Too much oil?

Summary

Marketplace: "Too Much Oil?" – November 14, 2024

Marketplace, hosted by Kai Ryssdal, delves into today's pressing economic and business issues, providing comprehensive insights without requiring an economics degree. In the episode titled "Too Much Oil?", released on November 14, 2024, the program explores a variety of topics ranging from the global oil surplus and its implications on political agendas to the resurgence of Disney’s streaming services, challenges in the retirement landscape, shifts in regulatory environments under the incoming Trump administration, the pivotal role of the Federal Home Loan Bank system, and the resilience of Asheville, North Carolina, in the aftermath of Hurricane Helene.

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1. Global Oil Surplus and Political Implications

Overview: With Republicans securing control of the House, President-elect Donald Trump aims to advance his priority agenda, notably expanding oil and gas production to reduce American energy bills. However, existing record production levels under the Biden administration, coupled with the International Energy Agency’s projection of a global oil surplus exceeding one million barrels per day next year, pose significant challenges to Trump's plans.

Key Insights:

• Demand and Supply Dynamics: Mark Finley of Rice University highlights that global oil demand growth is lagging due to decreased consumption in China and a shift towards electric vehicles (EVs). He notes, “The basic story of oil this year is that the growth in demand for crude keeps falling short of expectations” (01:19).

• OPEC’s Production Strategies: OPEC's deliberate restraint in oil production to sustain high prices is counterbalanced by increased supply from non-OPEC countries like Guyana, Brazil, the U.S., Canada, and Norway. Matt Smith from Kepler explains, “Oil coming to the market from the likes of Guyana, from Brazil, from the U.S., from Canada, from Norway, essentially making up for any supply gap left by OPEC” (02:08).

• Impact on Oil Companies: With Brent crude trading around $70 a barrel, lower prices challenge the financial viability of oil companies. Clark Williams Derry from the Institute for Energy Economics and Financial Analysis states, “Lower prices mean oil companies aren't as eager to spend money to drill” (02:27). This economic pressure could limit the effectiveness of the Trump administration’s regulatory cuts and land-opening initiatives unless global conditions drive prices up.

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2. Disney’s Streaming Resurgence

Overview: Disney reported impressive fourth-quarter earnings, surpassing expectations with its streaming services generating $321 million in operating income. This marks a significant turnaround from a loss of over $4 billion two years prior. The company also onboarded over 4 million new Disney+ subscribers.

Key Insights:

• Content and Strategy: Kaylee Wells attributes Disney’s success to high-quality content and strategic restructuring. “Disney's got great content,” notes Brad Adgate, an independent media consultant, emphasizing the appeal of award-winning shows like The Bear and Shogun (03:42).

• Diversified Offerings: Michael Smith from Carnegie Mellon University highlights Disney’s diversified portfolio, including ESPN for sports enthusiasts and a robust brand for children’s entertainment, which sustains subscriber growth even with the introduction of cheaper, ad-supported tiers (04:11).

• Market Competition and Sustainability: Brandon Katz of Parrot Analytics observes that while Disney’s financial metrics improve, the streaming market remains competitive. “Out of the main eight streaming services, roughly half will still be here in a decade” (04:56), suggesting that sustained success requires continual innovation and adaptation.

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3. The Struggles of Retirement Amid Inflation

Overview: A report from the Employee Benefit Research Institute reveals that nearly one-third of retirees now feel they are spending beyond their means, a figure nearly double what it was in 2020. Factors such as inflation, increased debt, and rising living costs contribute to this growing financial strain.

Key Insights:

• Economic Resilience vs. Personal Struggles: Mark Ivry from the Brookings Institution acknowledges the economy's rebound but emphasizes that many retirees, particularly older adults who retired prematurely, continue to face financial hardships (06:39).

• Impact of Inflation: Teresa Ghilarducci from the New School points out that retirees are most affected by inflation in essential areas like food, shelter, and medical care, exacerbating their financial instability (07:04).

• Rising Debt Levels: The number of retirees with credit card debt has surged from 40% to 70% in two years, alongside increasing mortgage burdens and persistent student debt issues, as noted by Bridget Bearden (07:17).

• Systemic Issues: Alicia Minnell from Boston College’s Center for Retirement Research underscores that long-term structural problems, such as inadequate retirement savings and the prevalence of jobs without retirement plans, necessitate urgent reforms (07:38).

Conclusion: Improving retirement conditions hinges on ensuring continuous coverage and overhauling Social Security to sustain its financial viability, as advocated by Samantha Fields (08:10).

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4. Navigating Regulatory Changes Under the Trump Administration

Overview: Businesses currently under investigation or facing lawsuits by the Biden administration, such as Live Nation's antitrust case, are contemplating strategic responses in anticipation of regulatory shifts with the incoming Trump administration.

Key Insights:

• Antitrust Approach: Kimberly Adams discusses how companies like Live Nation hope for a less aggressive antitrust stance under Trump. “We are hopeful that we'll see a return to the more traditional antitrust approach” (09:25), contrasting the Biden administration’s interventionist strategies.

• Strategic Delays: John Coffey, a Columbia Law professor, suggests that companies might delay settlements or legal proceedings to await potentially more favorable regulatory conditions (10:19).

• Agency Leadership Impact: Jennifer Saline of Arizona State University highlights that the effectiveness of such strategies depends on President-elect Trump's appointments to regulatory agencies and their willingness to prioritize business-friendly policies (10:34).

• Consistency in Enforcement: Despite anticipated regulatory leniency in certain areas, fundamental enforcement regarding insider trading, fraud, and corruption will persist, ensuring that core legal standards remain intact (10:44).

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5. The Role of the Federal Home Loan Bank System

Overview: Henry Epp and Elena McCargo shed light on the often-overlooked Federal Home Loan Bank system, an essential component of the U.S. banking ecosystem that supports affordable housing and economic development through low-cost loans to financial institutions.

Key Insights:

• System Functionality: Henry Epp explains that the Federal Home Loan Banks provide funding and liquidity to member banks, credit unions, and other lenders, facilitating affordable housing projects and community development (15:11).

• Organizational Structure: Contrary to common misconceptions, these banks are member-owned cooperatives, not federal agencies, and do not engage in direct consumer banking (15:56).

• Regional Impact: Elena McCargo emphasizes the critical role of the Federal Home Loan Bank of San Francisco in supporting over 300 members across California, Nevada, and Arizona, particularly in addressing housing shortages (16:29).

• Affordability Challenges: Epp outlines the severe housing deficits in states like California, Arizona, and Nevada, where millions of affordable units are needed to meet low-income demand. The scarcity of affordable housing exacerbates price increases and hinders new construction efforts (17:10).

• Responding to Criticism: Addressing recent Senate criticisms regarding inadequate investment in affordable housing, Epp asserts that the system is adapting by increasing commitments and implementing new programs to better meet housing needs (18:43).

Conclusion: The Federal Home Loan Bank system plays a pivotal role in sustaining community banks and credit unions, thereby supporting broader economic stability and growth. Henry Epp urges the public to recognize the system's contributions to everyday banking and affordable housing (19:41).

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6. Rebuilding Asheville After Hurricane Helene

Overview: Asheville, North Carolina, a vital tourism hub with an economy heavily reliant on visitor spending, grapples with the extensive aftermath of Hurricane Helene. Local businesses and residents are navigating the challenges of restoration and the psychological toll of rebuilding their community.

Key Insights:

• Economic Impact: The hurricane devastated Asheville's water system, leading to canceled bookings and a drastic reduction in income for local workers like Rene Bouchard, who experienced significant financial losses from her cleaning jobs (21:30).

• Community Struggles: Laura Hackett reports on the ongoing hardships faced by residents, including limited access to clean water, reduced restaurant operations, and the emotional burden of disaster recovery (22:05).

• Psychological Effects: Mental health professional Kayla Clark highlights the collective trauma, with many residents describing their daily lives as moving "through their day in a fog," complicating efforts to welcome tourists back (23:05).

• Business Resilience: Despite personal and financial struggles, businesses like Jeffrey Burroughs’s jewelry shop remain open, underscoring the critical need for tourism to sustain the local economy (23:59).

• Tourism Relaunch Strategies: The community agrees that rebuilding requires patience and support from visitors, who are encouraged to contribute by staying patient, bringing essential supplies, and spending money in Asheville to aid recovery (24:33).

Conclusion: Asheville’s path to recovery hinges on both rebuilding infrastructure and fostering a supportive environment for both residents and incoming tourists. The community's resilience and collaborative efforts are central to restoring its economic vitality and quality of life (24:45).

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7. Infowars Acquisition by The Onion

Overview: In an unexpected twist, The Onion won the bankruptcy auction for Alex Jones's Infowars media company after Jones was mandated to relinquish his assets due to a substantial judgment related to the Sandy Hook School Massacre misinformation.

Key Insights:

• Parody Revival: The Onion plans to relaunch Infowars as a parody platform in January, incorporating advertisement revenue and content from Everytown for Gun Safety, reflecting a satirical take on conspiracy media (25:22).

Conclusion: This acquisition symbolizes a significant shift in media ownership and the repurposing of a once-controversial platform into a satirical and socially conscious outlet, blending humor with advocacy (25:22).

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Market Movements and Financial Updates

Towards the episode's conclusion, Marketplace provides an update on stock market performance and specific company activities:

• Stock Performance: The Dow Jones Industrial Average fell by 207 points (0.5%) to close at 43,750, while the Nasdaq and S&P 500 saw declines of 6.10% and 6.10%, respectively.

• Corporate Actions: Companies like Exxon Mobil, Valero, Chevron, and Advance Auto Parts experienced varied stock movements. Notably, Advance Auto Parts announced plans to close over 500 corporate stores and 200 independent locations as part of a broader restructuring effort (12:29).

• Bond Market: Bond prices declined with the 10-year Treasury note yield rising to 4.45%, indicating shifting investor sentiments and potential implications for borrowing costs (12:29).

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Final Thoughts: Marketplace continues to deliver in-depth analysis and updates on critical economic issues, empowering listeners with the knowledge to navigate complex financial landscapes. From global oil markets and corporate strategies to the intricacies of retirement and community rebuilding, this episode encapsulates the multifaceted nature of today’s economic environment.

For more insights and detailed reporting, tune into Marketplace daily and explore how global events shape your personal economy.

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Note: This summary excludes advertisements, introductions, and non-content sections to focus solely on the episode's substantive discussions.

Transcript

[Amy Scott]

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[Henry Epp]

Oh, oh, oh, O'Reilly Auto Parts.

[Kai Ryssdal]

Politicians have their plans, but the market doesn't always cooperate. From American Public Media, this is Marketplace in Baltimore. I'm Amy Scott in for Kai rysdal. It's Thursday, November 14th. Good to have you with us. Now that Republicans have won control of the House, President elect Donald Trump will have an easier time passing his Agenda 1 priority. We heard a lot during the campaign. Drill, baby, drill. Trump promised to cut Americans energy bills by expanding oil and gas production. Thing is that production is already at record levels during the Biden administration, and today the International Energy Agency projected a global oil surplus of more than a million barrels per day next year. Marketplace's Henry Epp looks at how that might complicate Trump's plans.

[Mark Finley]

The basic story of oil this year is that the growth in demand for crude keeps falling short of expectations, says Mark Finley at Rice University. And so it looks like global oil.

[Kai Ryssdal]

Demand is pretty sluggish.

[Mark Finley]

It's still growing, but not very aggressively. One of the main reasons for that is weakening demand from China, which is both a function of the rapid growth.

[Kai Ryssdal]

Of electric cars but also the overall weakness of their economy.

[Mark Finley]

China has been going through some tough economic times, as you might have heard, and a weaker economy needs less oil. At the same time, the country is rapidly switching to EVs, which cuts into the market for gasoline. And with that softer demand, opec, the cartel of oil producing countries in the Middle east and elsewhere, has been holding back oil production to try to keep prices high. But Matt Smith, an analyst at Kepler.

[Kai Ryssdal]

Says, at the same time, you've seen.

[Henry Epp]

Oil coming to the market from the likes of Guyana, from Brazil, from the.

[Mark Finley]

U.S. from Canada, from Norway, essentially making up for any supply gap left by opec, Smith says. So with weak demand and ample supply, you get lower prices. Brent crude right now is trading around $70 a barrel. This creates challenges, financial challenges for the.

[Amy Scott]

Oil industry that really depends on high.

[Kai Ryssdal]

Prices in order to make big profits.

[Mark Finley]

Clark Williams Derry is an analyst with the Institute for Energy Economics and Financial Analysis. Lower prices mean oil companies aren't as eager to spend money to drill. So he says while many oil producers will welcome the Trump administration's likely efforts to cut some regulations and open more public land to drilling, if the conditions aren't there for oil companies to make.

[Amy Scott]

Money, they're not going to be doing.

[Kai Ryssdal]

What a politician tells them to do.

[Amy Scott]

They're going to be doing what's profitable.

[Mark Finley]

Of course, he says oil markets are susceptible to global conflicts and other factors which can push prices up and make companies more eager to boost production.

[Kai Ryssdal]

I'm Henry App for Marketplace Disney had some good news for its investors today. The media giant reported better than expected fourth quarter earnings and said its streaming services posted $321 million in operating income, a pretty big deal considering just two years ago they were losing more than $4 billion. The company also added more than 4 million new Disney plus subscribers. Marketplace's Kaylee Wells has more on the apparent turnaround.

[Kaylee Wells]

The primary driver of Disney's success is pretty straightforward.

[Kai Ryssdal]

They've had a great quarter in streaming because people want to subscribe.

[Kaylee Wells]

Independent media consultant Brad Adgate says Disney's got great content.

[Kai Ryssdal]

The Bear and Shogun. They won Emmy awards for best drama and best comedy.

[Kaylee Wells]

Disney's also got espn, which satisfies sports fans, and it's the big brand for kids who want to watch the Little Mermaid again and again. The company's also found success in its cheaper subscription with ads, says Michael Smith. He's a professor at Carnegie Mellon University.

[Amy Scott]

Adding, the advertising tier has brought in more customers than it cannibalized customers from the from the full paid tier.

[Kaylee Wells]

Smith says Disney also got rid of the old structure with a movie division and a TV division and an international team.

[Amy Scott]

Bob Iger blew up that traditional organizational structure and made his org structure look much more like Netflix, where he's got a division that's focused on content and he's got a division that's focused on platform.

[Kaylee Wells]

Disney's success is not that unique. Brandon Katz is a senior entertainment industry strategist with Parrot Analytics.

[Henry Epp]

All companies right now are getting better from a monetary perspective in terms of streaming and narrowing losses to turn a.

[Kaylee Wells]

Profit thanks to growing advertising and increasing subscription prices. Plus, there's the whole thing where it's harder to share passwords.

[Henry Epp]

Now, proving that Netflix is not the only one that can get you off.

[Kaylee Wells]

That freeloading ability, Kat says that success won't last for everyone. Out of the main eight streaming services, he says general consensus is roughly half will still be here in a decade. I'm Kaylee Wells for Marketplace.

[Kai Ryssdal]

After some sticky inflation data this week, the Fed is taking a cautious approach to further interest rate cuts. In a speech in Dallas today, Fed chair Jay Powell said the the economy is not sending any signals that we need to be in a hurry. Wall street had a down day. We'll have the details when we do the numbers. We had an UPDATE this week on the state of retirement in this country. A report from the Employee Benefit Research Institute found that nearly a third of retirees feel like they're spending more than they can afford. That's almost double the percentage who said that in 2020. Marketplace's Samantha Fields has more.

[Samantha Fields]

The last four years have been a bit of a roller coaster.

[Kai Ryssdal]

We had a huge pandemic.

[Amy Scott]

It was traumatic for so many people.

[Kai Ryssdal]

And their jobs and the economy.

[Samantha Fields]

Mark Ivry at the Brookings Institution says the economy has bounced back well, but.

[Amy Scott]

Many people are still hurting, especially many.

[Samantha Fields]

Older adults who retired earlier than they planned, says Bridget Bearden at the Employee Benefit Research Institute.

[Elena McCargo]

Many of the retirees that we spoke.

[Henry Epp]

To experienced a decline in their standard of living.

[Samantha Fields]

Inflation is part of the reason. Teresa Ghilarducci at the New School says the biggest increases were on things that retirees spend most of their money on.

[Kai Ryssdal]

In food, in shelter and in medical care.

[Samantha Fields]

People are also carrying a lot more debt. Two years ago, 40% of retirees had outstanding credit card debt. Today it's 70%.

[Kai Ryssdal]

And we're finding more and more retirees with larger and larger mortgages. And we also see a significant number of retirees who are still carrying student debt.

[Samantha Fields]

Some of these factors are new or getting worse. But Alicia Minnell at the center for Retirement Research at Boston College says the basic reality has been true for years.

[Kai Ryssdal]

That somewhere between 40% and 50% of people who are entering retirement are not going to have the kind of money that will let them spend the way they spent before.

[Samantha Fields]

One of the biggest issues is that nearly half of people never work a job that offers a retirement plan, and others only do for part of their career. Manell says that needs to change.

[Kai Ryssdal]

Continuous coverage is really the most important thing that we can do to improve the whole retirement situation.

[Samantha Fields]

That and fix Social Security before it runs out of funds. I'm Samantha Fields for Marketplace.

[Kai Ryssdal]

Imagine for a moment you're involved in running a business that's been the target of an investigation by the Biden administration or even a lawsuit. You're probably weighing two options right now. Try to reach some kind of settlement with the outgoing administration, or sit back and wait for what might be a better deal from the Trump administration after Inauguration Day. Marketplaces Kimberly Adams has been looking at that very real scenario.

[Kimberly Adams]

Earlier this year, the Biden administration sued Live Nation, the entertainment company that runs Ticketmaster along with concert venues, accusing it of antitrust violations harming fans and performers by monopolizing the live music industry. But on Monday, during the company's earnings call. President and CFO Joe Berchtold had a cautiously optimistic outlook on life under the incoming Trump administration.

[Kai Ryssdal]

We are hopeful that we'll see a return to the more traditional antitrust approach.

[Kimberly Adams]

As opposed to the more aggressive approach of the Biden administration's lawsuit.

[Kai Ryssdal]

Some parts of the case, we think, reflect a much more interventionist philosophy today than you'd expect of a Republican administration. Obviously, the request to break up Live Nation and Ticketmaster would be an example.

[Kimberly Adams]

Of that, so we can expect some companies to try to slow down the progress on some of these cases during the transition, says John Coffey, a professor at Columbia Law and an expert on corporate governance.

[Amy Scott]

They don't know, but they are hoping that the incoming administrator of a given agency will be dramatically opposed to the positions of the predecessor administrator.

[Kimberly Adams]

Coffee says companies may choose to hold off on a settlement or slow down legal proceedings to wait for more favorable conditions.

[Amy Scott]

This is particularly true at the SEC and the ftc, where they've had positions that Trump has publicly criticized.

[Kimberly Adams]

Now, not everything at the securities and Exchange Commission and the Federal Trade Commission will grind to a halt.

[Kai Ryssdal]

Things like insider trading, accounting fraud, when people pay bribes to, you know, foreign officials, those types of cases are going to continue.

[Kimberly Adams]

Jaime Marlier is a partner at Morrison Forrester in New York and spent years in the SEC's enforcement division.

[Kai Ryssdal]

Where I think we might see some changes would be in more topical areas.

[Kimberly Adams]

The cryptocurrency industry, for instance, has an incentive to wait things out, given what the president elect has said. So do companies, in fights over corporate disclosures around environmental, social and governance issues, esg. But whether or not waiting will pay off will depend on who President Elect Trump chooses to run these agencies and how far he gets with efforts to turn career civil servants into political appointees. Jennifer Saline teaches law at Arizona State University. Many of those positions will end up being attorneys, and those attorneys are the ones who often are the ones that are negotiating with corporations and companies that regularly interact with the federal government. And even if the pressure to toe the line isn't explicit, Celine says, those attorneys in the back of their minds, they'll also be thinking, well, I'm going to have to really come down hard on what the administration wants, because if they don't, they might find themselves looking for a new job in Washington. I'm Kimberly Adams from Marketplace.

[Laura Hackett]

Coming up, I've heard from a lot of people that they feel kind of like they're moving through their day in.

[Kai Ryssdal]

A fog, and who could blame them? But first, let's do the numbers the Dow Jones Industrial Average lost 207 points, a half percent to close at 43,750. The Nasdaq fell 123 points, 6. 10% to land at 19,107 and the S&P 500 shed 36 points 6. 10% to finish at 59. 49. Henry Epp was telling us about global oil supply and demand and their possible impact on oil prices. Taking a look at some firms in the petroleum industry. Exxon Mobil rose less than a 10%, Valero gained 3. 10%, Occidental soured 9. 10%, Chevron grew 1 and 9. 10%. Advance Auto Parts added 6. 10% and announced plans to close more than 500 corporate stores, stores and 200 independent locations as part of a wider restructuring. Bond prices fell. The Yield on the 10 year T note rose to 4.45%. You're listening to Marketplace.

[Amy Scott]

You turn to Marketplace for up to the minute news for stories that show you the connections between global events and your personal economy. And you're not alone. Marketplace is the most widely consumed business and economic news program in the country. We're proud to make fact based journalism freely accessible and Marketplace investors make it all possible. Your year end donation today will make a real difference in our nonprofit newsroom and in the lives of millions of Marketplace listeners every single day. So please contribute what you can [e-mail].

[Elena McCargo]

Donate this podcast is supported by Fortune.

[Kai Ryssdal]

Dedicated to empowering leaders to make intelligent business decisions and delivering unbiased reporting since 1929. Subscription options, email newsletters and more [e-mail] this is Marketplace. I'm Amy Scott. There's an important part of the US Banking ecosystem it's possible you've never heard of. It's the Federal Home loan bank system, 11 regional banks that operate throughout the country providing low cost loans to banks, credit unions and other lenders. The Federal Home Loan bank of San Francisco, as the name implies, is based in San Francisco, but it has more than 300 members throughout California, Nevada and Arizona. Elena McCargo recently took over as President and CEO of the San Francisco Bank. Before that she was the president of Ginnie Mae. Thanks for joining us.

[Henry Epp]

Thanks, Amy.

[Kai Ryssdal]

All right, so let's start with a quick explanation for people who aren't familiar with the Federal Home Loan banks, which I think is probably many of our listeners. So what do you do?

[Henry Epp]

So first of all, it's great to be with you. And the Federal Home Loan bank system, you are absolutely right, is pretty much an unknown system that has Been in the background of our financial Services system for 92 years. The federal Home Loan banks are really here to provide sources of funding and liquidity to our members to really support economic development. Affordable housing, I think those are, that's the system perspective. And so, you know, understanding that the federal home loan banks1 are not federal agencies, we are, we're member owned cooperatives, which is a really interesting structure. And this is why a lot of people have a hard time understanding what we are and how we are. But our members.

[Kai Ryssdal]

Yeah, well the word federal is right in there. So it implies a certain relationship.

[Henry Epp]

Yeah, federally regulated, chartered by Congress. We don't make home loans. And so that's part of our name. And we're not a direct retail bank to consumers. We are a bank of bankers and financial institutions. It's a growing role and I think going forward will continue to be the case.

[Kai Ryssdal]

So it seems like a rebranding is in order. Federal Home Loan bank, none of those.

[Elena McCargo]

Are really what you do.

[Kai Ryssdal]

So that's a question for another time, I guess.

[Henry Epp]

Exactly. We'll talk about that one later. I just wanted to mention too, just in San Francisco alone, most of our footprint, believe it or not, is smaller local lenders. So we're a real like daily part of our financial institutions ability to provide their products and services and really support grant making affordable housing and economic development in their communities.

[Kai Ryssdal]

Yeah. And your mission, housing affordability is one of the reasons we wanted to have you on because this crisis has been especially acute in your region, California, Nevada and Arizona. So as you've taken on this new role, what challenges are you seeing in making, in closing that affordability gap?

[Henry Epp]

Yeah, I mean, as you know, affordability has been a long time challenge. Our state, the state of California alone needs to build 1.2 million affordable homes to meet the demand of low income renters in our state. Arizona is over 175,000 units short. Nevada nearly 100,000 units. So the overall sort of shortage of housing and then the implications of homes that are in disaster prone areas are on the rise. And so when that convergence happens, you can understand if you have a significant shortage, all prices are going to do is rise. And it's making it very, very difficult for affordable housing developers in our states to even bring new construction and new affordable housing online. And I think that's a real significant challenge.

[Kai Ryssdal]

I want to ask you about some criticism of the Federal Home Loan bank system, which is, you know, that some argue the banks have really strayed from their mission to support affordable housing and community development. As I'm sure you know, this summer, a group of mostly Democratic senators sent letters to each of the 11 banks pointing out that last year they spent only $398 million on affordable housing and that a sizable share of bank members had not originated a single mortgage in five First, I know you're new to the system, but I want to know how you respond to that and do you think the system needs reform?

[Henry Epp]

So I think the system has changed and the needs across the country have changed. And I think the system has done a really good job of listening to stakeholders of all kinds, including members of Congress. I think that there has been increased commitments, increased investments nationally in the affordable housing side of our mission. I do think what we do with our affordable housing advisory councils, what we're doing to really increase our investments, the new programs that we've put in place, that's really meaningful, and we are already seeing meaningful change, and we'll continue to see that going forward.

[Kai Ryssdal]

So going back to what we talked about at the beginning, that many people aren't familiar with the Federal Home Loan bank system, I read a line from the Brookings Institution that said the system has basically been toiling in obscurity. So why should a regular person know about and care about your institution?

[Henry Epp]

I would say that the reason to know that your banker has a bank that is helping to support their ability to do whatever it is they're doing, whether it's to bank you, to lend to you, to provide you with a mortgage loan. Those are enabled by your bank's relationship with the Federal Home Loan bank system. I would go as far as saying without the Federal Home Loan bank system, we would probably not have as many community banks and credit unions and smaller financial institutions that could maintain themselves and continue to sustain. It's not obscure and it's not small. It's very consequential that the Federal Home Loan Banks are there to provide that needed liquidity and ensure that we have the financial stability we need and that community banks and others can thrive.

[Kai Ryssdal]

All right. Elena McCargo is president and CEO of the Federal Home Loan bank of San Francisco. Thank you so much.

[Henry Epp]

Thank you so much for having me.

[Kai Ryssdal]

On the show. Yesterday we heard from a tea producer in Asheville, North Carolina, who's figuring out how to rebuild in the aftermath of Hurricane Helene. Lots of businesses in Asheville are trying to do the same. It's a mountain community of about 95,000 people, and tourism is a big part of the economy that brings in nearly $3 billion per year. But when flooding destroyed huge parts of Asheville, including its water system, tourism ground to a halt. Laura Hackett from Blue Ridge Public Radio looks at how locals are navigating, when and how to invite tourists back.

[Elena McCargo]

Asheville is a mountain community and can be an expensive place to live. So, like a lot of residents, Rene Bouchard has a couple jobs. One teaching yoga, the other cleaning short term rentals. When Hurricane Helene hit, both jobs were affected.

[Laura Hackett]

My yoga studio that I was teaching.

[Elena McCargo]

At completely flooded, so now she's relying on her cleaning job for income. But most visitors have canceled fall bookings, meaning much of Bouchard's income dried up. She used to clean one or two houses every day and get around $900 a week. Now she's lucky if she gets a third of that.

[Laura Hackett]

I've just today, you know, showed up to a property and it wasn't used, so the guests didn't come. And it's just like, that's me losing money that I thought I was going to get.

[Elena McCargo]

Still, Bouchard says she gets why visitors are avoiding Asheville Right now.

[Laura Hackett]

The water is probably going to be some sort of yellow to sweet tea color. It's not going to be clear when you wash your hands. It's going to smell like chlorine and chemicals.

[Elena McCargo]

There's no timeline for when clean drinking water will return. The reservoir is still a muddy mess, and in town, it still feels like a disaster zone. The restaurants that are open are serving reduced menus on paper plates, and residents are still visiting aid sites for basic necessities like drinking water, clean showers, and laundry.

[Laura Hackett]

We're left with all this wreckage and trying to navigate how to rebuild or whether to rebuild or relocate.

[Elena McCargo]

That's Kayla Clark, a comedian and mental health professional. She's been holding weekly support groups for Asheville residents to grieve and process.

[Laura Hackett]

I've heard from a lot of people that they feel kind of like they're moving through their day in a fog.

[Elena McCargo]

And in this mental state, it's hard to welcome and serve tourists.

[Laura Hackett]

There are people that come in and they say, whoa, there was a storm here. Which is really jarring because it feels like, I mean, it was just so intense and huge for all of us.

[Elena McCargo]

But what's also tough right now is paying basic bills. On a Saturday morning, Jeffrey Burroughs sits in his tiny jewelry shop in Asheville's River Arts district with an iced coffee. Luckily, his business didn't get flooded during Helene.

[Henry Epp]

We're on the higher side of the tracks, further from the river, and there's only about you know currently 20% of the district remaining, but it's open.

[Elena McCargo]

Pre Helene, his store and the whole neighborhood will be filled with shoppers.

[Henry Epp]

And this is a Saturday. There would be so many people out here walking around and it's just leaves on the ground.

[Elena McCargo]

And normally he would sell at least a few custom bracelets, but so far today, zero sales. Burrow says he's still processing the disaster himself and it feels awkward to reopen the shop.

[Henry Epp]

Well, I have to open. I don't know for whom, but I have to open because now I've got to pay rent.

[Elena McCargo]

And he says Asheville needs visitors right now.

[Henry Epp]

Regardless of how I feel about tourism, the reality is our city is built in defined by the income we generate from tourism. That's our current situation.

[Elena McCargo]

He understands that residents are torn, but they do agree on one if tourists do come, they should bring patience, plenty of drinking water and plan to spend some money in Asheville. I'm Laura Hackett from Marketplace.

[Kai Ryssdal]

This final note on the way out today in news that sounds like something you'd read in the Onion. The winner in a bankruptcy auction for Alex Jones's infowars media company was the Onion. Jones, a far right conspiracy theorist, was forced to surrender infowars and related assets after a billion dollar judgment against him for promoting lies about the Sandy Hook School Massacre. With backing from some Sandy Hook families, the Onion has plans to relaunch the platform in January as a parody site with ads and other content from the nonprofit Everytown for Gun Safety. John Buckley, John Gordon, Noya Carr, Diantha Parker, Amanda Peacher and Stephanie Seek are the Marketplace editing staff. Amir Bibawi is the managing editor and I'm Amy Scott. We'll be back tomorrow. This is apm.

[Amy Scott]

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