100 More Years of Google

0:11Elizabeth Spiers: Hello, welcome to Slate Money, your guide to the business and finance news of the week.

0:18Emily Peck: My name is Felix Salmon. I work at Bloomberg. I am here with Elizabeth Spiers of New York Times. Hello. I am here with Emily Peck, née Friedlander of Axios.

0:30Felix Salmon: Hello, hello.

0:30Emily Peck: We are going to go down memory road, Emily, you and I.

0:35Felix Salmon: Memory road. Let's go.

0:36Emily Peck: And talk a little bit about back when you were Emily Friedlander and what we used to get up to back in the day. We are also going to talk about Bad Bunny. We are going to lead with a whole segment on the Google Century Bond and do nerdy bond math because we love doing that kind of thing.

0:54Felix Salmon: We're going to talk about tariffs.

0:56Emily Peck: We have a fire take from Emily, hot fire take from Emily, explaining, and by the way, she is right about this, explaining why the Trump tariffs are good somehow. We have a Slate Plus segment on Johnny Ive, who apparently designed a Ferrari. It's a fun one this week. Well, it's a nerdy one this week. And in this house, nerdy is fun. So stay tuned. It's all coming up on Slate Money.

1:32Emily Peck: All right, so this is one of the bits where I get to nerd out about the bond market. A million years ago, even before I started writing for Emily Friedlander at IP Law & Business, I was a bond market reporter. And bonds have a price and they have a yield. And one of the things that you often read in the fixed income stories is the price and yield move in the opposite direction. So when price goes down, yield goes up, and then people read that, and then they're like, oh, now I understand what a bond is. But let me tell you, folks, you do not understand what a bond is. There is something else they have, which is a maturity date, which is not the same as duration, which is a very technical term, which we were going to get into.

2:14Emily Peck: And people don't really understand how maturities work on bonds. And Emily, you have a news which allows us to dive into this.

2:26Felix Salmon: Alphabet, aka Google, they put out a big bond issuance this past week. They sold like$20 billion worth of US dollar denominated bonds. But in the UK, they sold a 100-year bond denominated in gilts in the UK currency.

2:45Emily Peck: Denominated in pounds. I believe the UK currency is called the pound.

2:48Felix Salmon: Why do we say gilts? What's that about?

2:50Emily Peck: So the way it is priced is that it is priced off gilts. And in America, we have treasuries, which are the government debt. In England, gilts are what's UK government debt is known as.

3:00Felix Salmon: Fine.

3:01Emily Peck: One thing we should mention, Google has a higher credit rating than the UK government.

3:06Felix Salmon: Yeah, fascinating stuff.

3:08Emily Peck: One of the first like curious quirks about this deal is that normally, if you have a better credit, you can borrow at a cheaper rate. In this case, the bond came quite wide to Gilt. It came like more than a percentage point higher than the UK government, even though Google has a better credit than the UK government. So that tells you a bunch of interesting stuff. There's basically a couple of things going on here. One is that people trust the UK government to be around in 100 years in the way they don't necessarily trust that Google is going to be around in 100 years. And then the other thing is just that liquidity matters.

3:46Emily Peck: Bond traders and bond investors, when they buy a bond, one of the great reasons why people buy a bond rather than just lending money directly is that you can sell the bond and you want to be able to trade the bond. And some obscure sterling denominated Google century bond is always going to be much more illiquid and much harder to trade than a UK gilt. And so that explains why you need to pay, why Google needs to basically pay a premium for being able to issue this. Doesn't explain why Google issued this, but that explains why it's more expensive than gilts.

4:16Felix Salmon: So let's talk about why Google issued this. And I'd like to hear your and Elizabeth's theory. I mean, the bigger story that's been happening, and this started at the end of last year, is that these big tech companies started needing more cash than their businesses were throwing off, or they wanted to use even more cash than they had or something. They wanted more money to do what everyone is now calling hyperscaling, which, as far as I could tell, just means really investing in data centers and AI infrastructure with lots and lots and lots and lots of crazy amounts of money. So bonds, they started issuing all these bonds at the end of last year, something like$90 billion worth from just the top five hyperscalers, Meta, Microsoft, Google, Oracle, and one other that I don't know off the top of my head.

5:00Felix Salmon: And that seems to be continuing now into 2026 and Alphabet's sort of like leading the charge. So there's this like big push to get lots more money by issuing bonds rather than just using the cash that these companies throw off, which is a considerable amount of cash. I think that's like sort of like the bigger picture. But even amid all that, I don't understand why you would do the century bonds specifically.

5:22Elizabeth Spiers: This is a little speculative, but I think a lot of these companies, the hyperscalers, have been funding data centers and buying chips out of free cash flow, but also using a lot of private credit on off-balance sheet vehicles. And I think maybe they have gotten so accustomed to using credit to finance this stuff that they're just sort of exploring other places in the credit markets where they can raise money really quickly. So I think maybe this isn't a big kind of strategic move. It's more experimentation to see what the market will bear in terms of, you know, them issuing public credit.

5:54Emily Peck: So the private credit, to be clear, there's two different flavors of hyperscaler. There's a bunch of like data center companies, and then there's the big public companies. And when Elizabeth is saying, is talking about off balance sheet vehicles and private credit, She's talking about the data center companies who don't have trillion dollar market caps.

6:14Elizabeth Spiers: Well, Google has done this too. The big hyperscalers have also used private credit in this way to get stuff off their balance sheet.

6:21Emily Peck: So what I'm trying to say is when Google uses private credit, what they do is they sign a contract with a private company, one of these data center companies. And then the private company, which has a contractual, has a piece of paper from Google saying, we promise to pay you this much money for compute in the future, can then take that piece of paper to a private credit company and borrow money against it in the private credit market. And as far as the lender is concerned, the borrower is not Google. Like it is sort of backed by cash flows from Google, but it is not Google itself putting debt on its own balance sheet.

6:56Emily Peck: That's why you refer to these things as off balance sheet vehicles. Google itself is not the borrower. Google is just promising to pay for compute. And then the person that's paying for the compute is the borrower.

7:07Felix Salmon: So those are the leases everyone talks about?

7:10Emily Peck: Exactly.

7:10Felix Salmon: Google and Meta, they're signing leases, which is basically giving cash flow to the smaller companies. Exactly.

7:17Emily Peck: And now what Google is saying is like, this is kind of silly. You know, why don't we just use our incredibly strong credit rating to borrow unsecured money? because ultimately it's cheaper for us to borrow in the bond markets directly than it is to go through all of these shenanigans of promising to pay money to people who then borrow against that.

7:37Felix Salmon: How is promising to pay money the same as borrowing money?

7:42Emily Peck: So when I issue a bond, what I'm doing, let's just say I'm issuing a standard 20-year bond. I will pay you a million dollars a year for 20 years and I'll pay the principal back, right? And then that money that I'm promising to pay in the future is basically that is what the bond is. It's a promise to pay money in the future to bondholders. It has a family resemblance, let's say, to if I sign a contract with a data center saying, I promise to pay you a million dollars a year for compute.

8:12Felix Salmon: So instead of compute, you're getting money.

8:14Emily Peck: But in this case, instead of me getting compute for my promise, what I get is a whole bunch of cash from bond investors. and then I can just put the cash on my balance sheet. And then to what Elizabeth was saying, that becomes an on-balance sheet borrowing. And so what Google has done is it has realized it is fine with having debt on its balance sheet. It is not a very levered company. We've talked a little bit on this show in the past about how really none of the big tech giants are particularly leveraged except for Oracle. And one of the things that people worry about with Oracle is that it already has a lot of debt, but the other ones don't.

8:49Emily Peck: So there's a lot of, Google has a lot of capacity to borrow. It has, you know, however many trillion dollar market cap and a very modest amount of debt. So it could borrow a bunch of money and the bond markets wouldn't blink.

9:03Elizabeth Spiers: What are the pros and cons of doing a century bond though, specifically?

9:07Emily Peck: Right. So when you do a bond, what you are doing is you are selling your cash flows, that million dollars a year or whatever it is, to bond investors. And at that point, what you do is you phone up a bank. And you're like, where are the bond investors? What kind of investors are there who really want cash flow? And what kind of cash flow do they want? And as Emily said, like most bond investors are normal bond investors and they like buying normal bonds. And most of the bonds that Google issued are normal bonds. But there are always little outlier pockets here and there. And in this particular case, it turned out that there was a bunch of like insurance companies in the UK who, for various internal technical reasons of their own, wanted massive amounts of duration and something else which we can talk about if you really want to get nerdy called convexity.

9:59Emily Peck: And remember, this is in the UK. They're borrowing in sterling, right? These are like pension funds in the UK who know what their liabilities are going to be in the future, and they want to match their assets to their liabilities. and if they have long-dated liabilities then they want to match that to long-dated assets but they also have like trading desks and they feel that maybe long-dated interest rates in the uk are quite high and that those interest rates might come down and one of the interesting quirks about century bonds is they have very high duration which is not the same as maturity but it's related and so in the event that interest rates come down in the uk they will be able to register a mark to market profit on these bonds that is much higher than they will be able to see on any other bonds.

10:46Emily Peck: Basically, small movements in interest rates result in very large movements in price on century bonds in the way that they don't with normal bonds. There's a really good example of an Austrian century bond that was issued at an interest rate of 1 % back when interest rates were very low, issued at a price of 100 cents on a dollar. Now that interest rates are a bit higher, the price of that bond is 30 cents on the dollar like the austrian credit hasn't changed the money is still cash flowing but like because that price versus yield calculation is very very sensitive when it comes to century bonds what you wind up with is a very volatile price for these bonds and for some investors who are like making directional bets a volatile price and the opportunity for large gains is a feature that they're willing to pay a little bit extra for and then you swap it back into dollars and compared to the price of funding in dollars, it starts looking attractive.

11:43Felix Salmon: Can you explain how that works actually? So like I buy a century bond at 100 cents on the dollar or whatever, 100 British things on a pound, at par, and it's paying a little bit above whatever the government rate is. Then the government rate falls. And what happens to me?

12:02Emily Peck: Let's say the spread between Google and the UK government stays the same. Nothing changes on that. right and let's say the you know uk government rate falls from i don't know four percent to three percent right then if it's a hundred basis point credit spread then the yield on the google century bond will fall from five percent to four percent okay and the point here is the price of the bond if the price is issued at par at five percent and then the yield goes to four percent the price will go way up to like 120, 130, something like that, right? I don't have a bond calculator in front of me.

12:40Felix Salmon: And then you can sell it.

12:41Emily Peck: Yeah, as you say, at that point, if you wanted to, you can sell it for a big profit within just a couple years, perhaps. You don't need to hold it for 100 years to make a lot of money on it.

12:48Felix Salmon: So you're betting that the price of your bond will go up and then you'll sell it to someone who wants it for some reason?

12:55Emily Peck: Well, so the point is, if you're an insurance company or a pension fund, it's like, it's a free option. You have a bunch of long dated liabilities that you need to fund with your assets. And so in principle, you are happy holding this to maturity. On the other hand, if you wind up one morning waking up with a massive market profit on your century bond, you have the option to take profits on that bond, and then reinvest the proceeds into something a little bit more sensible and normal. So it's like, if it goes down in price, you're like, this is an investment. And if it goes up in price, it's this is a trade.

13:33Emily Peck: And you're actually structurally capable of doing that.

13:36Felix Salmon: Okay, that actually makes sense to me. And Google is issuing it just simply because there's some demand for that right now.

13:43Emily Peck: Exactly. One particular market.

13:45Felix Salmon: But it's very rare. There hasn't been demand like that, according to all the reporting I'm reading since like 1997 or something.

13:51Emily Peck: Yeah, it comes and goes. We did mention that Austria did this a few years ago when interest rates were very low. There are lots of weird technical things within various different bond markets which create and destroy demand for century bonds. And it's not a coincidence that this bond was done in the UK, which is kind of a backwater when it comes to the bond markets, because obviously they just found this weird technical pocket of demand in the UK. they did a little weird thing in Swiss ranks as well. Not because they need pounds or need Swiss ranks, but just because that's where the bond investors were who were willing to desire this.

14:25Felix Salmon: I feel like some people, they look at the stock market to decide how the AI boom is going or whatever. And in the past few weeks or so, these hyperscalers haven't been doing as well. And everyone's like, oh, it's not going well. But then when you look at the bond market and you see Google do something like this, you think, oh, it is going well.

14:42Elizabeth Spiers: The bond market is always more sophisticated about these things. And so I don't think they're looking at the immediate week-to-week movements in AI. And this really isn't even necessarily a long-term bet on AI. As Felix said, there's a demand for a product that looks like this, a financial product. And so the underlying business, unless they believe that Google is not a particularly stable business, I don't think they really have to make big directional bets on AI to decide that this is an attractive product for them.

15:12Emily Peck: On the other hand, the amount of debt that is being issued to fund data centers and AI is really increasing the total amount of debt being issued. And one of the interesting things is that this debt, quite unlike technology stocks in general and speculative Silicon Valley stuff in general, this debt is actually safer than most of the corporate credit that is out there. and one of the funny little consequences of this my colleague matt levine had a wonderful little column about this this week is that credit is beginning to look a lot more like rates right rates it's just interest rates it's like what happens to interest rates it's what happens to government bonds and then the idea behind credit is that you take credits and you layer on top of it this credit risk and the credit risk that you layer on top is just this thing that you can be incredibly sophisticated about and calculate and all the rest of it.

16:11Emily Peck: In this case, as Elizabeth says, the bond investors aren't actually particularly worried about the credit risk that is implicated in the AI revolution, yada, yada, because they're like, it's Google, it's enormous, it has massive amounts of free cash flow. That's all the analysis I need to do. I'm perfectly happy with the credit.

16:26Felix Salmon: What could go wrong?

16:27Emily Peck: And so what happens is the bond funds who invest in the credit markets wind up buying a bunch of paper that isn't particularly information sensitive, right? If Google has a good month or a bad quarter or something, like they don't particularly care because Google is a safe credit either way. And all of that like credit analysis that used to go into credit markets has become less important than it used to be because really the only way you make money in this market is by making the right bet on rates. Wow.

17:01Felix Salmon: So it's all about rates. It's not about AI,

17:03Emily Peck: like kind of well i mean it's weird right because rates are relatively high compared to the kind of world that we used to live in and now is the point at which these companies are borrowing money and so these companies are borrowing money at real you know numbers not at zero and that's going to be an obligation on them for centuries i mean the one other thing i just need to add very quickly is one of the things i got very annoyed about was that there was a bunch of talk about like look all the companies that issued century bonds in the past and how few of them even exist anymore and this shows that like companies can rise and fall in the space of much less than 100 years and lending money to a company for 100 years is a dangerous thing to do no no no just because a company you know gets bought or merged or goes through some corporate restructuring or delists from the stock exchange does not mean that the bond investors lose money the bond investors always get paid back unless there is an actual bankruptcy proceeding.

18:02Emily Peck: And in 100 cases out of 100, I have yet to find a century bond that has ever actually gone through bankruptcy and default.

18:09Felix Salmon: Wonderful.

18:10Emily Peck: And as we've said, like the risk on a century bond is not default and bankruptcy. It's not credit risk. The risk on the century bond is interest rate risk, which is the interest rates go up and your bond is worth 30 cents on the dollar, not because of any credit reasons, but just because of rate reasons.

18:40Emily Peck: let's move on quickly to tariffs because there's a little bit of news the big news on tariffs we're still waiting for which is the supreme court and whether they're legal or not but there's like academic news on tariffs which says elizabeth that they're basically a tax hike yes they are

18:58Elizabeth Spiers: a tax hike on consumers and American businesses, which is the opposite of what the administration

19:03Felix Salmon: says.

19:04Elizabeth Spiers: But it sort of works out to about$1 ,000 per household in 2025, and it's projected to be around$1 ,300 per household in 2026. These numbers are coming from the Fed.

19:15Emily Peck: The New York Fed.

19:16Elizabeth Spiers: Yes.

19:17Emily Peck: To be clear. And there's a few different people who have run this analysis in a few different ways, and they all come to pretty much the same conclusion, which is, yes, the impact of tariffs is borne mostly by the importers, i.e. the people paying the tariffs, i.e. Americans, rather than the foreigners who Donald Trump likes to think are paying the tariffs.

19:36Elizabeth Spiers: As it turns out, the economists are perfectly right about how tariffs work.

19:41Emily Peck: Have we therefore found, for the first time in my living memory, a form of broad taxation that is politically acceptable to Republicans?

19:53Felix Salmon: Yes. No. I have a hot take.

19:57Emily Peck: Okay. What's your hot take?

19:58Felix Salmon: The answer to your question, Felix, is kind of maybe because this past week there was some revolts. A few, six Republicans in the House voted to get rid of Trump's Canada tariffs.

20:10Elizabeth Spiers: And everyone's like, oh, the GOP is, they're anti-tariff now or whatever.

20:13Felix Salmon: But who knows where that goes. But anyway, this is my hot take. The U.S. needs to raise tax revenue. We need more money. And it's very difficult to do that. in the Congress. You can try. Republicans aren't going to do it. There was no other feasible, politically feasible way to do it except for the wild way that President Trump did it or the way President Biden did it, which targeted tariffs on certain industries. The way President Trump did it last year, he raised close to$200 billion in tariff revenue. It's not a lot. If you would raise it. It's not nothing. It's not nothing. It's pretty decent.

20:49Felix Salmon: It's pretty decent. It's not what you would have gotten by like taxing the rich, etc. But that is not politically feasible. Debt in the U.S. right now is 100 % of GDP and it's projected to get a lot, a lot higher. We need this money. On Friday, as we're heading into tape, we got inflation numbers that were, as the kids say, benign. 2.4 % inflation year over year. Yes, in pockets, it was some astonishing numbers like beef, coffee, etc., blah, blah. Electricity all went up quite a lot. But overall, not a lot. And tariffs, as we've said repeatedly, they're on goods, but goods are only a small part of the consumer basket overall.

21:29Felix Salmon: So maybe, maybe it's fine. I have two objections to this.

21:35Elizabeth Spiers: First of all, because I was thinking about this this morning, when you say, you know, we need more taxes. Yeah, that is true. But, you know, why do we need more taxes? What do we use taxes to fund?

21:45Felix Salmon: Yeah.

21:45Elizabeth Spiers: So this is a regressive tax and people it affects the most are, you know, lower income people, people who are more price sensitive at around the, you know, that thousand dollars.

21:55Emily Peck: Well, to be clear, it is basically a consumption tax. So the more goods you buy, the more taxes you spend. It doesn't matter.

22:01Elizabeth Spiers: Stay with me. stay with me. So I, you know, if we're thinking about it, you know, we need to raise more taxes. That's kind of like saying, okay, I need some surgery. And then somebody amputates my arm. It's like, yes, I did need surgery, but not just any surgery. So this is when you're talking about this being a tax that's productive in the sense that, you know, we need higher taxes. It's like, well, yes, but to what end? And, you know, is this the appropriate way to do it? We need more tax revenue.

22:25Emily Peck: Let me answer that objection first, because I feel like the first and most obvious thing we need more tax revenue for is to start attacking this unsustainably massive budget deficit that we have. And yes, it works on that. Like if we get$200 billion of revenue from taxes, that reduces the budget deficit by$200 billion, right? That's not knees and arms. That is perfectly fungible cash, which does exactly what it's designed to do, which is raise money for the public fisc.

22:51Elizabeth Spiers: Yes, but it also puts more pressure on the other stuff that we pay for the healthcare system, things like that, because people are, you know, they need more assistance for the government whenever you take money away from them. And the other thing is Trump is doing tax cuts. And these tariffs are not going to come anywhere near compensating for the cuts he's making that are benefiting wealthy people and corporations.

23:13Emily Peck: Right. So what you are doing, Elizabeth, is you are talking about how would you, Elizabeth Spires, design optimal fiscal policy in terms of like a tax revenue system that is perfectly designed to fund all of the things that the government needs to do. And this is a conversation we can have anytime. And it's a perfectly rational conversation to have. What Emily is saying, and I think this is really interesting, is like, what if you don't ask that question? What if you don't ask that question, and instead you ask a different but equally important question, which is, if you start with the premise that we need to raise taxes, which I think we all agree with, and then you also add in the premise that the government is controlled by Republicans, and then you so you ask yourself like what is the only way that republicans will ever vote for a tax this seems to be the answer to that question is it like perfect no but is it better than no taxes

24:07Elizabeth Spiers: i see no point and first of all republicans are pushing back they mostly don't like the tariffs they just don't want to run afoul of trump i think if they had more backbone to stand up for trump you know the free market types don't like tariffs they never wanted the tariffs to happen and so So I think we shouldn't conflate the outcomes that we're seeing right now with where the political will is on the Republican side. Because first of all, I think they never really wanted those tariffs in the first place. And now they're sort of building some momentum toward pushing back on them. So I understand the logic of your argument, but I'm not I'm not sure your assumptions are correct.

24:41Emily Peck: So I mean, the deeper logic of my argument is that it's my argument. Okay, so the deeper logic of Emily's argument, which I agree with, is that we have a mildly dysfunctional Congress that is very bad at passing anything, let alone the tax hike. And maybe the solution to this problem in a world where the Congress has the power of the purse and only Congress can raise taxes is to find a quasi tax that can be imposed unilaterally by the president and it does not need Congress to pass anything in order to be imposed. Bing! It's tariffs.

25:17Felix Salmon: Of course, it's probably unconstitutional, as you just laid out. It's explicitly unconstitutional for the president to unilaterally raise taxes on Americans. But he's done it. And you can tell by the Supreme Court not weighing in week after week after week that they don't know what to do about that. But yeah, I think there was no other politically feasible way to raise taxes. So this is where we are. And yes, it's really regressive. hurts poor people more than everyone else. And I think Elizabeth's right that in the end, that will mean that poor people and lower income people will need more help and resources from the government.

25:53Felix Salmon: But again, we have a Republican government. They're not going to help them either way. So their literal policy is tax the poor.

26:00Elizabeth Spiers: They are sensitive, though, to their own constituencies. Are they? Particularly around the issue of inflation. And right now, it's the reason why you are seeing some movement is that, at least in polls, voters, Republican voters, feel like things are more expensive now. And if they can tie that to tariffs, then they can absolutely have the political will to push back on tariffs. It doesn't mean that they're going to tax the rich. Of course they're not.

26:26Emily Peck: I feel like trying to persuade Republican voters that tariffs are the reason why things are more expensive, even though to a large degree it's true, is not easy. And as we have mentioned many times on this show, poor people don't vote.

26:42Elizabeth Spiers: So do we like, yeah, anyway, business owners do small business owners do.

26:46Emily Peck: And most of those are in the service industry. But the point is we have a tax hike. Congratulations, Mr. Trump. It'll be all be found unconstitutional in about a week. So well done.

26:56Felix Salmon: Time will tell.

26:57Emily Peck: February 23, the Supreme Court is going to strike down a terrace. I'm coming out and saying it right now.

27:03Felix Salmon: Did you put that on? You have a polymarket bet? I'm putting that on my calendar.

27:21Emily Peck: Guys, since we're nerding out about tax incidents and century bonds and currency swaps and all the rest of the nerdiness, why don't we just lean into the nerd and talk about fakes and counterfeits? because, Emily, explain our history on this.

27:39Felix Salmon: This is so fun. 20 years ago, I was - 21 years ago. Oh my God. 21 years ago, I was in charge of a magazine called IP Worldwide. It was about intellectual property. I think at the time, Elizabeth was still at Gawker doing the most cool thing you could do in business. I was at this magazine doing the least cool thing you could do in journalism, by contrast. And while I was doing my least cool job, We got a lot of contributions, columns and things, typically from IP lawyers, and we covered copyright. And typically IP lawyers writing about copyright were like figuring out new and better ways to defend the rights of companies to protect their copyrights.

28:19Felix Salmon: And along the transom comes this piece that was like copyright. You can back me up and correct me later. It was like copyright's kind of bullshit. Selling fakes is fine. On Canal Street, they sell fake handbags. It's not a big deal. Don't even worry about it. Everything you think you know about this is completely wrong. And it was all written in plain English pretty clear. And I was like, oh, my God, what is this? And the author was Felix Salmon.

28:45Emily Peck: The Latin America editor at Euro Money Magazine, who somehow had managed to find Emily Friedlander's email address.

28:52Felix Salmon: Yes. And I was like, we got to run this.

28:55Emily Peck: And you did. And you paid me$1 ,000 for it.

28:58Felix Salmon: Yes. Yes. And so this week I got an alert to my new name and email address, Emily Peck. And it was another article from Felix Salmon. And once again, he's writing in defense of fakes and phonies and copyright infringement. 20 years later, can't stop thinking about it. Can't stop writing about it.

29:16Emily Peck: Copyright infringement and just like remixes and reboots and replicas and forgeries and pastiches and all of these things. They're what drives the culture. I love them. There aren't enough of them. I have a piece in the newsletter this week about the new Wuthering Heights, which they've had to put in quotation marks because it's so unlike the original. But have you seen how many movie adaptations of Wuthering Heights there have been? The list is as long as your arm. Why? Because it's out of copyright, and anyone can have at it. And that's awesome, and we love it. And if you want to see Margot Robbie and Jacob Elordi going at it like hammer and tongs.

29:58Emily Peck: Like, we are happy that Wuthering Heights is out of copyright.

30:02Elizabeth Spiers: What do you say to people who are like, well, if we don't have copyright, then what happens to all the artists? What happens to journalistic publications? If anybody can rip off your stuff, what's your counter argument to that?

30:15Emily Peck: So I'm not saying that copyright is terrible in all cases and all situations. I am saying that the way that copyright has been extended over the years and strengthened over the years is bad. Like we could have a pretty weak form of copyright, which basically says, you know, if I write something for Bloomberg, you can't just copy and paste it onto some other website for free. And that would solve 90 % of the kind of things that you're talking about, while also allowing for the kind of creativity that we saw like from Walt Disney. Like one of the great ironies of copyright is that the things that Walt Disney did when Disney started back in the 30s and 40s would be illegal now under the current copyright regime that has been put in place as a result of lobbying from Disney that wants to make sure that Mickey Mouse remains in copyright in perpetuity, basically.

31:09Felix Salmon: But Felix, as the former editor of IP Worldwide, I'd be remiss in not bringing up the distinction between copyright and trademark, because you're also, I think, in big favor of trademark infringement and fake handbags and fake LeBouBous and all of this. And you seem to think that everyone selling fake handbags isn't a big deal, that the brands that are copied, your Fendys, your Louis Vuittons, whatever, they shouldn't even care about that stuff because it's fine. That's different from me copying a Bloomberg article. That is.

31:39Emily Peck: And trademark infringement is actually even less damaging than copyright infringement. And there's this wonderful piece by a couple of Italian professors of marketing that I linked to in the piece, which basically says that all of those fakes, they act as basically free advertising for the real thing. And they create demands rather than destroy demand for the real thing. And the way that we can see that this is true is that Louis Vuitton or LVMH spends$11 billion a year on advertising and spends$40 million a year on chasing down fakers. They know that the existence of the fakes, it like ratifies the desirability of these objects.

32:25Emily Peck: They would be very worried if these fakes went away.

32:28Elizabeth Spiers: It's kind of like fan culture, right?

32:30Emily Peck: Yeah, exactly.

32:31Felix Salmon: Yes, but what about the non-LVMHs of the world? What about, one thing coming to mind is the rise of dupe culture. I'm thinking specifically now about Lululemon, which was making coveted leggings with the little Lululemon logo on the back. You know, everyone knows how that looks. But now everyone knows you don't need to buy$90 leggings from Lululemon. You can just go on Amazon and buy$20 ones. And Lululemon is not doing very well. Like, I think sometimes that dupe culture does cut into a trademark's worth and value.

33:01Emily Peck: So again, there are two different things that we're talking about here. One is that Lululemon, as we have seen a couple times over the past couple years, makes see-through pants and people don't like it very much. And a lot of the damage that is happening to Lululemon there is self-inflicted.

33:18Felix Salmon: Well, they do have that issue, yeah.

33:20Emily Peck: Another thing is that if all you're making is a stretchy piece of nylon, it's not actually that difficult to make it. And people have realized that they can go on Amazon and find a stretchy piece of nylon for less than it costs from Lululemon and it's just as good, and they can go and buy it. That's good. That's a consumer surplus right there. The third thing is, is there anyone going on Amazon buying something that actually has a Lululemon branding and name on it and paying less because it's a fake?

33:49Elizabeth Spiers: No.

33:49Emily Peck: No.

33:49Elizabeth Spiers: I don't think so.

33:50Emily Peck: They are not.

33:51Elizabeth Spiers: What about things where, you know, you have indie designers who come up with like something that really works for them and then they get ripped off by like a giant retail behemoth that makes the same thing. It's not really benefiting the indie designer. Yeah.

34:04Emily Peck: Correct. And that is the one example of trademark and IP law failing to be enforced or enforceable. Like for all that we have the strongest copyright and trademark protections the world has ever seen, that one example, which is the one example where like the big business gets to make all of the money, is the one example where no one ever seems to be able to sue and stop it from happening.

34:31Felix Salmon: Because our IP laws really just benefit big, deep-pocketed businesses who can file lawsuits and not like the little, typically not the little guys.

34:38Emily Peck: Right.

34:39Felix Salmon: I just read this whole book about Mattel and Bratz and how Mattel came after the Bratz dolls. And we did a whole podcast episode on it, Money Talks, and really destroyed that brand as far as I could tell.

34:50Emily Peck: So, yeah. So, like, don't worry about buying fakes, people, because everything is fakes. Everything is remixes.

34:56Felix Salmon: Feels wrong.

34:57Emily Peck: You know, I think a lot about how wonderful, you know, Paul's Boutique was, the most iconic album of the 1990s, and how we could have had hundreds more of those, except for that the music industry freaked out and basically made it impossible, and there will never be another album like it again. And that's sad.

35:15Elizabeth Spiers: I have a related story. I was at a restaurant in the West Village, and two of the Beastie Boys walked in, and I was sitting with the guy who knew them, and I was wearing a bracelet that said, no sleep till Brooklyn, just totally coincidentally. And I looked down at it and started sort of laughing, and my friend said, what's so funny? And I showed him the bracelet, and he turned around and tapped Mike D on the shoulder and said, have you seen this? And he's holding my bracelet. And Mike D looks at it in disgust. It was a Kate Spade bracelet. Looks at it in disgust. Fucking Kate Spade. He's like, I'm calling her fucking lawyers.

35:52Emily Peck: Even Elizabeth Spires was happy to buy IP infringing objects from Kate Spade when the spirit moved her.

36:00Felix Salmon: But you still think some IP is good, right? Or no? Just get rid of it all?

36:05Emily Peck: Look, I'm not making a policy recommendation here.

36:08Felix Salmon: Oh, boring.

36:09Emily Peck: I'm just saying, like, vibes.

36:12Felix Salmon: You can't take your hot take all the way. What's the point?

36:15Emily Peck: Well, I will, but that, you know, this is a will I need to come back to.

36:19Felix Salmon: No, clearly, it's not going away for you.

36:21Emily Peck: Yeah, maybe in another 21 years, I'll come up with a policy recommendation.

36:25Felix Salmon: Wait, can I just interject and say, it's not just, it's been 21 years. Like there was the piece in IP Worldwide. Then there was like follow-up pieces on wherever you were writing in your blog. There was another piece in 2009 that just goes on and on about how all counterfeit statistics are bullshit. Which honestly, I feel like we need many more articles like that. Like what are you doing? Like snap to it. Like we need so many more. We need an article like that about shoplifting statistics, which probably are also bullshit.

36:51Elizabeth Spiers: Well, now you know we can get a Felix a fake Louis Vuitton something for Christmas and he won't mind.

36:57Emily Peck: I won't mind because it's fate. I'm just not sure that, like, you know, Louis Vuitton is my brand of choice.

37:04Elizabeth Spiers: Fair.

37:20Emily Peck: But we should have a numbers round. Why don't I start this week? 90 is the percentage of cities in america that have less annoying people than new york per chat gpt there's this wonderful there's gpt is annoying that's that's just a very bad source of judgment there's this wonderful experiment that these guys did where you you basically go into chat gpt and you say like which of these two cities are people more annoying which of these two cities are people that do this and that and you can basically find out where chat gpt thinks the most annoying people are and the answer is unsurprisingly basically new york i will say that san francisco is only 73 on the more annoying scale but it does score 89 on people use more drugs wow ai is changing the world this is not chat gpt looking at the statistics this is just chat gpt getting the vibes from Reddit.

38:27Emily Peck: Elizabeth, what's your number?

38:28Elizabeth Spiers: My number is 7 million. And that's the number of Ray-Ban slash Meta sunglasses that Luxottica sold last year. And this number came up because there was a story in the Times this morning about Meta wanted to add facial recognition to the glasses. And they were under a project called Name Tag. And in a memo, the internal memo last year, they said that they thought that we were now in an environment that was conducive to doing this because the civil society groups that we would expect to attack us would have their resources focused on other concerns like the downfall of democracy.

39:03Emily Peck: This is the time to just build AI face recognition into everyone's glasses. What could put, I mean, as a consumer product, I can see the attraction of it, but we do need to get Kashmir Hill back on this show to explain why it's a very bad idea. Emily, what's your number?

39:20Felix Salmon: My number is 761 ,719. In the 15 minutes after Bad Bunny's halftime show ended, there was a spike in water usage in New York City equivalent to 761 ,719 toilets flushing across the city at the same time. It was a spike. In 1983, when the TV series MASH ended, there was a similar kind of toilet flush heard around the world in New York City. Even bigger, but this is pretty big for our time.

39:48Emily Peck: This reminds me of the way that the UK national grid, the kettle thing, everyone puts their kettles on when EastEnders ends. It's like a Pavlovian response. When EastEnders is over, you put on the kettle and so everyone like the amount of electricity surges after EastEnders. But the other thing it reminds me of is the fact that everyone talks about how like the 93 of the top 100 TV shows in America each year are NFL games. But the number one most popular TV show in America each year is not an NFL game. The number one most popular TV show in America each year is the Super Bowl halftime show, which is a music show and has nothing to do with football or very little to do with football.

40:31Emily Peck: And more people watch the halftime show than watch any of the football in the Super Bowl. And so well done to Bad Bunny for, I believe, being like the most viewed TV show in years. not just of the year, but in many years, like he just crushed it. He's bigger than football.

40:49Elizabeth Spiers: My favorite aspect of that show, though, was that all the cane stalks were people. Yes. And there were like 17 ,000 people wearing cane stalks. And there was one guy who tracked his run around the stadium on his Strava.

41:02Felix Salmon: So you could see the cane stalk. That's great.

41:06Elizabeth Spiers: It was great.

41:06Emily Peck: Well done, Bad Bunny.

41:08Felix Salmon: And good job to the New York City sewer system for holding up.

41:11Emily Peck: And well done to all of you listeners who held it in through the halftime show. We appreciate you. Thanks for listening to Slate Money. Thanks for emailing us on slatemoneyatslate.com. Thanks to Jessamyn Molly of Seaplane Armada and Shana Roth and Michael Phillips for producing this show. And we have a Slate Plus segment on Elizabeth.

41:35Elizabeth Spiers: Ferrari and Johnny Ive.

41:37Emily Peck: Ferrari and Johnny Ive, which is going to be fun. And otherwise, we'll be back next week with more Sleep Money.