Canadian Beef

0:08Hello and welcome to Slate Money, your guide to the business and finance news of the week. I'm Emily Peck. I write the markets newsletter for Axios and I'm here today with Elizabeth Spiers of the New York Times. Hello. And filling in for Felix, who is trapped in Canada, more on that TBD. Today we have the amazing Scarlett Foo of Bloomberg. Hi guys, this is such a thrill. Scarlett, I'm so glad you're here because Felix, you know, he's trapped in Canada and stuff. So this is actually the best timing imaginable.

0:39Scarlet Fu: I know, I thought we were going to be here together, but the thunderstorms had their say. The Trump administration has tariffed Felix's return to the U.S. by 50%. and we're deciding whether to pay it. There you go. We're deciding whether to retaliate as well. Rumor has it you have a new podcast coming out. Do you want to give that a plug? We have a new show that came out at the start of the summer called Bloomberg Money, which features personal finance, wealth management, and retirement. So everything is kind of done through that lens. And I believe that is going to be turned into a podcast. So you are correct in that there might be a new podcast coming out, but it's really kind of a new brand, a new platform overall.

1:15We could have a merger and just call it Slateburg money. Ooh, it kind of rolls off the tongue. So we thought this was going to be a slow summer show. August, late August, what could possibly happen? We would talk about personal finance perhaps with Scarlett. No, there's been a lot of news. We were out last week. So today we are going to be talking about this new big settlement that Meta has announced with most of the states and whether or not this is going to have any impact on the teens. We're going to be talking about our new number one enemy, Canada, which we have picked a fight with. There are developments this week and last week, new tariffs, things like that.

1:59As I said, Felix is trapped there. Maybe that's related. We don't know. Who can say? And then finally, what is Scott Bessent doing with the treasury market? Should we be worried about it? Is it fine? I don't know. Then Slate Plus subscribers have a treat in store for them because I think that Elizabeth and I maybe have beef because rare disagreement. Rare disagreement. When Felix is away, what happens? We turn on each other. It's unclear. You have to tune in to the Slate Plus segment and subscribe to find out. Seriously, though, we are going to talk about using AI to write and what happened when a big shot investor admitted to using AI to write an op-ed for the Wall Street Journal, and no one seemed to care that much.

2:47Well, Elizabeth cared. Well, some people care. Journalists care, I guess. Anyways, that's all coming up on Slate Money.

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4:41Okay. Meta agreed to pay$17 or$18 billion, sort of, we'll get into that this week, and impose some new child or teen safety measures to settle a lawsuit it was facing over social media addiction, teenage social media addiction. This is stemming from a 2023 lawsuit that I think we've talked about on the podcast that sort of had this novel theory of the case, which was consumer protection, that Meta knowingly had a product that hurt teenagers. And instead of dealing with that, it just went ahead and shoved it down our throats anyway. Or I'm sorry, offered it to us and made it very appealing and we loved it.

5:25So instead of going to trial in this case, we got a settlement this week. There are still more suits coming from individuals in schools. The company agreed to put some limits on Instagram and Facebook for teens under 18. Elizabeth, what are the limits that Meta is setting up? Okay, so for users 18 and under, they're going to limit usage to two hours a day on Facebook and Instagram. They're also going to have blocks from midnight to 6 a.m. and limited notifications during school hours. And you can opt for a chronological feed instead of an algorithmic feed. And kids will not be able to see likes on their posts.

6:04Okay, so the reaction to this has been really interesting because a lot of the comments I'm seeing, people are saying, this is a landmark. This is a really big deal. Meta slash Facebook, typically they fight really hard. I think this was on The Daily. The New York Times reporter, Cecilia Kang, was arguing this. So this is a big deal. It's akin to the tobacco settlement that we saw, you know, in the 90s. Scarlett, what do you think about that?

6:30Scarlet Fu: I mean, it's a big deal in terms of the dollar amount. $17 billion plus is a large amount, but it's a pretty small amount compared to how much money Meta makes in general just on a one-year basis. It's revenue, for instance. I believe I read somewhere like it's 1 % of how much it brings in per year. and these penalties, I suppose, will be termed out over the course of 10 years. So it's not like it has to pay it out all at once. The other thing is that for all the restrictions that Elizabeth just told us about, the teens can opt out of this with your parents' help. So parents are still playing a role here.

7:03Scarlet Fu: They're still very much involved in whether this actually goes through in the strictest way possible. I think it's interesting that they settled this before Mark Zuckerberg was called to testify. We heard from the head of Instagram during the trial that took place in Oakland. And my understanding was that the lawyers were going to call Mark Zuckerberg to trial as well to testify as a witness. That did not happen. I'd be really, really curious in terms of what he would have said had he gotten in front of the stand. I think they knew not to put him on the stand, especially given the sensitivity of what the lawsuit was about.

7:37You don't want Zuckerberg on camera looking sort of Zuckerberg-ish while you have grieving families, you know, whose children have taken their own lives because of stuff like this. It's just it would not have been good for them, I think, to put Zuckerberg up. And I think at this point, these lawsuits have been going on for a while. I think they sort of saw the writing on the wall about what they could and couldn't push through. And just to compare it to the tobacco lawsuits, the tobacco lawsuits paid out$200 billion over the course of 10 years. And is that the 1990-ish dollars? Yeah. Okay, so this is a lot less.

8:11So comparatively, I understand why people are using the analogy, but this actually looks so much smaller.

8:16Scarlet Fu: But this is one company, right? There's also other companies that could end up coming in with their own settlement, which Meta kind of wrote into the payment, which is they're only going to pay, and I'm not recalling the number specifically, like maybe$10 billion or the$17 billion if it's just Meta. But if, say, YouTube and Snapchat or some other social media network also takes part in its TikTok, I believe, then it'll go up to$17 billion. So they want it to be kind of in concert with these other social media companies. I don't really understand, though, the incentive that YouTube and TikTok would have to do this and foregoing all the lawsuit potential.

8:52Because it seems like Facebook is asking them to give up competitive advantages that they already have in the space without contesting any of it. I mean, do you guys think that they have any incentive to do that? I think two things. The other social media companies might do it out of a sense of like a shaming or like for PR and be like, we'll do this too. And if you look at Meta's public comments, they sort of are trying to frame this as like something that they're doing because they care about the kids, you know. I don't think any of them are really susceptible to shame. Right. But, you know, we want to get this right for parents and teens.

9:26That's the official statement. So maybe like TikTok, YouTube might say similar things. I think what we need to be watching and thinking about is just like how effective this is going to be. You already mentioned that parents can opt you out of this. And the other thing we're relying on is teens signing up for Facebook and Instagram, telling Instagram how old they actually are, which I'm hearing through back channels is not something that's happening all the time.

9:50Scarlet Fu: I mean, yeah, suddenly everyone's born in 1960 when they're on Instagram and Facebook. Yeah. It's not like the teens don't know how to create an extra Gmail account. Right. Right. The age verification is not really a thing that we have. And if we did have it, the privacy concerns would then kick in. So there would be like controversy over such age verification. So and there's no enforcement mechanism that I'm aware of where the states can go back and say, like, we know that the 16 year olds are still at, you know, 1 a.m. looking at this stuff. Right. I also think about how a lot of the kids who are now adults have gotten addicted to the infinite scroll on, it could be YouTube shorts, it could be Instagram.

10:29Scarlet Fu: They're now over the age of 18, so they're not part of this settlement. But the damage done from scrolling through these things for years is still there. And they're addicted to social media, and that part's done. They're moving on in the world, or not. I think this lawsuit is kind of a red herring for the larger problems of social media. and I actually think the teenagers now are more savvy about using social media than a lot of the adults. Yeah so this is also I historically and I've said this on the pod before I really hate the Jonathan Haidt view that basically if you took away phones from kids everything would be fine because the reality is that the underlying problems are structural.

11:06Teenagers are not the only people who are addicted to social media and infinite scroll and susceptible to likes And I don't think cutting them off from it until they're 18, I think that just kicks the can down the road because then they show up in college. And even if they were kept away from it, then they show up and have exactly the same pressures and environment and the same problems develop.

11:26Scarlet Fu: You know who's most addicted to social media? Elderly people like boomers. Not just boomers, but retired people. Like they're always watching YouTube. They're always checking Facebook to post on their grandkids or see other people's posts on their grandkids. It's pretty remarkable how online they are. I've seen a lot of posts that were like, now do my parents. Under 18 and over 65. There you go. Get them off there. But I'm also wondering maybe two things. One, people hate social media now. It seems like public opinion's really turned against all of this stuff. And then two, does that even matter because we're now in a period where everyone's turning against something new, which is AI?

12:08Like, yes, we'll have maybe a little bit of social media restrictions or people finally waking up and like putting down their phones. But if we're all moving over to AI anyway, is that going to have the same exact problems as this? I think there are different categories, way different use cases. The social part of social media is what attracts the teens to it and the youth. And with AI, a lot of people are using it for more utilitarian reasons. But you do have the same, I guess, addictiveness when people get sucked into it. There's the same concern that teens who are having mental health problems can be led astray by whatever AI is producing.

12:46So I understand why you would compare the two, but I think they meet different needs generally.

12:50Scarlet Fu: Yeah, Facebook and Instagram is not the first place that teens go to anyway. So let's be clear. Most of the teens are using other platforms, TikTok, notably YouTube, rather than Instagram and Facebook. they haven't seen growth in that cohort. They've really seen growth, as we talked about, in the over 65 demographic and, you know, maybe some older Gen Xers. But are they giving up that much when it comes to the teens? And a lot of analysts are pointing out, you know, it sounds good, but maybe not so much when it comes down to the numbers. So, you know, all the coverage of this was like, for the past 15 years, teenagers, mental health has been worsening.

13:27Like, we've seen those reports and data and Elizabeth already said she's a hate hater, which I feel like could be a broader description. But do we think that it's true that social media really has caused a mental health crisis among teenagers? Or are there other factors at play? Like, is it just getting scapegoated the way like TV once did, the way social media once did? There's a moral panic around it, definitely. And I think, you know, if you're going to read an alternative to Jonathan Haidt, any work by Dana Boyd, who is an actual expert on social media and teenage use is really good. But if you look at any studies about it, they're all observational.

14:06And there are so many things that have happened to that generation of kids that we don't have a precedent for. You know, they went through the pandemic. They are in a different economic situation. They have pressures that are sort of all over the place. And so it's hard to isolate social media usage specifically, especially in the U.S. where it's so ubiquitous.

14:25Scarlet Fu: Yeah, their entire childhood and young adulthood is so vastly different from generations past. I mean, just the way that they learn in school, they're using Chromebooks, things are online in a way that they weren't when I was growing up. And so, yeah, to pinpoint it on social media, I think, is kind of convenient. There's also the proliferation of marijuana. Is it legal? Is it illegal? It doesn't matter. Everyone uses it. So and it's all accessible. And I think that adds to the conversation as well. Last thing is, do we expect lawmakers, policymakers to do anything? Like, we waited so long. Scarlet made a face.

14:58I've been part of, you know, working groups that have advised people in Congress on some of these issues. And one thing that just consistently happens is that everyone in the working groups is just shocked at how technologically illiterate most of our lawmakers are. And the educational curve is so steep, especially when you're talking about complex issues like consumer use of AI. Lawmakers generally have so many other things on fire that it's hard to kind of get them to really understand the complexities of the issue. And I think that's really a challenge. Even look at the meta remedies. One of them is really dependent on parents understanding how to control the parental controls on the software, which in a lot of cases, they don't even know how to use the software in the first place.

15:42Right.

15:42Scarlet Fu: Good luck with that. Yeah. Also, let's not forget, after the midterm elections and even up to the midterm elections, all these big tech companies are going to donate a lot of money to Republicans, to Democrats, and they're going to be lobbying for their positions. And of course, AI is a much bigger deal to them now than social media. So they are going to make sure that their concerns are front and center with these lawmakers. And I think lawmakers will move on pretty quickly. We're moving on. And that is literally true because now we are moving on to a new topic, which is, oh, Canada.

16:25So while we were out last week, we had some trade talk collapse. Canada walked out on trade talks with the United States. We can get into why there was a walkout. There's a lot of reporting and a little bit of rumors, I think, going around. And that triggered 50 percent tariffs on Canadian goods. And what was different this time than the last time we were threatening tariffs on Canadian goods and raise tariffs on Canadian goods is these goods. I have to. That's it. We're all forbidden from saying goods again. And this time, the tariffs were levied on products that should be covered by the USMCA.

17:01That's the tariff trade agreement negotiated by the first Trump administration. And then as if that wasn't enough, early this week, Trump then threatened 50 % tariffs on vehicles coming from Canada. These are vehicles made in Canada by U.S. companies.

17:18Scarlet Fu: But that's not until after Trump leaves office. So he's giving himself a lot of runway to perhaps negotiate his way out of that. Not until 2027, not until after the midterm elections. Oh, excuse me. Right. Yeah, that's a really good point. I mean, one of the things I want to ask you guys is like, are we going to see a taco pretty soon on this? I think so. You know, and Carney said something about the U.S. signature lately seems to be written in pencil, which I think is true. You know, Trump might get up tomorrow and just decided to reverse himself on all of this or decide that some other sector is worth attacking.

17:51But it is a little crazy to me how we're this far along. And Trump still has a very kindergarten-like understanding of global trade. Carney also tried to explain to him what a trade deficit was. You know, he's explaining, like, we're not ripping you off. You get goods in exchange for the money you pay. And it was like explaining existentialism to a chicken. He just couldn't register it.

18:12Scarlet Fu: He's made up his mind already, and that's it. Yeah, even consumers and voters understand that if you're buying any kind of complex piece of technology, including a Ford F-350, there are going to be components that are made all over the world. We don't have really anything that complex that's manufactured exclusively in the U.S. So especially with the auto tariffs, it's hard to even tease out what's being tariffed, because it differs per vehicle. It differs based on changes to supply chain that these automakers have to make on the fly. It's just way more complex than Trump has made it out to be.

18:46Scarlet Fu: I think that's a really important point because a lot of analysts and reporters have pointed out that one piece of a car will be made in Canada, then cross the border back to the U.S. and they'll do something else to it. Then it'll go back to Canada where they finish another round of finishing out the product and then it'll go back into the U.S. So it'll cross the border several times. Do you tariff that each single time it crosses the border? Nobody knows. There was a piece in the New York Times by, oh, Chad Bone of the Peterson Institute. And he was pointing out that, I mean, the auto market already is on edge globally because China and has really its car industry now, we've talked about it on the pod a lot.

19:25EVs coming out of China are slowly but surely taking over, the country is taking over the auto market. And the U.S. position in that global auto trade is very fragile. And you could imagine in a different administration working really closely with Canada on that supply chain, sort of like making sure we're doing everything we can to sort of like fend off the encroachment of the Chinese automakers into the country. Instead, we're doing this. I mean, what do you think, Scarlett? Do you think that this like long term is going to weaken the U.S. auto market to the point where we're going to see China get another leg up?

20:02Scarlet Fu: It feels like the U.S. auto market is entirely its own thing. I mean, the rest of the world has moved on to EVs, and certainly Chinese EVs are a big hit in Europe and in the rest of Asia. But the U.S. market is still very much dependent on the gas-guzzling SUVs with high price tags. And that's what General Motor, Ford, Chrysler are now really creating for this domestic U.S. market. I don't know that sells well anywhere else, but that's what the U.S. market wants. And that's what the U.S. auto industry is building for this domestic market. At some point, maybe under a different administration, Chinese EVs might make their way in.

20:38Scarlet Fu: I'm not sure who's going to approve that right now because the Biden administration certainly was not for that either. But you've got to figure that at some point that kind of bleeds over. Another thing I'm wondering about. So, Elizabeth, you guys were talking about Mark Carney, the Canadian prime minister. He's been really outspoken as sort of biting back at Trump. And he's obviously announced retaliatory tariffs. The Canada itself in the provinces, they've banned U.S. alcohol brands. It's hurting companies here. When Trump kind of started this tariff war onslaught, everyone was like, tariff wars go nowhere because there's a big there's tit for tat.

21:16It becomes a back and forth. Other countries retaliate and then you retaliate and so forth. That didn't really happen, you know, in 2025. five. Other countries were sort of, they raced to negotiate with Trump. They really tried to work things out, et cetera. But I'm wondering now, like, is Carney's pushback and retaliation, are we entering a new phase where other countries are sort of like tired of this? Are they finding the U.S. to be an unreliable partner? And we're in this like new phase now. Is that what's happening? I think they already find us to be an unreliable partner. I think using tit for tat as an example.

21:52Part of the reason why it's bad is that it's supposed to be an iterative game. It's not something that you do once. And I think Trump has a very zero-sum idea of how the economy works. So for him, he pushes the nuclear button every single time. And it's very difficult to negotiate with anybody in that stance. But historically, trade agreements are made via negotiation. And so when Trump comes in with these insane terms, leaders can sort of react one of two ways. I think they always start from a position of diplomacy and trying to indulge him and be deferential as much as they can. But a lot of the stuff that Trump put on the table this time was so insane and really kind of touched on Canadian sovereignty.

22:34He wanted to be able to negotiate their tariff agreements with other countries, which is beyond unreasonable, but also things that were just kind of way out of scope. Like, for instance, Canadian laws require that on streaming services in Canada, let's say we're talking about Netflix, they have to promote French-speaking movies to a certain extent. And this is part of maintaining relationship with French Canada, Quebec. And this doesn't really have much to do with any of the trade agreements, but part of what Trump put on the table is that he wanted to eliminate that. And it's just so wildly like, do it because I said so, that it doesn't leave Carney very much room to move.

23:12And then there's also the tension between Jameson Greer, who's the U.S. trade representative, and Howard Lutnick, who seems to be just completely off on a different direction. The Commerce Secretary. Where every time, yes, every time Greer kind of takes two steps forward, Lutnick pulls him back somehow. And that's a little bit of what's happening now.

23:31Scarlet Fu: Yeah, the left hand is not talking to the right hand with the U.S. And the negotiators are not speaking with one voice, with one intention. I feel like the Trump administration and President Trump in particular, his M.O. is that he just has to have the last say and he has to be able to walk away feeling like he got the better of the deal no matter what. So if it in any way feels fair, because I remember reading Mark Carney talking about how they want a fair trade deal and other Canadian politicians talking about a fair trade deal. That's not a trade deal the U.S. will ever want. The U.S. wants an unfair trade deal that advantages the U.S.

24:03Scarlet Fu: That's the bottom line. So it has to look like the U.S. wins in every way for the U.S. to go forward with it. And even then, the Trump administration might change its mind at the last minute. So I think for a lot of the countries, they're thinking we're not dealing with an honest broker here because they'll negotiate something. And then maybe a month later, change their mind or maybe a few years later, change their mind like they did with the USMCA. I think it takes a lot of obnoxiousness to make the Canadians mad. But somehow, well said. Oh, you know what? That reminds me. So I think it does take a lot of obnoxiousness to make nice, friendly Canadians so angry, which Trump has been doing for the past year or so.

24:39And I was like, that's like a movie trope, a TV trope, right? There's like a really nice guy, but then you push him to his breaking point and he like gets real mad. Mark Carney roars. Yeah. And, you know, I had to talk to Claude because I'm OK with talking to Claude. And I was like, who does this remind you of? And he said, have you guys seen Love Actually? No? Yes. Yes. OK. Terrible movie, but yes. OK. So apparently there's a scene, Hugh Grant is the prime minister of the UK and Billy Bob Thornton is the president. And Billy Bob Thornton as president has been bullying the UK and like pushing them around.

25:13But then this is the scene that I watched. Hugh Grant walks in on Billy Bob Thornton in the Oval Office and Billy Bob Thornton is hitting on inappropriately, like maybe sexually harassing some woman that, I don't know, you've seen the movie. What U.S. president would do that? It's an unimaginable scenario. obviously. And, you know, gets really incensed. And then he has this press conference. And Hugh Grant's character says, a friend who bullies us is no longer a friend. And I was like, wow, this is actually quite, this is quite appropriate and relevant. But that's what feels like is happening now.

25:46And I think it's also interesting to kind of watch the border states on this one, because those guys have tight relationships with Canada. These economies up there, Western New York, Michigan, Maine. They're very tied together. It's not. Well, you did see that Trump also, as part of this, has decided to rename unilaterally Lake Ontario to Lake America because changing the Gulf of Mexico to the Gulf of America was such a great hit. He's going to redo it.

26:15Scarlet Fu: Emily's just shaking her head. I mean, Lake, it doesn't really, Lake Ontario sounds much better than Lake America. I mean, And it's not like Canada named it Lake Ontario. That was the Native American name from long ago. And no one declared it Lake Ontario. That was the name. That's what it always was. Everything always winds up boiling down to the renaming. And this predates Trump, right? Do you remember the Iraq War and we had to eat freedom fries for a second? Yes, that's right. I mean, we call hot dogs hot dogs because we didn't want to call them like Frankfurters, I think, World War I. Like, renaming is kind of like a core American act, actually.

26:54I mean, this takes it to another level, obviously.

26:58Scarlet Fu: But are there any foods we eat that are, like, obviously Canadian? Don't they have a maple syrup monopoly? Vermont? Vermont. That's in there. Yeah, I guess that's true. I would actually be fine with if we wanted to ban, like, Canadian bacon, because what is it? Are we going to get a name in Canadian, or is it just called that? I think it's just called. Yeah, it's ham. Yeah, it's circular. Why doesn't Trump rename that? That would be noticeable. Canadian Bacon Ham. Okay, so I guess what to watch. Are any of these tariffs going to stick around very long? What happens next? Who knows? What else will be renamed?

27:31Let us know. Slate at SlateMoney.com.

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31:24Another kind of Trump administration story. We're going to talk about the Treasury Secretary, Scott Bessent. He is messing around in the markets again. We've talked about this already on Slate Money. We've talked about, I think a few weeks ago, we talked about Scott Bessent's Yen intervention when he intervened. Oh, I like that. in the yen market. And then we talked about when he intervened in Argentina, creating a swap line for those guys. But last week when I was out blissfully on vacation, the Treasury announced that it was going to double the size of its long-dated buybacks. What that basically means, and please feel free to interrupt me, either of you, what that basically means is they're going going to buy more long-dated treasury bonds.

32:11Those are the specifically or mostly the bonds with a 30-year yield because yields on 30-year bonds were going up to levels last seen in 2007, an auspicious year for those who know, they know. And people were worried about it because yields go up inverse to price. So that means there was less demand for 30-year bonds. It means that investors are pricing in more inflation, so they need more return on their treasuries. And people were starting to, people, investors, analysts were starting to say like, hmm, the US has all this debt now. That's worrying. Policy coming out of the White House, it's a little erratic.

32:56I think we can all agree. That's worrying. Inflation has been higher than target now since 2021. Five years now. Five years. That's worrying. So then Besson did this in an effort to basically push the yields back down. And maybe that's worrying too. I mean, what do you think, Scarlett?

33:17Scarlet Fu: It's worked for now, but I mean, we're only like a week or two into this. And actually, the purchases haven't even taken place. They're supposed to take place in September. But usually in an intervention, it's the announcement that moves prices. And a lot of people are saying This is, as you put it, the Treasury manipulating the Treasury market, moving yields higher, pushing yields higher. It doesn't solve the basic problem, though, which is manyfold, right? Inflation being persistent. Also, a lot of the competition from credit sold by the big hyperscalers, Alphabet, Amazon, Meta. These are not price sensitive bars.

33:50Scarlet Fu: They just have they have to raise a lot of money. They're selling a lot of debt and they're selling a lot of long term debt, 30 years, 40 years. And that's crowding out treasuries. A lot of investors would rather buy debt from some of these hyperscalers and perhaps don't have as much room or are concerned about the U.S. fiscal situation and therefore don't want to buy treasuries. There's also, as you mentioned, the worries about the national debt with absolutely zero appetite from either party to address that, either through reduced spending or raising tax revenue. Neither party wants to do that.

34:19Scarlet Fu: And in fact, we're moving in the other direction. So all of this, according to investors and analysts, means that down the road, yields are still going to stay high. And they'll probably bounce right back from where they were when the Treasury Secretary announced the intention to buy back more treasuries and they came down. The direction of travel is yields will continue to move higher. This is going to create problems for the Federal Reserve because under the new chair, Kevin Warsh, he really wants the treasury market to be able to kind of send a signal to the central bank about where it sees things settling down when it comes to inflation, the views on inflation, the views on all sorts of things in the economy.

34:56Scarlet Fu: But if you have the government manipulating the treasury market, you're not getting a clean read anymore. Also, Orsch is trying to reduce the balance sheet in theory. So he's selling off bonds and then Vesit is turning around and buying them. You know, Emily mentioned erratic policy around these things, but I think it's sort of like saying hell is a little bit warm because the Treasury Secretary normally doesn't intervene in bond markets. You know, the conventional wisdom is that you don't boss around the bond market generally because it doesn't work. And here you see a little bit of short term decrease in yields because he gets up and talks about it.

35:27But then they went right back up. And the reality is he doesn't have a lot of money to play with. He's doing this out of the$950 billion deposit account at the Fed. And he's talking about buying back bonds in excess of that or over the long term, insinuating that he can do that. And it's not clear that he really can or that would be sustainable over the long term. So I think he's setting a precedent that isn't good. And I think it's already apparent that it's really just a short term fix and it doesn't last very long. Treasury does do things like this. Like Janet Yellen also bought back treasuries at the long end of the curve.

36:03And the Treasury was planning on doing a buyback just as sort of like regular maintenance. What was unusual here is that it was a surprise announcement. No one was kind of expecting it. That's sort of where the manipulation comes in. Yeah, but that's why it's an intervention. The Treasury does do scheduled buybacks. And usually to just retire long-term maturities, this was not a scheduled buyback. This was an attempt to change the price. And it wasn't based on any kind of liquidity concern. So that's why it's unconventional, not just that it's a buyback, you know. Yeah.

36:33Scarlet Fu: And I wonder how much of this announcement was tied to being able to show the president, hey, we did something. We brought down yields because the 10-year yield is what Treasury Secretary Scott Besson has said he is laser focused on. If you think about the first Trump administration, they were really looking at the stock market as their scorecard. This time around, they're really looking at the 10-year yield as the scorecard because that's the benchmark rate that so many of our consumer loans are tied to, whether it's car loans, student loans, your mortgage. So in order to improve the affordability situation, you want to make sure that the yields don't go up any more than that and, in fact, come down.

37:09Scarlet Fu: But for all kinds of reasons, they're staying elevated, including all the things we talked about, whether it's inflation, whether it's national debt, whether it's the crowding out from corporate credit. Yeah. And I think important to mention, like you just did, that these numbers and all of this treasuries are really important to talk about because this is the backbone, not only of the U.S. economy, of the global economy. The rates that governments pay to borrow money start with U.S. 10-year treasuries. And if we're paying more to borrow money, everyone literally on the planet is paying more to borrow money.

37:44And the smooth functioning of this market matters. I mean, it is the important thing to look at. Like in 2020, when we had a financial meltdown, basically at the start of the pandemic, that was because the treasury market had essentially stopped functioning. And then the Federal Reserve needed to jump in and they bought just an insane amount of treasuries to keep things running smoothly. And that's what Elizabeth was saying. This time, we're not seeing anything like that. There's not a liquidity crisis the way there was in 2020 or the way there was back in 2008. This is just more like investors think maybe, and some people are arguing, investors think inflation is going to be higher for longer.

38:22They need more yield to loan money. They don't want their money to get inflated away. They need more yield. What probably needs to happen is that some would argue that the Federal Reserve needs to raise interest rates, actually, on the short end to signal to markets like we're on top of the inflation thing, right? That's what needs to really happen. But instead, we're getting this kind of manipulation or this intervention from Scott Besson. And it does seem like the two are at cross purposes right now, which is an argument they were making against Janet Yellen two years ago when she was doing her buybacks.

38:58So this is also because they don't want to fix the structural problems, which really is just the, you know, ballooning debt and they don't want to raise taxes. So, you know, but I'm curious about how this affects Scott Besson's reputation longer term because everybody was kind of relieved that Trump had installed this guy who seems to be really smart and savvy. And lately he's been walking back all the things that he said when he was up for nomination about whether you should intervene in the bond market and things like that. And he's doing it for the obvious reason that everybody in the Trump cabinet always has to be sort of talking the Trump line all the time.

39:34But I think it's making people uncomfortable and nostalgic for Mnuchin. Well, he's always my favorite of the first Trump White House. I think he's the slate money pick.

39:42Scarlet Fu: Yeah, I mean, all of Wall Street applauded the appointment of Scott Besson as Treasury Secretary because he understands the markets. He knows this world very well. And you can tell by the moves that he has made. And you mentioned Argentina, you mentioned the intervention. And now this, he knows how markets behave. He knows what he can say, what he can do to get the market's attention. And this really goes back to his hedge fund trader roots, where, you know, he's thinking, if I do this, then this will happen. And this sends a message. Even with the yen intervention, that was all tied to making sure that Japan doesn't sell treasuries, which would then push yields up and increase our borrowing costs at home, that the U.S.

40:23Scarlet Fu: government went in with Japan to support the Japanese currency. So that's kind of always top of mind. A lot of people know Scott Besson from his time on Wall Street, including Stan Druckenmiller, who was his mentor at the time. And he wrote this scathing op-ed in the Wall Street Journal, which really got my attention. You guys must have read it, too. Oh, yeah. Yeah. We're actually talking about it in the plus because he used AI to help write it. But there was a funny comment from Claudia Sam who said something like, the argument was so obvious that Druckenmiller didn't even bother to spend any time on it.

40:55He just had AI do it and put it out there. Yeah. But it got, I mean, a lot of attention. And he made some of the arguments we've already gone over. The headline was, let the bond market speak. Like, investors are saying we think yields should be higher. Let them be higher. That is the free market that people like Scott Besson are always arguing that we should have in the United States. But when he was in the markets, when he was in the markets, when he was able to control the free market, I think things can get more complicated.

41:22Scarlet Fu: Well, when you have the president breathing down your back about how you want to lower rates, lower barring costs, then it's a different story. One of my favorite 5D chess move conspiracy theories around this is that Besant quietly doesn't want to do this, but he needs somebody to make the case to the president. And that's why Druckenmiller wrote the op-ed, which I don't think is true, but I like it. I like how we've gone from 3D chess to 4D chess to now 5D chess.

42:00All right. I need to talk to you guys about calendaring, which is a verb, sadly. And it starts with me having not one, but two different Google calendars that I deal with. One is personal. One is for my work at Axios. And my work at Slate gets kind of spread over both the calendars. My doctor appointments hit one or the other. Y 'all, it's a mess. And that's just me. Okay. Then there are the kids. They have their own schedules. Work, school, back to school is underway. It can get really chaotic. But what's happened recently is that I have been given a Skylight calendar. Skylight is designed to bring families together for more time.

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43:28Go to myskylight.com slash slate money for$30 off your 15 inch calendar. That is M-Y-S-K-Y-L-I-G-H-T dot com slash slate money. This episode is powered by AT &T Business. For every small business owner, there's a moment they remember when they realized they wanted to start their own business. It can be a life-changing moment, but those first steps are never easy. Figuring out the right building blocks, your goals, your schedule, your mindset, you have to think about an entire ecosystem. Not just the big stuff, but the little bits too. In this day and age, a major point for any successful business is strong connectivity.

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44:38Yeah. I'm going to go first. I'm going to use my Felix is Away host privilege. My number is 30 million. That's dollars. That is apparently the number that makes you golden, sets you up for a wonderful life. Just$30 million. This is from John Morgan, who is a billionaire personal injury lawyer. He said this on the Iced Coffee Hour podcast, and I saw it on Twitter, on x.com. He said,$30 million means that you can tap. You have to invest it. Just a 4 % return gets you$1.2 million a year. If you have that along with a paid off house, he adds, then you should be set up for financial success. I thought I'd ask maybe if Scarlett had thoughts because she's a personal finance person.

45:26Scarlet Fu: 30 million. That feels like it's just a number plucked out of the sky. Might as well be 30 billion. What difference does it make? I mean, there are a lot of zeros. That would be the difference. But OK, it depends what kind of life you want to lead. So you're saying no. You could have less and be OK. Because I was worried because I don't have$30 million. No, I don't think any of us, if you combine everything we have, would come anywhere close to$30 million. But yeah, that's one perspective. That's the upper leg of the K-shaped economy. He said, you just can't have more than one house. He did a pen.

45:57Well, there

45:57Scarlet Fu: are standards to uphold after all. Yeah. Sacrifices must be made. You must make a sacrifice. Elizabeth, what do you got? My number is 8.5, and that's the average number of hours a day that Americans in white-collar jobs, working full-time jobs work. And this came up because I had to rewatch 9 to 5 because of Dolly. Yes! And it totally holds up. But I was thinking, 9 to 5, actually, and maybe this is just because we're journalists and we're always a little bit on the clock, so it never feels like we have a 9 to 5. No. I kept thinking, you know, 9 to 5 actually sounds pretty luxurious. If you could actually just get to work at 9 and then actually leave at 5.

46:36and you know nine to 8.5 or nine to 5 30 just doesn't have the same ring musically plus that

46:43Scarlet Fu: nine to five also had a lunch hour built in too where you had to leave the office or you would leave the office and go get food eat outside come back there's that great slate article a few years ago uh from dan coys where he's like once upon a time we used to leave work and do things after work like at five o 'clock and let me tell you of the things we did and it was like a very viral article because he was like, we would go out. We would talk to each other. We would hang out. We wouldn't think about work at all. And it's back in my day. Yeah. Before the internet, when you had to call someone on a landline, if you wanted to get your employees to do something for you.

47:18Yes. And you like thought carefully, if your boss called you on the landline, it was like, oh my God, that just didn't happen.

47:25Scarlet Fu: And if you couldn't reach someone on the landline, you left a message and nothing would happen until the next day. Yes. Yes. All right, Scarlett. All Right. My number is 529. And it's those education savings plans. There's a great article in the Bloomberg Terminal and Bloomberg.com, so shameless plug, about how money saved in these education savings plans can grow tax-free. But there are a lot of people, including people without kids, who are setting them up and using these 529 plans as a backdoor to fund their Roth IRA plans. How does that work? I have seen the headline and I'm like, I got to read that.

48:00Scarlet Fu: So anyone can set up a 529 plan. You can set up one right now if you have children, if you don't have children, because you can use it to pay for your own educational costs. Like if you decided to get another degree or if you decided to get some vocational training, whatever it is, you can use it for that. If you don't use up all the money, you're able to roll over up to$35 ,000 into a Roth IRA, which you get to tap during retirement tax-free. Now, there are a lot of restrictions in there. Like you have to have that 529 account open for 15 years, something like that. And there's a limit on how much you can roll over every year.

48:35Scarlet Fu: But it's a way for some people who have already maxed out their 401k, their Roth IRA and other things to then sock away some more money and then move it over into their Roth IRA later on. Diabolical. I know. And when you put money into your 529, in some states, like in New York, if you put your money into a New York 529, you can also get a tax break on that money as well. That's right. Yeah. Wow. Interesting. So these are people called like Roth IRA maxers. You know, they're not just retirement maxers. Yeah, they're not savings maxers. They're going for it in every way. So much to max these days.

49:11Scarlet Fu: So much to max. I wonder if you explain to the tween boys that Roth IRA maxing is a thing if they would suddenly be interested in it. Anything's possible in this world. I brought up the 529 because this is the kind of stuff we cover on Bloomberg Money, which is our show that airs every Friday at 12 noon Eastern time on Bloomberg Television. We focus on personal finance, retirement, wealth management, the financial and business news issues that we face during the day through that prism. I'm so excited to learn how I can manipulate my finances more to avoid paying taxes. Save more money, whatever we can do to get there.

49:43Well, I think that's it for our show today. Thanks to Justin and Molly for producing. Thanks to Scarlett for stepping in and saving us while Felix is locked down in Canada. And thanks to Elizabeth. And we will see you here next week on Slate Money.

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