, as I say, the biggest market moving tweet of all time. And it really does look, if you look at the oil price chart, that this price of oil did start moving about five minutes before the tweet was sent. Now we are living in very volatile times and the price of oil moves for any or no reason all the time. So the fact that it was moving five minutes before the tweet was sent is not proof of anything. But if you knew that tweet was coming. Oh, my God, how much money could you have made?

S9: So what are you the latter? Felix, you trying to say both things at the same time? Is Indiana, isn’t he just saying both?

S11: I think so. I think so. So, I mean, it is hard for me.

S13: I, you know, like we are in the middle of an S.E.C. investigation into senators who were inside trading their dogs and rules against insider trading stocks are much stricter than rules against insider trading oil. It’s it’s very hard to get prosecuted for insider trading oil. I don’t think it’s ever been done, to be honest. So, I mean. Yeah. OPEC is it’s a cartel and it just sits there in the world. And cartels are meant to be illegal, but that doesn’t stop OPEC from existing.

S1: Yeah, I think it would be very hard for I honestly, just because of the size of this market we’re talking. I just think it would be very hard for any conspiracy theory here to actually work. I’m not saying it’s impossible, but it’s close. Why would I mean.

S13: I mean, it would be very easy, right, if you knew that the tweet was coming. It would be the easiest thing in the world to go long oil futures and make a ton of money that wouldn’t. Logistically speaking, it’s easy. The only hard thing is like knowing that the tweet is coming.

S7: Right. You’re saying there was enough volume that was actually moving the price before? There’s always huge amount. It’s one thing if you of course, don’t I’m saying that like I understand that if once. Well, obviously, once the tweet happens, if you bought beforehand, you’re going to do exceptionally well. Because clearly you bought at a price that’s now at a much higher price. That makes sense. But I guess I’m just saying, if you’re saying that people were buying beforehand and they were buying with enough volume to significantly or to to move the price in advance of this, I guess. Who who’s doing that?

S16: Emily. And any idea? I mean, it wouldn’t even need to be Americans. Right. It could have been just m.b.a.s. Right. It. I mean, if. Because.

S13: Because even if m.b.a.s didn’t talk to Putin, it looks like m.b.a.s didn’t talk to Putin. It does seem that MBBS did talk to Trump. m.b.a.s talks to Trump, makes a bunch of noises on that phone call about cutting production. There’s no rules against m.b.a.s playing the futures market in oil. And then if he’s like if he’s like, I’m just going to buy a whole bunch of oil futures in the hope and expectation that Trump is going to come out and do a crazy tweet like that’s actually I don’t even think that’s illegal.

S7: It’s actually even seem to me it would.

S17: But it also would seem unlikely that he would know exactly five minutes or so before Trump was going to send out his tweet that this. I guess it’s like it’s not impossible. I just feel like it’s it’s probably unlikely. And I think this is just Trump being stupid and the market’s moving.

S5: I think it is Trump trying to move the markets, though, like, isn’t it?

S11: Yes, that’s right.

S7: Yeah, I agree with you on that. Yeah. He’s now that I agree with you on he front runners, which is just bizarre when you think about it.

S11: Yeah.

S4: That was me that this all happened on Thursday after 6.6 million people hit the unemployment rolls in one week. And that sent the stock market maybe down a little bit because I mean, apparently that was priced in. But then the minute that the Trump tweet comes out, Bings stock market goes up. Yay! Well done, Mr. Trump. You saved us.

S18: It does seem like that’s what he that’s all he’s good for is like trying to move the stock market with his tweets. He’s like, oh, this will help. This will help the economy. I know what to do. I won’t fix which small business thing or anything like that, but I’ll do it right.

S12: Yeah. You mean 2020? This is where we are.

S19: Emily, how is your toilet paper situation in Westchester?

S9: We are sitting pretty here in Westchester.

S11: Felix, we subscribe to toilet paper on Amazon so that we ribe you have a toilet paper subscription. Tell me what what is what is more expensive, a toilet paper subscription or a New York Times subscription? And can you use it instead of toilet paper?

S9: No, it can’t, because we’re on septic and I don’t know the answer because it’s on subscription and no one’s looked at how much we’re spending on toilet paper in a while. I’m very lucky person. I suppose so. We haven’t struggled in the new reality of toilet paper shortages. But I assume you’re asking me because you read the brilliant well auriemma’s piece on toilet paper.

S3: Felix, we miss Willa Ramus at Slate. He’s now disappeared off to a medium somewhere and he has come up with this theory after. We’ve all been told for weeks that there is no toilet paper shortage and there’s just a whole bunch of irrational hoarding. And that’s why the supermarket shelves are empty of toilet paper. He has now come out with this.

S10: Really quite compelling theory for that there is a toilet paper shortage and there’s no real way of fixing the toilet paper paper shortage. And Emily, what are we going to do?

S18: His theory is so brilliant and it is it just seems so correct that I can’t believe it took this long for someone to figure this out. We’re all at home. So much more than we used to be. And we’re using the bathroom here at home, in our home, so much more. So obviously, we all need more toilet paper. No one’s in the office using the office toilet paper and Starbucks using Starbucks toilet paper. So according to well, Americans at home are using like 40 percent more toilet paper. So. Adar We’re all out of toilet paper. Well, except me because I say that.

S17: And but then the businesses aren’t buying it. So if you’re talking about the the global amount of toilet paper that is being used by the population, if I’m regardless of where I’m going to the bathroom, I’m using the same amount of toilet paper.

S11: Oh, Anna, thank you so much for asking that question, because that is the best question you could possibly have asked because there is a very, very good reason why that doesn’t work that way.

S3: Emily, what is the good reason?

S15: Well, it’s two words you’ve heard before. Supply chain. There are two supply chains of toilet paper in the world. There’s the commercial toilet paper, supply chain and the residential toilet paper supply chain. And they’re two different streams. Sorry. Of toilet paper. So like if the commercial. No one’s using the commercial. Toilet paper. It’s not like I can just go and buy it and have it in my home. It’s like that just builds up separately from the home use toilet paper, which is all different suppliers, different buyers, different producers. And you can’t cross the streams. Don’t cross, Anna. So you can have it is where it is a residential kind, but not the commercial.

S4: So, for instance, and I it’s been a little while since I worked at Thompson Reuters. But as I recall, the bathrooms at Thomson Reuters like many corporate bathrooms, and that the toilet paper dispenser is a very large and they have these like sort of like four foot wide or three foot wide, big toilet paper dispenser things. And you get these massive rolls of toilet paper, which are kind of crappy toilet paper. And that’s what you’re stuck with in the bathrooms.

S17: That’s not what people buy a home, you know? You know, it’s a whole different product. This this this makes total sense. I’m wondering, though, if if I say this, because in my particular neighborhood, there is so much toilet paper at the grocery stores.

S14: All right. If I moved to Brooklyn, where the Brooklyn. That’s right. That’s right. Which Hershey stars start talking about.

S17: But there in the last week, I’m like they literally have mountains of toilet paper stacked in different places. However, it is very low quality toilet paper. We’re not talking about nice stuff here. So this is I’m like wondering if you’re getting shipments moved from. I don’t know.

S7: But I’m just saying that I get what you’re saying.

S1: But that’s also not what I’m seeing on the ground.

S10: I do think that there is a bigger story here, though, because similar things have been said about food. There are two very different supply chains. There’s the.

S4: Individual supply chain into supermarkets where food that people cook at home. And then there’s the institutional supply chain for sending food to restaurants and fast food joints and all the rest of it. And you again, you can’t redirect all of those burgers from McDonald’s into Westchester homes. And this is actually causing food shortages. So just my local butcher was set up as a kind of an equivalent of a restaurant basically with its fish supplier. And the fish supplier just stopped supplying fish. They like well, the way we do our business works is by supplying restaurants and now all of our restaurants have closed. And so we’re closing, too. And so I couldn’t even buy fish from my butcher baker because they weren’t getting fish because their fish were part of the restaurant supply chain and not part of the individual supply chain. And I think this thing of like two parallel very different supply chains and making it very different across those streams. It doesn’t just apply to toilet paper.

S7: Oh, no, I think. And I think you’re totally right about that. I will also say I’m going to continue to use anecdotes here because same at my grocery store as though the price of groceries has increased so much to the point of like I didn’t even like I didn’t. I normally don’t look so much at like the prices, other things because I’m like whatever they cost, what they cost. It was literally like twice as much. So I think that yes. I mean, I do think that clearly there are and fair enough. Look, the grocery store. Like they should pay their workers more. I’m sure that’s not why the money’s going. But in theory, it should. But it may.

S4: Is that fair? Like produce or what?

S1: Well, to be fair, I should also say, like what my groceries are, which is also like the price of oatmeal has really increased the price of all my milk. Try to fight over milk. You can. But but even like things like onions, like, just like and like try to get flour or yeast, you know, because apparently everybody’s baking their own bread.

S7: But so, I mean, I do definitely think we are seeing that. It’s not that the products themselves don’t exist in sufficient quantities. It’s that these supply chains we have set up the means by which they get to people and businesses are. That is the issue.

S5: Yeah. And it is there. I mean, it’s you convince me that there is a legitimate toilet paper shortage because everyone is at home and needs more toilet paper and there isn’t enough because these companies are operating on super thin margins and they have everything calibrated just so.

S18: And meanwhile, the whole economy has been totally thrown off balance and all those calibrations are totally out of whack now and all these. He had a good example about bananas. Also, like there is the kind of bananas that we buy and then the kind of bananas like restaurants and cafeterias buy. And there’s like banana disruptions also. I mean, everything has been totally thrown out of whack.

S19: Let’s have a numbers round, Yevhen number Annam.

S7: I do. My number is roughly twelve percent. Because so Carnival Cruise came to market with a debt issuance and it was originally being priced at around 12 percent. And I mean, on the one hand, you say Carnival Cruise. Why would anybody be giving them? You know, and it’s like money at this point at any yield. But like technically, they’re still an investment grade company, which is questionable, but they technically are. And if you’re thinking you could potentially get a twelve percent yield for an investment grade company, it’s kind of shocking.

S4: Can I jump in and do a cruise? No. Myself, I was going to do a different number.

S16: But since you’re doing a cruise. No, I’m going to do a cruise number two. Eighty one percent, which is the U.K. cruise company Saga, says that 81 percent of its capacity increases from September onwards has already been filled.

S3: I have this theory which we have talked about on this show before, that the Post’s Corona virus life is going to look very different from the Priefer on the virus life LIVEFROM. People are going to be much more reluctant to travel, to be in close quarters with each other, to go to Broadway shows, to go on planes and certainly to get on cruise ships. But apparently everyone who all of the old to a totally at risk of Corona virus whose cruises were canceled by Saga, just turned around and rebooked them for later in the fall. So maybe I’m just 100 percent wrong about this. I actually think you are wrong.

S17: Well, but I just wonder how much of it is just that. At the time when they were canceling, it was far easier to just rebook. And I’m sure, Pete, companies were like, oh, well, you’ll get a better deal if you just rebook than if we totally refund you. You had a lot of people at the time. We just said, OK, I’ll just rebook, but come six months from now or a year from now.

S7: Are people actually going to go on those cruises that they just simply rebooked?

S5: I think if ever these restrictions on leaving our house are lifted, people are going to be so excited and and everyone’s going to go nuts. And I don’t think people are going to be hesitant to hang out together anything. I think people are going to be so starved for interaction that things are going to be wild.

S12: That’s right. Yeah. I go back and forth. But I think that there is a strong argument for that. I just feel like it’s hard to say. I really think it just depends on how long this last, because I think people have very short memories. I think I don’t.

S4: I disagree on that. I think that so many people have now had like deeply ingrained paranoia about touching. And the thing that anyone else has touched or being near anyone and trying to stay you six feet away from people, that the idea that, you know, Donald Trump can give a press conference one day and say, hey, you’re allowed out of your houses again, that that is in and of itself going to cause people to go out and start hugging each other and sharing bodily fluids like I dont see it happening.

S9: Well, when you put it like I just meant like go out to eat and like to the movies or something.

S17: Well because I also feel like it’s going because like just think about how many people are not following the rules as they are supposed to in terms of going out and going through even if they’re going to parks are going to restaurants before.

S3: I think I mean Adriana, I think it’s like those like occasional again, like those occasional anecdotes of people who really glomming on to pictures of people who are breaking the social distancing rules precisely because like feeling judgmental about those people is part of how we’re getting through that.

S4: Right. The crisis and those pictures are going viral. I don’t think it’s happening that much. I think there’s much, much more common. Extreme is the opposite extreme of people like really retreating and being super paranoid. But Emily, what’s your number?

S9: All right. We’re in the numbers round. I forgot my number is nine million. That is the number of health care workers that are being left out of the paid sick leave provisions. In the second stimulus bill, which I feel like I’ve been updating you guys on throughout this thing has become an incredible disappointment. So the Department of Labor just put out guidelines for the for how this sick leave will work. And there was like an exemption in the law that said, you know, emergency responders and health care providers might be exempted from this. They won’t be allowed to have paid sick leave or paid family leave if they have a kid home from school and that they have to watch. So, OK, fine.

S5: But then the Labor Department just went wild in defining what a health care worker is to the point where it’s anyone who works any place that is even remotely health care.

S18: So like a janitor in a hospital is can’t get sick leave or like a pharmacy clerk can’t get sick leave or someone in a medical school can’t get no one can get the sick leave that they made a big deal about putting about an acting. Seventy five percent of workers don’t get the sick leave in the stupid stimulus bill. Like, I’m actually really upset about this. It’s particularly galling because who is even working outside their homes right now besides these health care workers who are on the frontlines of an epidemic who are most likely to get sick and then the government’s supposed to be helping people stay healthy and safe.

S15: And they carve out this big exemption for them. I find it very upsetting. I wrote a story about it. So if anyone.

S16: So, I mean, my question is, is, is this a cock up or conspiracy like it? They.

S3: Trying to do this to save money. Or like what would be the sort of malign intent behind this or is it just a complete cock up?

S5: I think it’s a conspiracy is a very strong word. But the White House Republicans and business groups really made a big stink about not liking putting any kind of mandate on businesses, especially now when they’re struggling now. That makes sense.

S18: So the government could have stepped in and said, OK, we’ll pay for all this. Don’t worry about it. It’s a mandate only in that you have to give it, but like we’ll give you money for it. Don’t even worry. And they did give them tax credits. I think that there’s just a strong dislike for this kind of policy coming from business and coming from Republicans. And that’s what put the kibosh on it. And they hold that they held their nose and voted for it and then they just undercut it. However they could. So, yeah, I think on the scale of cockup to conspiracy were leaning conspiracy here. Yeah.

S3: On which note, I think we will wrap up slate money for this week. We’re going to have a slate plus segment about the hand market, which is a little wonky part of the media market, which is worth talking about, but no one else.

S20: Thanks very much for listening to Slate Money. Thanks very much to Jessamyn Molly for producing. Keep the e-mails coming. We are, as ever, asleep Monday at Slate dot com and we will talk to you next week on Slate Money.

S4: I have a interesting paradox to put to you guys, which is, as I’m sure both of you know, as he both work for news organizations, my news organization is no exception. Everyone is seeing record traffic right now.

S21: That’s unprecedented demand for news out there. And the way that the media industry works in this digital age is that you put stuff on the Internet and then people read it on the Internet. And then when they load those pages on the Internet, there are ads on those pages. And the revenue of the news organizations is a function of how many ads they serve. And you would think that given the record number of pages being served up, that would be spectacularly good news for news organizations and a nice little bump in revenues. But that is not the case because one of the things that advertisers do is that they have a list of.

S4: The kind of news stories that they don’t want to advertise against. Basically, if there’s a news story saying mass shooting, lots of blood and guts, lots of people die. You know, you don’t want to put your ad for luxury jewelry against that because that’s not a good association. You want the potential buyers of your jewels to have. And right now, the top thing that everyone doesn’t want to advertise against is coronavirus. So given that the majority of the traffic is going to coronavirus areas and given that the majority of stories are coronavirus stories, those coronavirus stories are just not. Coming with ads and all of this record traffic is not.

S19: Turning into revenue.

S6: And a lot of these organizations are in trouble now, right? There’s been a lot of layoffs, especially at like local papers. I think one of the papers in Miami I think is only publishing like twice a week. We have to fact check me on that. But and then I see like at BuzzFeed, salaries have been reduced. On Friday, the outline, which was an Internet publication, just folded. So it’s it’s it’s this real paradox. There’s an amazing online traffic and the industry is in more trouble than ever, it seems like.

S7: And I wonder, you know, because it doesn’t really make any logical sense at this moment. If you’re thinking like Norm in like a normal time when there are relatively good stories and really horrible stories, you can kind of understand why the luxury jeweler would want to advertise next to the really nice stuff. But at a time and like pretty much everything is awful.

S17: Like, I don’t I don’t think you’re going to be harmed by being next to the stories that are the only stories people are reading. Because I feel like all anyone wants to read about is the corona virus of the economic impact. So not putting your advertising dollars there, just that doesn’t seem to make a lot of sense.

S4: I mean, it does make sense to me because. Yeah, I mean, the jewelers are not selling a lot of jewels right now, so they.

S21: Yeah, I guess they are naturally going to want to sort of find excuses to pull back on their ad budgets anyway.

S7: I think that is more the issue is that it’s not that they don’t actually want to advertise Mexico buyers. It’s like they do not want to advertise.

S4: And this is where Tim Armstrong, who is one of the one of the top ad salespeople in the world, we can all debate how good he is as a sort of entrepreneur or leader.

S21: But you suddenly a great ad sales guy, Tim Armstrong, used to run AOL, came out and said that never in history has there been such a big disconnect between attention and ad revenues that, you know, the ad market, the ad revenues always follow where individuals attention is and wherever people are paying attention, that’s where the ad money flows. Right now, all of the attention is on coronavirus news and none of the ad dollars following the attention there because I guess partly because they don’t want that adjacency and partly just because they don’t want to be advertising right now, because no one’s really buying this stuff.

S5: You do expect to see some advertising because there there are certain industries and and companies that are still doing well even now. Right. I mean. Wal-Mart. Right. But I get on, you know, any grocer, any any. Like Zoom, which we didn’t talk about. We should talk about soon. Like there are these bright spots in business. You would expect to see like if you pay to draw a line.

S4: Have you ever seen an ad for Zoom?

S7: I’ve heard them on podcasts. Yeah. But no, I mean, but like I mean, like, where are you going to cut it at the first place you’re gonna cut is advertising. And also if you’re Amazon and you really need to advertise like they’re gonna.

S1: There’s toilet paper subscription will continue regardless. If Amazon ever did. Yeah. Never. Never dropping the toilet paper. We also subscribe to paper towels. By the way, it’s wise. It’s wise. But.