Remember credit-default swaps?

Make Me Smart April 28, 2023 Transcript

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Kai Ryssdal 

There it is. Right on the stroke of the bottom of the hour. Hey everybody I’m Kai Ryssdal. Welcome back to make me smart. Back I hope because you’re a regular listener. If not then, welcome. Make today make sense. That’s what we do on this podcast. It is Friday today, the 28th day of April.

Amy Scott 

Hey everybody. I’m Amy Scott in for Kimberly Adams, thanks for joining us for happy hour or economics on tap as we call it. Today we’ve got drinks, then we’ll do a news fix and then we’ll take a break and play everybody’s favorite game Half full/half empty or as I like to call it stump the guest host.

Kai Ryssdal 

That’s a good one. That’s a good one. I think technically we have one drink today because I’m in the office as anybody who’s gonna watch this later on YouTube knows. I’m driving home so I can’t drink. Ms. Scott what are you having?

Amy Scott 

You don’t even have water? I mean you gotta hydrate.

Kai Ryssdal 

I do. I have my very old glass of studio water. You know, whatever.

Amy Scott 

LA’s finest studio water. That’s a whole different kind. So yeah, I have kind of a fun one today actually. I’m drinking a pilsner from von Trapp Brewing Company. Which if the name sounds familiar, it’s the folks from the sound of music movie, they settled in Vermont and opened a lodge and a brewery and it’s this beautiful, like, pastoral scene up there. We spent a couple of days in April, earlier in April there and brought some home.

Kai Ryssdal 

That’s very cool.

Amy Scott 

And I promite not to sing The hills are alive. But I’m thinking it!

Kai Ryssdal 

The… was it like the grandchildren or the great grandchildren that were some singig group? Weren’t they ;ike four of them? And they had some?

Amy Scott 

Yeah, there were more. There were…. it’s funny. The movie got some things wrong as we learned when we were there. There’s lots of history. There were more kids. There was like fourteen or something.

Kai Ryssdal 

No no. Yeah, no, all told, but no. Not that generation, the next generation, right? I think the next generation had its own like, like, quartet singing group or something. I don’t know. Somebody will look that up. Anyway. So let’s do some news. What do you got?

Amy Scott 

It sounds good. I’m gonna put off drinking this so I can tell you. Okay. So, in your neck of the woods, California regulators approved today and yesterday, new rules for locomotives and larger trucks that they say will drastically reduce air pollution and carbon emissions, particularly around the ports and rail yards. So I think this is really interesting. The California Air Resources Board voted to set an age limit to retire old locomotives and require upgrades to cleaner engine engines and eventually to zero emission locomotives. And then the Board also approved a rule to accelerate adoption of zero emission, medium and heavy duty vehicles so school buses, freight trucks, delivery vehicles, both in public fleets, but also in some private fleets. All cargo trucks that enter the California ports and rail yards will need to be zero emission by 2035, which is pretty soon. So you’re in Southern California, you know, the rules are expected to make a big difference to places like Long Beach and San Bernardino where diesel exhaust and smog are a huge problem for workers and people who live in those communities. These changes are estimated to prevent 1000s of premature deaths and decrease cancer risk near railyards by 90%. But, I mean, you’ve got to imagine there are huge obstacles. For one thing, just the supply of these vehicles, we’re still right, we’re still so early in making electric trucks. And this is going to be like a million of these things needed by 2035. And also, the reporter on this story, Tony Briscoe, interviewed a truck driver who works at the port. He just bought a new diesel truck recently. And he’s like, look, I support this. I’m breathing in that diesel all day but you got to give people like me more time to be able to buy these. You know, there are a lot of these owner operators who buy their own trucks. So I think there will be some resistance, maybe some challenges in getting this done, but could be pretty good for people’s health and the environment.

Kai Ryssdal 

Yeah, it would be great. I just in addition to the supply of actual vehicles, let me just say as a brand new EV owner, the whole charging infrastructure is going to be really challenging, right? I mean, my little car… Well, you know, it’s no, it’s a sort of an SUV-ish, kind of EV right. But it’s got, and I don’t want to get all geeky, but it’s got a 77.4 kilowatt hour battery, and that’s a passenger vehicle. I imagine these trucks are going to have ginormous batteries, which are going to take much longer to charge. And even if the technology gets a lot better, that’s still going to be an impediment. And I just wow, yeah.

Amy Scott 

Yeah, yeah, we’ll see if it’s achievable.

Kai Ryssdal 

Right, exactly.

Amy Scott 

You know, when you read the IPCC report like about climate change.

Kai Ryssdal 

Oh I know. Well, let’s make it achievable

Amy Scott 

Like, we need swift action, we need ambition. So this is what ambition looks like. And we’ll see what it does to the market. But as you know, like when California passes something, it often catches on. I mean, they passed the very first tailpipe emission standards in the country in 1966. So what California does can have a big impact

Kai Ryssdal 

I didn’t know it was that long ago, that’s wild. Okay, here’s mine. It’s a little geeky, but I’m gonna roll that anyway. And it’s a thing that we all became really familiar with during the financial crisis in 2007, 8 and 9, and it’s a thing called credit default swaps. And what

Amy Scott 

Agh. I just shuttered

Kai Ryssdal 

I know, I know, I know, I know, I know, I know, I know. We had… so credit default swaps are when one party takes out a form of insurance that basically says, “Look, if x entity defaults on their debt, we will pay you out.” Right? And it’s it’s simply insurance against a default. Now, why would default be on the rise do you suppose? Talk of default? Well, because the debt limit is in the news. And I mentioned that because, according to Bloomberg, I will just read the first sentence. “In what is a traditionally moribund corner of Wall Street speculators are piling into a bed that once seemed unthinkable: that the US government will default on its debts. Trading on credit default swaps is growing as we approach the debt limit deadline,” which is depending on who you talk to somewhere between June and early September, that the US might not be able to pay what it owes. So Wall Street being Wall Street is looking for a way to make money on this. And if the US does default on its debt and if you’ve got a credit default swap against treasury bills, you’re gonna make some money. Capitalist. Ain’t it great?

Amy Scott 

Oh my god. Let’s hope they don’t make money. Come on. I’m just looking at the headline bets offering 2400% payout on us default. Lord, growing crowd, dear lord.

Kai Ryssdal 

Crazy. Crazy. Yeah, credit default swaps.

Amy Scott 

It’s funny that I literally shuttered when you mentioned credit default swaps. Some of us are still suffering a light form of PTSD from that crisis.

Kai Ryssdal 

Totally. Totally. Anyway, so it’s coming back. We’ll tell you more as it develops. Done with the news fix we are. We’re gonna take a quick break and we’re gonna come back with Drew Jostad. Half full/half empty or stomp the guest host.

Kai Ryssdal 

Alright half full half empty is the game. News topics during the week we will tell you how we are feeling about them. Drew Jostad is in charge. Go.

Drew Jostad 

Are you half full or half empty on virtual try on technology?

Kai Ryssdal 

I don’t know what that is.

Drew Jostad 

This would be like an augmented reality mirror. That allows you to see what a shirt might look like when you buy it.

Kai Ryssdal 

I thought it was some weird kind of physics with a try on being spelled T R I O N. You know, like, like newurons and electron.

Drew Jostad 

Yeah that’s a different podcast.

Kai Ryssdal 

Yeah so it’s try on. I think I’m half full on that. I mean, and I’ll tell you exactly why. I went to target the other day. I wanted to buy a pair of shorts, but Target has closed it’s changing rooms and so I couldn’t try them on. And of course I got them home and they were too big. So I had to schlep over to Target and take it back. Yes virtual try on for sure. Physics or not.

Amy Scott 

I have the exact opposite experience.

Kai Ryssdal 

What?

Amy Scott 

They were too small. But yes. Yeah, I think I’m half full. That’s… it’s nice to… I mean, any experience that is kind of difficult for people like trying on clothes, if you can kind of take some of that out. Although maybe I don’t want to see the AR or AI version of myself in a swimsuit, either. I guess that’s why it’s half full.

Kai Ryssdal 

I feel you there. All right. Yeah. Drew go ahead.

Drew Jostad 

Half full or half empty on the demise of the stretch limo.

Kai Ryssdal 

I did not know this.

Amy Scott 

Oh, I saw that headline. But I didn’t read the story. So are they like, really declining?

Drew Jostad 

Yeah, I mean, there was like, apparently some sort of automotive show. And there wasn’t a single stretch limo. Like, people people are like, it’s gone. It’s dead. It’s going away.

Kai Ryssdal 

Wow. I had no idea. I had no idea. I don’t feel strongly. I’m gonna say half full because let’s let’s evolve and just do different things.

Amy Scott 

Yeah, I mean, I kind of always wanted to ride in one when I was a kid. But yeah, I mean, do rich people really need all that space to like sit around? What I really want those the thing where you push the button and the divider goes up. I have so many times in my life as a parent wanted that. I guess I’m half full. Who needs all that room?

Kai Ryssdal 

Absolutely. Absolutely. All right. Wait, let me back it up real quick here. So Courtney stuck this in the slack about the Von Trapp Family Singers. An article from Rolling Stone in 2015. Grandchildren of Sound of Music von Trapp Family form indie band Sofia, Melanie, Amanda and August von Trapp. Their first EP was called Dancing in gold. That’s the title track. So there you go.

Amy Scott 

Will have to check it out.

Kai Ryssdal 

Learn something new every day on this podcast. Drew.

Drew Jostad 

All right. Next topic is half full or half empty on Jack Dorsey’s Twitter, alternative BlueSky,

Kai Ryssdal 

We were just talking about this before Charlston, turned on the microphones. We saw Molly Woods’ post on this and both Amy and I were like, how do I sign up? And I’m still waiting for my little free invite thing. So..

Amy Scott 

yeah, Jack, I want an invite. Well, I’m basing mine entirely on what Molly wrote about this. She said it was like a great experience. Like Twitter in the early days. Yeah, I’m half full. I kind of miss the old Twitter. I’m not a super user, but I’m kind of a super lurker. I get a lot of information there. And it has grown wearing so yeah half full.

Kai Ryssdal 

full and total. I’m all the way full time. Yep. If you work for blue sky and you’re listening to this, you know how to reach us. It’s all I’m saying.

Drew Jostad 

Okay, Porsche is bringing back buttons and knobs in the 2024 cayenne. Are you half full or half empty on maybe not quite so many touchscreens in cars

Kai Ryssdal 

Yeah. I’m way full. Totally. I’m way full. I have a new-ish, well, it’s not new-ish. It’s brand new. I think a few too many touchscreens for my taste.

Amy Scott 

Yeah, I still have lots of buttons and knobs in my car. I think come on Porsche. I mean, like it always starts with a high end right? Can you get a Subaru with some buttons and knobs. Yeah, I mean, I still tell my kids to roll down the window. And you know, it’s like, I’m never gonna not say that. So once they… when they get the hand cranks back, I’ll be happy.

Kai Ryssdal 

You know what’s funny is our kids would not know what to do with hand cracks. They would just be like, Oh, this is so hard. What are we doing?

Amy Scott 

And it was hard. We had this old Volvo it was like you had to have some serious bicep to get that thing down.

Kai Ryssdal 

And let me tell you about driving without power steering. Don’t make me come back there. All right. Anyway. Drew.

Drew Jostad 

All right with an AI generated song out that is supposed to mimic Drake and The Weekend collaboration. Are you half full or half empty on AI generated music?

Amy Scott 

I’m dead empty. Yeah. There’s not a drop in that glass.

Kai Ryssdal 

Yeah, yeah, totally. I think as it as it veers toward the artistic and look, what I do every day on the radio, and what Amy does every day on the radio is not artistic, but it’s it’s deeply susceptible to AI and so I’m I’m opposed. I’m opposed.

Amy Scott 

Yeah, but it fooled a lot of people, right. That’s that’s scary. I mean, I think it also says a lot about the quality of music these days.

Kai Ryssdal 

Yeah. Yeah. Is there another one or was that five?

Drew Jostad 

That’s all I got.

Kai Ryssdal 

All right.

Amy Scott 

We were pretty cheerful.

Kai Ryssdal 

We went right through that. Jeezo Pizo. We’re done, quickly done on a Friday. Back next week. Today’s pod goes up on YouTube later on. We’re still working on that live stream thing but we will figure it out and get ourselves back on a Friday

Amy Scott 

Make Me Smart is produced by Courtney Bergsieker. Today’s episode was engineered by Charlton Thorp. Drew Jostad wrote the theme music to Half-Full/Half-Empty. Antonio Barreras is our intern.

Kai Ryssdal 

Mel Rosenberg, Emily Macune and Antoinette Brock is the team, are the team? Is the team. Marissa Cabrera is our senior producer. Bridget Bodnar is the director of podcasts. And Francesca Levyis the executive director of Digital and On-Demand.