0:03

Hello! Welcome

0:13

to Sleep Money, your guide to the

0:15

business and finance news of a week.

0:17

I'm Felix Amalovaxios, I'm here with Elizabeth

0:20

Spires of New York Times. Hello. I'm

0:23

here with Emily Peck of Axios. Hello,

0:25

hello. Sam Bankman-Fried was sentenced to 25

0:27

years in jail. We are

0:29

going to talk about that. We

0:31

are going to talk about the credit

0:33

card settlement, which might wind up causing

0:36

people to get charged different prices depending

0:38

on what type of Visa or MasterCard

0:40

they have. To start off though, we

0:42

are going to talk about the

0:45

latest meme stock on the market, Trump

0:48

Media and Technology Group trading

0:50

under the ticker symbol DJT.

0:52

It's meming up the stock

0:54

charts. We have a

0:56

Sleep Plus segment all about Coco

0:59

and the price thereof. It's all coming

1:01

up on Sleep Money.

1:13

This show is brought to you by

1:16

Schwab. With Schwab investing

1:18

themes, it's easy to invest in

1:20

ideas you believe in, like

1:22

online music and videos, artificial

1:24

intelligence, electric vehicles and more.

1:28

Schwab's research process uncovers emerging

1:30

trends, then their technology curates

1:32

relevant stocks into themes. Choose

1:35

from over 40 themes. Buy all the stocks

1:37

in a theme as is or

1:39

customize to better fit your investing

1:41

goals. All in a few clicks.

1:45

Schwab investing themes is not intended

1:47

to be investment advice or a

1:49

recommendation of any stock or investment

1:51

strategy. Learn

1:53

more at schwab.com/thematicinvesting.

2:01

Apple Card is the perfect cash back rewards

2:03

credit card. You earn up to 3% daily

2:05

cash on every purchase every day. Visit

2:08

apple.co.com to see how much you can earn.

2:12

Apple Card issued by Goldman Sachs Bank USA

2:15

Salt Lake City branch subject to credit approval

2:17

in terms of why. So

2:22

talking of purchasing stuff, Emily, have

2:24

you ever gone out and bought

2:26

something and then held onto it

2:28

for a few years and realized

2:30

that it's actually worth more than you

2:32

paid for it and that you could sell it at a

2:34

profit? Felix, no. That's literally

2:36

happened to me. The

2:39

kinds of things that people buy that

2:41

sort of become more valuable over time

2:43

are things that Emily Peck traditionally isn't

2:45

that into such as like fine

2:48

wines or collectible art

2:50

or antiques, things like

2:52

that. I'm just not that kind of

2:54

consumer. It seems more up your alley.

2:56

It has happened to me. I have at

2:59

least one artwork that is worth more than

3:01

I paid for it. I have definitely a

3:03

couple of bottles of Clorujard that I bought

3:05

back when they were not ludicrously expensive and

3:08

if I wanted to sell them,

3:10

I probably could. I've never actually

3:12

made money on any

3:15

of these things. I've never actually

3:17

done the full round trip

3:19

transaction. But in principle,

3:21

I do think that it helps to explain

3:23

why people are willing to spend a lot

3:26

of money on something like a Rolex watch

3:28

is because they have some faith that there's

3:31

a decent chance it might go up in value rather

3:33

than down. I actually bought a house. Just

3:36

remembering eight years ago that I

3:38

live in. Did you remember when you bought a house? Yeah. It

3:41

has actually, in fact, if you believe Zillow, gone

3:43

up a lot in value but I don't think

3:45

of it as something that I'm one day going

3:47

to sell or make money from. I think of

3:49

it as just where I live and

3:51

it costs a lot of money to live here and keep it up.

3:54

I don't see it that way. Maybe

3:57

if you had a Rolex, you would think to yourself, if I

3:59

ever needed cash, I'd I could tell my role that. Okay. Should

4:03

we talk about how former

4:05

president Donald Trump has become a meme stock?

4:08

We should. You don't

4:10

seem excited about this, Emily. I

4:13

mean, it's like we try very hard here

4:15

on Slate Money and have tried really hard,

4:17

I think, for the past eight

4:20

years, longer to void

4:22

talking about Donald Trump. He comes up,

4:24

but now he's intersected with the market

4:26

and with business and finance news in

4:28

such a way that we

4:30

must discuss, dewack or dwack, or

4:33

however you want to say the

4:35

name for the Trump's back. Whack.

4:38

Spack. The whack,

4:41

the whack, the whack, Trump's

4:43

back. No, okay. So

4:45

Trump, when he got kicked

4:47

off Twitter, started his own

4:49

social network, as you do. He

4:52

called it Truth Social, and

4:55

it struggled to

4:58

raise money, and

5:00

it struggled to raise revenues.

5:02

In fact, according to a financial

5:04

sit, contrived to lose $49 million

5:06

in the first three quarters of

5:09

2023 on $3.3 million of revenues. So

5:14

on its face, not a great business.

5:16

It has about 5 million unique users, which is

5:18

a rounding error by the standards

5:20

of most social networks. It is, as far

5:24

as I can tell, almost entirely American. It

5:26

exists no other country. And

5:30

normally, this would be a vanity

5:33

play. If some

5:35

celebrity launches their own social network, a few

5:37

of their fans will download it and then

5:39

they'll forget about it and they'll move on.

5:43

But we are now in the era of meme

5:45

stocks. And I think this is the thing that

5:47

interests me the most, is that I

5:50

was uncertain

5:52

whether meme stocks would survive the

5:55

end of the ZURP era, whether

5:57

now that interest rates are high.

6:00

Whether that was gonna kill meme stock

6:02

but now we're seeing not only this

6:04

becoming meme stock, we're also

6:07

seeing arguably possibly reddit becoming stock

6:09

and most. Notively with seeing

6:11

that research into the bunch of like

6:13

me coins as well like dog with

6:15

hats and things like that so. The

6:20

the memes are back people

6:23

and which is the symbol

6:25

of the now public trump

6:27

media and technology group. Is

6:30

being is trading on the market

6:32

at crazy capitalization it has because

6:34

trump himself owns about sixty percent

6:36

of the stock it is made

6:38

him. A clear multi

6:40

billionaire like all of these debates that people

6:43

used to have about like the really have

6:45

all of that money will now he does

6:47

right now he own. Five

6:49

billion dollars worth of stock in

6:52

media and like if you look at any billionaire

6:55

like mostly the billions are held in.

6:57

Talk of public list of companies that's a

6:59

that's a legitimate form of wealth and he

7:01

has a lot of wealth now. That's true

7:03

but i think we have to sort of

7:05

articulate what that means and part of it

7:07

is you know he owns around sixty percent

7:10

of the company that's around six billion dollars

7:12

on paper. He's locked up for

7:14

six months and if he sells it many

7:16

massive volume

7:18

than a sensibly the stock goes down

7:20

other shareholders are mad i mean whenever

7:23

you have a big sell off. That's

7:26

usually bad news for the other shareholders and the

7:28

value of the stock goes down right

7:30

now around eleven percent of the stock

7:32

is held by short sellers and that's

7:35

versus you know five percent normal company

7:37

and that's a storm thing it's almost

7:39

impossible to show up the stock right

7:41

now. I was having dinner last night

7:43

with an investor who told me

7:46

that the cost of the borrow if

7:48

you want to borrow through social stock so that

7:50

you can sell it in the market so that's

7:52

sure the cost of that is two hundred and

7:55

fifty percent. Yeah that's also

7:57

because backs are really hard to short you

7:59

know. mutual funds and ETFs are not generally

8:01

going to hold them. So that's, that's part

8:03

of the premium. Well, it's not a SPAC

8:06

anymore. Yeah. Now it's, now it's a real

8:08

listed company. And this is why

8:10

we're talking about it now, to be clear,

8:12

there has been this SPAC stock called the

8:14

WAC or WAC or something digital

8:17

world acquisition court that has been

8:19

trading since September, 2021. And

8:22

for most of that time, it

8:24

has had a stated intention to acquire

8:26

front media and technology

8:29

group. And so there was a

8:31

lot of kind of jostling for

8:33

position in WAC stock sort

8:35

of in anticipation of this event happening

8:37

and in anticipation of Truth Social being

8:39

a public company. But

8:42

it's only this week that Truth Social has

8:44

actually been a public company. This

8:46

is such a strange SPAC because for a

8:48

lot of the investors, it's really just kind

8:50

of like a call option on MAGA. And

8:53

you can't really say that about the other

8:55

meme stocks, you know, there are dynamics here

8:58

that just don't exist in any other SPAC

9:00

or meme stock. There are other

9:02

ways Trump could cash in on

9:04

his stock without selling a big

9:06

chunk of it and risking the

9:08

stock price going down. He

9:10

could borrow against the stock, right? Like

9:13

borrowing against stock also, like you're

9:15

borrowing from a bank normally, and

9:18

then the bank wants to hedge the risk that the

9:20

stock will fall. So they will basically

9:22

short the stock. So that involves them

9:24

effectively selling the stock. It still produces

9:27

downward pressure on the stock. But

9:29

honestly, like if the stock is if

9:31

his stock is worth six billion dollars

9:33

and, you know, he needs to raise,

9:35

you know, three or four hundred

9:37

million or something, then like he's not selling

9:39

a huge amount. And look,

9:42

there was 55 million shares traded

9:44

on the first day that it was

9:47

officially a company. There's a lot of

9:49

volume in this stock. There's a lot

9:51

of people playing it for the lulz

9:53

and for the memes and for the,

9:56

you know, volatility. I'm

9:58

not nearly as convinced. as

10:00

Elizabeth, that like if Trump wanted

10:02

to spend a few weeks selling

10:05

down his stake that he couldn't find

10:07

buyers for, especially if he's

10:10

president at that point and,

10:12

you know, the Saudi wealth fund wants to

10:14

make friends with Trump. So they're like, yeah,

10:16

we'll just, you know, come in and buy

10:19

your stock. That's completely legal.

10:21

I think the bottom line is if you

10:24

want to call the meme stock or not, there's

10:27

value in a stock that is associated

10:29

with Donald Trump right now, as

10:32

much as I hate to say it,

10:34

he, his brand is, is quite valuable. There are

10:36

people who want to buy shares

10:38

to support him. It's

10:41

considered to be a way of showing your support

10:43

for Donald Trump. And there are always going to

10:45

be a lot of people who want to do

10:47

that. And if he becomes president, then

10:49

the value of the company and

10:52

the stock shoots up to

10:54

who knows where, because then suddenly this guy

10:56

is the most, you know, he's, he's the

10:58

president of the United States. You can show

11:00

support for him by buying the

11:02

stock. You can follow him and

11:05

his, the things

11:07

he says, you'll have to theoretically be

11:09

on truth social. So that would theoretically

11:11

drive a lot of traffic. Like

11:13

the platform all of a sudden becomes

11:15

incredibly relevant if he actually wins the

11:18

election. So like betting on the stock

11:20

almost makes sense. Now it's

11:22

terrifying to think of someone that powerful

11:24

owning a social network. We're like, we

11:26

already see what it's like when a

11:28

billionaire who is what unpredictable, capricious, racist,

11:31

narcissistic owns a social network. We are

11:33

living through that now. And it's, it's

11:35

not pretty. Like we saw what happened

11:37

on X with the Baltimore bridge collapse.

11:40

And you know, we saw the conspiracy

11:42

theories running rampant and all of this.

11:45

It's really scary, but like bottom

11:47

line is I think it's, it's more valuable

11:49

than just like some random coin someone

11:51

made up. It's also valuable because there are

11:53

a lot of people who assume that Trump,

11:56

if he is president will use the site

11:58

as kind of like a back door. mechanism

12:00

for like bribery or monuments in the

12:02

same way that his hotels became magnets

12:05

for foreign dignitaries who wanted to suck up

12:07

to him. This is much easier,

12:10

right? It's much easier to just buy

12:13

a bunch of stock on the open market and

12:15

then go along to Trump and say, hey, guess

12:17

what? I'm a major shareholder in your company than

12:19

it is to sort of quietly run

12:22

up a bill at the Trump Hotel and hope

12:24

that the news gets back to Trump

12:26

that you got him money that way. That's

12:30

so bananas. That's

12:32

so bananas that someone can be president

12:34

and you can buy shares in their

12:36

company. Like they made, didn't they make

12:38

Jimmy Carter like get rid of his

12:41

peanut farm? Well,

12:43

the thing is, these are norms. They're

12:45

not really laws technically. So

12:48

Jimmy Carter got rid of his peanut farm

12:50

because it was what he was supposed to

12:52

do. It's what we expect presidents to do.

12:54

Yeah, there is this thing called the emoluments

12:56

clause, but like we discovered in Trump's first

12:59

term that that's basically unenforceable and

13:01

it has no teeth. And so, yeah, there's

13:03

a very good chance that all of this would be illegal

13:05

and there will be all

13:07

manner of wailing and gnashing of teeth and

13:09

rending of garments by various ethicists. But

13:12

it's clearly going to happen. And

13:16

I think there is a certain amount

13:18

of wishful thinking going on among people

13:20

saying, oh, it's just paper

13:23

wealth and oh, he's locked up

13:25

for six months and oh, it's not real

13:27

liquidity. He's not really

13:29

as rich as everyone's making him out to be. And

13:31

I'm like, yeah, no, actually

13:33

like that, you know, for one thing,

13:36

the lockup is nothing, right?

13:39

If he wanted to go

13:41

to his board and ask them to

13:43

waive the lockup, it becomes like September,

13:45

October, and he's run out of

13:47

money in his election campaign and he wants

13:49

like an extra billion dollars to get elected.

13:51

And he says, the easiest way

13:53

I can raise this billion dollars is to just

13:55

sell a billion dollars of DJT stock. It's

13:58

going to help me get elected. And

14:00

Heyboard, which includes my sons and my most

14:02

MAGA supporters, do you think you could wave

14:05

the lockup so that I can do that?

14:07

They would have it wave before he could

14:09

even end the sentence. So what happens in

14:11

November if he loses the election? Then I

14:14

assume DJT goes, whatever the

14:16

slide whistle equivalent is. Yeah,

14:19

that's a good question. Yeah. I mean, I do

14:22

think, I do think that it's, it's a bet

14:24

on Trump and a bet on Trump's cultural

14:27

relevance. And clearly he's

14:29

going to be culturally relevant through

14:31

November. After November, if he

14:33

loses, I mean, obviously he's not going to concede.

14:35

He's still going to be out there being Trump.

14:38

But if he loses, I think

14:40

there will be more people like

14:42

kind of like, why am I

14:44

still holding onto this? And there

14:46

will be less incentive for, you

14:49

know, foreign wealth funds

14:51

to be supporting the

14:53

stock. Wait. So Truth

14:55

Social has 5 million monthly active

14:57

users. Pinterest has 250 million

15:00

monthly active users by comparison. I don't

15:02

even think of Pinterest when someone says,

15:04

name a big social media company. But

15:06

the point, like one of the things that I

15:08

wrote about this week was if you think about

15:10

Truth Social as

15:13

a meme investment and look

15:15

at its valuation in comparison

15:17

to, you know, the valuation

15:19

of Dogecoin or the valuation

15:21

of GameStop.

15:23

Is peak or the valuation of like Robinhood

15:25

at this peak or Upstar at this peak

15:27

when, you know, when they were like full

15:30

of VIM and meme

15:32

vigor. Like it's actually not that big.

15:34

There's a lot of meme coin. I

15:37

think Dogwif hat is worth more than

15:39

Trump Truth Social. So like what

15:41

I'm saying here is that objectively

15:43

the valuation is insane. It's completely

15:46

unsupportable on any kind of fundamentals.

15:48

That's how memes work. But

15:51

by the same token, yeah, it

15:53

can go up 100 percent. It can

15:55

go up. I want to talk about

15:57

the meme meme stock resurgence, but also about you.

16:00

definition of what a meme stock

16:02

is because you mentioned Doug with

16:04

hat several times, but also Robinhood. And

16:07

to me Robinhood is beyond

16:09

meme stock. Like this is a company with

16:11

value with a product that people use that

16:13

it makes money from. So how is it a meme

16:15

stock? So it's not anymore.

16:17

For like a hot minute after it

16:20

went public, it was. And

16:22

then it isn't anymore. A stock becomes

16:24

a meme stock when it stops trading

16:26

on any kind of hopes or valuations

16:29

for the company and starts trading just

16:31

as a speculative ticker symbol. Don't a

16:33

lot of stocks trade on speculation beyond

16:35

like things that are classically thought of

16:38

as meme stocks? I think there's probably

16:40

a gray area between just, you

16:42

know, garden variety speculation and GameStop.

16:44

You could probably make the case

16:47

of Tesla, you know, at certain

16:49

periods of Tesla's existence. Yeah.

16:51

But no, like the overwhelming majority of stocks, people

16:53

are like, I want to invest in this company

16:55

because I think the company is going to be

16:58

better in the future than it is in the

17:00

present. That's why they're investing in

17:02

DJT. They think they want to invest in

17:04

this guy because he's going to be president

17:06

at some point. To remember and

17:08

to be clear, like we do not

17:10

live in a world where you can

17:12

buy stock in individuals. They are not

17:14

investing in Donald's Jay Trump. They are

17:16

investing in DJT, which is not investing

17:18

in Elon Musk. They're investing in Tesla.

17:20

But it's like, come on, it's the same thing. Yeah,

17:23

you know, it's a bet. The valuation

17:25

is completely decoupled from the underlying

17:27

business. Yeah, the underlying business, you know,

17:29

probably if he becomes president will make

17:31

more than, you know, a million dollars

17:34

a quarter because people will start buying

17:37

ads in an attempt to bribe

17:39

Trump. But even then, it will be

17:41

very hard for the business to even

17:44

make a profit, let alone grow to

17:46

any kind of, you know, multi-billion

17:49

dollar valuation. This is off

17:52

the shelf, open source, mastodon

17:54

clone, and not very well

17:57

executed version of that. company,

18:00

Quay Company has maybe

18:03

some growth potential, but nothing to justify

18:05

this kind of valuation. And so when

18:07

I was talking about how like Robinhood

18:09

was a meme stock, I

18:11

was talking about when it was worth $60 billion, right? When

18:14

it was worth $60 billion, that wasn't

18:16

because people were like, well, if you

18:18

run a discounted cash flow analysis on

18:20

the possible future profits

18:22

and you plug in various assumptions and it comes

18:25

to $60 billion, no, they were just buying the

18:28

stonk because it was going up and they

18:30

were like, number go up. I mean, I

18:32

guess that's just part of, like

18:35

you were saying at the beginning, meme stocks didn't

18:37

go away after zero interest rates

18:39

after Zirp went away. Meme

18:42

stocks are just investing like

18:45

that as divorce from the fundamentals

18:47

based on the vibes and believing in

18:49

something or someone. That's just part of

18:51

it now. That's just part of the

18:53

reality now. So what's

18:55

the bottom line here? Truth

18:58

Social is a public company. People

19:00

can invest in the president

19:02

of the United States maybe at some

19:04

point and that's really messed up. Yeah,

19:06

it's not like there's a

19:08

business under there. If you've ever been on

19:10

Truth Social, it's horribly shitty.

19:14

And you said something about you said all the

19:16

users were in the US. They're actually not. They

19:18

have around 5 million

19:20

monthly active users and

19:22

that's a very small number. You

19:25

know, anything about website reach and social reach

19:27

in particular, but only a million of those

19:29

are in the US. I'm not

19:31

sure what the breakdown is. Where's the rest? They're

19:33

in like Kazakhstan? I guess.

19:36

That's weird. They're probably bots, honestly.

19:39

They're probably just foreign bots, but like, why can't

19:41

we make have like good made in America bots?

19:44

God damn it. The

19:46

mainstream media is doing everything within

19:48

their power to phone it, hatred

19:50

and energy. They are fake news

19:52

and truly bad people with a

19:55

sick agenda. Before

20:02

we go to the break, I'm going to tell you about

20:04

our Slate Plus today. This week we

20:06

are talking about, because tomorrow is Easter, but

20:08

also because I love to talk about it,

20:11

we are talking about chocolate. We're

20:13

talking about the recent spike in

20:15

cocoa prices and also how

20:17

long it would take me to eat 250 Kit Kats. Anyway,

20:21

if you're not a Slate Plus member and you

20:24

don't want to hear ads and you do want

20:26

to hear us talk about chocolate and you want

20:28

a bunch of other great Slate stuff, you

20:31

should sign up for Slate Plus. With

20:33

Slate Plus, you get ad-free listening on

20:35

all the podcasts from Slate, plus you

20:37

get unlimited access to slate.com content. There's

20:39

a newsletter that's really good. Yeah,

20:42

every week an exclusive bonus

20:44

segment where we really

20:46

just go wild. We really open

20:48

up in the Slate Plus segment. Sign

20:51

up at slate.com/plus.

20:54

That's slate.com/plus. Apple

20:57

Card is the perfect cash back rewards

21:00

credit card. You earn up to 3%

21:02

daily cash on every purchase every day.

21:05

That's 3% on your favorite products at Apple,

21:07

2% on all

21:09

other Apple Card with Apple Pay purchases

21:11

and 1% on anything

21:13

you buy with your titanium Apple Card

21:16

or virtual card number. Visit

21:18

apple.co/card calculator to see how

21:20

much you can earn. Apple

21:23

Card issued by Goldman Sachs Bank USA, Salt

21:25

Lake City branch. Subject to

21:27

credit approval, terms apply. This

21:30

episode is brought to you by SAP. First,

21:32

the bad news. SAP Business

21:34

AI won't help you generate cubist versions

21:37

of your family's holiday photos. It

21:39

will help you understand which supplier is

21:42

best to help you roll out your

21:44

plant-based packaging in Southeast Asia, identify

21:46

the training your junior project manager needs

21:48

to rise up the ranks, and automate

21:50

repetitive tasks while you focus on big

21:52

innovation. So you can be

21:55

ready for the next opportunity. Revolutionary

21:57

technology, real world results. That's SAP

21:59

Business. So

22:03

now that we have all sold

22:06

out of a s&p 500 index funds

22:08

and gone all in on. Trump

22:10

media and technology group, let's move

22:12

on and do the former king

22:14

of the memes himself. Sam

22:17

bankman freed. He had

22:19

his own coins. He had coins which were worth

22:21

much more than six billion. He had like that.

22:24

There are a whole series of what was called

22:26

Sam coins, including a coin

22:28

called ftt. He was

22:30

just issue in almost unlimited quantities of science

22:33

on random value to multiply by the unlimited

22:35

quantities that he was issuing and call himself

22:37

a trillion there. Smart and

22:39

there were various other ones as well, including

22:41

Solana and others, which some of which have

22:43

bounced back. So I'm just doing quite well

22:45

right now. Anyway, it turns out that a

22:47

huge chunk of what he was doing was

22:49

incredibly illegal. There was a very

22:52

high profile court case in

22:54

lower Manhattan. He was convicted of

22:56

many crimes and this week he

22:59

was sentenced and the judge gave

23:01

him 25 years

23:03

and that is a lot of

23:05

years in one of the there

23:08

were two main reasons why he

23:10

got such a long sentence. The first was

23:12

just the sheer enormity of the crime and

23:14

I'm using that word advisedly. This is not

23:17

the wrong sense of the word enormity. It's

23:19

his true sense of the word enormity. Part

23:22

of the judges sentencing was not just that he

23:24

goes to jail for 25 years,

23:26

but also that he repay 11 billion

23:29

dollars in damages. So yeah, 11

23:32

billion dollars. That's a big crime.

23:34

That's a lot of damages and

23:36

that was one reason why he

23:38

got such a long sentence. The

23:42

other reason was that the judge

23:44

said that he had never seen

23:46

such a sort of shifty, such

23:49

shiftiness, such perjury, such lack

23:52

of remorse from a defendant.

23:54

You know, that Sam Beckman free had kept on

23:56

saying even in his, you know,

23:58

like the brief he gave. the judge

24:00

saying, please be gentle on me. You know, he

24:02

kept on saying, I kind of didn't do anything

24:04

wrong. It's like, yeah, actually you did, you know?

24:06

It's like there weren't any victims. It's like, actually

24:08

there were. He also rubbed the

24:11

judge the wrong way in a lot of

24:13

ways. He lied on the stand. He had

24:15

his bail revoked because he was accused of

24:17

trying to intimidate witnesses. He seemed even more

24:19

evasive than most people in this situation

24:22

would be. And so the judge said that he

24:24

also thought that SPF had such

24:26

an insane tolerance for crazy risk

24:29

that, you know, if he had a shorter

24:31

sentence, he's just going to turn around and do

24:34

something incredibly risky again and sort

24:37

of portrayed him as the prosecutors

24:39

referred to him as a pernicious,

24:41

as someone who had a pernicious

24:43

megalomania. Uh, and,

24:46

and so SPF's response to

24:48

that or his, his defense's response to

24:50

that was that he was sort of

24:52

unlikable on the stand because he's autistic,

24:55

which I'm not sure that's, I've never

24:57

read that anywhere. I think he has had

24:59

a diagnosis and he does remind me in

25:02

many ways of Martin Shkreli and

25:04

like Martin Shkreli, he made the

25:06

case at his criminal trial that

25:09

the sentence should be

25:11

light because it was

25:14

like a victimless crime and people didn't

25:16

lose money. Now in Martin

25:18

Shkreli's case, this was actually kind of sort

25:21

of true, but you know, the judge addresses

25:23

this. He's like, if you steal a million

25:25

dollars and take it to Vegas and win

25:27

lots of money and then hand a million

25:30

dollars back, like you still stolen

25:32

a million dollars and you still go to jail. But

25:34

at least in Martin Shkreli's case, you know, he had

25:36

a bunch of like risk taking

25:38

equity investors who did get paid back

25:40

and thought there were very few obvious

25:43

victims of his crime in the

25:46

case of FTX. John

25:48

Ray, who's now running FTX, says

25:51

that the total claims on

25:54

FTX are 18 quadrillion

25:56

dollars, 18 billion billion

25:59

dollars. No

26:01

one knows exactly who is

26:04

owed what, but just to give one example,

26:06

if you look at the customer

26:09

accounts for FTX when it failed, customers

26:12

thought that they had 100,000 bitcoins on

26:15

the exchange. In fact, the number of bitcoins that

26:18

was held by FTX on the exchange was 105.

26:22

Basically, SBS had sold 100,000

26:24

bitcoins that didn't belong to

26:27

him in an attempt to

26:29

keep the exchange afloat. At $60,000, those 100,000 bitcoins were

26:31

worth $6 billion right there. This

26:36

is just mind-boggling amount of

26:38

money that were being stolen. Just

26:41

to contextualize, the prosecutors asked for

26:43

40 to 50 years, and SBS

26:45

lawyers asked for six and a

26:48

half. Just to put

26:50

this in relative context, the maxi could

26:52

have gotten was 110. Bernie

26:54

Madoff got 150, and Elizabeth

26:56

Holmes got 11. Do we

26:59

think 25 seems like the right number?

27:01

He's getting more than twice

27:03

what Elizabeth Holmes got

27:05

for what she did at Theranos. I

27:09

agree with Felix that there are victims for SBS

27:11

crimes. He was basically stealing

27:13

customers' money from the beginning. There's

27:16

a good Bloomberg piece on this. FTX

27:21

from the beginning was just a

27:23

vehicle for it. That seems bad.

27:25

But Elizabeth Holmes, she messes people's

27:28

health and misled them about real

27:30

health concerns. That's a real

27:32

public health danger to a

27:34

different kind of level than

27:36

Sam Bankman Freed's crime. The

27:39

fact that he got more

27:41

than twice the time she got is sort

27:43

of, I don't know if that's right. I'm

27:48

not here to defend Sam Bankman Freed at

27:50

any level, but 25 years is a really

27:52

long time. You kind of

27:54

think that he'll get out early. He'll get

27:56

time off for good behavior. There's

28:00

an appeal, like maybe he's not going to be

28:02

in there for 25 years, but to

28:04

take away, like that's taking away someone's basically their

28:06

whole young life. Like he would get out and

28:08

be over 50. Like, I don't

28:11

know, that's a pretty serious thing to do

28:13

when someone didn't do any violent crime or

28:15

anything, you know, damaging to public health.

28:18

I mean, to be honest though, it's

28:20

a crazy sentence even for people who

28:23

do do violent crime. The

28:25

thing we know about violent criminals upon

28:28

being released from jail is that if

28:30

you get released from jail in your mid

28:32

30s or 40s, you

28:35

tend not to be violent anymore and you

28:37

tend not to be convicted of

28:39

further violent crimes. Like, violent crime is a

28:42

crime of the young overwhelmingly. Look,

28:45

we've had this conversation on slate

28:47

money many times. White

28:50

collar sentences

28:52

can feel extraordinarily

28:54

punitive and too

28:56

much, but by

28:59

the same token, virtually all

29:01

sentences in the American criminal justice system

29:03

are punitive and too much. And

29:06

you know, so like we have to use that context. If

29:09

you're a judge and

29:11

you're handing down very punitive sentences day

29:14

in and day out, because that's what

29:16

American judges do, then this

29:18

one is entirely in line, I

29:20

think, with what you might see in other

29:23

crimes. And the crime was truly

29:26

enormous. It was truly

29:28

enormous. And there are people now,

29:30

and Felix and I were fighting about this

29:32

yesterday, but there are people now who are

29:34

saying things like Sam Bankman Fried is actually

29:36

an investment genius and you know,

29:39

he didn't really lose anyone's money.

29:43

The reason the estate is going to be able

29:45

to recover so much money is, you know,

29:47

John Ray, the guy in charge of doing

29:49

that is good at his job. And also

29:52

because there's been this big rally in crypto,

29:54

like apparently there was a billion

29:56

dollars worth of Solana at the bankruptcy filing

29:58

time, but they didn't. cash it out right

30:00

away. So now it's worth like $10 billion.

30:02

And that has nothing to do with Sam

30:05

Beckman treat, I guess you could say it was

30:07

his vision, but I don't know. Right.

30:09

Or like, you know, he made a half a

30:12

billion dollar investment in an profit, which is now

30:14

worth, you know, an absolute fortune. It's like, great,

30:16

okay, so like, he gets lucky on some of

30:18

the investments. But again, getting lucky on an investment

30:20

does not mean you didn't commit the credit. John

30:23

Ray has also made it very clear, and has

30:25

been very vocal about the fact that the company

30:27

was run horribly and that, you know, some of

30:29

his decisions were just inexplicable. So

30:31

anyone calling as we have a genius at this point,

30:33

I think is just not paying attention. They're

30:36

not a genius either. You

30:51

want control of your financial future

30:53

and Schwab knows that. That's why

30:55

when it comes to managing your

30:57

wealth, Schwab gives you more

30:59

choices like full service wealth management

31:02

and advice when you need it

31:04

most. You can also invest on

31:06

your own and trade on think or swim,

31:09

the powerful award winning trading

31:11

platforms. Plus, you'll get low

31:13

costs, transparent pricing, and

31:15

24 seven live help. Because

31:18

Schwab understands it's your financial

31:21

journey, and they believe you should have

31:23

choices in how you invest. Visit

31:25

schwab.com to learn more. Slate

31:31

Money is sponsored this week

31:33

by BetterHelp. A lot

31:35

of us spend our lives wishing we had

31:38

more time, but the question that raises is

31:40

time for what? If time

31:42

was unlimited, how would you spend that

31:44

time? The best way to

31:46

squeeze that special thing into your schedule is to

31:48

know what's important to you and make that thing

31:51

a priority. How do you find out what's important

31:53

to you? Therapy. Therapy can help

31:55

you find out what matters to you so

31:57

that you can do more of that thing.

32:00

If you're thinking of starting therapy,

32:02

give BetterHelp a try. It's entirely

32:05

online, it is designed to be

32:07

convenient, flexible and suited to your

32:09

schedule. Just fill out a brief

32:11

questionnaire, get matched with a licensed

32:14

therapist and switch therapists anytime, no

32:16

additional charge. Learn to make time

32:18

for what makes you happy with

32:21

BetterHelp. Visit betterhelp.com/Slate

32:23

Money today to

32:26

get 10% off your first month. Visit

32:30

betterhelp.com slash

32:33

Slate Money. Let's

32:37

move on to a perennial favorite

32:39

subject on this here show, which

32:41

is credit cards. We

32:43

had a big plus action settlement this

32:45

week, which may not make a huge

32:48

amount of difference in the short term,

32:50

but could be pretty

32:52

enormous in the longer term,

32:54

which is basically that Visa

32:57

and MasterCard have

32:59

made an agreement with a bunch of

33:01

merchants. This has not been ratified and

33:03

a bunch of merchants say it doesn't

33:05

go far enough. We don't know whether

33:08

it's completely enforced, but

33:12

the broad idea is that for the first

33:14

time, merchants are going to be able to

33:16

say, if you come in here with a

33:18

really expensive credit card with high interchange fees,

33:20

it's going to cost us like 3% every

33:22

time we accept your payment.

33:26

We can charge you more for using that credit

33:28

card than if you come in with a credit

33:30

card with a really low interchange fee. In

33:35

theory, for the first time, which

33:37

flavor of Visa card you

33:39

have will affect the price

33:42

you pay. That

33:44

is fascinating because that

33:47

might finally give people

33:49

an incentive to

33:51

stop just using the highest

33:53

reward card they can find.

33:55

Because the highest reward card is also going to

33:57

be the one that might wind up. costing

34:01

more to use in the shop do you think that

34:04

people with very high-end credit cards are even

34:06

gonna notice that difference because what you're talking

34:08

about is two dollars and

34:10

sixty cents and fees on every hundred dollars

34:12

versus two dollars and ten cents and if

34:15

you're the person who pays up for you

34:17

know i'm very high and credit

34:19

card. Are you even gonna register

34:21

that especially if you're spending a lot on

34:23

things like hospitality and what not. So

34:27

two different questions that the things

34:30

that the merchants are being allowed to

34:32

do is charge more for the people

34:34

using the more expensive cards. They

34:37

as far as i know there's nothing

34:39

in this agreement saying that you can

34:41

only charge the difference in fees so

34:44

if they want to give everyone who

34:46

doesn't use a sapphire reserve for twenty

34:48

dollar discount but then just not give

34:50

that discount to the people paying with

34:52

the sapphire reserve then. They

34:55

can do that i don't think that the

34:58

amount charged the

35:00

amount extra you need to pay using that credit

35:02

card needs to be entirely commensurate with the cost.

35:06

What you just said so at first the

35:08

news of this broke my brain because i

35:10

was like what merchant is gonna be like

35:13

sapphire users have to pay five percent more

35:15

on transactions like no merchant is gonna do

35:17

that but what they'll do is say like.

35:20

If you have a card or that card or that

35:22

card you get five percent off just like they do

35:24

now with cash if you pay cash in a lot

35:26

of places you got a little discount two percent three

35:28

percent whatever. And some people take advantage

35:31

of that but most so that was

35:33

like my first step in my brain on

35:35

breaking like okay they're not gonna advertise surcharges

35:37

or extra fees are gonna average

35:39

eyes discounts for other card holders.

35:42

And then i started thinking about those

35:44

cash discounts and the truth is like. The

35:47

cash discounts are cool but most people don't

35:49

use them i think most people just still

35:51

they don't maybe don't even have cash anymore

35:53

like we spoke about a few weeks ago

35:55

they're using digital totally so you know they

35:57

don't they don't do it so i. kind

36:00

of feel like it's going

36:02

to wash out maybe because you know

36:04

there's this worry like, oh my God, if I'm

36:06

a Sapphire blue person and then everyone who just

36:08

has Visa regular is getting the discount. I'm not

36:11

getting the discount. I'm not going to use my

36:13

Sapphire blue and like maybe at the margins,

36:15

some people will, if they have a different

36:17

card, they'll switch to the different card. But

36:20

if they don't, they'll probably still use their Sapphire blue

36:22

or their whatever, because at the end of the day,

36:24

it's not like that big of a deal. Just like

36:26

the cash discount isn't that big of a deal to

36:28

people. They just want the convenience of their

36:30

card. Right. But the idea being that

36:32

if you switch to

36:34

the cheaper cards, that

36:36

not only gets you access to those discounts,

36:38

but it also saves you money in terms

36:41

of like an annual fee, right? Because the

36:43

more expensive cards generally carry an annual fee.

36:45

And so what you're doing at that, what

36:47

you're doing in this like possible

36:49

future world, I'm not saying the future world is

36:51

definitely going to happen, but it could happen. What

36:54

you're doing is you're paying, you

36:57

know, hundreds of dollars a year for the

36:59

privilege of using the one card that doesn't

37:01

give you a discount. And at

37:03

that point, you start thinking to yourself, well, hang

37:05

on a sec, if I just use a free

37:07

card, I would get all of these discounts, and

37:09

I would save money on credit card fees. Like

37:11

at that point, do I really care about my

37:14

lounge access? I think it'll depend on

37:16

how many merchants start doing the discounts, you know,

37:18

how many merchants start advertising, like if you have

37:20

this card or that card will give you, you

37:22

know, a break because if it's only in

37:24

a few places, then I don't think people

37:26

would change their card behavior. The

37:29

other thing that is allowed in this

37:32

settlement is for merchants to group together

37:34

and negotiate collectively to try and

37:36

reduce the interchange that they pay. And so

37:38

that's going to put like a downward pressure

37:40

on interchange. And I do think that the

37:42

big picture in America is that credit

37:45

card interchange fees have been

37:48

rising steadily and unconscionably, I

37:50

think there was 170

37:53

billion dollars last year or something crazy like

37:55

that. It's a stupid

37:57

system of kickbacks.

38:00

Most of that 170 billion dollars winds

38:02

up getting like kicked back to rich

38:04

Americans who pay for expensive cards in

38:06

the form of like free

38:08

flights and stuff. And it's just like

38:10

this is so dumb. You know, this

38:12

does not really help anyone. And I

38:15

guess, you know, except for

38:17

Delta Airlines, you know, who, which is

38:19

basically a credit card company with an airline

38:21

attached. People who carry balances on

38:24

credit cards are basically funding rich

38:26

people's cash back and rewards, you

38:28

know. In addition

38:30

to the things you just said, kind

38:33

of. They don't get to, they have to

38:35

use the credit cards, pay the inflated prices

38:38

for goods and services. Yes. Because of

38:40

the fees. That is true. And then

38:42

every month, you know, they don't pay

38:44

their bill in full, don't get those

38:46

fees back to them the way people who pay

38:48

in full every month get cash back. No,

38:50

it's true. And the big hidden fee

38:53

is just this thing that every single

38:55

shop in America effectively

38:59

charges 3% more than it really

39:01

needs to just because it needs to build

39:05

in the cost of the interchange. So

39:07

yeah, so like, so that's the question. Like do we

39:09

believe if interchange went away tomorrow, do we think that

39:11

all prices in America would drop by 3%? In

39:14

place. In place. But like I do think I

39:16

do think it is something that has pressured prices

39:19

upwards over time. And if it went away,

39:22

then there would be less upward pressure on

39:24

prices and some indeed some downward pressure on

39:26

prices. Like Americans would find it a little

39:28

bit easier to compete on price. That's

39:30

good. We could we could use a little downward pressure

39:33

on prices because we still do have some

39:35

inflation that needs to calm down

39:37

a bit. There you go. The FEDGE like this

39:39

settlement. It's an inflation friendly

39:41

development. Numbers

39:44

round. Let me start because I have one

39:46

this week. That

39:51

is the number of

39:53

Ferraris that were sold

39:56

in Taiwan last

39:58

year. That comes with 11,000. Seven percent

40:00

of the total global sales of Ferraris took

40:02

place in Taiwan. Is

40:04

that normal? So they normally buy more

40:07

than 10% of the Ferraris in Taiwan?

40:10

No, they don't. This is a new

40:12

development and it's all to do with

40:14

all of the TSMC gazillionaires. Wow,

40:17

that's great. Good for Taiwan. No? If

40:20

you want to hang out with a bunch of

40:22

Ferraris, just book a flight to Taipei. You can

40:24

use your airline miles. Who buys most of the

40:26

Ferraris? Not me. I can't

40:29

afford Ferraris. Is it American? I know

40:31

one Italian guy who has a collection

40:33

of Ferraris and likes racing them on

40:35

the tracks. How about you,

40:37

Emily? What's your number? My

40:39

number is 100 million, 100 million

40:42

Newtons. Oh,

40:44

I like this already. Is

40:48

this a spaceship number? No,

40:50

no, that's what's so shocking.

40:54

That's an estimate of the measure of force

40:56

of impact when the container ship

40:58

Dolly hit the Francis Scott Key

41:00

Bridge in Baltimore earlier this week.

41:02

It wasn't going very fast, but

41:04

the ship is massive, like one-third

41:06

to one-half the size of the Empire State Building.

41:09

So even though it was going slow, like under

41:11

10 miles an hour, I don't know

41:13

how to translate that into knots. It's

41:15

about 10 knots. It's not a mile

41:17

an hour, basically the same thing. The

41:19

same knots, Newtons. I know. So

41:22

even though it was going really slow, it's so

41:24

big and heavy, it collapsed the bridge. The New

41:26

York Times upshot, I

41:29

guess you call it a blog still, but they did this

41:31

analysis and they figured it was 100 million

41:33

Newtons, at least around

41:36

a force when it hit the bridge, which

41:38

is why it collapsed. And just to give

41:40

you a sense of comparison, if

41:42

a fully loaded 18-wheeler collided with a

41:44

bridge at 80 miles an hour,

41:46

that would only be 1 million Newtons. So

41:51

it's like 100 of those. 100

41:55

fully loaded 18-wheelers all going at 80 miles an

41:57

hour and bashing into a bridge at the same

41:59

time. The Saturn

42:01

V rocket thrust at launch was 35

42:03

million newtons. So,

42:05

I mean, this is just like you begin

42:07

to understand how a bridge could collapse

42:09

when this giant container ship hit it.

42:11

If you didn't already understand, just intuitively

42:13

when you saw the video.

42:17

Elizabeth, what's your number? My number is

42:19

five and that's pounds. And

42:21

that's the weight of the bag of

42:24

Kit Kats that my mother sent my

42:26

eight-year-old for Easter. And it's

42:28

enormous. And this is a little bit

42:30

of a lead-in to our plus segment because I

42:32

think now a portion of the global cocoa supply

42:34

is in my house. And

42:36

I'm just glad that she didn't try to send

42:38

him five pounds of Peeps or I would have

42:41

gotten a box the size of a coffee table.

42:45

Wait, just plain Kit Kats or are they Easter themed

42:47

Kit Kats? They're Easter themed Kit Kats. What is

42:49

the difference between an Easter themed Kit Kat and

42:51

a normal Kit Kat? Pastel wrappers. Although

42:55

apparently the Kit Kat is making a

42:57

sort of lemon bar Kit Kat, which

43:00

I assume is probably like white chocolate and lemon

43:02

or something like that. How

43:04

does your son feel about having all these

43:06

Kit Kats? Weirdly, my son is good

43:08

at – He will hoard things like that. So,

43:11

we will probably still have Kit Kats by

43:13

the time he's able to drive. I can take them

43:15

with him to college. So,

43:18

my question is – and

43:20

it's a very important question and I feel like

43:22

we need the State Money audience to write in

43:24

on this question of extremely great importance. Is

43:27

there anything better than

43:29

sliding your thumbnail down

43:31

the foil wrapping

43:33

of a Kit Kat and

43:36

then snapping it off? It

43:39

is very satisfying. I feel

43:41

like 90% of the success of Kit

43:43

Kat is all just that weird sort

43:45

of ASMR feeling of slicing it open

43:48

and breaking it off rather than anything

43:50

to do with the actual

43:52

candy itself. Our producer should

43:55

put in a sound effect of a

43:57

Kit Kat snapping so everyone can enjoy

43:59

it. First

44:01

of all, lie down, then

44:04

ease out and think of irresistible

44:06

crisp light wafers covered in delicious

44:08

milk chocolate. Now, snap

44:11

out of it. On

44:13

which delicious note we will wrap up

44:16

this podcast. At least what I did there. We

44:19

will convey our deepest thanks to

44:21

Jared Downing and Shane Arath for

44:24

producing. We will

44:26

encourage you to write in

44:28

on slatemoneyatslate.com with talks of

44:31

your favorite unwrapping sounds and

44:33

feels. And we

44:35

will tell you that on Tuesday

44:37

we are going to be back

44:39

with a Money Talks episode.

44:43

Emily, who are you talking to? I feel

44:45

like I'm talking to Cal Newport. He is

44:47

a New Yorker contributor and so many

44:49

other things and the author of a

44:51

new book called Slow Productivity and

44:54

our conversation was really good if you care

44:56

about workplace stuff like I do, you're going to

44:58

want to listen. So that's all coming

45:00

up on Tuesday but with any luck

45:02

you are a Sleep Plus subscriber so

45:04

you're just about to hear us talk

45:07

about Coco. Ten thousand

45:09

dollars a ton. Let me kick-tats with

45:13

that. Without the ones like you who work

45:15

tirelessly to keep things running, everything would suddenly

45:17

stop. Hospitals, factories, schools

45:19

and power plants. They all depend

45:21

on you. No matter the weather,

45:23

emergency or time of day, you're

45:25

the ones who get it done.

45:28

At Grainger, we're here for you

45:30

with professional-grade industrial supplies. Count

45:32

on real-time product availability and fast

45:34

delivery. Call, click grainger.com or just

45:36

stop by Grainger for

45:38

the ones who get it done.