Old Bob, New Bob

Summary

Slate Money – "Old Bob, New Bob"

Date: February 29, 2020
Hosts: Felix Salmon (Axios), Anna Szymanski (Breaking Views), Emily Peck (HuffPost)

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Episode Overview

This episode of Slate Money offers a wide-ranging, insightful, and lively discussion of the week’s most important stories in business and finance. The hosts tackle the sharp decline in the stock market (colloquially: “stonks went down”), the economic and political implications of the coronavirus outbreak, a deep dive into Disney’s CEO succession intrigue (“Old Bob, New Bob”), and the peculiar world of French Ponzi schemes. The discussion flows naturally, mixing sharp analysis with humor and a conversational tone.

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Key Discussion Points & Insights

1. Stock Market Turmoil: "Stonks Went Down"

• [01:19 – 04:03]

  • The panel kicks off by noting the extreme focus on headline alerts when the stock market drops, particularly sudden drops as opposed to slow declines or rises.
  • Emily Peck highlights how "A sudden drop is much more scary than a gradual decline. Like, walking down a little hill, you know, is okay, but, you know, falling off a cliff is more troubling, I suppose." (02:50 – Emily)
  • Felix questions why investors and media become much more alarmed by abrupt market movements, despite 10 years of steady increases getting little attention.

• [05:29 – 09:20]

  • Anna suggests the current correction is a mix of rational response—due to potential coronavirus impacts on the supply chain and real economy—and panic.
  • The group notes that, despite the latest fall, the stock market remains objectively high by historical standards.
  • Discussion on “V-shaped” recoveries (down then up quickly) – previous viral scares showed rebounds, but the timeframe and severity remain uncertain for COVID-19.

2. Coronavirus Crisis: Economic, Social, and Political Impact

• [03:00 – 12:37]
  • Hosts comment on the blending of economic and public health fears in public consciousness, with President Trump seeming to worry more about markets than citizens' health.
  • Emily critiques the appointment of Treasury Secretary Mnuchin and economic advisor Larry Kudlow to the coronavirus task force:
    • "Noted health expert Larry Kudlow." (05:01 – Emily, sarcastically)
  • Detailed discussion of how the U.S. healthcare system may worsen the crisis:
    • Lack of sick leave and high deductibles make people less likely to seek medical care or stay home, raising contagion risks.
    • "Yeah, the health care system in the United States is almost designed to exacerbate this kind of thing." (11:47 – Felix)
  • The CDC warnings marked a turning point for market sentiment, particularly as it hit home for U.S. investors and businesses.

3. Disney’s Leadership Shuffle: “Old Bob, New Bob”

• [12:40 – 22:55]
  • Disney’s CEO Bob Iger steps down (or "up" to Executive Chairman), replaced by Bob Chapek.
  • The group finds the “Executive Chairman” title inherently contradictory:
    • "Executive Chairman is an oxymoron...It’s basically a way of CEOs to not be CEO anymore but still be in charge, which makes no sense." (13:10 – Felix)
  • Anna calls the structure “bad corporate governance,” and Emily notes the gender assumptions in the term “Chairman.”
  • Bob Iger’s remarkable record—transforming Disney with acquisitions (Pixar, Marvel, Lucasfilm, Fox) and turning it into an omnichannel IP juggernaut. Felix observes:
    • "I cannot think of any other company that has been so unbelievably good at M&A." (16:40 – Felix)
  • Debate on whether a creative or operational leader is needed now that the complex empire is established, paralleling changes seen at HBO.
  • Ambiguity over Iger’s new “head of creative” title and how Disney’s creative strategy may not be as innovative as it would seem:
    • "The thing about all of these IP franchises, whether it's Star Wars or Pixar or Marvel, you know, Avengers and all of that, is they're not that creative." (21:23 – Felix)
  • Caution that Disney’s two biggest bets—21st Century Fox acquisition and Disney+ streaming—are still unproven and need careful stewardship.

4. French Ponzi Scheme: The Case of Gerard Léroutier and Astrophil

• [23:52 – 29:33]
  • Felix brings up David Segal’s New York Times story on Gerard Léroutier, who ran a Ponzi scheme involving rare books and manuscripts—a "deliciously French" twist.
  • Rare books are a niche, illiquid asset class. Anna summarizes:
    • "It's just not the type of alternative asset that is going to appreciate in value enough to securitize it." (28:11 – Anna)
  • Léroutier promised his clients a safe, steady (but unsustainable) 9% return—close enough to Madoff’s 10% to seem credible but moderate.
  • The twist: Léroutier won €2 million in the lottery, but even that couldn't save the scheme.
    • "It's just so unreal." (28:47 – Emily)
  • Classic Ponzi dynamics: when the scam collapses, investors blame authorities for intervening rather than the fraudster.
    • "When Ponzi's go down, the investors in the Ponzi blame the government and not the Ponzi. This is…absolutely standard." (29:33 – Felix)
  • Comparisons drawn between Ponzi dynamics and speculative investments in markets and companies.

5. Numbers Round

• [31:21 – 35:54]
  • Anna: $330,000 – Steven Seagal’s SEC fine for promoting a shady cryptocurrency (“Bitcoin2Gen”).
  • Emily: 29 – Leap Year Day and a hilarious "Ask a Manager" story about an employee with a Feb 29 birthday only getting time off “every four years”.
  • Felix: 25 – Section 25 of the German Nationality Act; his personal tale of inadvertently losing German citizenship by becoming a U.S. citizen due to bureaucratic fine print.

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Notable Quotes & Memorable Moments

• On sudden market drops:
  • "A sudden drop is much more scary than a gradual decline..." (02:50 – Emily)
• On U.S. coronavirus response:
  • "Noted health expert Larry Kudlow." (05:01 – Emily, sarcastically)
• On the Disney exec shuffle:
  • "Executive Chairman is an oxymoron...It's basically a way of CEOs to not be CEO anymore but still be in charge, which makes no sense." (13:10 – Felix)
  • "No one does their best work with like the former CEO breathing down their neck and second guessing everything they do." (14:55 – Felix)
• On Ponzi schemes:
  • "When Ponzi's go down, the investors in the Ponzi blame the government and not the Ponzi. This is…absolutely standard." (29:33 – Felix)
• On losing German citizenship via bureaucracy:
  • "The thing I did was fail to read section 25 of the German Nationality act, and now I have lost my German nationality." (35:27 – Felix, personal and poignant)

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Important Timestamps

• 01:19 – Market headlines and panic psychology
• 03:00 – Intersection of coronavirus fears and market moves
• 05:01 – Critique of Trump’s coronavirus task force
• 10:28 – Real-world effects of coronavirus in New York’s Chinatown
• 12:50 – Disney CEO succession and the “two Bobs” conundrum
• 16:40 – Disney’s M&A triumphs
• 21:23 – Creativity (or lack thereof) in Disney’s business model
• 23:52 – French Ponzi scheme breakdown
• 28:47 – The lottery twist in Léroutier’s Ponzi
• 31:21 – Numbers round, including Steven Seagal’s crypto fine
• 35:27 – Felix’s German citizenship story

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Tone & Style

The hosts maintain a witty, sharp, and conversational tone. They mix levity (“Old Bob, New Bob”) and dry humor with thoughtful, well-informed discussion, delivering both entertaining anecdotes and substantive analysis. The language is direct, clear, and often self-deprecating.

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Summary

"Old Bob, New Bob" captures a turbulent, headline-filled week in finance with Slate Money’s trademark blend of sharp analysis and humor. The panel dissects the psychology behind stock market panic, the U.S.’s complicated economic vulnerabilities in a pandemic, the confusing (and perhaps troubling) leadership shuffle at Disney, and the whimsical, yet ultimately predictable, downfall of a French literary Ponzi scheme. For those seeking insight into the intersection of markets, corporate shuffles, and financial absurdities, this episode delivers a both breezy and substantive listening experience.

Transcript

[A]

Hello and welcome to the old Bob new Bob edition of Slate Money, your guide to the business and finance news of the week. I'm Felix Salmon of Axios. I'm joined by Anna Shymansky of Breaking Views.

[B]

Hello.

[A]

I'm joined by Emily Peck of HuffPost.

[C]

Hello.

[A]

And yes, we're going to talk about Stonks. Stonks went down. We're going to talk a little bit about Stonks went down. Because we have to, because Stonks went down. But we're not going to talk too much about Stonks went down. We're going to talk a bit about coronavirus. We're going to talk a bit about Bob's. Bob's. We're going to talk a lot about Bobs. Actually, there's two Bobs now running Disney and we're going to talk a lot about Disney and what that means and why they need two Bobs to run it. And most excitingly, to be honest, we're going to talk about French Ponzis because there's the most French Ponzi scheme you've ever heard of and it's glorious. And we're going to dissect that. We also have a Slate plus about the four day work week. All of that coming up on Slate Money. So that was a fun week.

[C]

Wild.

[A]

Wild. There were so many headlines about the stock market. Apparently, in case you've been under a rock, it went down.

[B]

It does go down.

[C]

I got some alerts about that on my phone.

[A]

I. I've been in long meta discussions with a bunch of people at Axios about when and why and whether we should alert stock market movements and send out alerts and that kind of thing. Because on the one hand, everyone seems to do it. It seems to be a thing that people do. And then on the other hand, that's a little bit of like, why are we doing it?

[B]

Right.

[A]

Yeah.

[B]

I have a rule.

[A]

What's your rule?

[B]

It should only be based on percentage, not like just number of points.

[A]

So we, yeah, so we have this 3% rule now that if the stock market moves 3%, we should move it. Alert it. But, like, one of the weird things is that people alert it like six hours after it falls 3%, like when the market closes. Because apparently the close is important for some reason. But the more interesting question is why do people get much more exercised about fast drops and slow drops and about fast drops and slow rises? Because we've had like an incredibly strong and powerful slow rise for like 10 years and it hasn't been generating These kind of headlines.

[B]

Well, of course, anything that's out of the ordinary, that's based on uncertainty, I mean, this is panic. So, of course, people just like, kind of the natural human reaction is to feel like this is far scarier than just like, oh, things are continuing to keep getting slightly better.

[C]

Yeah. A sudden drop is much more scary than a gradual decline. Like, walking down a little hill, you know, is okay, but, you know, falling off a cliff is more troubling, I suppose.

[A]

And I think. I think one of the things that's going on this week is that the panic associated with the coronavirus has become intermingled with the stock market. And suddenly they seem to be pretty much the same thing in the mind of Donald Trump.

[C]

Yeah. I think his reaction has been interesting that the President of the United States seems less concerned with the impending public health crisis, which the CDC said this week, like, expect coronavirus to come here, and we'll have to deal with it and get ready to deal with it. And instead of the president saying, we're doing everything we can to. To deal with it, we're mustering all our resources. Da, da, da. He's trying to reassure people that the stock market's going to be okay. I think he's trying to maybe even reassure himself that the stock market's okay. And Anna and I were saying before we came in, like, Americans are concerned with not getting sick and not dying.

[A]

Not dying would be good.

[C]

And getting an alert on my phone about the stock market, it just adds to this feeling of chaos and panic and doesn't actually serve a purpose to, like, a normal.

[A]

One of the things that seems to be happening in the mind of Donald Trump is that this is like an attack on his residency.

[B]

Yes.

[A]

And it's like. And he should belittle it and deny it and do all of the things that he does to, like, blame it on the Democrats, individuals who attack his residency. And you can't just go around belittling and denying something like coronavirus. That doesn't really get you very far.

[B]

Although I think he has tried to somewhat blame it on the Democrats of, like, that they are, like, creating all this fur as a way to kind of bring him down.

[C]

And I think it's really sad and telling that he created a coronavirus task force. And who did they put on the coronavirus task force, but Steve Mnuchin and Larry Kudlow. As if, what are they gonna do? How are they gonna help me?

[B]

Noted health expert Larry Kudlow.

[C]

It's just. It doesn't give you much Confidence.

[A]

Little known fact. Larry Kudlow is a epidemiologist, but no, it's with an expert in infectious diseases.

[B]

But it's fitting. It's fitting in the sense because as we're just saying, he doesn't really care about the effects of the virus in terms of how it affects people's health. He cares about not even how it affects the economy, but how it affects markets, which I think is interesting.

[A]

So, big question which we should be asking is, is this stock market fall, belated though? It is, because coronavirus has been a big story for like all year. Pretty much, but certainly all month. And the stock market fall is just like a week old. But is this a rational response to supply lines being cut, the people staying at home, all of the potential effects that a major pandemic could have on the global economy? Or. Or does it feel a little bit jittery and panicky?

[B]

It's probably the greatest answer, but a little bit of both. Like, I think that because this is going on for so long and because recently we've been seeing this spike in cases outside of China, there is now concern that this could actually, you know, last into potentially the next quarter and actually be disrupting supply chains, actually have an impact on the real economy, not just markets.

[A]

It could affect the supply of Diet Coke.

[B]

Yes. But also even, like medication.

[C]

Fox really overblue that. Did you read that article? There was an article online on Fox and it said Coca Cola warns of Diet Coke shortage because of coronavirus. Then you read the piece and it's like, there might be a shortage of some of the various chemicals used to produce Diet Coke, but Coke says it's probably gonna be fine. So if that's what we're worried about, it doesn't seem like it's much to worry about. On the other hand, yeah, there are.

[A]

Bigger things to worry about.

[B]

Yeah, I mean, I think that, like, because it's also, you know, China really is in a lot of ways the linchpin of the economy. Like what they buy from other countries. If you're looking at a lot of EM economies and how they're affected by China, like, this is a big deal. And it comes after a period where we were already having some China weakness. So I think that part of this is actually a little bit of a rational comedown from what I would call a little bit of irrational exuberance.

[A]

And to be very clear about this, stocks are down, but they are still at objectively high levels. The stock market is still strong and pricing in pretty healthy economic activity in the future. Because ultimately stock prices are basically a bet on what is going to happen in the future.

[B]

Yeah. And also just maybe a tad bit of a wonky thing, but like also last year's, you know, almost 30% return was mostly from multiple expansion. And that is basically you're bringing returns from the future into the present. Right, right. So if you're looking at what we can expect now, you're not going to expect the market to go up that much.

[A]

And just to finish that thought thought, if we just go back down to where we were, say this time last year, that's a long way to fall even from where we were.

[B]

Yes, that would be a big way to fall. Yeah.

[C]

I have a couple of questions and thoughts. My first thought is if the market's truly being affected by coronavirus and the economy is truly being affected by coronavirus, isn't that just a short term problem? Because eventually people get sick and they get better and supply supply chains and lines resume and hotels fill back up and you know, people go back outside again, conferences, you know, happen.

[A]

This assumes that. Well, there are two different parts to that question. The first one is that, you know, are you assuming that coronavirus will be a temporary thing which comes and then goes. And I think that's the base case scenario that basically these kind of flu like viruses tend to go away in the summer, but if it doesn't go away in the summer and then it resurges in the fall, and it looks like it's in so many countries now and so many continents now and so many people now that it might, well, it probably will come back in some way in the fall and then next winter and then it'll become a permanent thing and that could be really bad. And then the second part of it is, yes, you know, previous scares like SARS and whatnot have seen that kind of what they call V shaped recovery. It goes down and it goes back up again. But that's no guarantee that we'd have the same kind of V shaped recovery this time.

[B]

Right. And the longer this goes on, the less likely it is that we're gonna have just this kind of massive V shaped recovery. And also when you're talking about services that people aren't doing, it's not like I can see four movies, you know, because I didn't see the movie this time. You know what I mean?

[C]

You can never recover those losses. You can never.

[A]

I mean, they're still one off losses, but you know, I mean, travel is interesting. Travel has been increasing steadily again like this is one of those things where we're at levels which we have never seen before, especially travel from has been hitting unbelievable records which were unthinkable just a few years ago. Do we assume that Chinese people are going to start traveling again? To the degree that they were, you know, before this virus, it is possible. But then it is also possible that they weren't.

[C]

I think a lot of this might hinge on what happens in the US because it seems like what the turning point was for markets this week really was the CDC warning, making people in the US Be like, oh, my God. And I think if it hits here and we have the same, you know, the hotels closing, people can't. Schools closing, whatever, all that stuff is gonna be a really bad sign for the economy and the markets.

[A]

I can tell you, as someone who lives in Chinatown, that I have my own tiny little mini local recession going on right now. The restaurants are super empty. There's a lot of genuine hardship. People are wondering how they're gonna make rent. You know, the merchants. There's, you know, this is a thing that exists on the ground not just in Hong Kong, but also in bits of New York City.

[C]

And then my thing, I'm gonna write a piece, I think, today that you guys can look for, that listeners can look for online, but really about how, like, Donald Trump says many crazy things, but he actually said one really good piece of advice this week in his press conference was like, if you're sick, stay home. But the problem in the US Is a lot of people can't just stay home. They don't have paid sick leave, and if they don't go to work, they don't get paid, or if they don't go to work enough times, they don't. They get fired. And then meanwhile, people should go to the doctor, presumably. But again, like, it's the beginning of the year, and a lot of people have these very high deductible health insurance plans where, you know, you have to spend like a thousand, two thousand more dollars out of your pocket before you get covered. And at the beginning of the year, all your deductibles have reset themselves. So a lot of people, especially now, won't go to the doctor unless it's, like, dire. So the potential for infection is higher here because of how lame we are about that.

[A]

Yeah, the health care system in the United States is almost designed to exacerbate this kind of thing. Yes, I was reading. You know, I think we've all seen the headlines now about, like, you know, someone goes in to get tested for coronavirus, it comes back negative and then they get like a fifteen hundred dollar bill and you're like, what? That's not the way that you treat a highly infectious disease.

[C]

Right. And when you had, I think it was Azar the, the HHS director who said if they find a vaccine, they, they get it up to market. And he was asked, like, will you make it affordable for people? He said no.

[B]

Well, no, he didn't.

[A]

He didn't.

[C]

He wouldn't want to mess with the market. He doesn't want to mess with the private markets. Like that. Like he should have said, absolutely, yes. Like, we will do all we can to keep Americans healthy. But like, that's not the way it works here. We don't do all we can to keep Americans healthy. It's crazy.

[A]

It's true that we didn't.

[C]

Old Bob, New Bob. Old Bob, New Bob, that's right, Felix. Two Bobs for the price of two Bobs.

[B]

Two Bobs for the price of millions and millions of dollars.

[A]

The old Bob was making $47 million a year and is still making $47 million a year. He didn't get a pay cut for his no longer being CEO.

[C]

And you're talking about Robert Iger, the CEO of Disney who just announced he was stepping down.

[A]

Well, stepping up, I think is probably a better word.

[B]

Stepping to the side, ascending.

[A]

We have talked on this show before about the bizarre weirdness that is the Executive Chairman job. And guess what? Bob Iger has become the latest bizarre, weird Executive Chairman. Just for those of us who have short memories, executive Chairman is an oxymoron. Basically, that executive means you're an executive, which means you report to the CEO. And chairman means you are the CEO's boss. So you are both working for the company and therefore for the CEO, while also the CEO is working for you. It's bizarrely circular. And it's basically a way of CEOs to not be CEO anymore but still be in charge, which makes no sense.

[B]

Yeah. And it's also just bad corporate governance.

[C]

Wait, but hang on. I've read an article. First of all, I just need to say it's annoying to me that the position is just chairman. Like, no one is even pretending that a woman has this job. Okay, Put that aside.

[A]

The people Jeff Corey called herself Executive Chairman. That was the job that she gave herself.

[C]

Yeah. And someone sent me on Twitter an article that was about, I think, Shapiro becoming the first female chairman of the sec, which, anyway, so. But beside that, the article made the case in The Journal. That executive chair is actually like a good thing for corporate governance because it, it allows someone with experience to sort of like mentor and guide a new CEO through.

[B]

Yeah, no, no, no, no, no, no, no.

[C]

Because everyone's saying that, like, oh, this isn't a big deal because Bob Iger will like essentially mentor and train the other. Bob. Bob. How do you say his name? Chapek. Chapek. In his new role. Although Chapek's been there for 27 years at Disney and like, no, no one.

[A]

No one does their best work with like the former CEO breathing down their neck and second guessing everything they do.

[B]

Right. I think both from a management's perspective, this makes no sense. It seems like a really bad idea. It's like when you try to have co CEO, it's like horrible idea. And it's also, it's bad from governance because the board is the one who's like voting on the CEO's pay package. They're not supposed to be like mentoring the CEO. It's a different job, it's a different role. They're supposed to be looking out for shareholders.

[A]

And Bob Iger, to be clear, is the most actively involved executive chairman I've ever seen. Because he's not just doing this kind of amorphous executive chairman job, which no one really knows what it means. He's actually given himself a real job on top of that, which is head of creative. And he's like, I'm going to be in charge of everything creative at Disney, which includes basically everything important. It's all of the movies, you know, all of the TV shows, all the fun stuff. And on some level those people who work. If you're like a film producer at Disney, who are you working for? Are you working for Chapek, who's the CEO of the company, or are you working for Iger, who's the head of creative? It's basically impossible to tell.

[B]

Yeah, I mean, I think Iger has done a very good job. I mean, I would think give him credit, he has done an exceptionally good job in this role. But I think this decision is not good. And I feel like it could actually hurt his life.

[C]

He really has done. I mean, he has done a remarkable job. When he started in 2005, Disney had two movie studios. Now it has eight movie studios, including Lucasfilm. So all Star wars stuff. Pixar, which is like a cash cow, and Marvel, like it's an enormous cash cow juggernaut. Like, it wasn't when he started. It's truly amazing.

[A]

Has been I think uniquely, I cannot think of any other company that has been so unbelievably good at M and A. That what, what he did, what Iger did, and you have to give credit to Kevin Mayer here, who was the architect of that M and A strategy and who everyone assumed would be the next CEO, was they went out and they spent relatively small amounts of money, like single digit billions on Marvel, on Pixar and on Lucasfilm. And those things turned into just absolute juggernauts and with the best acquisitions you could possibly imagine. And also, it's not like those businesses could have done that on their own. They needed the Disney machine behind them. So it was a really strong strategic move for all concerned. It worked out really well. Now the other, the really big one was 21st Century Fox.

[C]

Yeah, that was just.

[A]

That one was like orders of magnitude, at least an order of magnitude bigger than all of the rest of them combined. And the jury is still out on that one.

[C]

Although. And the fun fact, Chapek was running Disney theme parks, which we haven't really discussed because it's not sexy, but it's. Almost half of Disney's income is from.

[B]

The parks, although it's also like lowest growth, lowest revenue growth.

[C]

But he like drove, I think we recently talked about rising prices at Disneyland. He's. Every year he does another ticket price increase.

[A]

And, and one of the things that Disney does very well is it really does get all of its different arms working to strengthen each other. So the Disney theme parks do well precisely because you have like Lucasfilm and Star Wars. So they put a Star wars attraction into Disney World. And so then everyone wants to go to Disney World to ride the Star wars attraction. And they all feed into each other, you know, even unto, you know, Frozen on Broadway and all the rest of it. So it all. They've done a great job of creating these massively lucrative IP franchises. And you know something, you know, whether it's, whether it's Star wars or Frozen or Cars or anything like that, you find them in all manner of different formats. You find them in theme parks, you find them on Broadway. You find them. It's not just anymore. And there was an ad for Elsa on my banana at Axios. And I was like, why is there an ad for banana?

[C]

There's always Disney ads on bananas. It's like a thing. I see them all the time.

[A]

You see them all the. I've never seen one before.

[C]

Oh yeah. And sometimes on we get those little red cheeses, Edams, little baby, little baby bells. And they'll sometimes have like, Toy Story wrappers and stuff like that.

[A]

Yeah, you can't get away from it. Do you remember when United painted all of its planes after Star Wars?

[C]

No.

[A]

Yeah. And they had that little video you have on the seat back showing you how to use a seatbelt because no one knows how to use a seatbelt. Was all like, Star wars themed. Yeah.

[C]

Interesting.

[A]

So Disney has this kind of omnichannel ubiquity, and that is all part of the strategy. And again, you can definitely thank AIGA and Mayor for that.

[C]

I have this one theory that's not really fully formed, but I'll just bring it up now because where else could I talk about it? But you know the HBO guy, Plepler, who left a while back? He was kind of like, not an Iger figure, obviously, because it's not comparable, but like, he was like the creative boss type who led HBO to sort of transform itself and do these great, like, shows and stuff that. That kept HBO in the conversation kind of a thing. And then. And then he left because they merged with at&t and everyone was like, well, now it's like a bigger thing. And Plepler was a creative guy, but they need more of, like an operations Y kind of person to do the job. And I was kind of thinking, is there a parallel with Iger? Like, he was so focused on creative, and a lot of the pieces about him this week said, you know, Disney's too big to have a creative type running the show, that you need more of an operations person. Like, are these entertainment companies becoming so big that, like, these creative. They just don't even make sense anymore.

[A]

I see. I'm not entirely convinced that Iger is some kind of.

[B]

Yeah, I'm with you there.

[A]

And it's weird to me that, like, that he's given himself that head of creative job because I'm not sure he's qualified for that. And then on the conference call that Disney Court put out announcing the succession, someone asked him, I was like, wait, are you going to hire a chief creative officer? And he's like, yeah, I don't think we need that. I'm like, if you don't need it, why are you giving yourself that job? It's so. And plus, like, the thing about all of these IP franchises, whether it's Star wars or Pixar or Marvel, you know, Avengers and all of that, is they're not that creative.

[C]

Right. You know, sequel after sequel after sequel.

[A]

It's kind of a lack of creativity which is going on there.

[B]

You Know, understanding markets and what people want, which is important, but that's not necessarily creativity.

[A]

Right.

[C]

And Iger was the creative mind behind the show Cop Rock. I don't know if anyone remembers that, but it was creative. That was creative, but it did not do very well.

[A]

I mean, Disney is famous for its imagineers. You know, it does have this legacy of genuine creativity and it does every so often come up with something genuinely new.

[C]

Frozen One.

[A]

Yeah, Frozen One, exactly. So I just noticed it's very unclear to me what Iger thinks he's going to be doing in terms of creative. But what he said he was going to. How he explained this on the call was basically, we have done the strategy, the. The big acquisitions strategy of buy Marvel, buy Pixar, buy Lucasfilm, buy 21st Century Fox, have everything everywhere, have the theme parks, everything there is in place. And now it just runs itself. There's no more M and A to do. And so I can just let Chapek run all of that in the kind of operations way. And now I get to have fun playing with Minions or something.

[B]

That seems like always what happens before everything falls apart.

[C]

Yeah, that seems like a bad idea. I mean, you need someone in charge who can, I'm sorry, saying this. Think outside the box. Like you need someone who's thinking ahead, because what can't just run it.

[B]

What's working right now is not necessarily what people are going to want and what is going to work in five or 10 years. And the reason that Disney is where they are is because they were thinking ahead. And so their strategy now is, and it doesn't sound great, and there are.

[A]

Two massive, massive plays that Iger made very recently, which no one knows whether they're going to be successful and whether they're going to work out. One of them, as we've said, is 21st Century Fox, which was like a existentially huge acquisition and we don't know how that's going to play out. And the other one is Disney, which is brand new and seems to be getting off to a quite good start. But again, no one knows if it's actually going to be able to, you know, be in remotely as many houses as Netflix, be that popular, and so on and so forth. So that strategy, like he says, it's all in place, but really two of the biggest parts of it are still super babies and need a lot of tending. So David Siegel is my favorite writer at the New York Times. I love him. And he's moved to London and he came out with this spectacular story about the French Bernie Madoff. How awesome was it?

[C]

It was a great story for sure.

[A]

And there's this one twist. You start reading it and you're getting into it and then about a third of the way through, your jaw just drops and you're like, what in actual.

[C]

Fuck should we spoil it and say what it is? Because when I came across it, I was like, that's what Felix was talking about.

[B]

Yeah, I think we have to.

[C]

Okay, okay.

[A]

So there's this amazing character called Gerard Leroutier who Ponzified, like rare books and manuscripts, which is the most French thing you can possibly imagine. It was so glorious. I love this story so much. It is much more interesting in a way than just a story about Gerard Le Routier and his company, which was Astrophyll, Astrophil, which is a glorious name because I would say probably two or three times a week someone comes up to me and says, hey, Felix, have you seen this company that's securitizing paintings or securitizing this or securitizing.

[C]

David Bowie was big for a while.

[A]

Securitizing David Bowie cash flow, right?

[B]

Bowie bonds were real.

[A]

Yeah, Bowie bonds were real. But there's these people coming out and there was a big story in the Wall Street Journal about this guy who was buying up a Basquiat painting at auction and was going to slice it into 100,000 slices and sell off each slice for 1,000 bucks or what? None of it makes any sense. And this Astro Fill company in France was the first and pretty much the only company in the world to ever have any seeming success with this strategy of buying a product with no cash flow. In this case, manuscripts. Giving people a little baby slice of those manuscripts and then saying that they're going to appreciate in value and then we'll sell them for a profit and then you get to make money.

[C]

And they. And Astrophil, he said he would buy them back at a price.

[A]

This is how it turned into a Ponzi. And so most of the companies in the US which are trying to securitize Basquiat paintings or anything like that, are quite sensibly not promising future returns. They're not going.

[B]

And definitely not 8.95% future returns.

[A]

Yeah, it's very. A very Madoff like number there, right? It's like Madoff famously promised about 10% a year. Laritier was promising about 9% a year. It's not so high as to be unbelievable. And so people actually weirdly feel safer with the single digit returns. And they Would like if there was a big double digit return, if they were like, we're going to quadruple our money in five years, everyone would be like, no, that's ridiculous. You can't do that by buying manuscripts. But because it was like, modest, it was 9% a year, people believed it.

[B]

That's a decent return. But yeah.

[A]

And so people believed him also because he actually paid, like all Ponzi schemas. When people went back to him with their pieces of paper and said, I want my 9% return on this, he paid them, or he paid some of them early on, and he paid a little bit of money and he promised more money later. Like, it wasn't that people weren't getting any money back from him.

[C]

And one thing I thought was interesting is that he did this again with men manuscripts and rare books, which David Siegel points out, like, the prices don't change. There's only about 2,500 people in the market for these kinds of things. It's not like art, which can. Like, people can get really excited about a certain artist and the price of their paintings could go up and down. Like, it's a very steady market.

[A]

We had a whole mini series on slate money of the swag series of all of these things. Silver, wine, art, gold, bitcoin cars that people invest in as investments and want to get some kind of a positive return from. It never occurred to us to do, like, rare books and manuscripts, because people don't buy rare books and manuscripts as an investment. It's just not one of those things. People collect them.

[C]

They're not flashy. Like, you don't put a manuscript, Siegel says, like, you don't put a rare book out for display. You keep it in like a dark place that's like kind of cold, and you don't show it to anyone. It's like the exact opposite of like, you know, a flashy car or a cool painting.

[B]

And it's just not the type of alternative asset that is going to appreciate in value enough to securitize it.

[C]

So the French kind of caught.

[A]

Unless you're French.

[B]

Unless you're French. That is true.

[C]

So the French kind of like caught on to this guy and you could like, reading along and, like, they're catching on to him and he's. His money is kind of dwindling away. Dwindling away. And then all of a sudden, oh, my God, this man, this French Madoff dude, he wins the freaking lottery, wins.

[B]

It, Wins the millions of like $100 million or something.

[A]

2 million. He wins the Lottie.

[C]

It's just so unreal.

[B]

And I'm reading this and I'm like, wait, did he fake his ticket? But it's like, no. Apparently the universe is just really, really bizarre.

[C]

Like everyone's grandmother. He played his kids birthdays every week. And finally it pays off. He says in the piece he checked the numbers a bunch of times. He couldn't believe it either. What are the odds? But even that money couldn't save him.

[A]

He made $215 million. It just is a windfall. He wins the lottery and. And he's just like, yeah, the Ponzi is still going down.

[B]

Well, my favorite part of the whole story though was that apparently you had people who like. So like, the Ponzi wasn't actually insolvent. It was just that the government had kind of realized like, okay, this isn't legitimate. But then apparently people were mad at the government because they were like, we're still getting our return.

[A]

They always are. This is absolutely textbook. When Ponzi's go down, the investors in the Ponzi blame the government and not the Ponzi. This is in not 100%. I don't think it happened in Madoff, but it happens with basically all of the others. It's absolutely standard. Because the great thing about Ponzi is that so long as they keep on going, they keep on going. As long as you can find more suckers to buy in. It actually works.

[C]

Most things are Ponzi's, aren't they? Really Start thinking about.

[B]

No, it is, it is funny. I was kind of thinking about it. If you have like certain companies that like aren't actually generating any money and like they just keep getting Tesla.

[A]

We were.

[B]

Exactly, yeah. There's some similarities here.

[C]

There are similar. If you had to do a Ponzi, what do you have a. Anything you would.

[A]

I think, I think, you know, office sharing seems to be like a very.

[B]

I can tell you my favorite Ponzi scheme. Well, we can get into this more in another episode. The Lebanese government, the way their financial system works. It's amazing and it is essentially a. The way they get dollars is basically a Ponzi.

[A]

It's Ponzi esque. But it is reliant on. One of the weird things about the Lebanese diaspora is it's incredibly global, incredibly wealthy and there's just this constant sucking.

[B]

Well, there was. And they were. And then they were also getting money from other golf participants. And then once that started to stop, now this is part of the reason they're having this massive financial crisis.

[A]

Wait, anyway, we will talk about that.

[B]

We will talk about that more. Another.

[C]

Okay.

[A]

All right. Next week you can come in with all of your questions about Lebanon.

[C]

Okay.

[B]

Yeah, because they have the bond payment. Well, they're going to postpone it, but they have the bond payment supposedly on March 9.

[A]

So after March 9, we will see whether they make their bond payment and then we will talk about Lebanon on Slate Money.

[C]

All right, we heard it here first.

[A]

So let's have a numbers round.

[B]

Who can I go?

[A]

You can go, yes. What's your number?

[B]

$330,000. That was the fine assessed to one Steven Seagal.

[A]

Well, as Matt Mileen said, the main obvious way to work out what cryptocurrency to invest in is to ask yourself, where would Steven Seagal?

[B]

Yes. And I also love that the name of this was Bitcoin with two eyes. 2gen was the name. I was like, eh, I kind of feel like if people invested in that, like, I don't feel too bad for them.

[C]

So today listeners, you're listening to this on my number is 29 because it's leap year and Saturday is February 29, which is also my half birthday. Yes. Which only comes every four years. But I'm telling you this because there is this amazing. It's, I guess it's a blog or a website called Ask a Manager. And four years ago she ran maybe the weirdest and craziest nuttiest question from this woman who is a manager asking for advice because her company gives people the day off on their birthday.

[A]

Oh, wow.

[C]

And this one worker's birthday is on February 29th. So the letter writer says, so she only has a birthday every four years. What? And she says this woman is mad because she only gets her day off every four years. And the manager says, I don't see what she's so upset about. And it's just the nuttiest letter I've ever seen. So I'll put the link in the show notes and everyone can read it.

[A]

That's the classic Reddit like, am I the asshole thing? Am I the asshole for just giving her a quarter of the days off that everyone else gets? Yes.

[C]

Not understanding the problem. And in addition to the day off, workers apparently also get a gift certificate and a cake. And the weirdest part of the letter possibly actually is the fact that the woman says, we don't make a big deal out of it. We just put the cake in the lunchroom and anyone could come eat it if they want. What? What is that? I've never. Everyone knows. Office birthday cake. Everyone comes over and it's like this awkward conversation and maybe even singing. Like, you don't just put a cake in a room and, like, quietly d about. That's weird.

[B]

The whole thing is, are we sure this is real?

[C]

Yes. Yes, Anna, it's real.

[A]

You can't make this stuff up.

[C]

Who would make it up?

[A]

Do I do the Felix's sad number or do I do the Federal Reserve number?

[B]

Do the Felix's sad.

[C]

Felix is sad.

[B]

We can always do a Federal Reserve number.

[A]

The Federal Reserve number. Yeah. Is like, you know, are they going to cut before the next meeting?

[B]

Or blah, blah, blah.

[A]

You know, if they do cut before the next meeting, I told you so. If they don't. Of course they weren't going to. The Felix's sad number is 25. 25 is section 25 of the German Nationality act, which is what the chap at the German consulate told me that I should have read before I became a US citizen in 2016. I went into the German consulate this week to renew my German passport because I'm a proud European and I don't have European nationality on the grounds of being British anymore because Britain is not in the EU anymore. So I was like, that's okay. I am still European. I am still a German citizen, and I want to have a passport. So I went into the consulate. Of course, like any other country, you just mail in the old passport and they send you a new one. The Germans are much more bureaucratic. You need to make an appointment. You go into the consulate. I go into the consulate, I hand over my passport, and they say, oh, yeah, we're not giving you this passport back because you are not a citizen. I'm like, what? And they said, you are not a citizen because you naturalized as an American. And then automatically, under section 25 of the German Nationality act, you lost your German citizenship. When you did that, I was like, what? I could have murdered a bunch of people or done any number of heinous things and I would have remained a German citizen. But the thing I did was fail to read section 25 of the German Nationality act, and now I have lost my German nationality.

[C]

So it wouldn't have becoming an American citizen was the problem.

[A]

Yes.

[C]

So if you could go back in time, would you have not become an American citizen to remain a European citizen?

[A]

All right, if I could go back in time, what I would do before I became an American citizen was I would go up to the German consulate and ask for, this is going to be fun. A Biberhaltungsgeniemengung. Yes.

[C]

Okay.

[A]

And a Biberhaltungsgenemungung is a piece of paper that they give you saying you want to become an American citizen. That's okay. You can keep your German citizenship. And if you get that before you naturalize, then it's all fine. But you need to know about it in order to ask for it. And that also is in section. Actually, that's section 17 of the German Nationalities Act. So I didn't know about this. And so now I need to basically try and persuade the Germans that if I had applied for one of these things before I naturalized, then they would have given it to me. This is a process that takes three years and has a relatively low chance of success. Yeah. So, anyway, if anyone listening to this was under the misapprehension I'm a European citizen, I am now not sad. Sad. On which note, I think we're going to just wrap this up for the week. Thank you for listening to Slate Money and thank you for emailing us. It's slatemoneyleep.com thank you to Jessamine Molly for producing, and we'll talk to you next week on Slate Money.