Make Me Smart August 23, 2023 Transcript

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Amy Scott 

I can, can you hear me?

Kai Ryssdal

There she is. Sweet. It turns out you have to plug the microphone into the Comrex.

Kai Ryssdal 

And with that we’re on our way everybody. Hey, I’m Kai Ryssdal. Welcome back to Make Me Smart where we make the day make sense.

Amy Scott 

Oh my God, I don’t even have my script up. Hi

Kai Ryssdal 

That’s all right. We can wing it. Go ahead. You know what to do from here. Go ahead. Keep going.

Amy Scott 

Yeah, no, and I’m Amy Scott. Today we’re gonna give you a news fix. And then we’re going to do some smiles and we’ll get out of your way. And I’ll find my script eventually.

Kai Ryssdal 

There you go. There you go. Kimberly, by the way, is still on vacation, trekking across the Himalayas. I don’t even know. I couldn’t even tell you. I could not even tell you. I keep looking for new Instagram reel from her and it doesn’t show up. Okay, well, I’ll tell you what, while you find your copy of the script, I will do my news. And then you can do your news. How about that?

Amy Scott 

All right. Sounds good.

Kai Ryssdal 

Okay, so mine is a little bit geeky, but also a little bit geopolitical. I’m speaking here, the earnings report from Nvidia today, the AI chip maker which has been going great, great, great guns ever since AI became the new new thing. In video reported profits today, sales for the current quarter read this subhead in The New York Times, “sales for the current quarter were nearly triple their total a year ago, which obviously, as I just said, makes chips essential to the development of AI systems. So everybody’s piling into AI, Nvidia is by miles, the leader in AI specific chips, right? If you think of like Intel back in the mid and early 80s, and everybody getting into computers, then that’s sort of this on steroids. So there’s that, number one, AI is a huge business opportunity. Number two, I mentioned this because the Secretary of Commerce Gina Raimondo is going to Beijing and Shanghai this week, to talk about, among other things, the U.S. push to develop its own chip industries and its own ways to do AI and all the big nifty computer stuff. But also she will be responding to the Chinese government, which says, “Why are you not letting American companies sell these really fancy whiz bang chips to us, that makes us angry.” And Ramona was gonna have to do a whole lot of tap dancing, to get out of there without you know, getting a very stern talking to you. I mean, look, she can tap dance, if the cows come home, she’s still gonna get a stern talking to it will not be I think, like Secretary Yellen visit, or Secretary Blinken visit, in part because of the things that have happened since those visits the app and investment limitations by the Biden administration that we talked about. So computers are a big geopolitical thing right now. And and today’s earnings report just shows exactly how big that is. Well that was a rant.

Amy Scott 

You know, Kai, one thing I thought was really interesting about that article that you link to in The Times is, you know, who’s making money on AI, and the companies that are pouring all this money into it are not actually making that much like, you know, Google and Microsoft, but who is making money? The chipmakers, of course, that makes a lot of sense. So I think it’s interesting, who’s going to be, you know, really cashing in on this moment.

Kai Ryssdal 

Totally. It’s a really good point.

Amy Scott 

It’s not necessarily who you think.

Kai Ryssdal 

Yep, absolutely. Absolutely. What do you got?

Amy Scott 

All right. Well, I know you and Reema talked about housing yesterday, and this really difficult market for people who want to buy homes but I saw something on Bloomberg that I thought was really interesting about who’s buying houses right now. And 50% of homebuyers surveyed by Zillow between April and June, were first time buyers, which I think is kind of counterintuitive. Yeah. That’s up from 37% in 2021, and the highest level since 2010, which is when a federal tax credit for first time homebuyers expired. But again, this is at a time when housing affordability is at a record low according to the Mortgage Bankers Association. And here’s why. Zillow quotes its senior population scientist, which I think is fascinating that they have a senior population scientist at Zillow. But anyway, this guy Manny Garcia says that, you know what we all have been talking about high mortgage rates and a shortage of homes for sale are keeping current homeowners from selling and therefore buying a new house, which leaves more room for first time buyers who are basically competing with each other for the scraps. Scraps is my word, not not many Garcias. But that leads me to item two related to housing, which, you know, even with interest rates so high home builders are faring surprisingly well. Today, the Census Bureau and HUD said that new home sales rose by almost four and a half percent last month, that is June to July, but up 34% from last year, and sales generally have been moving up over the past year. And that’s partly again, because so few existing homes are on the market. So people are turning to new houses. And builders also are able to do things that existing homeowners may not like offer incentives to ease the pain of these high interest rates. I was actually at a, touring a model home earlier this summer and saw this big sign that said like rollback sales event, and what they were rolling back is the interest rate. A builder can basically pay the lender to lower the rate. Sometimes it’s a teaser rate, but it kind of gets people across the you know the Yeah, the line if they’re hesitating to buy, and an analyst that I talked to frequently Ali Wolf at Zonda told me today that almost 60% of builders right now are offering rate by downs or other incentives, like funds toward closing costs. And that’s one way they’re boosting sales.

Kai Ryssdal 

So so maybe the housing market isn’t as tight as we think. I don’t know.

Amy Scott 

You know, what I hope is that, like when we talk this time next year, yeah, if interest rates have come down a little bit, you know, and we’ve had builders building more, maybe we’ll catch up a little bit. Wouldn’t that be nice?

Kai Ryssdal 

Yeah, no, it would, it would. I feel like a way to explain why this matters. First of all, homes are the most expensive purchase that most everybody in this economy makes except the top like 1,000th of 1% make. That’s number one. Number two, getting a house is the surest and quickest way to build wealth in this economy, which is why we have a lot of wealth disparity racial and ethnic in this economy, right? White people own more houses, black and brown people typically don’t. And then finally, also, we have a housing crisis in this economy, and we don’t have enough affordable housing. And we need people to have houses. So getting the housing market moving again, is a way to do that. By just

Amy Scott 

Yeah, and when buying houses is too expensive. That means renting houses is too.

Kai Ryssdal 

Absolutely. That’s so. All right, Jayk, let’s go.

Amy Scott 

Alright, what do you got? Okay. Sometimes I struggle with something that makes me smile. I don’t know what it says about me or the news. But today, I picked one that’s just kind of weird, which is that I saw this in the Wall Street Journal, Ford is having a problem with some of its newer trucks and SUVs, where the speakers suddenly emit a piercingly loud sound. One driver described it as like a loud crashing sound that sounded like breaking glass followed by static and said his ears rang for days. Others say this last like 15 minutes or more, and they can’t turn it off even when they turn the car off, which just sounds horrible. And also, yeah, awful. Like as a person who works in sound and has headphones on all the time, I just can’t even imagine. But Ford says apparently this is a problem with the amplifier and the sound system and it’s come up with a software fix. This doesn’t seem hugely widespread. The company says it’s received about 100 complaints mostly involving Ford F-150 pickups, but also the F-150 lightning electric trucks and some Expedition SUVs. Meanwhile, several dozen people have also filed complaints with federal regulators because you know, this is an obvious safety concern. If you’re driving down the highway and this startles you. It could be pretty terrible. But apparently the company says, So far this doesn’t merit a recall. I’d be really interested in hearing from any of our listeners who have experienced this problem. It sounds awful.

Kai Ryssdal 

Yeah. Also, it bears a mention here that the F150 is the most popular selling selling vehicle by which I mean car and light truck in the entire country. So this is this is no small thing for Ford. If this goes sideways, that’d be really bad, right?

Amy Scott 

Those bad boys are everywhere. No joke.

Kai Ryssdal 

No joke. All right. So so here’s mine, and this is something really I should have picked up on like a year and a half ago, but I didn’t. I did. It only because one of the amazing producers on the radio show pitched it as an interview, Sarah Leeson said, “Listen, you got to do this interview. Maybe some of y’all have heard about it. It’s called Tradale, T-R-A-D-L-E. So we all know Wordle is right. It’s the New York Times game, not originally in the New York Times, but they bought it, where you have like six guesses to guess a word and it gives you a very sense and blah, blah. Anyway, it’s it’s maniacal, and it’s so so my, my second son and my daughter and my wife play it every single day. They text each other their results. And there’s some kind of competition that just I can’t just keep up with. And that kind of game never really did it for me, right trying to figure that out. But there’s this thing called Tradle, which is put out by by an economic data company. And what it does, it’s just Tradle. Put that in your browser thing and and it’ll come up. And what it does is it gives you a grid of a certain country’s exports, and it will give you the total value of that country’s exports. And then in grid form, it will give you the percentage of X product or y product that make up that country’s exports like today, right? And there’s those the squares in the grids are sized so that the biggest export percentage has the biggest square. So today the country in question has total exports of $7.81 million, which globally speaking is nothing so it’s a really small country. And then of that $7.81 million, 12.5% are mollusks, eight and a half percent are crustaceans, wait It gets better 4.8% or polyacetals whatever those are. And then 5.75% are processed tobacco and it goes down from there. Non-knit men suits are 2.93%.

Amy Scott

Wait non-knit men’s suits?

Kai Ryssdal

Non-knit men’s suits are 2.93% of this country’s exports. Cranes are 3.06%. Anyway, so you have six guesses to dump and right. And so you have to guess what it is. And then once you once you enter your guess, it will tell you how far away in kilometers you are from the actual country in question. It will  give you a direction that you should move on the globe to figure out where it is. So my first guess today was Solomon Islands, right? Because it’s got to be an island, right? It has to be, mollusks and crustaceans, right? It has to be an island. So my first guests was Solomon Islands. I was 10,000 kilometers away. So I was on the wrong side of the planet. So then I guessed, I guess the Maldives the Falkland Islands, and I was like 8000 kilometers away. But the arrow pointed straight up. So I went up to the Caribbean and cutting to the chase. And I’ll spoil it for those who have no I won’t spoil it. Play today’s game. Let me you know, figure out how you win and give it to us. I know get it to us in our comments. And and as you know, it’s 508-U-B-SMART, write to us and makemesmart@marketplace.org. Anyway, fun game. I’m definitely gonna keep playing this. I’m going to do the interview tomorrow for the radio show and it’s going to air and I’m going to play tomorrow’s game on the air in the interview and we’ll see how I do anyway. That’s my make me smile. That’s super fun.

Amy Scott 

Amazing. So it sounds a little bit like Wordle or Globle, one of the two were exact similarly you just guessed based on the the map and how far you are away but this is an added economics lesson which is awesome for you betcha for us econ nerds very cool.

Kai Ryssdal 

Yeah, very cool. We are back at it again tomorrow. Keep sending us your comments your questions or Wordle scores whatever your your Tradle scores 508-U-B-SMART. Write to us at makemesmart@marketplace.org. We will hook you up.

Amy Scott 

Make Me Smart is produced by Courtney Burgsieker. Ellen Rolfes writes our newsletter. Today’s program was engineered by Jayk Cherry. Our intern is Niloufar Shahbandi.

Kai Ryssdal 

Ben Tolliday and Daniel Ramirez wrote our theme music. Our senior producer is Marissa Cabrera. Bridget Bodnar is the director of podcast. Francesca Levy is the Executive Director of Digital and on demand around here.