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- [00:00]
A
Foreign. Hello and welcome to Sleep Money, your guide to the business and finance news of the week. I'm Felix Salmon of Bloomberg. Yes, you heard that right. I have this new job if you missed it last week. I am here with Elizabeth Spires of the New York Times.
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B
Hello.
- [00:29]
A
I'm here with Emily Peck of Axios.
- [00:31]
C
Hello, Hello.
- [00:32]
A
And we are all in New York City, which has 3.775 million homes. You will understand that number if you continue listening. We are going to talk this week about the ICE raids on Hyundai in Georgia. We're going to talk about the astonishing up into the right nature of Oracle stock this week and why that happened. We are going to talk about JP Morgan's new headquarters. We have a Sleep plus segment on Zuckerberg versus Zuckerberg. It's a fun one this week and it's all coming up on Sleep and Money.
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C
This podcast is brought to you by Progressive Insurance. Fiscally responsible financial geniuses, monetary magicians. These are things people say about drivers who switch their car insurance to Progressive and save hundreds. Visit progressive.com to see if you could save Progressive Casualty Insurance Company and affiliates. Potential savings will vary. Not available in all states or situations. This message is brought to you by apple card. Get 3% daily cash back when you buy an iPhone with your Apple card at Apple. Subject to credit approval. Apple Card issued by Goldman Sachs Bank USA, Salt Lake City branch terms and more@applecard.com.
- [01:53]
A
So here we are in this slightly unexpected world where the stock market and corporate America seems to have made its peace with Donald Trump, tariffs and all other manners of weirdness notwithstanding. And we had a really, really interesting example of the tensions there this week when a bunch of ICE agents marched into a multi billion dollar Hyundai plant, arrested most of the senior folks who were in there trying to build this multi billion dollar Hyundai plant, which was, you know, a major crown jewel of Georgia's economic development, and marched them off in like handcuffs and shackles for some kind of immigration violations. And this then became, you know, a summit level mini crisis between Korea and the United States where the Secretary of State got very involved, the president of both countries got involved. Eventually the workers were flown back on a chartered jet. And the whole thing was, on the face of it, very terrifying for any of the many countries and companies who have promised to invest billions of dollars in the United States because they don't want their employees to wind up, you know, getting handcuffed and shackled. That's not a fun experience for anyone. And yet, despite all that, everyone was bending over Backwards to say, oh no, this isn't, you know, we'll send more workers, different workers. This doesn't derail anything. No. Phone companies in Korea or anywhere else have been like, okay, this is ridiculous. We can't build in America anymore. No one has used this as a sort of, it doesn't seem to have had any sort of broader repercussions beyond. Well, that was a fuck up.
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C
It's only been a week. I mean, I don't know if that's the conclusion to draw yet.
- [03:52]
B
Yeah, and there was some, there was a report that officials in South Korea were saying, you know, we don't really have much incentive to keep funneling money into the US if this kind of thing is going to happen.
- [04:02]
A
No, absolutely. I mean, that was, that was the whole thing that the discussions were about. Right. The Koreans were furious, as you would expect. And so they were shouting at Marco Rubio and anyone else who was available to be shouted at. Not, of course, that Marco Rubio has any real control over ice, which is one of the problems. Like the Republicans who want investment in the country and the Republicans who want an immigration crackdown are not necessarily the same Republicans.
- [04:29]
C
Right. I mean, I think the incident really does highlight that sort of tension. And it's not just a tension between different factions of Republicans. It's a tension between in the White House where we have this president who is, you know, forcing company or forcing countries to invest in the United States. And then at the same time, this sort of ham handed ICE raid in Georgia that is going to, it hasn't had repercussions yet. It's only been a week. But just like you're saying, Felix is certainly going to deter or make other countries think twice before setting up factories in the United States. To get back to the ham fisted, the New York Times today had reporting that said ICE went into this factory in Georgia looking for undocumented immigrants from Spanish speaking countries and they just stumbled upon all these Korean workers.
- [05:20]
A
Oh my God. It really was a cock up.
- [05:22]
C
Yeah, that's what it sounded like in this story out Friday.
- [05:24]
B
Also, they had four specific people they were looking for, all of whom were Hispanic. And they sent 400 agents and just rounded up approximately the same amount of people. 475 people were detained.
- [05:39]
A
One of the interesting things is that it wasn't just ice. The same tension you have at the federal level exists even at the state level because the Georgia State Police cooperated with ICE on the raid, even though the Georgia State Police reports up to the Georgia governor who is like, this is the thing he's most proud of of his entire career as governor is building this factory and getting all of this investment into the state.
- [06:05]
C
The backstory there was like he had flown to South Korea and really, like pushed for Hyundai to open this plant. The surrounding area has seen, like, economic revitalization. You know, there was some line in one of the stories you read in the prep, like going from dollar stores and Walmarts, you know, in the area, to Bibimbap and, you know, Korean barbecue and, you know, just more revitalized kind of economy. Something Brian Kemp is really proud of. But the politics are all screwy because Kemp isn't, you know, big Trump guy, obviously. And I don't think he's even said very much about this.
- [06:40]
A
Yeah, he's been very, very quiet about the whole thing. One thing I will say, and this goes back to a series of Democratic administrations, but especially the Biden administration, is that Korea, unlike many other countries, like, if Hyundai was an Australian company, none of this would have happened because Australia has a deal where it's very easy for Australian companies to get, you know, temporary work visas for highly skilled employees to come in and build factories. And a lot of countries do, but Korea, for reasons that no one entirely understands, does not. And so, you know, they wind up getting these like B1 visas, which are, you know, historically, for the past however many decades, if you came in on a B1 visa and you sort of supervised a bunch of building of a factory, that was kind of understood that was what a B1 visa is for. But technically, there is definitely a very simple reading of the law around B1 visas which says you're not allowed to do that. And ICE is just being very maximalist in the way it interprets the visa laws and is saying like, well, ok, now you're an illegal immigrant and we have to deport you. One of the interesting things about this case though, was that the ICE basically dropped all of the charges against everyone. No one was deported. They flew back on a jet that was chartered by the Korean government and they are all free to come back to their jobs if they want. I don't know how many of them are going to want to. And this is, I think the thing that I'm kind of chewing on the most about this whole story is, is less like this high level conceptual countries and companies investing in the United States thing and more like the very low level individual. If you are a Korean manager and you are expert in building battery plants and your boss goes up to you and says, we want you to build a battery plant in Atlanta, Georgia. Like, you have a pretty decent life and job opportunities in Korea, and you really don't want to run the risk of, you know, all manner of run ins with Trump goons. And so, like, just finding the workers for these phone companies, I think, is going to be a lot harder.
- [08:56]
B
Yeah. Although I think a lot of them were, you know, just sort of told that they had to do it. They were sort of assigned. And in a lot of those cases, you know, people can't just quit their jobs. But, you know, what's astounding about this is, you know, it's just another example of how Trump's, you know, immigration line is not something that he really has thought through in any meaningful capacity. Once he realized that this Hyundai plant was going to be unstaffed for people who would actually be able to train the workers, he said, well, why don't we let them stay long enough to, you know, do their jobs and train the workers? And it's like, well, what did you think they were there for in the first place?
- [09:29]
C
Yeah, I was curious. Maybe you two know more about this. But when Hyundai says there are no American workers who can do these jobs, is that true? And B related, if we want to broaden it more. Just thinking of the tension in the White House between the two goals. Right. Having foreign companies produce things in America and having American workers do the work, is it good for an economy, even when it's not American workers doing the work? If it's in America, like what I was saying before, there's still economic revitalization. You know, when immigrants come in or even temporarily come in to do the work, that's still a bonus.
- [10:05]
A
I mean, it's still like they're spending most of their salaries in America. Like, all of that. Like, economically speaking, the ownership is kind of neither here nor there. Right. It is absolutely right that if you are managing a battery plant in Georgia and you're Korean, then that ipso facto means that an American does not have that job. But this is a job that wouldn't otherwise exist were it not for Korean investment. It's not like, you know, they're creating a bunch of jobs and then they're filling them with Koreans. It's like, you know, companies are still national. The vast majority of companies, you can vote very much assigned to a country, and this is the basis of Trump's entire economic policy, is that the countries can make promises about investment, even though the investment is made by companies, not countries. And in most Companies, you will find that most of the senior management ranks are kind of the same nationality, that they kind of have grown up, as it were, within that company. They understand how it works. They literally speak the language. You know, if you're building a plant for Hyundai in Georgia, then you're going to be doing two things. You're going to be like, managing down in terms of getting the plant up and running in Georgia, but you're also going to be managing up and trying to coordinate with a whole bunch of different arms of the company in Korea to try and make everything happen that needs to happen. And you need to understand how the company works. And frankly, you need to speak Korean. I think there aren't that many Americans who can do that.
- [11:35]
B
Well, another thing is that these workers specifically were there to install very sophisticated equipment that's used to build these electric batteries. And because it's Hyundai specific, it's their proprietary technology, you couldn't just find workers in the US that could do it. They haven't been trained.
- [11:52]
C
So, okay, so, yeah, so it's correct to say that Hyundai wasn't able to find people in the US to do this work. They needed to have South Koreans come and help open this plant for various reasons.
- [12:04]
A
To be very clear about this, you know, the alternative to having Hyundai build a battery plant is to find domestic companies who want to invest billions of dollars and build a battery plant. Right. And the stated goal of the Trump administration is to get inward investment and for a bunch of foreign companies to invest in the United States. They do want to replace foreign workers on these shores with domestic workers on these shores, but they do not want to replace foreign companies on these shores with domestic companies. They are actively trying to encourage the foreign companies to continue to invest. And if you have a bunch of foreign companies to continuing to invest, that is going to mean a bunch of foreign workers working for those companies. It just is. And that is a tension that is going to exist for as long as the Trumpists remain in government.
- [13:04]
C
When it comes to things like Batterbury Manufacturing and encouraging domestic production, the White House is not doing that because it sort of pulled back on all those kinds of investments made by the previous administration's bazaar.
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A
Batteries are like woke coded, aren't they? Because they're electric rather than fossil fuels. And so therefore, we don't like them anymore.
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C
And we don't like the ira, the legislation that, you know, put all this money into building things like battery plants and, you know, solar plants and anything. So woke as energy that's not polluting.
- [13:38]
B
Not wanting the planet to die.
- [13:49]
C
Slate money is brought to you by Charles Schwab Decisions made in Washington can affect your portfolio every day, but what policy changes should investors be watching? Listen to Washington Wise, an original podcast for investors from Charles Schwab to hear the stories making news in Washington right now. Host Mike Townsend, Charles Schwab's managing director for legislative and Regulatory affairs, takes a nonpartisan look at the stories that matter most to investors, including policy initiatives for retirement savings, taxes and trade, inflation concerns, the Federal Reserve, and how regulatory developments can affect companies, sectors and even the entire market. Mike and his guests offer their perspective on how policy changes could affect what you do with your portfolio. Download the latest episode and follow schwab.com washingtonwise or wherever you listen. This message is brought to you by Apple Card. Each Apple product, like the iPhone, is thoughtfully designed by skilled designers. The Titanium Apple Card is no different. It's laser etched, has no numbers, and it earns you daily cash on everything you buy, including 3% back on everything at Apple. Apply for Apple Card on your iPhone in minutes, subject to credit approval. Apple Card is issued by Goldman Sachs Bank USA Salt Lake City Branch terms and more at applecard.com.
- [15:18]
A
Talking of energy, I feel like we have a good segue here into the Oracle news of the week, which is that they came out with their earnings this week and the earnings were slightly below expectations in terms of profits. But everyone completely ignored that because they said, hey, we have a whole bunch of contracts, like hundreds of billions of dollars of contracts that we have signed for future revenue for, for data centers in the future. And everyone got very excited about this. And the Stock went up 35% in one day and Larry Ellison became the richest man in the world. And there was a whole like news cycle around it. But yeah, this is definitely just a tiny part of this massive energy economy that is growing up around AI. You know, when he's saying we're signing contracts to build data centers, what he means is we've signed a, you know, $300 billion contract with OpenAI and the amount of power that just the OpenAI contract alone is going to require is like two Hoover dams worth.
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C
Yes. That was in one of the stories that the contract between Oracle and OpenAI, $300 billion, one of the largest cloud contracts ever signed, 4.5 gigawatts of power capacity. I'll be full disclosure. I don't know really what that means.
- [16:40]
A
But that gigawatt is a lot of watts. Like you can have power plants that, you know, produce less than A gigawatt and this is four and a half gigawatts.
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C
Two Hoover dams are the amount consumed by 4 million homes, which, that is quite a lot of power.
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A
And that's like all of New York City. How many homes are there in New York City?
- [17:02]
C
Well, more than 4 million, right?
- [17:03]
A
Less than 4 million, I would say.
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C
I don't know.
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A
New York City has a population of like nine million. So doesn't everyone live by two and a half people per home? Something like that?
- [17:11]
C
I don't know.
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A
But yeah. So these are absolutely enormous numbers. Oracle spiked to become worth almost a trillion dollars. And it's kind of interesting to me conceptually because really what Oracle is being paid for here is buying a bunch of H100 chips from an outside vendor, Nvidia, putting them in a box, plugging the box into the electric grid, and then buying a bunch of electricity from an outside electricity vendor and turning the box on. And that can be worth like if you look at the increase in market cap overnight, that can be worth $250 billion right there. Like somehow what you would think would be a pretty sort of commoditized service at this point, which is putting chips in the box and turning the box on, turns out to be an incredibly either difficult and, or either difficult and, or valuable service to provide. It doesn't seem to be like, that doesn't seem to be competition, sort of competing away profit margins on this.
- [18:10]
B
I think at enormous scale it is kind of difficult to do. It's not like buying a couple of servers off of Amazon AWS or you know, some smaller service, because it's just when you're running a data center that's that big or you, you have that many servers live, it's just more complicated to keep it all up and have all the redundancies that you need. But I, I do sort of take your point that it's not particularly complicated base level technology and what they're doing is just kind of outsourcing everything to other companies. There's a Crusoe that builds data centers.
- [18:44]
A
Yeah, it's just plug and play, right? You go to NRG or some utility and like, can you build me a power plant? You go to Nvidia and say, can you sell me some chips? You go to Crusoe, say can you, you know, and then you just put it together. It is obviously more complicated than that. The question that I have is like, where is the moat? You know, if you look at trillion dollar companies, they all seem to have some kind of monopoly. And I Just don't see the competitive moat that Oracle has here compared to like any number of other people who can do this.
- [19:12]
B
I think it's just, you know, the deals that they're doing, the sort of backlog of orders are for basically three companies and OpenAI is the big one. And OpenAI already, you know, they had $10 billion of revenue last year, so they just signed a $300 billion deal with Oracle. And Oracle is taking on a lot of debt to get this done too. So you could sort of see if, for whatever reason, OpenAI vaporizes all this kind of falls apart.
- [19:38]
A
Yeah, I was looking at the debt side of things. Moody's and S and P kind of put Oracle on watch for a possible credit downgrade because they are going to have to borrow money to build these data centers. But it doesn't seem like everyone seems very bullish about this kind of. I mean, it's real estate, right? Real estate is always built with debt. No one ever builds real estate with equity.
- [20:01]
C
Also, can we just talk about briefly, Larry Ellison being so rich and his son, who just bought Paramount, is now trying to reportedly buy Warner Brothers Brothers Discovery. Like, is this AI money, like, reverberating now into sort of the Hollywood media landscape?
- [20:17]
A
I think David Ellison had more than enough money to buy Paramount and Warner Brothers even before the Oracle AI convergence. Oracle was late to the AI game. It hasn't really been considered an AI play up until this week. But yes, I think broadly speaking, you know, in a world where Larry Ellison's net worth can go up by a hundred billion dollars in one day, yeah, they're spending $16 billion on Paramount or whatever is a rounding era.
- [20:46]
C
You know, I saw some reporting that maybe TikTok is gonna happen or could happen. There was rumors.
- [20:53]
A
I will always. I will always take the over on that one. Like TikTok is banned. There was a law that was passed. Sure, it is, by Congress and was signed into law by the President. And so therefore there is no TikTok. But, yeah, like that can is going to get kicked down the road forever. You know, I do not see a world in which Donald Trump suddenly goes, oh, fuck it, okay, let's ban it. And I do not see a world in which the Chinese government just like gives up everything that they're being asked to give up. I know. I feel like this is just going to sit in its current limbo state indefinitely. You know what, it's going to be like Fannie and Freddie, they've been in limbo since like 2009. TikTok will be in limbo for at least that long.
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C
Well then maybe to get back and to change the subject one more time, we have a really smart editor at Axios, Scott Rosenberg, and he talked about like when these tech bubbles or tech booms start, the infrastructure companies make a lot of money and then it builds out to the consumer facing companies. Like as happened with the Internet a little bit. But now with AI, it seems like there's something different happening where like Oracle is an infrastructure company making a lot of money off AI and it's making the money from OpenAI, which is the cons. What am I trying to say? I'm trying to say that it seems very incestuous, the AI bubble.
- [22:08]
A
I think what you're trying to say is that the tail is wagging the dog here.
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C
Yes. It seems like the companies are just sort of like the money is just going back and forth and not coming to the consumers.
- [22:18]
A
Unlike the tech boom of the 90s, the current tech boom is being driven by private company losses to a very large degree and to a certain other degree, like by public companies like bearing losses on their balance sheet. You can see this most obviously with the OpenAI burn rate that OpenAI is just burning through astonishing numbers of billions of dollars. And Sam Altman is just like, give me another $10 billion so I can light it on fire and give it all to Oracle, you know, and people seem to be very happy to do that. But also, you know, how many billions of dollars has Google lost on like DeepMind over the years? That is just buried somewhere in its balance sheet. And Will, you know, you can't even see because that's not a reported figure. There's a huge amount of investment. Like this is what used to be called back in the day, you would see it on the statements, on the financial statements is R and D. But like it's a very weird kind of R and D because it's just buying electricity to a large degree. And you're like, that's not what I always used to think of as R and D expenditure. I used to think of RD expenditure as like hiring a bunch of boffins wearing white coats and giving them a whiteboard and some dry erase markers. Whereas just buying a nuclear power plant and plugging it into a box with chips in feels a little bit more hard, sciencey. It's like those CERN particle accelerators and whatnot. You know, it's like you just, you need to spend a huge amount of money on building something expensive in order for this shit. To work.
- [23:51]
C
But meanwhile our electricity bills are just going up.
- [23:55]
A
Yeah, because demand for electricity is going up. And as we discussed last week, you know, the supply of electricity is being stymied by the fact that Donald Trump hates windmills.
- [24:05]
C
The latest CPI has electricity up 6.2% year over year versus just 2.9% inflation.
- [24:11]
A
Overall, like which of course the Fed tends to ignore because that's considered food and energy and food and energy is considered volatile. But yeah, the energy part in particular seems like it's only going up and you can't really expect that this isn't volatility as in what goes up must go down. It's more volatility as in what goes up is like to go up even further.
- [24:30]
C
I feel like I resent maybe having to pay a higher electricity bill so Larry Ellison can have another 30 billion so that his son can buy Paramount. So something something so that Barry Wise.
- [24:43]
A
Can take over CBS News.
- [24:45]
C
Yeah, yeah, that doesn't seem and so.
- [24:47]
B
That all of our kids can be brain rotted by AI slop.
- [24:50]
C
Yes, something feels off in that. What of the public good?
- [24:54]
A
It's a good question. No, it's a really good question and it's super interesting as you see all of these AI companies being founded, you know, Ilya Sutskever's New One and Anthropic and all the rest of them, and they're all sort of trying to one up each other on in terms of claiming that they're the white hat good guys and it's just not obvious how much if any public good any of them are actually creating. We should probably just mention, since we're on the subject of AI and money, that the OpenAI transformation into a for profit looks like it is still on. And they seem to have agreed that the sort of they will buy off the nonprofit by basically giving it a hundred billion dollar stake in OpenAI. But what exactly the nonprofit is going to be able to do with owning a bunch of shares in OpenAI that are technically worth $100 billion remains to be seen. Slate Money is sponsored this week by Life Kit, which is a podcast from npr. If you could use a little help to shape the direction of your life, from fitness routines to mental resilience, or navigating personal goals or just tackling burnout, then Life Kit will help you. If you're looking to move with more intention or just need thoughtful guidance on Living Better, LifeKit delivers strategies to help you make meaningful, sustainable change. LifeKit offers real stories, relevant insights, and clear takeaways to help you meet those large and small decision making moments with confidence and clarity. It features trusted voices, expert advice. So listen to LifeKit and hear hear thoughtful conversations that unpack the emotional and practical side of personal wellness along with actionable guidance you can use no fluff, no judgment, tackle common issues like relationships, finances, parenting, your career and walk away with a game plan you can implement right away. Life Kit isn't just another podcast about self improvement. It's about understanding how to live a little better. Starting now. Listen to the LifeKit podcast from NPR. Slate Money is sponsored this week by Mint Mobile, which is an incredible way to get fantastic mobile phone service without paying the kind of price that you think mobile phone service ought to cost. You should be out there enjoying your life, traveling the world, getting great experiences. You should not be held back by massive wireless bills. That is why you should switch to Mint Mobile. I can tell you I've used Mint Mobile in lots of different places around the world. The service is fantastic. The cost is tiny compared to what are you paying normally. If you have a classic cell phone plan like $10 a day to roam internationally, I can tell you you pay like $20 a month. With Mint Mobile it's nothing. So say but bye bye to your overpriced wireless plan's jaw dropping monthly bills. Not to mention the unexpected overages. There's never any unexpected charges with Mint. All plans come with high speed data and unlimited talk and text. They're on the largest 5G network in America. You use your own phone. Nothing really changes. So this year, skip breaking a sweat and breaking the bank and get this new customer offer and your three month unlimited wireless plan for just 15 bucks a month at mintmobile.com slatemoney that's mintmobile.com slatemoney upfront payment of 45 bucks required. That's $15 per month. It's a limited time new customer offer for the first three months only. Speeds may slow above 35 gigabytes on the unlimited plan. Taxes and fees are extra, but C Mintman Mobile for details all right, I've forgotten what Segment three is. What Segment three?
- [29:05]
C
We're talking about JP Morgan building this like monument of work palace thing right near Grand Central. So I would work there for sure.
- [29:15]
A
I hate this building. I'm just going to come out and say I think this is the worst new building in New York, if not the world. It is just hulking and ugly and I hate how it meets the ground and I hate how it meets the sky and I hate how it lights up at night And I hate how it screws up the skyline. It's so gaudy. The way it lights up. It looks like a naff Vegas hotel.
- [29:37]
C
But everyone says that about new buildings. And then.
- [29:40]
A
Well, I don't. Honestly, tell me one skyscraper in New York that I haven't liked in the past 30 years. Like, I am a pro skyscraper person.
- [29:50]
C
Okay, I believe you.
- [29:52]
B
It seems a little fitting, though, that it looks like a casino. It's a perfect housing for an investment bank.
- [29:59]
C
So we're talking about J.P. morgan's new building at 270 Park Avenue. 60 stories, 2.5 million square feet. It's going to have a food court curated by a fancy chef that I don't remember the name of anymore.
- [30:12]
B
It's Danny Meyer.
- [30:13]
C
Danny Meyer.
- [30:14]
A
Not just a food court. It's going to have 19 restaurants.
- [30:17]
C
19 restaurants.
- [30:18]
A
And if you're sitting at your desk in the building, you get to just tap a few keys and they will deliver lunch to your desk.
- [30:25]
C
Sounds great. And there's like some fancy gym, which controversially, apparently, JP Morgan is going to charge a membership fee for. But I'm sure it'll be subsidized by the company, so I'm sure it'll be.
- [30:35]
A
Subsidized, but also, like, dirt. This building is going to house 14,000 people. There is no gym on the planet that is big enough to accommodate 14,000 people.
- [30:44]
C
They're not all going to go.
- [30:45]
A
And if you're an investment bank, the only real sensible way of rationing access to the gym is by charging for it. They're not doing it for the money. They're doing it so that the gym is a pleasant place to be and not overwhelming by 14,000 people.
- [30:58]
C
And it's going to have class. I mean, it just sounds great. It sounds like a great place to work. I'm someone who's been working from home for the past five years. So the idea of going into a super swanked out office building seems great. And I mean, if Jamie Dimon has been, you know, all about the office now since 2021, he was among the first CEOs to be like, this is bullshit. Everyone back in. What are you doing? He recently was like hot mic'd on some call where he was like, this Friday thing is ridiculous. I call people, no one's there. Like, we need to be working on Fridays, you know, because most other companies have come to this place where every day is in the office, except Friday has become sort of everyone stays home kind of a thing. Anyway, I can tell you that as.
- [31:43]
A
A someone who now has an office and colleagues in the office. And I go into the office pretty much every day. I. Number one, I'm loving it. Number two, there's this sort of official four day a week mandate. But there's a large number of people who come in on Fridays, might not come in on Mondays or might just take a different day off because Fridays are a little bit quieter, it's a little bit less hectic and you can get a little bit more sort of work done. But it's still. You still get all of the amenities. You know, the Bloomberg snack situation is legendary.
- [32:16]
C
I love it. Yeah. So I think it's great if he wants to be all about people coming to work. And now he's making work like a really nice place to be be. And it's an investment.
- [32:25]
A
Like, yeah, I will totally take it as. Read that as a place to work. Once you're in the building, it's a great place to work. The ceiling heights are much higher than the old 270 Park. Part of my beef, as longtime listeners to this show might remember, is that in order to build this building, they demolished the old 270 park with the old Union Carbide building, which was an absolutely gorgeous piece of architecture. The tallest building in the world ever designed by a woman. I really loved that building. And it went through a massive eco refit in 2011 which made it lead platinum and was basically a completely rebuilt building. It was kind of new. At that point in 2011. It seems crazy that they would then demolish it. It was the largest and tallest building in the world ever to be demolished on purpose. They just took down all of this steel, all of this embedded carbon and replaced it with. This is like one crazy stat. The new 270 park is shorter than the Empire State Building, has fewer square feet than the Empire State building, but has 60% more structural steel. It has 95,000 tons of steel in that building, which is wild.
- [33:39]
C
What is that? So why should I be? So what? Why it matters.
- [33:44]
A
Think of every ton of steel as having a massive carbon footprint. And you're like, this is just. And they're making a bunch of green claims for this building, right? They're saying this is the first all electric building. This is the first zero emissions building, you know, which is all kind of meaningless. It's like, well, we're buying green electrons to power our building, whereas the building next door has dirty electrons. Like, how can you let an electron come on people?
- [34:07]
C
So they're greenwashing what has been kind of like an environmental catastrophe. Yes. Got it, got it. Okay. Yeah, that's. That seems like a fair point to make. And also JP Morgan is now like the biggest bank.
- [34:19]
A
And yeah, it used to be like there are, you know, four big banks in America. You know, it's like JP Morgan and Citibank and Wells Fargo and Bank of America. Now it's like there is one big bank in America and everyone else is competing for second place. And it's not just in America, it's in the world. JP Morgan reportedly is looking at spending another $3 billion ish to build a massive new headquarters in London which would immediately become by some margin the largest building in London. There is an old rendering from Richard Rogers which if it winds up looking anything like that, will look much nicer than 270 Park. But yeah, I don't have a problem with big building. I just have a problem with this big building.
- [35:00]
C
But I mean there is that thing when the new big building comes to town. Like a lot of critics are like, it's so ugly. I hate it. And then after like 10 years or 15 years, it's. It becomes a crucial part of the skyline and very beloved.
- [35:13]
A
I just don't. I mean, you know, I've lived in New York for almost 30 years now and I'm thinking about all of the big buildings that have gone up over that period of time. Like just down the street from 270 park is 1 Vanderbilt, you know, the bank of America headquarters. And when that went up, people were like, that's strange. But then there wasn't a vehement hatred towards it. Right next to 270 park is 383 Madison, which was the old Best urns headquarters. When that went up, people were like, oh, that's quite nice actually. Has a nice little crown on top. You know, it's a pretty building. The new 425Park that has just opened up the road from 270Park, which is where Citadel is. Everyone loves that is just like. Everyone's like, wow, this is a really fucking gorgeous building. So I don't, I don't really buy this thesis that new buildings are always hated.
- [36:02]
B
I think you know, that until 911 the World Trade center buildings had a lot of critics that were, you know, persistently hated it.
- [36:10]
C
That was the one I was thinking of.
- [36:11]
A
And that again belies Emily's. You know, they got built in what, the mid-70s, early-70s. So you know, even 40 years later, sentiments hadn't changed. People started liking them a little bit more in sort of retrospect, once they were gone. But like the replacement one World Trade, the new, the David Childs one, it's kind of, eh, you know, it's not anyone's favorite building. But again, like, I don't see anyone saying I hate it.
- [36:38]
C
All right, well, what about this, what about this other thing that I want to say, which is that when a company builds a splashy new headquarters, as Jamie Dimon himself has said, that's time to short the stock. That is a sign of hubris and everything's about to come crashing down. Lehman Brothers built a new building in 2002. By 2008, they were caputs. Enron had a big fancy, famously, Bear Stearns, Time Warner, aol, whatever that building situation was, they were out soon after. It just seems like you're really tempting fate.
- [37:13]
A
I mean, you're using a relatively generous definition of soon here, but like, if.
- [37:18]
C
You include like 15 years, whatever. I'm saying that it's tempting fate to build a big, splashy headquarters and spend a lot of money often. But maybe, maybe I'm just totally wrong again, twice in a row in this conversation, but I don't think so.
- [37:34]
A
I definitely see a certain amount of hubris going on at J.P. morgan, especially with 383 Madison, which, you know, when it was built as Bear Stearns's headquarters, they said exactly that. They were like, this is a very hubristic headquarters for Bear Stearns. Why are they building such a great monument to themselves right next to Grand Central Station? JP Morgan has now taken 383 Madison now that it can move back into 270 Park. And it's like we're going to completely revamp the whole thing. Tear off all of the exterior cladding, replace it with glass, change the sidewalk situation. Like it's not good enough for them. You know, this incredibly grand and special Bear Stearns headquarters that everyone was kind of jealous of when it was built is now considered like Class B. And so it needs a major upgrade from JP Morgan. That's kind of wild.
- [38:24]
C
Class A is the only, like the commercial real estate sector off office buildings specifically, obviously haven't been doing very well since 2020, with the exception of Class A buildings, which have been doing well. So in that sense, it kind of makes sense.
- [38:38]
A
Yeah. I mean, to be clear, 383 Madison is a Class A building. It's just like it's not A plus.
- [38:43]
C
You got to be a plus. You got to be a really one.
- [38:46]
A
Vanderbilt is a plus.
- [38:48]
C
Right? That's the space where the commercial real estate sector is doing well. So maybe it's not hubris, maybe it's just smart.
- [38:56]
A
It's an interesting question, right? So JP Morgan spends $3 billion or whatever it is building this new headquarters. They own it, they're paying rent to themselves. Like it kind of lives as an asset on their balance sheet. They don't ever really want to move out. It's an interesting question, like if it is true that these things are in demand and increasingly valuable, you know, if it goes up in value and no one ever hears it because they never sell it, like maybe at some point they'll do some clever financial engineering. You know, if it doubles in value and becomes worth $6 billion, then maybe they'll do a sale and leaseback thing with a Saudi Arabian sovereign wealth fund or something and so they could realize that gain. But it's all very theoretical really.
- [39:37]
C
Plus office building sustain. Like what is state of the art now in 15 years will be weird and old fashioned and yeah, I mean.
- [39:45]
A
I think, I think 383 Madison is a really good example of that. You know, it, it's what, 20 years old and already it's considered to be out of date. And it was state of the art. I mean actually a really, an even better example of that is one Bryant park, the bank of America building, which was super brand new and swanky not that long ago, maybe 10, 15 years ago, it got built and it was very eco friendly at the time and it was full of lead gold or lead platinum signs all over the rest of it. And now is considered to be so out of date and behind the times that it's going to get fined under Local Law 97, something like that, over $2 million a year because its emissions are so high, because it has like an internal. It heats itself by like basically burning fossil fuels in the basement, which is how buildings always used to do it up until 270 per a guy down.
- [40:36]
C
There shoveling coal into a furnace.
- [40:40]
A
Not quite, but yeah, almost. But that'd be an amazing job, right? I work for bank of America shoveling coal into the furnace so that the.
- [40:48]
B
Traders, a little bit of a metaphor.
- [40:49]
A
Can keep cool in the summer because we have like coal powered air conditioning.
- [40:54]
C
That's like the AI economy basically at the bottom of it all is just a bunch of guys shoveling coal into a furnace.
- [41:00]
B
A few hamsters on wheels making the.
- [41:01]
A
Servers go, yeah, yeah, I'm long hamsters. I'm telling you man, I'm going to tap into hamster power. Sleep money is sponsored this week by SAKS Saks Fifth Avenue makes it easy to shop for your personal style this season. Fall is here, and there are so many new fall arrivals that you're going to want to wear again and again. There's a great new relaxed Prada blazer. There are Gucci loafers you can take from work to the weekend. It is incredibly Easy to visit Saks.com and find new arrivals from your favorite designers. I kind of love the shirts from Commes des Garcons. I can't always afford them, but it is definitely always there on my inspo board. And once in a blue moon, I might even buy one. Saks makes shopping feel customized to you. They have in store stylists. They have Saks.com showing you only what you like to shop. They will even let you know when arrivals from your favorite designers are in or when something you love is back in stock. So find inspiration for your personal style every day at Saks Fifth Avenue. We should have a numbers round. Emily, what's your number?
- [42:27]
C
Oh, this is kind of nerdy.
- [42:29]
A
Okay, I like nerdy. Nerdy is good.
- [42:31]
C
I'm going to go for it. So my number is 9.9%. That is the official poverty rate for adults age 65 and older, senior citizens. And it's slightly higher from last year, according to new census data that came out this week. And the supplemental poverty rate, which I don't need to define, do I? But whatever, it also went up. Was the only poverty rate to go up among all the demographics. And you're saying what? Why are the seniors so poor? Emily, what's going on with the seniors? Are they okay? You guys, they're fine. They're totally fine. It turns out that the way the census calculates the poverty rate, particularly for seniors, leads to a misleading and higher rate of poverty than you would think. And I know this because I read this great substack from a guy named Andrew Biggs who works at the American Enterprise Institute, who explains that the poverty rate doesn't take into account irregular income. So it'll take into account paychecks, it'll take into account Social Security, it'll take into account your pension, but it won't take into account your 401k or your IRA income at all.
- [43:35]
A
Oh, wow. So if the seniors are all increasingly relying on their 401ks and they pull out every quarter, whatever they need to live on for the next quarter, none of that is counted as income, even though it is taxable.
- [43:48]
C
Yes. And apparently the census knows this is a problem and puts out there's been tracking this other kind of data, more complete set called like news or something. But there's. It's still preliminary and behind the scenes, so they don't publish it the way they do these other numbers.
- [44:03]
A
Well, I'm sure that given the Trump administration's commitment to high quality national statistics, we will have that very soon.
- [44:11]
C
Oh, yeah, I'm sure it's right around the corner. But if you look at that, then the poverty rate for old people in our country is really, really low. The poverty rate for children is like three or four times as high. Which I feel like is a conversation for another time. Like, what are we doing?
- [44:25]
A
We need age based redistribution.
- [44:28]
C
Yeah.
- [44:28]
A
Take, take from the old and give to the young.
- [44:30]
C
Give the babies for one case to spend right away.
- [44:34]
A
Elizabeth, what's your number?
- [44:35]
B
My number is 3600 and that's dollars. And that's what you would pay for a leather workout bag from Aloe Yoga, which is not really a luxury brand. They sell, you know, $70 leggings. And so they're, they're sort of trying to break into the luxury handbag market because everyone knows that if you need a workout bag, you want it to be leather or suede, which is not at all problematic when you put all your stinky clothes in it. But my favorite detail about this bag is that it comes with an embedded crystal for intention setting.
- [45:05]
A
I like that. Yeah. Various people. As I lower myself gently into the water of the Bloomberg offices and I notice all of the random Bloomberg screens that people have, a bunch of people have a little circle in the top left hand corner of their Bloomberg screens, which is just like going in, going out, going in, going out. And all you need to do is if you're feeling a little bit stressed or something, you just look at the circle and you, you breathe in, you breathe out, and then it helps you, like, calm down. And it's just a nice little calming thing. That is. And that's even better than an intentional crystal in a workout bag.
- [45:42]
C
What?
- [45:43]
A
But aloe bags are. They're having a moment right now. Do not ask me how I know this, but there's this. The basic aloe bag is tie dyed. Right. And it is ubiquitous. And everyone's walking around with like tie dyed aloe bags. No one can quite work out why.
- [45:58]
B
I think it's the Bella Hadid and Kendall Jenner are fans.
- [46:02]
A
Well, there you go. That'll explain it.
- [46:04]
C
Oh, I see it. Aloe intention crystals. Individually selected. The energy of the crystals carries the, the resonance of your intentions throughout the day protects you, balances your daily life, and grounds you where your true power lies. Wow, that's very powerful. Incredible stuff.
- [46:22]
A
I mean, let's all go out and start crystallizing.
- [46:25]
C
How do you know your intentions if you don't have a crystal? How do you even intend to buy a crystal without a crystal? That would set your intention to buy the crystal?
- [46:34]
A
It's crystals all the way down. Emily. My number is 63, which is a percentage. And while Emily is talking about the olds, I'm going to talk about the youngs. I'm going to talk about 18 to 26 year olds. Specifically Japanese 18 to 26 year olds. 63% of them have not had a drink in the past six months. Not even a beer. 63%.
- [46:58]
B
Wow.
- [46:59]
C
I was reading recently in America, many people are drinking less, but not to that extent.
- [47:03]
A
Many people are drinking this, but like, it's not like a majority of people are drinking nothing.
- [47:08]
C
No, that's great. They'll be healthier.
- [47:10]
A
Yeah. Well done, Japanese people. This is bad for the Japanese beer companies, but good for the Japanese general metabolism.
- [47:17]
C
And considering the demographics in Japan, like they need those young people really badly. Like they can't afford stay healthy youngs in Japan. But why is that? Why is it like that there? I mean, is there something going on that explains this?
- [47:31]
A
We're just gonna have to send you to Japan to find out.
- [47:33]
C
I would like to find out if.
- [47:35]
A
We have any listeners in Japan and you want to like, you know, send us an email slatemoneylate.com saying I would totally pay for a ticket to a Slate Money live show in Tokyo. We'll fly out.
- [47:48]
C
I thought you were gonna ask them to explain why 60. What is it, 63%? Yeah, 63% young people aren't drinking. But no.
- [47:55]
A
Is there a reason? Let us know slatemoneylate.com Otherwise, thanks very much for listening. Thank you to Shayna Roth and Jessamine Molly and Merritt Jacob for doing all the wonderful behind the scenes work that makes this whole show possible. And all month, if you join Slate plus in Apple Podcasts, you can get an Apple exclusive two week long free trial. Just press Try three at the top of the Sleep Money show page in the app. If you are a subscriber, thank you very much for subscribing. And we have a Slate plus segment coming up for you on Zuckerberg versus Zuckerberg.
- [48:32]
C
It's not a divorce, something else.
- [48:34]
A
Zuckerberg versus Zuckerberg. The defining lawsuit of our age. So that's for you special people. Otherwise we will see you next week with more Slate Money. Slate Money is sponsored this week by Saks. Saks Fifth Avenue makes it easy to shop for your personal style this season. Fall is here and there are so many new fall arrivals that you're going to want to wear again and again. There's a great new relaxed Prada blazer. There are Gucci loafers you can take from work to the weekend. It is incredibly Easy to visit sachs.com and find new arrivals from your favorite designers. I kind of love the shirts from Commes des Garcons. I can't always afford them, but it is definitely always there on my Inspo board. And once in a blue moon I might even buy one. Saks makes shopping feel customized to you. They have in store stylists. They have Saks.com showing you only what you like to shop. They will even let you know when arrivals from your favorite designers are in or when something you love is back in stock. So find inspiration for your personal style every day at Saks Fifth Avenue.