Slate Money – "Finders Keepers" (August 22, 2020)

Overview

In the "Finders Keepers" episode, hosts Felix Salmon (Axios), Emily Peck (HuffPost), and Anna Szymanski (Breaking Views) offer their weekly analysis of the top business and finance news stories. They dive deeply into the U.S. Postal Service's troubles, the rapid shift toward online shopping, and a wild financial mishap involving Revlon and Citigroup. The episode is marked by the hosts' signature blend of wit, skepticism, and sharp insight.

1. The U.S. Postal Service Crisis

Background and Current Controversy

• Felix Introduces the Topic: The USPS is facing existential threats, heightened public scrutiny, and financial losses amidst the pandemic and the run-up to the 2020 election. (01:00)
• Emily Provides Context:
  • Louis DeJoy, the new Postmaster General and Trump donor, has instituted cost-cutting measures (e.g., reduced overtime, removal of sorting machines).
  • These changes feed into Democrats’ fears of a deliberate attempt to undermine mail-in voting, though Emily says the real issues are longer-term.
  • "The post office has been going through a long period of transformation ever since the internet became a thing…So it’s got declining volumes." (02:15 – Emily)
• Felix’s Perspective:
  • The USPS’s problems stem from decades-old structural issues—namely, its funding model and required pre-funding of retiree benefits.
  • No immediate cash crunch exists; if people vote by mail early, "You should be fine." (03:47 – Felix)
  • Both political parties have politicized the issue, especially Trump, but fears of a master “conspiracy” are overstated.

The Role of USPS in American Society

• Anna’s View:
  • The USPS isn’t really a business; it provides essential services not profitable for private companies. "There’s a reason that FedEx isn’t going to want to go to that random guy way the F out there." (04:54 – Anna)
• Felix’s Key Stat:
  • "The US Post Office delivers 50% of all of the mail in the world. It’s like, no one else sends remotely as much mail as Americans do." (06:08 – Felix)
  • USPS as a natural monopoly and an exception for having been largely self-funding.

Funding, Politics, and Cultural Importance

• Emily on Public Support:
  • USPS is widely liked: "It’s like 90% of Americans like the post office…Literally no other part of the government has that kind of numbers. It’s really wild." (07:45)
  • USPS as a vital employer, especially in marginalized communities—over a quarter of employees are African American.
• Anna and Felix on Privatization, Unions, and Funding:
  • Skepticism about privatization—it would not necessarily reduce inefficiency.
  • The union’s focus on benefits created long-term fiscal liability.
  • "You can’t fix this problem with a silver bullet like privatization or a one-off appropriation." (11:50 – Felix)

Postal Banking as a Solution?

• Emily: Advocates for USPS innovation and postal banking to ensure survival and relevance.
• Felix: Notes the banking lobby’s strong opposition, seeing it as validation of the idea’s disruptive potential. (13:37)
• Anna: Skeptical—suggests a deeper discussion is warranted.

Notable Quotes:

• "[The] post office is a business faced a hit with the pandemic…Postal workers have gotten sick at the same time they cut overtime. So there have been slowdowns…which sort of feeds the conspiracy theory." (02:50 – Emily)
• "It is very rare for the post office to be particularly profitable in any country in the world." (06:00 – Felix)
• "It’s a service…It is the one institution left that seems to connect everyone in the country." (07:50 – Emily)

2. The Pandemic, Online Shopping, and Retail’s Future

COVID-19 as an Accelerator

• Anna: COVID has dramatically accelerated the pre-existing trend from brick-and-mortar to online retail. "It was obviously having issues before then, especially large department stores…those are a lot of the names we’ve seen go into bankruptcy." (15:06)
• Felix:
  • The shift means commercial landlords, not retailers, lose most—commercial rents will drop.
  • "No one is crying for them." (15:55)

What Will Stick? Consumer Behavior After COVID

• Emily: Wonders whether the online shopping boom will hold after the pandemic. "Some retailers…the brick and mortars like Home Depot and Lowe’s…what’s going to happen there is a big question." (16:50)
• Anna: Thinks much of this shift will be permanent as people realize the convenience.
• Felix’s Counterpoint:
  • Last-mile delivery costs traditionally borne by consumers (driving to the store) may harm business models if shifted to retailers.
  • Opening physical stores can actually be a cheaper marketing channel than digital advertising.
  • "Discovery on Amazon is terrible. Buying clothes online is terrible. Buying shoes online is terrible..." (23:37 – Felix)
• Emily: Online commerce isn't necessarily more efficient; platforms like Amazon, Etsy, and Shopify now collect the "rent" that used to go to landlords. (21:24)

Impacts on Labor

• Emily: Concerns about the disappearance of in-person retail jobs, labor conditions in warehouses, and the loss of human connection.
• Anna: "I do feel like…you're probably going to have a shift from the people who worked in stores to people working in warehouses." (22:45)

The Social and Cultural Role of Shopping

• "Shopping is our church in America." (24:43 – Emily)
• Felix and Emily agree: in-person shopping holds cultural value, especially in fashion and luxury goods.

3. The Wild Citigroup/Revlon Lawsuit: 'Finders Keepers'

The Case

• Felix Recaps:
  • Revlon, debt-laden after a major acquisition, owes creditors millions through syndicated loans now trading at ~30 cents on the dollar.
  • Citigroup, as Revlon's agent, mistakenly wires $900 million to these creditors—far more than intended.
  • "That is a fat finger error…" (26:21 – Felix)

What Happened Next

• Anna: Some creditors, notably hedge fund Brigade, refuse to return the money, claiming "finders keepers" and initiating legal combat. "It is the investment strategy known as finders keepers." (28:23 – Anna)
• Emily: Sees this as evidence that "the finance industry lives in a completely different moral universe than everyone else." (28:26)
• Felix: This tough-guy reputation can be seen as a selling point in distressed finance, attracting institutional investors who value aggressive tactics. "There’s a correlation between…most dickish hedge funds and which ones make the most money." (30:07 – Felix)
• Anna: Pushes back, noting institutional clients (like state pension funds) often shun the worst publicity, but may still prioritize returns.

Broader Lessons

• Felix: Such stories show why irreversible transactions (e.g., Bitcoin/blockchain) are risky—"People make mistakes all the time, and transactions need to be able to be reversed." (33:25)
• Anna: "As long as any human being is involved, you will…need to be able to undo them." (33:52)

Notable Quotes:

• "To me, it just shows that the finance industry lives in a completely different moral universe than everyone else." (28:26 – Emily)
• "It's the investment strategy known as finders keepers." (28:23 – Anna)

4. Numbers Round & Final Moral Thought Experiments (34:11–41:58)

COVID, College Football, Unemployment, and Gender Gaps

• Anna’s Number: 13.6% – positivity rate for COVID tests at UNC after campus reopens, highlighting chaos in college football’s 2020 season. (34:15)
• Felix’s Number: 4.4 million – "phantom" unemployment claimants, caused by statistical quirks in seasonal adjustment. (36:50)
• Emily’s Number: 31% – proportion of women ages 25–44 out of work due to COVID, compared with 11% of men, underscoring the pandemic's disproportionate impact on women and caregivers. (39:36)

5. Memorable Quotes & Moments

• "Like, voting is the most visible sign of big government. It is everywhere." (08:43 – Felix)
• "If every single post office in the country automatically became a bank branch, that would be the biggest bank in the country overnight." (13:37 – Felix)
• "There is nowhere in America that you can't find the post office." (08:43 – Felix)
• "Shopping is our church. So let's talk about the other kind of store that people really like to visit in person, which is cosmetics." (24:44 – Felix)

6. Moral Thought Experiment (Last Segment, 41:55+)

Felix poses a fascinating game theory question: Given a six-sided die, how much would you stake to double your money each roll (with a 5/6 chance) before hitting a six wipes you out? He asks listeners to write in with their answers—framing a deeper discussion about risk, probability, and psychology in finance.

Key Timestamps

• USPS Crisis & Politics: 01:00 – 13:30
• Online Shopping/Retail Shift: 13:30 – 24:45
• Revlon/Citigroup Lawsuit: 24:45 – 33:52
• Numbers Round & Final Thoughts: 34:11 – 41:58
• Risk Thought Experiment: 41:58 – end

Tone & Style

The hosts maintain a conversational, irreverent, and jargon-light tone, blending skepticism with humor while making complex subjects approachable.

For listeners seeking a nuanced yet lively take on business news, this episode delivers sharp context, memorable debates, and a distinctly human lens on financial institutions, retail shifts, and the oddities of the modern economy.