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- [00:10]
A
Hello, welcome to the Backwardation edition of Slate Money, your guide to the business and finance news of the week. My name is Felix Hammond. I work at Axios. I have here Emily Peck. Hello. Huffington Post.
- [00:27]
B
Hello.
- [00:28]
A
And Anna Shymansky, who loves nothing more than backwardations. Anna Roe. Yield is my thing going to tell us what backwardation is? We are going to talk about the oil market. You may have been reading headlines about war drums in the Gulf and all manner of possible war between the US and Iran. So we're going to talk about that and whether it has any effect on the price of oil. And even if it does have an effect on the price of oil, whether anyone should care. We are going to talk about South Africa and whether they're going to expropriate land from the white landowners who own most of the land right now and try and get it into the hands of the majority black population. We are also going to talk about home buying and why it's so expensive, or more to the point, home selling and why that is so expensive. And is there any chance that those 6% broker fees are going to go away anytime soon? We are even going to have a Slate plus segment for you lovely Slate plus members all about a Jeff Koons rabbit. All of that coming up on Slate Money. So let's talk about South Africa, where it's chaos right now in politics, or I mean, there's always chaos in politics in South Africa. Emily's just like, nah, it's just business as usual.
- [01:51]
C
No, I think what's happened in South Africa is not negative news, which is they elected and I'll probably butcher his name. So I'm apologizing in advance. Cyril Ramaphosa.
- [02:03]
A
That's exactly right.
- [02:03]
C
Phew. And he is taking over from Jacob Zuma, who was extremely corrupt and basically was ousted by his own party. And the fact that the country was able to have a democratic election and get rid of the corrupt guy is like, not a negative sign in my opinion. Although he won with like 58% of the vote, which is a very low majority for South Africa and for anc, which is the party of Nelson Mandela. So they still have power, but it's sort of like a reduced power, basically.
- [02:32]
B
Right. Because this election didn't get rid of Zuma. That was before. But what is interesting here, you can read it in a few ways. Like, on the one hand, definitely the ANC's majority has declined and the Democratic alliance, which is the opposition party, has increase depending on where you start counting. And the Economic Freedom Fighters, which are A leftist offshoot of the ANC have significantly increased. So on the one hand, this definitely shows that there continues to be some fatigue with the rampant corruption in the anc. However, if you compare this to the last municipal elections, in many ways you could say the anc, I don't want to necessarily say slightly outperformed, but they did reasonably well. And the reason I think that that's also significant is to say, well, does it look like there is a trajectory where the ANC will ever not be in power?
- [03:28]
A
And this is the thing which interests me. And I'm looking at like Brazil here. Like there are countries where the population just understands that their government is corrupt and they don't seem to care that much, like Russia. And then there are countries like Brazil where when it turns out the government is corrupt, they get incredibly angry and wind up installing Hay Bolsonaro, you know, and that's like, and I want to know which one is South African. It's kind of looking to me like the anti corruption Democratic alliance forces have failed to tap into a kind of deep seated well of resentment on the part of the South African populace.
- [04:08]
B
Well, but I think you can't talk about South Africa without talking about racial politics. And for essentially always and even now, to some extent, the Democratic alliance is seen as the party of white people. Now that is not necessarily actually true. In many ways the current leader is a person of color. But I, but I think when you're talking about why we aren't seeing these significant movements away from the anc, well, one, this is still the party of Nelson Mandela. And also when you're talking about South Africa, you're talking about a country with incredibly high rates of unemployment, the most unequal country in the world. So when people look and they say, well, which party am I gonna vote that's going to support my interests? Am I going to vote for a party that continues to say, like, you know, we are going to continue to subsidize things to have state jobs? Or are you going to vote to a party that's much more kind of business friendly? I think it's not overly surprising that you're gonna have a lot of people who are probably going to continue to vote for the ANC or vote for.
- [05:07]
C
The eff the other reason besides the election, the immediate news that I thought South Africa was really interesting was this piece that Ariel Levy wrote in the New Yorker, which sort of got into this whole notion that's being propagated by people like Tucker Carlson. This whole white national streak in South Africa. And there's this movement now, it's basically propaganda saying like, oh, black people are barging onto white farmer's land and like murdering farmers and stuff like that. And the New Yorker piece is really good because she just blows up that myth.
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A
That is a myth and it's not happening. But one of the interesting things that is happening in South African politics, which.
- [05:42]
C
She goes into very well, expropriation without.
- [05:45]
A
Compensation, is this question of expropriation and this question of here we are how, what, like 20 years after the end of apartheid, More than that. And South Africa has significantly and obviously failed to move significantly in terms of getting the land out of white hands. The vast majority of South African land is still owned by white people. And this is a problem for a billion obvious reasons. And one of the interesting questions in South Africa right now is what kind of forces do you use to try and change that? And some kind of limit. If you have a farm which isn't being used or land which isn't being used and is just sitting there in an economically unproductive way, can the government expropriate it from its white owner and give it to black South Africans?
- [06:34]
C
And I guess, I think it's Ramaphosa who's used the language of expropriation without compensation. And people are. I guess some people, the ones that own the land, are afraid that they. The literally land will be taken away from white landowners. But then apparently there are a lot of people coming in and they're buying land that's not really being used and just sitting on it, waiting to get paid out for it by the government. So that's like in the midst that.
- [06:58]
A
Would be expropriation with compensation in that case.
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C
Yeah. So I guess the without compensation part is tricky to implement and I think there is some fear over it, but it's unfounding.
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A
It has not happened theoretically legal. Now there have been laws passed which makes it theoretically legal under circum circumstances, but the government has not done it.
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C
Well, except it did do it in the 1920s when it took all the land away from black people and gave it to white people.
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A
Exactly. The black government has not done it.
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C
That's why this problem started in the first place.
- [07:31]
A
The white government totally did this. And this is. And this is one of the, like, the really big picture here is that, of course, you know, pre1920, South Africa was not owned by white people.
- [07:42]
B
Right. And I think when you're talking about this issue, the, the language actually kind of matters whether you're talking about land reform or expropriation because historically land reform has actually been an early stage in the economic development of a lot of emerging countries, whether you're talking about Meiji Japan or in, you know, in South Korea, where in this instance this was obviously a long time ago, where you have basically like feudal lords that have land, you just take it and you give it to the people. And at a period in time, even America supported this. The problem is that we're not at that moment in time anymore. And when you're thinking about what South Africa's actually going to have to do in order to be able to actually generate a functioning economy for its people, this type of rhetoric which now Ramaphosa has definitely taken a step back and said like, no, no, no, no, we're not expropriating land. This is mostly going to be land that's either owned by state owned enterprises or is just lying fallow or he's definitely taken a step back now post the election. But I think it is concerning, let's.
- [08:47]
A
Be clear about what's concerning here. What are we talking about? Are we talking about like, if they were to start expropriating land, that would be concerning. Are we talking about the fact that they talked about expropriating land during the election as part of the presidential election campaign that' Are we talking about like, are we thinking that this is a genuine threat or are we just worried about the rhetoric?
- [09:10]
B
To me, I actually think I'm probably more worried about the rhetoric and it's not only the rhetoric itself, but it's also what the rhetoric suggests. Because one of the things that the Democratic alliance has really pointed to is that yes, obviously we need land reform, but if you're looking at what that means, a lot of that should actually be putting more power in the judiciary, are cutting the red tape so that the land that's already been purchased by the government can actually be given out to people. Because if you're talking about saying like, well, you know what we're going to do, we have an incredibly corrupt government, so we're going to give them more power to take over more land and then. And think that they're not just going to give it to their cronies, which is exactly what's happened. I think people question and they say, does this, because to me this is what's important because does this suggest that the ANC is actually trying to change from the kind of era of Zuma or does this suggest that it is just going to be business as Usual.
- [10:03]
A
I mean, what it suggests to me is that after decades of failure to do land reform on the ground, the South African population is understandably frustrated and upset that the whites still own all the land and they will vote for the party which says that they will expropriate that land, whether or not they will actually do it. That we're talking about the rhetoric here. And so during the election campaign, Ramaphosa and others are happy to bang that drum, at least a little bit, because that's how politics works. And then in reality, as you have said, and you're absolutely right, like, it's that the problem is much more bureaucratic, really, that there are lots of instances that Ariel Levy goes into where the government has land and is trying to give it to the people who live on it. And it takes years and years and nothing happens because there's just like a bunch of red tape and corruption. And the practical difficulties are all about the red tape and the corruption and the bureaucracy. And so then you just have this cycle where you have elections where people talk in great hand, wavy terms about how we need to expropriate land and give it back. And then you go back into the governing cycle where you try and work out, can we find a way of doing this practically. And I think the big task facing Ramaphosa right now is to try and fix the South African bureaucracy so that he can start giving the land back to the people who live on it. And if he can do that, then maybe the political salience of this issue will decrease.
- [11:40]
C
It'll be interesting also to watch climate change is here and, you know, breaking up the land, giving it back to the people who rightfully own it, is not going to solve that problem. Do you know what I mean? We've already moved on from agrarian economies.
- [11:54]
A
Right. South Africa used to be a place where the land was where the value is. And increasingly in a. Yeah, the land just doesn't have that much value anymore.
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B
Yes. Only a reasonably small segment of the land is actually arable. And also it makes perfect sense why this is an important issue to people kind of symbolically and politically. But most people in South Africa have neither the desire nor the skills to actually farm the land. So I think this issue is very important because of what it symbolizes in terms of control over the country, the most unequal nation.
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C
Yes.
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A
And there are two issues as well. Like, one is the agricultural issue, like who owns the farms? And then the second issue is, like, is a basic residential issue of can you literally own the land that you Live on where your house is, your little plot where you live. And both of those issues need to be solved and they're connected. But I think if Ramaphosa can find a way of allowing people to buy the plot of land that their house is on, just residentially, that would be a huge step in the right direction. Talking of residential real estate, let's talk.
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C
About real estate and brokers fees. Please hit me. So while every other industry seemingly on the planet has been disrupted by technology, real estate has been remarkably analog, especially in the fees.
- [13:14]
A
So when you analog fees, meaning higher.
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C
Fees, they're higher fees than you would.
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A
Expect.6% fees for selling your apartment.
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C
Yes, 6%.3 goes to the buyer's agent and 3 goes to the seller's agent. And that's been remarkably sticky. And now there are these three lawsuits, and I don't know how viable they are, but the lawsuits say that the national association of Realtors is essentially price fixing to keep those, those fees high and that they should not be that high and there should be more competition so the fees could be lower. And there's a kind of sense right now in the industry, among brokers and agents and the people who run sites like Zillow and Redfin, that, like, things are actually finally maybe kind of changing now.
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A
I've read this story every year for the past 15 years, I think, and everyone's like, now you can search online and you can buy your house online, and there are all of these new hot, disruptive companies online which will allow, to, allow, you know, just have 2% fees rather than 6%. And isn't this amazing? And nothing ever changes, as you say. So the question is, like, what reason do we have to believe that this time is different?
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C
First, there's a lot of money coming in from investors to these websites like Redfin, Zillow, and these, like, little upstarts that are trying new systems. So there's just a lot of, like, money coming in and a lot of competition. And brokers are paying a lot of fees, like lead generation fees, and they, there's something has to give. In other words, the brokers aren't making as much money as they used to.
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A
But if the brokers aren't making as much money as they used to, the way you solve that is not for the broker's fees to go down. That would just make it worse.
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C
But I think they, like, have to go down.
- [14:50]
A
Right, but so, so, but all I'm saying is that, like, if you're saying something has to give because the brokers aren't making any money, then okay, fine. I mean, personally, I don't particularly care whether brokers make any money or not, but if that's one of the constraints here that brokers have to make money, then that's going to mitigate in favor of fees. Staying high, surely.
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C
I would think so. There's also another thing going on now where, like Zillow and Opendoor. Opendoor are just buying houses themselves.
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A
And I think this is, this is the new model which fascinates me, which is that rather than sell your house at full price and pay a 6% fee to the broker, you go, you sell your house for cash at like a 5% discount directly to Zillow or Opendoor, and then they do the whole renovation sale process and try and work out if they can make money.
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B
And I think in certain markets you could see that that could potentially make sense. Like, especially in markets where the housing stock is relatively new and it's actually.
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A
To me, it makes more sense when the housing stock is relatively old. That one of the interesting ways that the housing stock of a country evolves is that it often happens around the time that houses are bought and sold, either before you sell a house or just after you buy a house. Those are the two times that people generally do the big renovations and individuals rarely do a lot of renovation. Like, we tend to live in houses for decades and we don't renovate that frequently. And we're not that good at it because it's not what we do. And so there's a lot of inefficiency going on in the renovation world. And one of the interesting things about this Zillow and Open Door model is that they are basically saying, we're going to go in by the older house. Do the renovations make it like a nice new ish house, you know, spiffed up for today's taste? Sell it without the new owner having to go through the pain of doing all of that renovation. And because we are doing thousands of renovations at any given time across, you know, dozens of different cities, we are very good at this and we can do it efficiently and we know what we're doing.
- [17:01]
B
No, so thus far, if you look at what Zillow's actually done, they've been focusing on areas where they have very uniform new construction for housing specifically, because they're actually working with very slim margins. So, yeah, they'll say, we'll do the renovation cost when the renovations are incredibly simple and the kind of thing that someone probably could just do themselves, but they. They'd rather just pay for the convenience of someone else to do it. They're not talking about significant renovations. If they were to do that, they'd be losing money.
- [17:28]
A
Well, I mean, depending on how much value the renovations add to the house, of course.
- [17:34]
C
And they still could be losing money, too. I mean, it's a. As we've seen with the real estate bust 10 years ago, it's a dicey business buying up. I mean, they're basically selling houses, which is a dicey business.
- [17:45]
A
And Zillow is a public company, so you can actually see the numbers. And Ben Castleman, like, looked at the unit economics of this, and they do seem to be losing money on every house that they do this with. But they can make it up in volume, right?
- [17:57]
B
I mean, well, the idea they're trying to generate, yeah, they're more getting the.
- [18:00]
C
Mortgage business because like I was trying to say before, the advertising business, which is their core competency, is kind of flatlining. They can't raise their prices on ads anymore because of all the money coming in the competition. Da, da da, da, da da da, so on, so on. Brokers can't afford to pay more for advertising.
- [18:15]
A
The one thing I will say is that there's an interesting tension in terms of the choices people make when they decide to sell their home. And it's not dissimilar to the choices that a company makes when it decides to go public. On the one hand, paying 6% to a broker is clearly an enormous amount of money. It's like it's something which you do not want to have to do. And if some other broker comes along and says, I will do it for 2%, that's an attractive offer. And you, and you are price sensitive. And so you want to take the 2%. On the other hand, if the 6% broker can get you 10% more for your house, they more than pay for themselves.
- [18:55]
C
And that's part of the argument in the suit, is that if you don't go with the 6% broker, you're not gonna get the good buyer's agents to bring you the people to buy your house.
- [19:04]
A
And there's this weird. As I say, it's the same reason why the costs of going public seem to be stubbornly stuck at about 7%, is that people have this idea that this is like the one big transaction they're going to be doing, like this decade, and they want a certain amount of reassurance, so they're going to do it right and maximize their price. And they ultimately wind up saying, okay, I'm going to go the sort of high end, expensive route. And the discount brokers can shout until they're blue in the face that they get just as good prices. But somehow, just by dint of being discount brokers, people don't believe them.
- [19:41]
C
Yeah, but I think there's still, I mean, you still have this need like Glenn was talking about, like you still have to have the broker come with you to get into the house to like open the lockbox where the key is. Right. Like you still need the actual human analog broker to help you buy the house. And until the technology can really like advance past that need.
- [20:00]
A
Well, that's for when you're buying. And buyers don't really, you know, the buyers don't really pay brokers fees.
- [20:05]
C
Well, I mean, it's baked into the price of the house. They totally pay it.
- [20:11]
A
But one of the interesting things about the Zillow and the open door model of them buying up houses is that they are buying a lot more houses than they are selling. That what they are not doing is really just buying it up, maybe doing a little bit of renovation and flipping it. They're doing that to some extent, but a huge part of their business is buying it up and then just transferring it directly to Blackstone or some big real estate agent who then throws it into its rental pool and rents it out for a rental Yield. And the U.S. homeownership rate has been in long term decline for 15 years. And that long term decline, if you look at the chart, and it's one of my favorite charts, you cannot see the financial crisis. It's just a steady down into the right line where it was declining before the financial crisis and it was declining during the financial crisis and it was declin financial crisis. And the rate of decline was exactly the same all the time. The financial crisis is kind of invisible on that chart. And it continues to decline. And one of the ways that it continues to decline is by this new process of people buying buildings up for cash and then renting them out.
- [21:24]
C
That seems like a good development to.
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A
Me because I think it's a good development.
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C
Homeowning is not all it's cracked up to be.
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A
Agreed. Okay, this is Anna's segment because this is.
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B
I've been trying to have this segment for weeks.
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A
Anna finally gets to talk about oil prices, which I kind of love this story because this big headline news, which is shocking to everyone is oil prices haven't really moved.
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B
Well, it depends on which prices you're talking about, but correct. So we've seen a little bit of movement in oil since the end of April. And that was when the Trump administration said that they were going to eliminate the waivers for people importing Iranian oil.
- [22:01]
A
So basically, certain oil importers in China and elsewhere used to be allowed to import Iranian oil under very certain circumstances if the moon was in the right house. And then the Americans said, okay, all of these loopholes which allow you to do that, we're closing those loopholes and you can't import any Iranian oil at all.
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B
Basically.
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C
Yeah, it was China, India, Turkey, Japan.
- [22:26]
B
Yeah, there's. And granted, some people, most people still think some of this Iranian oil is obviously going to get to market. But point of the story here is that when that happened, you unsurprisingly did see a bit of an increase in at least the spot oil price.
- [22:41]
A
So basically what happens is that reduces the supply of oil in the market. When the supply goes down, the price goes up. This is economics 101.
- [22:50]
B
Exactly. But what you really weren't seeing is if you're looking in the futures market, you weren't seeing an increase in prices as significantly there. So what we have is what we refer to as backwardation.
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A
Whoa. And Emily is jumping up and down in her seat in excitement here because we get to talk about backwardation and contango and there's nothing which makes Emily more excited.
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C
I'm so excited to talk about backwardation. Tell us what it is.
- [23:18]
B
So there's like the official academic meeting and then there's a meeting which will actually say it, which is just that you have a downward sloping futures curve. But what it basically means is that right now people are willing to pay more for a barrel of oil right now than they would be willing to pay in three months. Willing today to get in three months.
- [23:38]
A
It's like the futures market doesn't expect this price rise to, to stick around or they expect. Well, or like if you consider the futures price to be a prediction of the future price of oil, which it isn't, then you can consider this to be like a prediction that the oil price is going to fall.
- [23:55]
C
Is that a sign that people think the American sanctions against Iranian oil aren't going to work? Because, I mean, what the United States is trying to do is just like shut it off, like cripple Iran. They're trying to make it so they can't sell the oil anymore. Right.
- [24:09]
B
Well, the issue here, and one thing, when you have backwardation, often people think of that as kind of a bit of a bullish sign because they think it Means that, that there's a shortage right now. That is why you're seeing the shape in the curve is that you have a lot of people who really need the oil and want the oil right now, and they're willing to pay now as opposed to just waiting.
- [24:31]
A
They could buy the oil in three months time, no problem, for much less, but they have to cough up extra to buy it today.
- [24:37]
B
Right. So what's been kind of interesting that we've seen is that after we saw that movement, that, that movement up really in spot prices, you then actually saw a bit of a dip, a marginal dip, let's just say. And then people were saying, like, okay, you know, is this. People have distinctly different thoughts now about, like, what actually is going to happen in terms of supply and demand of oil. But when you talk to a lot of analysts, really what they just say is this was more the difference of financial flows versus physical flows.
- [25:05]
A
Okay, but let's just zoom back a bit here and talk about the big picture, which is the Americans, as Emily says, are trying to cripple the Iranian economy by preventing it from exporting oil. At the same time, there's a bunch of brinkmanship going on in the Gulf and people are worried about war in the Gulf and specifically war between the US And Iran. And all of these things are the kind of things which normally result in significant rise in the oil price. And put aside all of the technicalities of futures and backwardation and whatnot, the fact is that the oil price has not risen. Why is that?
- [25:46]
B
Well, partly this has to do with the fact that it's not like Iran is the only place where oil is coming from. And the idea that a lot of people have is that Saudi Arabia can simply increase production and that they'll be able to make up with a number of other producers for that oil that's going to be taken off the market from Iran.
- [26:07]
C
One other thing I read is that the trade war with China is also keeping oil prices a little lower than they would be because people think that that's going to affect, I guess, consumption because consumer prices are going to go up and China's going to be hurt.
- [26:20]
A
But also, yeah, China, China is producing less than it needs less oil.
- [26:24]
C
Yeah.
- [26:24]
B
So yes, there is a little bit of that, although, which is kind of.
- [26:27]
C
Funny because, like, that's not what the US like the US is fighting these two different wars and now they're sort of at cross purposes. Right, right.
- [26:35]
B
Although as commodities go, oil is actually less sensitive to trade than a number of other commodities. And what we've seen since, like, say, 2014 is that oil's been responding much more to supply than it has been actually to changes in demand. And one of the things that I think is important to think about when you're looking at what may be happening with oil moving forward is actually what happened at the end of 2018. Because that's where, in anticipation of the kind of sanctions and potentially higher global growth, you had OPEC actually increasing production, and then as a result, you had a significant decline in prices because they basically did it too early.
- [27:15]
A
So my question is, does this even matter? I mean, why should anyone care about the oil price? Haven't we moved into an increasingly low carbon world where the price of oil is much less important than it was in, say, the 1970s and beyond? Like a little bit of sticker shock at the gas station when you fill up your car, like, does the oil price even matter?
- [27:37]
B
It certainly matters if you're talking about the global economy, because you're talking about a lot of countries where that is still a significant cost when you're thinking about countries that are importing oil. So we're not just talking about the United States here. Now, obviously, the way that oil works in the United States has changed dramatically because of shale. Obviously the fact that how much oil we are now producing.
- [27:55]
C
So much.
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B
Yes, quite a bit.
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C
Quite a bit more than Saudi Arabia. Is that true?
- [27:59]
A
When Saudi Arabia cut its production, we were producing more than Saudi.
- [28:04]
B
Yeah. So. But I think oil prices, it's not these tiny little moves here and there that's more interesting if you're, like, trading or you're just like, kind of following it. But in terms of looking forward and saying, where do we think energy prices and oil prices would be, I don't think you can possibly say it can't have significant impact. Because look at what happened in 2014 when you did have this significant decline in commodity prices, and it impacted a lot of economies quite significantly, obviously.
- [28:32]
A
For instance, what.
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B
So if you're a country that's going to be heavily reliant on money coming in from exporting oil, like you're a Russia, you're in Nigeria, that is going to force the government to have to do a lot of things, whether it's tighten fiscal policy, whether it's having to sell reserves to support their currency, whether it's also going to result in.
- [28:52]
A
Basically. So what you're saying is that the reason the oil price matters is because certain countries, Russia, Nigeria, Venezuela, are super reliant on oil revenues to fund their countries. And so if you care about those countries, then what you want is for oil prices to be high so they have lots of money coming in. And if oil prices are low, that's bad.
- [29:15]
B
Well, it's, I'm not necessarily saying this is good or bad. I'm just saying it's interesting because you can also see it from the other side. If you're a net importer and oil prices are low, well, then that can have a stimulating effect on your economy as well.
- [29:28]
A
Give me an example of that.
- [29:29]
B
You could see that in Turkey, not now, but in the past, where when you're, this is a big cost that you have importing and now it's, it's lower. So it's not just a matter of it harming when it's high, it's also a matter of it potentially helping when it's low. In terms of what impact this is going to have, I am certainly not going to say one way or another, because the one thing that is always true about oil forecasts is that they're wrong.
- [29:56]
A
So, I mean, for me, I have basically a mental picture of the oil market where there are three states of the world. There's the crazy cheap oil state of the world where it's $30 a barrel. There's the crazy expensive oil state of the world where it's over $100 a barrel. And in both states of the world, everyone's like, it's going to be like this forever. And of course, it never stays like that forever. And then there's the kind of normal middling, it's 50, $60 a barrel, which just feels like kind of normal and middling. And I feel like we have been in that normal middling state of the world for a while. And just like the other two states, everyone kind of expects us to remain here.
- [30:35]
B
I happen to disagree a little bit because I think after prices really came down from where you had, you know, above $100 when they came down. And even though, yes, in this year we've now seen an increase back to into the 70s for Brent, you still are significantly lower than where they were in the past. And the reason I bring that up is because what we saw as a result of that were, say, some changes in rhetoric coming out of the Middle east like you have now all of a sudden Saudi Arabia saying, oh, we're going to need to reorient our economy because we're concerned about the future of being so dependent on oil. So I'm not saying it was simply because you had one price decrease, but they definitely felt that. And it caused them, especially caused Mohammed bin Salman to try to think about different ways to orient the economy.
- [31:22]
A
Although it didn't stop him from spending $450 million. No, it didn't.
- [31:26]
B
And I still think he's a complete idiot. But I'm just. And also murderous. But just saying that. No, I mean, you're talking about really volatile parts of the world when you're talking about the Middle East. Very significant and also potentially politically volatile. And this is a commodity that has such a big impact on those economies. So I don't think we can say that it necessarily doesn't matter. And I also think when you're looking forward and saying, well, do we ever think oil prices are going to get back to those kind of, like, higher reaches, or do we think they're going to get significantly lowering, that will really change how many economies structure themselves.
- [32:04]
A
Let's have a numbers round. Emily, do you have a number?
- [32:07]
C
I have a number.
- [32:08]
A
What's your number? Are you excited about your number? You don't sound very excited about your number.
- [32:13]
C
I'm excited about it. It's 60%. That is the percent of male managers who said in a survey done by Lean in. It's the percent of male managers who said they were uncomfortable working with women, doing things like meeting one on one with women or being out to dinner with them, that kind of thing. And that percentage is up about 14 points from when they did the survey last year. And it's disturbing.
- [32:40]
A
And the idea is, or the implication is the number of male managers who ever feel uncomfortable in that situation with a man is, like, much, much lower.
- [32:48]
C
Yeah, they're single digits. They're not uncomfortable with men, they're uncomfortable with women. And I guess this discomfort started growing around, you know, when the MeToo movement started and, you know, men started getting accused of sexual harassment. But of course, you can't not interact with women at work. That is called discrimination. Especially if you're a manager and you're treating men and women differently, that's to be a problem. And so this is not a good thing.
- [33:10]
A
There is basically only one solution to this, which is that all managers should be women.
- [33:14]
C
Yeah, that is one solution. But the problem is, right now, most managers are still men. And in order to get more women managers, the men need to, like, promote them and mentor them and help them, but then they're not working with them. So that kind of, you know.
- [33:27]
B
Well, I think I would be a little wary about, like, one study that comes out that seems to reinforce an idea that people think about the last few years. I mean, like, this has been since the MeToo started. I think this is something you always heard people say there's going to be this fear that men are no longer going to want to work with women. And I'm not saying the study isn't correct. I'm just saying I'd be very curious about the numbers. I'd be very curious about, like, how it was actually structured. Because I also wonder if it's the kind of thing that as this continues to be in the news, maybe if someone is asked about it, a guy is more likely to be like, oh, yeah, maybe I'm a little more concerned. Whereas if it's less in the news, in five years, are you still going to see the same thing?
- [34:05]
C
I mean, it's an interesting question. I did speak to one lawyer who does a lot of sexual harassment cases and also represents men who are accused of sexual harassment, and he said it is something he had never heard before, really. And now he's hearing a lot, especially from female clients who say, like, it's harder for them to do their jobs because, like, maybe they're teamed up with a man, like, on sales or something, and. And, like, it's harder to get anything done, like, to go out and, like, socialize with clients or anything like that. It's become more difficult. And there was a good story in Bloomberg at the end of last year where they talked to, like, a bunch of hedge fund and private equity people who expressed, you know, fear and talked about, like, instituting Mike Pence rules. And it might be a little bit overblown, but I don't think so. I mean, I talked to even men at my liberal publication who are a little, like, antsy right now. So, yeah, maybe it's a little overblown, but maybe not. And men were already discriminating against women at work anyway. So it's like, is this so surprising?
- [35:01]
A
And I think part of this honestly, is that when men did used to go out for work dinners with women, maybe they were like, hey, I might have a shot here. And they could be a little bit like, sexual harassment. And now they go out for work dinners with women and they feel the same thing. Hey, I could be a little bit sexual harassy, and now they feel bad about maybe being a bit sexual harassy. So maybe it's positive. Yeah.
- [35:25]
C
Oh, and then I did on also find I talked to this one woman who did a study, and they talked to women who had been mentored by men and a third of the women said, oh, yeah, some. A little bit of sexual harassment did happen with the mentor. So I was just like, you can't win.
- [35:40]
A
The good bad news of the week is that a record number of Fortune 500 CEOs are now women. That's the good news. The bad news is that the Record number is 33. My number is 216. Two hundred and sixteen people, including Wanda Ricks and Susan Rust, wrote letters to the Consumer Financial Protection Bureau. And they all said, quote, I borrow from Cash Connection to help maintain my home. I needed to replace my hot water tank. It's amazing that there are 216 people who all needed to, repeat, replace their hot water tank. They have two hundred and sixteen different names and they all borrowed money from Cash Connection. It's such a coincidence.
- [36:32]
B
Yeah, that's funny. So mine is 5.5 billion. That is at least the last time I checked around the current market cap for Beyond Meat, which I know we talked about, I feel like a few weeks ago, but it is just, I think we talked about in the numbers round. But with all of the kind of failed IPOs, Beyond Meat is doing surprisingly well now. A lot of that is short interest, just just to be clear. So there is definitely a war right now between people who are very, very bearish and very, very bullish. And it'll be interesting to see where it goes. But I just think it's. It's actually at this stage, I think it's like done better than almost any other company that IPO'd in 2019.
- [37:15]
A
I mean, if you're comparing it to the IPO price, definitely. They just fundamentally mispriced that thing.
- [37:20]
C
What do they sell?
- [37:20]
A
Animals. Impossible Burgers.
- [37:22]
B
Oh, no. Beyond Meat.
- [37:23]
A
Oh, no, that's impossible.
- [37:23]
B
That's impersonate possible. Yeah.
- [37:25]
A
Basically there are two competing ones, like Beyond Meat.
- [37:28]
B
So Beyond Meat is pea protein. That's like their big thing.
- [37:31]
A
Impossible is. Impossible is the one, but Impossible is the one which is in Burger King, right?
- [37:36]
B
Yes.
- [37:37]
A
And then I think a large part of the Beyond Meat market cap is this perennial rumor sort of like bubbling under the market, that McDonald's is going to come back with a Beyond Meat, you know, rejoinder to the Burger King Impossible.
- [37:51]
C
So where can you get the Beyond Meat now in your Impossible?
- [37:55]
A
You can get in. Where can you. Where can you buy Beyond Meat?
- [37:59]
B
You can get in, like grocery stores. They have it and I do, and there are definitely some restaurants that I believe do carry it. But the Impossible Burger is much more the kind of marquee vegan burger.
- [38:09]
C
Does it taste like a hamburger?
- [38:11]
A
It does.
- [38:12]
B
I've had the impossible burger, which actually was, like, decent.
- [38:15]
A
I've had the impossible burger and it. And as someone who knows what a burger tastes like, it was, you know, it tasted like a well done burger.
- [38:23]
C
Okay. And the reason people are excited is because of McDonald's, not because, like, people will start eating less meat or something. Because climate change.
- [38:30]
B
Yeah, I mean, I mean, I do think that, like, the, the bullish story behind this is that there's this huge addressable market because all these people are going to start reducing their meat consumption. And I don't know if there's actually a tremendous amount of evidence to support that, but in theory.
- [38:42]
A
Okay, I think that's it for us this week. Are we gonna have a Slate plus segment about rabbits?
- [38:48]
C
Yes, we are.
- [38:49]
A
Okay. We're gonna have a slate plus segment about $91 million rabbits, because why not listen to that if you're a Slate plus member? Otherwise, thanks for listening to Slate Money. Go onto Apple Podcasts and review us and send us the emails. We love them. Their email address is slatemoney@slate.com. many thanks to Jessamine and Molly for producing and we will talk to you next week on Slate Money.