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- [00:00]
A
Foreign. Hello, and welcome to the Caper Capper edition of Slate Money. It's a cap. It's a cap caper. Welcome to the Cap Caper edition of Slate Money, your guide to the business and finance news of the week. I am Felix Hammond. I get all of my news by reading words. And so I was mentally sub vocalizing something about Kaepernick. Apparently it's not Kaepernick. Apparently it's Kaepernick.
- [00:41]
B
Yes, it is.
- [00:42]
A
So now I've learned that Kaepernick has got up to a Nike caper this week. There has been all manner of brouhaha surrounding it, even up to presidential tweets, although that bar is pretty low these days. We are going to talk about Nike and their marketing prowess. We are going to talk about Les Moonves. We've talked about him before, but he might be on the outs. And what is going on at CBS and what is going on at National Amusements and also what is going on at Warner Media, which used to be Warner Brothers. Have they suddenly got woke? We are going to talk about that. We are also going to talk about the death of. The death of cash in India. We have a big update for you on a story which we had about a year or so ago, I think, in any case. Oh, and we are going to have a plus segment about the fact that there are now two companies in America worth a trillion dollars, or they were. There were once upon a time. There was MIA one like a few days ago, and then briefly there was another one. You've heard of it, but we're not going to give the punchline away. If you listen to Slate plus, you'll find out what the second trillion dollar company was briefly and probably will be again. And to talk about all of this, there is going to be me, Felix Hammond of Axios. There is going to be Emily Peck of Huffington Post.
- [02:17]
B
Hello.
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A
And there is going to be Anna Shymansky.
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B
Hello.
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A
Who is an American football fan.
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B
I am.
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A
And can talk about Cap as apparently he's known. He's not just a Cap. Anyway, he. I know nothing about American football, but I know that he played American football. And then he stopped playing American football at about the time that people started kneeling during the anthem. And then even though he's good, no one signed him and there's a lawsuit. And then somehow, all along the way, quietly, he was drawing a paycheck from Nike. And now he is the front and center, voice and face of the new Nike ad campaign. And a bunch of crusty old white Guys are upset about this, but does anyone care about crusty old white guys?
- [03:08]
B
So, yes, there are certainly crusty old white men and also young white men doing stupid things like burning their own shoes on YouTube videos.
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C
They're cutting their socks up.
- [03:18]
B
They're cutting their socks up. Really good socks. And unsurprisingly, there is also criticism of the Nike move on the left. I think of some people saying, well, but they're just trying to take advantage of this political moment. And this is a company where recently they've had issues with women who work at the company. And there was a long history at Nike with labor practices. So, you know, is. Is this just hypocritical? I just want to be on record as saying, I think this ad is awesome. And this is a hill I'm going to die on in this segment.
- [03:49]
C
Yeah, I mean, yes, Nike is a business, and this is Nike. Brilliant stroke of marketing. Right? I mean, yes, they have. They're facing a lawsuit from women who are alleging pay discrimination. And Nike. I'm old enough to remember when Nike's labor practices were put in question. And the ad is cool. Believe in something, even if it means losing everything. That's cool. It's a great slogan. Nike knows who buys its products, mostly millennials and younger. I think it's like half. More than half, three quarters. I don't know. A lot of millennials buy Nikes more than the. The old guys cutting up their shoes. And even the. Aren't important.
- [04:34]
A
Or more to the point, it's not even the millennials. It's the. Insofar as the people who buy Nikes care about sports, the sports they care about are not normally American football. It's. They're more the tennis and the basketball and even the baseball and the soccer. But. And that's true in America, and it's even more true everywhere else on the planet where absolutely no one cares about American football and where all of Nike's growth is. So if what you want to do is create a global brand and you have this, you know, iconic figure in Colin Kaepernick, then it seems kind of obvious that it's. It's. It can play very well, not only domestically, but globally. The thing which surprised me, the thing that surprised me was that it was actually controversial.
- [05:23]
B
Right? But I think you're completely right that the ad itself, because it's not just Colin Kaepernick, it's also a number of other athletes. It's very, very diverse. That's clearly the point. So I think that does appeal to a more international audience. But Colin Kaepernick is a very controversial figure in the United States right now. This is not a fake controversial figure. Now I don't think he should be so controversial. I think what he's doing is awesome. I think it's fantastic. But this is, this is real. And also you're talking about Nike which has a long term contract with the NFL right now. They're putting someone in their ad who is suing NFL who was a major customer.
- [06:00]
A
So is, is this actually a risk though? Is there a risk that's going to be financially harmful to Nike? Because the NFL could be annoyed at the Nike for using this chat.
- [06:10]
C
Nike is so much bigger than the NFL. It does not need the NFL. Plus there its contract with the NFL isn't up for several years.
- [06:19]
B
No, they just renewed it. But I'm not saying that, that this means that. Oh my God, all of a sudden, you know, the, somehow the NFL is going to try to get out of this contract. What I'm saying is this is Nike using their power to put pressure on an organization that they have a relationship with.
- [06:34]
A
And that's. So you're saying that Nike is pressuring the NFL to do what exactly?
- [06:41]
B
Well, potentially for somebody to sign Colin Kaepernick. This.
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A
Do they have that power?
- [06:46]
B
The teams have that power. But it's also, it's just the idea that you, because you've also had the NFL come out and try to say that they are now going to be forcing players to stand for the national anthem. They're, they've been taking additional actions and what Nike is doing is they're saying, they are citing with what I think is, you know, on the right side of history. They're siding with Colin Kaepernick. I think that is putting pressure on the NFL to potentially rethink some of their stances or if anything just for Nike to show that, you know what, this isn't just because I think the way that the Kaepernick controversy has often been discussed, it's as though so many people are opposed to the, to the NFL athletes. And that's not actually true. And I think this is a way of doing Nike showing that.
- [07:33]
A
Yeah, I think the general opinion is, is, is positive. Suddenly if you look at the opinion.
- [07:39]
B
Polls, it's mixed depending on how you ask.
- [07:41]
A
It's mixed depending on how you ask. But like the people who oppose it are, you know, the crusty old white guys who own the NFL teams and they obviously have a lot of power. What's fascinating to me is that people are looking at numbers and splashing them across headlines like, Nike got $163 million in earned media from this ad. Or Nike's shares dropped 3% on the news that they signed this guy. And all of these numbers are incredibly small. Well, like 3% is. Is like Nike stock is back to where it was two weeks ago. Yeah. 163 million is a drop in the bucket of the Nike marketing budget. Most people who see this ad are just going to see it as an ad. They're not going to see it in the context of the news story and the controversy, in the way that we news junkies are consuming it.
- [08:33]
B
I'm not so sure about that. I do completely agree with you that the idea that this is somehow hurting Nike because their shares dropped 3%, whereas Adidas shares dropped more. This is just an overall market thing. I actually think this had almost nothing to do with the ad. I think.
- [08:47]
C
I mean, Nike is on the right side of history here. There's a great calm in the Times on Thursday night that looked back at the 1968 Olympics when two African American sprinters famously raised their fists in the air when they're up on the podiums getting their medals, and they were raising their fists in the air to protest discrimination and segregation. And at the time, it was also really controversial somehow. And these men, Tommy Smith and John Carlos, like, they were retaliated against, death threats, job loss, like, couldn't feed the family. Like, it was really bad for these guys. And I think Kaepernick, you know, he's carrying on that kind of tradition. But what's interesting now is that he has the backing of this, like, mega corporation, which is, you know, paying him, putting him as the public face.
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A
You mean, he hasn't actually sacrificed everything?
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C
I mean, he's. No, he has sacrificed quite a lot. I mean, he's really. He's lost his career. He's trying to. He's suing the NFL now because he. He's alleged they're colluding against him to not hire him. He's definitely lost a lot. But I do think it's telling that things have changed with corporate marketing, at least, and demographically, that a company like Nike would be on his side also. I feel like companies now, the way they're marketing, they have somehow, in this era where politics is so, where we have Donald Trump in the Oval Office, something's happening where, like, corporations seem to be more progressive than politicians or something. I don't know where I'm going with this actually. But something weird is happening.
- [10:28]
B
I do think there is some truth to that. And I also do think that advertising does seem to be shifting a little bit and it does seem to be more focusing on companies wanting to align themselves with certain values and certain identities. And of course companies have always tried to align themselves to a certain extent with identities. But I do think now you're seeing a number of companies and similar to when you saw after the North Carolina bill, the school shootings as well. And yes, the North Carolina bill where you are seeing a lot of companies that are pushing back. And I for one thinks that's a good thing. And I think something like this I also think is kind of nice because Nike is to a certain extent also putting a little bit of pressure on themselves because they did just recently have this issue where a number of women at the company came out and showed that there were some really bad labor practices against women in the company. And Nike has made a number of changes since that happened, but obviously not enough. But I think right now Nike coming out and saying we are aligning ourselves on the side of social justice is going to make them a huge target if it turns out moving forward that they're complete hypocrites and they're going back. So I think to a certain extent they're putting a little pressure on themselves.
- [11:35]
A
The one thing I think we can learn from this is that the thing to do if you're going to embrace some kind of a social cause is to embrace it wholeheartedly and full throatedly. Like sign up Colin Kaepernick, who's the face of the movement, as your spokesman. Don't get some random Kardashian kid to like give a Pepsi to a policeman.
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B
You know, Pepsi will end racism.
- [12:04]
A
Yeah, don't try and don't try and find a middle way because no one's going to be happy about that.
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C
Yeah, Will Leach had a really good piece in New York magazine that sort of argued the same. Like you can't, there's no middle anymore. You have to just pick a side at this point. Your customers expect it.
- [12:20]
A
Okay, so Les Moonves. There was of course this famous Ronan Farrow piece in the New Yorker talking about the culture of sexism that he oversaw and how he was even probably part of is Les Munovis is not a nice guy. He feels like a nice guy. He looks like a nice guy when he comes out in public and he's got this kind of avuncular nice smile. He doesn't have that kind of Harvey Weinstein to him. But it turns out that he's not so nice. And now the board of CBS is reportedly negotiating his exit. He wants 150 million in cash. They want 100 million of like clawbackable stock. And it looks very much like it's the end of Les Moonves. Do we think that it is long past, long since time that he should be gone already? Do you think he should be going with any kind of deal at all or what's. And what does this mean importantly for the future of CBS as an independent company? If anything.
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C
I think it's been seven weeks since Ronan Farrow's article came out and I think it's somewhat unconscionable that he wasn't at least put on leave. They kept him on that conference call, famously that right after the piece came out. They knew the piece was coming out more than seven weeks ago, yet they didn't launch an investigation until after it came out. They didn't even communicate to their employees on the Friday it came out. They waited the whole weekend and then they sent out some like generic, non reassuring kind of email to everyone. So. And if you go back and read the New Yorker article, the allegations are pretty gross and damning. It's not just his behavior is appalling and also the behavior of the men he oversees equally appalling. So that said, he's the CEO of a huge powerful media company and it's hard to dislodge these people. So I guess seven weeks is fine.
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B
Yeah, I mean, I think in an ideal world we would like him to be removed more quickly. We'd probably like him to be removed without this enormous severance package he's gonna get. But unfortunately we don't yet live in that ideal world. I would say. What's more interesting to me about this whole story though is how this is going to affect the soap opera that is the national amusements Viacom.
- [14:41]
A
So to rewind a little bit, you know, what is that? What is it they do on soprops like previously on Viacom, the big Sumner Redstone Viacom empire used to include cbs and then CBS got spun off as its own separate Companies under Lesman vs Leadership and the rest of the company. Viacom was a separate company and then Sumner basically became incapacitated. He was replaced by his daughter Shari, who wants to merge the two companies back together again. Moonves is completely opposed to this. If Moonves leaves, then it seems more likely that in the absence of his opposition that those two companies will be merged again. Does anyone care about this. Is it important whether they're separate or whether they're joined?
- [15:43]
B
I think a number of people at the companies care about it. I mean, Sherry Redstone certainly does. She wants to merge them back together, mostly because she wants to sell them. And selling them as a combination, she'll get a higher premium, almost certainly than she would get doing it, selling them both separately.
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C
Because I think the thinking at the time was CBS was the loser and other companies were going to do well. But then it turned out the reverse was exactly.
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B
Yeah. Part of the reason that cbs, unless Moonves and his kind of team didn't want Viacom to become a part, was because they would be a bit of an albatross around their neck. You have higher, you know, average revenue per viewer at cbs.
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A
No one watches MTV anymore.
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B
No, exactly. Nickelodeon and Paramount hasn't made money in a very long time. So also kind of the CBS team has wanted there to be a different potential merger with maybe a company like Verizon. Just cbs. Verizon, with where that would probably ultimately be better for the shareholders at CBS than if there was a combination of the two companies and then they were sold.
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A
So the sum of the parts works for cbs, but it probably doesn't work for Shari Redstone. I should mention, you know, in terms of the crazy tentacles of this organization, Emily, your esteemed colleague Yasha Ali came out with this amazing story about how Les Moonves retaliated against Janet Jackson following her super bowl wardrobe malfunction. And the way he did that was by using all of these insane tentacles. It wasn't just that the super bowl was on CBS, but he also had control over MTV and VH1. And he's like, do not ever show her on those channels. He had control over a bunch of music radio stations. He said, do not ever play her music on those radio stations.
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C
That was astonishing. Janet Jackson was. I mean, you cannot understate how popular and successful she was up until that.
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B
Point before that happened.
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A
And then after the super bowl, her career kind of falls off a cliff, and everyone's like, oh, isn't that sad? But, like, it was in large part because she was blacklisted by Les Moonvest to the point at which his tentacles reached so far. She signed a book deal with Simon and Shuster, and he was like, people are going to get fired because Simon and Schuster is also part of this empire.
- [18:04]
B
Yes, he's. He is both a very clearly bad human being, but also as you're. You're showing a very powerful human being. And having him removed from this equation does help National Amusements quite a bit because there's a lot. There's a lawsuit moving forward because these are some other little details from what's been going on where essentially CBS tried to change things so that they were going to massively dilute the voting power of the. Of national amusements from like 80% to 20% by issuing a dividend with shares. And then the Redstone family countered and said, well, we're going to change the company bylaws and make a super majority to make this dividend. And so now it's moving forward to court.
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A
But there's this whole wonderful thing about, like, who controls what and which board.
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B
It's a fascinating story.
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A
It's crazy. Fighting corporate governance. If you, if you're interested in corporate governance and Delaware law. Amazing.
- [18:56]
B
It really is. But now it looks like this. The. Perhaps they may end up settling or having a resolution and not actually moving forward because Moonves is leaving. Or at least that seems to be one of the reasons. We don't 100% know, but there have been a lot of leaks saying that could be the case.
- [19:13]
A
And meanwhile, like the thing that Moonves wants is to sell to, you know, one of those big telco companies just like WarnerMedia. Just like Warner Brothers sold to AT&T. Warner Brothers is now part of AT&T. It's now been renamed WarnerMedia and it has suddenly gone completely woke. It's like it's, it's doing the opposite of sex scandals. It's got inclusion writers.
- [19:42]
C
Yes. And I didn't realize we were talking about inclusion riders today, but I'm happy to discuss them. This is provisions in contracts that require you to hire a certain number of diverse candidates, women and minorities, people of color. Right.
- [19:57]
B
Yeah, we, we talked about this a bit in the Net. We had our, like the movie episode.
- [20:02]
A
Yeah. And but. So. Oh, right. Yeah, but in. So, but basically it looks like WarnerMedia has. Is doing that Nike thing basically of carving out a space for itself at the, you know, progressive end of the spectrum and saying like, we are going to be totally. We're going to have these inclusion writers in all of our mov and we're going to try very hard to measure diversity and show that it's up and to the right and that we keep on improving every year and we're going to file public reports and.
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C
Great.
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A
And that seems like a much smarter way. It seems that that's. It puts them in a better position than the kind of back foot that the CBS board is on trying to work out how on earth do we get rid of this dinosaur.
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C
I mean, cbs, even if they get rid of Les Moonves, is a company of dinosaurs. I think the board is the oldest and the S and P are one of the oldest. Average age is like 71. And if you go level below the board, there's only men, the executive level, only men. And that's just a signal. I mean that's, I mean, part of it is obviously Les Moonves had clearly had some issues with women and I'm sure that affects the whole company. But it's not clear to me if you just get rid of him that any of that changes.
- [21:17]
B
Right. But I think going back to Felix, what you were saying and also Emily, what you were saying in the previous segment, I do think it's interesting that we are seeing some companies take, not just releasing progressive ads, but actually taking progressive positions within their company. And in a at a time where our politicians just seem incompetent in order of achieving anything, it's nice to see some companies moving in that direction and you're not seeing shareholders abandoning them. There's an idea that actually this could potentially be good for all stakeholders. Okay, Anna, demonetization.
- [21:48]
A
We get to have our little obligatory Anna Shymansky emerging market story here.
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B
I'm not even the one who suggested doing the story.
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C
I'm very happy to.
- [21:57]
A
I will admit I read this story and I'm like, we have to talk about this. Because I was really, I mean, we talked about this when it happened. The Narendra Modi, when he became the prime minister of India, like woke up one morning and basically just said, well, all of the high denomination banknotes in India are now worth nothing. And everyone ran around like headless chickens for a while going, what on earth is going on? It caused a huge amount of chaos. Apparently it caused a non negligible number of deaths from people who didn't have money or had to line up in scorching heat to try and get money out of banks and this kind of stuff. So Anna, now that we have had some time to see the effect of this policy, what is the actual effect of the policy?
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B
So the article that we're referring to, which was a New York Times article, suggests that this policy was a failure because 99% of the value of the currency before demonetization found its way into the financial system.
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A
Basically these high denomination banknotes that were meant to be pushed out of the money supply and out of the financial system that all of these people who'd been paid in cash and hadn't been paying taxes, and all the rest of them had been keeping cash, like under their mattresses. That was all worthless. And they couldn't put it. They couldn't just deposit that cash into banks because then they would have to out themselves as money hoarders and have to pay lots of taxes. Well, it turns out they found a way pretty easily. And virtually all of that money has now found its way back into the system. And so the aim of, like, trying to punish the people who are in the cash economy clearly failed.
- [23:38]
B
Perhaps that failed, although I still don't think that this means that demonetization is itself a failure. I think that there were many goals of demonetization, and yes, one of them was this short term we're going to stick it to the cash hoarders, which I think a lot of people when this happened were like, are you. Money usually finds a way. But there were a number of other goals. One of them had to do with significantly increasing financial inclusion in the country, which very much has happened. You went from having like around 50% of people with bank accounts to 80% of people with bank accounts.
- [24:09]
A
But that's orthogonal. I mean, the demonetization didn't cause that.
- [24:13]
B
That was significantly affected. And if you look at the numbers, it's impossible to argue that that wasn't a big part of it. You've also had a lot of merchants who shifted not only from cash to credit card, but cash to digital payments. You had paytm, the Indian digital payment service, that is doing quite well. You went for something like, you know, like a million to 7 million, which granted, in a country of size of India, I'm not saying that's enormous, but it's still something you. You've also had significantly more money that's made its way into Indian mutual funds. So we are having a large increase in the official financial sector and getting more people in, more money in. And I think that's good. I also think this has given the government a lot more data about the actual economy and I think that that's good moving forward, because if you want to tackle corruption, you need to have a little bit of a better handle on what you're dealing with. So although I think in the short term, yes, basically this was implemented incredibly poorly and it didn't have that immediate impact. However, I don't think that means that moving forward you couldn't potentially see a more positive impact. If you do have more people in the official financial sector, if you do have more transactions in the official financial sector. Yeah.
- [25:19]
C
I mean, it. It does seem like the outcome seems good. More people using bank accounts. It does seem like. Did it need to be such a crazy shock to the system that just seems to be almost cruel?
- [25:30]
B
I agree. And I think that. And part of this.
- [25:32]
A
So there are countries, and we have talked about this in previous episodes, which are highly digital in terms of how they. How the payment system works, how the banking system works. And those countries range everywhere from Sweden to Kenya. You know, it's not a question of how rich you are. It's quite clear that India wants to be one of those countries. Its banking system has an unbelievably sophisticated payments infrastructure, like way. I mean, it's almost impossible for Americans to understand what a sophisticated payments infrastructure looks like because America arguably has the worst payments infrastructure of any country in the world. You know, in India, if you pay someone, the money arrives in their account within seconds. You know, in the US it takes three days. Still, it's such a big difference and all of that.
- [26:27]
B
I think you're completely right. But I think that in order to really move forward in the economy, to really move forward, not just to grow, but to have more inclusive growth, finding ways to crack down on corruption and increase, you know, the official financial sector is really important because if you look at countries that have, you know, say, the Nordic model that we all point to, the reason that that works is because people have faith in institutions and they say, look, we can have a thriving market economy, but we can also pay taxes and have a strong safety.
- [26:57]
A
But that's why I was talking about Kenya. Right. That you can, you don't need to be a Nordic in order to financialize. And what I worry about here is that now that the Indian grifters have proved that they can operate in the cash economy and get that cash back into the banking system, what's going to stop them continuing to operate in cash outside the official system?
- [27:21]
B
Well, I would say one thing we are seeing is that the cash in the economy as a percentage of like, you know, M1, which is a measurement of the money supply, is still significantly lower. So it doesn't look like we've gone back exactly where we were. And if you have more merchants taking money through digital payments, if you have more people with bank accounts. Yes. I'm not saying that overnight everything is going to just change, but I do think you are changing cultural norms. And, and you did have also, like a lot of Indians who would come out and say that, yes, they may have suffered personally as a Result of this. But they think that ultimately it's for the good of the country and people support it. And I think that. And I do think that could lead to improvements in the future.
- [28:02]
C
I want to live in a better financialized country. Why can't we step it up?
- [28:06]
A
Do you want the answer to that question?
- [28:08]
C
Yeah, give me the answer to the question. Why does it take five days for Aunt Millie's check to clear?
- [28:13]
B
So it's a vulcanized financial system.
- [28:15]
A
The answer is that America does not have a central bank. We have 12 central banks.
- [28:22]
C
Okay.
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B
And.
- [28:24]
A
They are controlled in large part by the commercial banks. And the commercial banks, of course, make money from this inefficiency if it. That Aunt Millie's money is basically sitting in the banking system, making profits for the banks while it's in transit, because Aunt Millie isn't making any interest on it, and neither are you. And so it's in the big bank's interest for no one to do anything about this. They have a lot of control over the central banks. And the central banks, plural, none of them is powerful enough to change anything. The Kansas City Fed, interestingly, is. Has always been at the vanguard of this thing. We need to improve the payments infrastructure. And you need the central bank to do it. Um, because the commercial banks aren't gonna do it on their own, but they have achieved basically nothing.
- [29:14]
C
Oh, that's really upsetting. Yeah, I'm sad.
- [29:17]
B
It's her birthday. Check.
- [29:19]
C
Exactly.
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A
So let's have a numbers round. Um, I know this is. This is one of the very few episodes where I know in advance what one of the numbers is going to be. I believe, Emily, Your number is 145,000.
- [29:40]
C
Yeah. Way to spoil it for me. Feel it.
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A
What is your number, Emily?
- [29:43]
C
Well, My number is $145,000.
- [29:48]
A
Wow.
- [29:48]
C
Yes.
- [29:49]
A
What is that?
- [29:50]
C
That is the amount of money Gwyneth Paltrow's lifestyle brand company Goop, paid to settle a case in California over claims made about the infamous jade egg, which is meant to be placed in one's vagina and bringing. They made all kinds of claims about it. That balances your hormones, regulates your menstrual cycle, bladder control. I don't know. Well, being. Blah, blah, blah.
- [30:16]
A
Which were considered to be advertising claims.
- [30:18]
B
Yes.
- [30:19]
C
And were mishelding and inaccurate.
- [30:21]
A
And this is now false advertising.
- [30:22]
C
So she's had to pay $145,000 and refund the money to anyone who bought the jade egg. Or there's also a rose quartz egg question.
- [30:31]
A
Now I'm like, I' I didn't buy the.
- [30:34]
B
Exactly.
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A
Because I would have got one for free.
- [30:36]
B
So here's my question. What about every other product on her site? Because they all make fake health claims. Yeah, I don't.
- [30:42]
C
I guess that's coming too.
- [30:43]
A
So reportedly, I mean this is the big effect. Like the fine, I'm sure that Gwyneth Paltrow can afford the $145,000. The big effect is that they are being much more circumspect in their health claims. They're still talking about lots of crazy chakra woo woo stuff. But the, anything which can be considered to be an advertising claim, they've, they've started pulling back on.
- [31:09]
C
Yeah, if you read the. There's a great New York Times profile of Gwyneth that came out a few weeks ago.
- [31:14]
A
Taffy.
- [31:15]
C
Such a good. So good. Yeah. It talks about how they, I think they hired someone to vet claims and maybe even got a lawyer along the way.
- [31:23]
A
But we're still a long way from, you know, being able to accept a Conde Nest fact checker.
- [31:32]
C
Yes, they, they, they couldn't handle it.
- [31:35]
A
My number is 50. This is the US Open. We are in the middle of. And the US the big innovation at the US Open this year is this thing called the Louis Armstrong Stadium which they completely rebuilt. It's a brand new stadium and many people prefer the new smaller Louis Armstrong Stadium to the big Arthur Ashe stadium which people think is too big. So Louis Armstrong Stadium, popular place, people hang out there. But like all new stadiums, it has corporate hospitality. Blah blah, blah, blah blah. They have this thing called the Centurion Suite. In order to get to the Centurion, in order to get into the Centurion Suite at Louis Armstrong Stadium, you need to have an American Express Platinum card or Centurion Card. The black card. 50 is the number of people standing in line to get into the Centurion Suite at any given time during the US Open. These are by definition very rich people. And these very rich people are perfectly happy to spend however long it takes to stand in the line of 50 people to just get into this suite, to be able to have a free beer or whatever it is that you get once you get in there. And it just astonishes me the way that these people like value their time and their priorities that they think this is a worthwhile use of their time.
- [33:05]
B
Yeah, it seems like maybe a lot of second generation Centurion holders there didn't make the money.
- [33:10]
C
So have you heard that Jerry Seinfeld is the one who came up with the idea for the black card, I feel like I heard this. I feel like I've heard him say this on his show, that he came up with the idea and they made one for him and then it became a thing. Am I making this up?
- [33:23]
B
I have no idea.
- [33:24]
C
Let us email us and let us know.
- [33:26]
A
I do know I have come across the Black Cardinal in the wild a couple of times, reportedly. I mean, it's technically by invitation only, right? But if you have. If you know someone at Amex, you can kind of ask them for an invitation. But the cutoff, the way. The point at which they'd be like, yeah, we'll invite you, is roughly a hundred thousand dollars per month in spending.
- [33:50]
C
My eyes got really wide. You can't see that. That's a lot of money to spend.
- [33:54]
B
That is a lot of money to spend.
- [33:56]
C
Not if you're Jerry Seinfeld, though.
- [33:57]
B
Oh, I don't know, actually. Like, I guess it depends. No, no, no, no, no, no, no. I'm just saying. No, I say this because, like, I've known extraordinarily wealthy people, and they do not spend that much money among, like. I mean, that.
- [34:08]
A
That's a.
- [34:08]
B
That's a lot of money. Like, that's a. Yeah. Just saying that's. It's a lot of money. Maybe they're paying, like, tuition and rent in many, many locations.
- [34:19]
A
How many kids would you need to rank up?
- [34:21]
C
100,000 to me, like Martin Stewart's real estate holdings times 10, maybe, then.
- [34:26]
A
Right.
- [34:26]
C
Or maybe less.
- [34:28]
A
So, Anna, what's your number?
- [34:29]
B
My number is 15,000. As in 15,000 rupiah. Indonesian. So it Indonesian currency breached a level it has not breached since the 1998 financial crisis. This does not mean we're in the middle of a financial crisis, but it does mean that the crises that you have had in Argentina and Turkey do appear to be spilling over into the next level of vulnerable countries. So we're seeing it in South Africa, which is now in a recession, and also into in Asia and Indonesia. So I do think it's notable.
- [35:03]
C
I keep seeing on Bloomberg headlines about the emerging markets crisis.
- [35:08]
B
I feel like, yeah, granted, you always have to take those with a grain of salt because we are in a different world. It's not the late 90s. You have floating exchange rates. You have lots of reserves. It's not the same thing, but there are other vulnerabilities. And we also are potentially in the midst of a trade war, so it's significant.
- [35:25]
A
On which happy note, I think we are going to wrap this episode of Slate money up. Unless, of course, you are a Slate plus listener, in which case you get to learn all about valuations and market caps.
- [35:41]
B
Woohoo.
- [35:42]
A
So stick around for that if you're a Slate plus listener. Otherwise, thanks for listening. Keep the emails coming. Our email address is slate moneylate.com Next week is a big week. It is the 10th anniversary of the end of Lehman Brothers. We are going to have literally the person who wrote the book about the financial crisis come on this show and talk about that, and also talk about her new book about fracking. If you can't work out who that is, then find out next week. In the meantime, many thanks to Max Jacobs for producing and we will talk to you next week on Slate.