Slate Money – "Literally Making Money" (June 22, 2019)

Episode Overview

In this episode of Slate Money, host Felix Salmon is joined by Emily Peck and Anna Szymanski to dissect the week's biggest business and finance headlines. The trio dives into the launch and controversy of Facebook’s cryptocurrency Libra, America’s resistance to upzoning and land optimization in housing, and the overheated valuations of recent IPOs like Slack and Beyond Meat. With characteristic wit and informed skepticism, the discussion unpacks the implications of these stories for markets, communities, and personal trust in institutions.

1. Facebook’s Libra Cryptocurrency: Ambition, Doubts & Controversy

Main Segment: [01:35–14:26]

Key Discussion Points

• Why Take Libra Seriously?

  • Unlike earlier cryptocurrencies, Libra launched with instant credibility and big-name financial backers (PayPal, Uber, Mastercard, etc).
  • Felix notes: "It's the first time that someone has launched a cryptocurrency and people have taken it seriously from day one.” [01:44, Felix]

• What Makes Libra Different?

  • Aims for global reach, especially appealing to the underbanked with cell phones but not bank accounts.
  • Claimed advantage: stability, based on a basket of global currencies (though details are opaque).

• Use Cases & Barriers

  • Debate over whether global remittances or seamless e-commerce will drive demand.
  • Anna highlights hurdles in the US: “Given the huge range of different payment devices that Americans are faced with, is there any realistic chance that it will take off in America?” [09:16, Felix]
  • Reminder that credit cards offer consumer protections and ubiquity Libra can’t match today.

• Regulation & Distrust

  • Hosts discuss how regulators and politicians are already wary, especially given Facebook’s poor reputation on privacy and trust.
  • Felix: “If you want to ... create a brand new currency with approval of domestic regulators... the last company you want to do to try and create that is Facebook, because it already has so much distrust built around it.” [07:04, Felix]

• Is Privatizing Payments the Way Forward?

  • Felix pushes back: the real innovation in payments has come when central banks, not corporations, create seamless systems (Sweden, India, UK).
  • Anna points out US regulatory balkanization may force innovation from the private sector.

Notable Quotes

• Emily: "It's just so undemocratic... You're going to put a bunch of private companies who really can't be trusted in charge of a whole new currency, aiming to take over the world with it. It just seems so..." [10:41]
• Felix: “If something does go horribly wrong with Libra... Facebook has set this up so that they aren't accountable because they're going to turn around and say, oh, no, we only have 1% voting power and we don't actually control Libra.” [11:11]
• Felix: “Currency is based on trust. Like, the dollar isn't anything but what we say it is. Who trusts Facebook?” [11:53]

2. Upzoning & America's Housing Crisis

Segment: [16:02–27:53]

Key Discussion Points

• Single-Family Zoning as a Driver of Affordability Crisis

  • Over 70% of residential land in the US is zoned for single-family homes ([16:50, Emily]), limiting diversity and driving prices higher in in-demand cities.
  • Example: 94% of housing-zoned land in San Jose allows only single family homes.

• Why the Resistance to Upzoning?

  • Anna: History shows zoning is about exclusion—often racial and economic—as much as property values: “...the history of zoning laws in this country are often much more about keeping other people out than they are about anything else.” [17:41]
  • Emotional attachment: Homeowners fear “ruining the tenor” of neighborhoods ([20:54, Emily]) over minor changes like a new 7-Eleven.

• Does Upzoning Lower Values?

  • Unproven; early experiments like Minneapolis have yet to yield data ([20:00, Emily]).
  • Felix: “I genuinely don't believe the property values will go down if this happens. I'm almost positive that they will go up.” [20:24]

• NIMBYism, Race, and Political Hypocrisy

  • Emily notes upzoning failures in progressive California; purported liberals oppose change in their own neighborhoods ([23:51, Emily]).
  • Parking concerns and strain on transit are frequently-expressed, sometimes specious, objections.

• Limits of Upzoning

  • Anna: “It's often written about…like this panacea that it's going to solve everything. Well, no...” [25:04]
  • Adding supply helps, but without other policies, may worsen gentrification or yield only luxury housing.

• Climate

  • Cities as essential for sustainability: “We can't afford more sprawl... Cities are by far the most energy efficient way to live.” [27:20, Emily & Felix]

Notable Quotes

• Felix: “It's always the latest, newest person to come in, the person who wants to sort of make the newest change, who gets the brunt of the resentment. But it never lasts that long.” [22:31]
• Anna: “Very often when people say [property values], what they really mean is people ‘not like us,’ which very, very often has to do with race.” [23:29]
• Emily: “There are all these liberals and progressives allegedly in California, but when it comes down to diversify your neighborhood... they're basically like the equivalent of build that wall, but on the left.” [23:51]

3. Unicorn Valuations: Beyond Meat, Slack, and the IPO Frenzy

Segment: [27:55–36:55]

Key Discussion Points

• From Billion-Dollar Jokes to Reality

  • Once, the idea of $1B unicorns was laughable; today, Uber is worth $75B, Slack $23B, Beyond Meat approximately $9B ([28:53, Felix]).

• Beyond Meat: Is it for Real?

  • Anna: “...this is a company that has a large addressable market. They are moving toward profitability... What you're seeing are just a lot of investors paying for growth.” [28:53]
  • The product is better than previous veggie burgers; Beyond’s innovation is in taste/texture and supermarket placement—right next to meat.

• The Flexitarian Market

  • Not just vegans/vegetarians: “They're trying to market towards people who are not necessarily vegans and vegetarians, but people who are like flexitarians.” [30:19, Anna]
  • Emily: “The veggie burgers are really hard to find. They're in like the frozen vegetable aisle ... Beyond Meat sells its ‘meat’ next to the actual meat. So there's more sort of a crossover effect.” [31:07]

• Cost Barrier

  • Price is a sticking point for fast food and grocery shoppers: “You have a significant number of who are going to pay that additional money, it seems kind of unlikely.” [32:59, Anna]
  • Anna’s treat: A Beyond Burger delivered for $33. [32:18]

• Subsidies, Environment & Meat Pricing

  • Felix: “Part of the reason why burgers are so cheap is just because beef is so heavily subsidized. It's basically just corn on legs.” [33:34]
  • Anna calls out hypocrisy: “So many Americans’ food choices are based on government policies and they have been for... as long as we've essentially had a government.” [34:34]

• Short Squeeze Drama

  • Nearly half the free float of Beyond Meat stock is being shorted; this may contribute to price spikes if shorts are forced to cover losses ([35:05–36:55]).

Notable Quotes

• Anna on Boca Burgers: “They're really, really bad... something not good is what they're made of. I have very bad college memories of too many Boca burgers.” [30:20]
• Felix: “...stocks always move in the direction of causing the greatest pain, basically.” [35:57]

4. Numbers Round

Segment: [36:55–41:42]

Noteworthy Numbers

• Three Billionaires: “Three is the number of individuals on planet Earth who are worth more than $100 billion.” (Bezos, Gates, Bernard Arnault) [36:55, Felix]
• $50.8 Million: US Women’s Soccer ticket revenue, surpassing men’s, yet women are paid less ([37:58, Anna]).
• $2.743 Billion: Worldwide box office for Avengers: Endgame, still $45m short of Avatar’s record ([40:17, Emily]).

Memorable Moments & Tone

• Humor & Banter:

  • Playful teasing about Emily’s suburban life: “You have, like, a white picket fence and a dog and 2.2 kids.” [16:02, Felix]
  • Felix’s “train carriage” analogy for NIMBYism: “You walk into an empty carriage and go, oh, I have this carriage to myself... and then someone would walk in... you’d mildly resent them...” [21:23]
  • Sly pop culture nods: The $5 shake from Pulp Fiction as analogy for expensive Beyond Meat burgers [32:37].

• Candid Skepticism:

  • Hosts repeatedly call out hype (“the marketing is genius, but the price isn’t right”), oversold “panaceas,” and utopian tech and real estate promises.

• Moments of Frustration:

  • On Libra: “Currency is based on trust... Who trusts Facebook?” [11:53]
  • On upzoning: “There are all these liberals … but when it comes down to diversify your neighborhood … they’re basically like the equivalent of build that wall...” [23:51]

Important Timestamps

| Time | Topic/Quote | |----------|--------------------------------------------------------------------------------------| | 01:44 | “It's the first time … people have taken [a cryptocurrency] seriously from day one.” | | 06:53 | Politician pushback against Facebook's Libra | | 10:41 | Emily on the undemocratic nature of privatized currency | | 16:50 | 70%+ of U.S. residential land single-family zoned | | 20:24 | Felix: Property values will probably go up with upzoning | | 23:51 | California “liberal” NIMBYism called out by Emily | | 28:53 | Beyond Meat et al. and the new unicorn reality | | 32:18 | Anna's $33 Beyond Meat burger anecdote | | 35:05 | Beyond Meat short interest and the mechanics | | 36:55 | Numbers round: $100 billion club, women's soccer, Avengers box office |

Conclusion

This episode of Slate Money delivers sharp, conversational analysis on several fronts: the cautious excitement and deep skepticism over Libra and the privatization of money, the emotional and historical currents behind America’s zoning laws, and the speculative fever gripping “unicorn” IPOs like Beyond Meat. Through it all, Felix, Emily, and Anna balance economic insight with relatable anecdotes, forthright skepticism, and an appreciation for the human dynamics behind markets and policy.