Amazon's outage, anxious retirees, and LA brings the Heat, too

0:01NPR.

0:11This is the Indicator from Planet Money. I'm Waylon Wong, here with my co-host Adrian Ma. Hello. And rounding out the Indicators happy trio, fellow co-hoster with the moster, Darian Woods. A pleasure, as always, to be in this economy explaining tripod. I think you've just invented a new word, by the way, moster. Yeah. Look at me, inventing words here on Indicators of the Week. Oh, I spoiled it. Indicators of the Week. That's what we're doing. That's right. We have looked at interesting numbers in the news this week, and we are here to tell you all about them. On today's episode... We have the global internet outage.

0:52Americans chomping at the bit for social security checks. And don't let yourself get attached to anything you're not willing to walk out on in 30 seconds flat if you feel the heat around the corner. After the break.

1:06This message comes from LinkedIn ads. One of the hardest parts about B2B marketing is reaching the right audience. That's why you need LinkedIn ads. You can target your buyers by job title, company, role, seniority, and skills. All the professionals you need to reach in one place. Get a$250 credit on your next campaign so you can try it yourself. Just go to linkedin.com slash nprpod. That's linkedin.com slash nprpod. Terms and conditions apply. Only on LinkedIn ads. This message comes from Amazon Business. With smart business buying, get everything you need to grow in one familiar place, from office supplies to IT essentials and maintenance tools.

1:49Ready to bring your visions to life? Learn how at AmazonBusiness.com. This message comes from Apple Card. You left your wallet in the car, or was it at home? No need to panic. With your iPhone, you can tap to pay using Apple Card with Apple Pay. And earn unlimited daily cash back when you do. Apple Card is ready when you need it. Subject to credit approval. Apple Card issued by Goldman Sachs Bank USA Salt Lake City branch. Terms and more at AppleCard.com. My indicator is 30%. That's how much of the internet across the globe is hosted by Amazon Web Services, according to the analytics company HG Insights.

2:28And that becomes a problem when Amazon Web Services goes down. Yeah, on Monday, as you probably heard or experienced yourself, Amazon Web Services, or AWS, had an outage. It was caused by a problem with its internal directory, basically. What's called a domain name system, or DNS. And so when that stopped working, this caused a pileup of errors that took the company over three hours to resolve. And then that outage created lingering interruptions among all kinds of web services throughout the day. Yeah, I feel like my email at work wasn't working right. Right. And I don't know if that was AWS.

3:07And then I saw a message in a local Facebook group that was like, no one go to the grocery store. Their whole point of sale system was down. And I don't know if that was AWS, but there was definitely a lot of funky stuff happening. Yeah, Snapchat, Reddit, all these services that were apparently affected. One question I was wondering was, will Amazon face material consequences for this? Amazon, by the way, is a financial supporter of NPR and pays to distribute some of our programming. And the answer to that question of material consequences is likely no. Amazon has agreements with everyone who signs up for their services.

3:44The most that companies might be entitled to might be some small credit for the time when AWS was down. Oh, probably prorated down to the minute. So it's basically like... Here's$3 off your bill. In defense of Amazon, which is that web hosting does sometimes go down. Remember, cloud strike. Errors happen. So the argument is that the owners should be not on Amazon per se, but on the companies using Amazon. They should have backup. They shouldn't have signed up to only one region within Amazon's cloud services and just that one company, Amazon. So this is the argument. But either way, investors don't think that Amazon's profitability will be badly affected by this fiasco between the end of day Friday and the end of day Monday.

4:33today, Amazon's share price was up, actually. It was up 1.6%. Maybe everyone just realizes the switching costs are too high. So it's like, no matter what happens, we're stuck. And speaking of security and backups and cushions. My indicator is about social security, which is the income safety net program a lot of older folks rely on in retirement. And the number is 44%. It comes from this survey of U.S. workers conducted by a financial management company called Schroeder's. And when they asked U.S. workers, 44 % of those they surveyed said they planned to file for Social Security benefits before age 67, even though most of them know that would incur a financial penalty.

5:17Right. That's because 67 is considered the standard age for retirement. Right. The earliest that you can collect Social Security benefits is actually age 62. But any age before 67 is actually considered kind of collecting on Social Security early. If a person collects Social Security at age 62, their monthly payment would be about 30 percent lower than if they waited until 67. So that's a pretty big spread. And it would be 45 percent lower than if they waited just a few more years until age 70, which is what a lot of financial planners would recommend. Wow. 45 percent? Yeah. Oh, geez. I guess you've got to gamble with how long your longevity is.

6:00But if you think you're going to last a long time, then 70 makes a lot of sense. Time value of money, life circumstances. But the reason that a lot of people in the survey said that they wanted to collect early was that they're actually worried that Social Security will run out of money or that it'll stop making payments. I guess this makes sense on one hand because of all these reports of the nation aging and fertility declining, the money going out of Social Security is greater than the amount going in. Yeah, and while Social Security does have a sort of piggy bank of reserve funds it can draw on, without any further changes to the program, those reserves are actually expected to run out in less than a decade.

6:43And if that happens, it does not mean that Social Security will just disappear, but it does mean that people might not receive full payments that they're entitled to, and that Social Security might only have enough money to pay about 81 cents on the dollar of the benefits they owe. So nobody should worry about just not being able to get any Social Security, but they may get less. Well, I feel like if I get to 62, 67, 70, whatever it is, and I'm only getting 81 cents on the dollar, I'm going to be pretty unhappy. It's true, though, if you essentially take a 30 or 40 percent penalty for drawing down early compared to like if you could have waited longer, then doesn't seem like a great move, even if you are only collecting 70 cents on the dollar.

7:33This is way more math than I want to be doing in my twilight years, I will say. Again, all this assumes that policymakers don't really take any other actions to shore up the program. And it's worth noting that in recent months, some Republicans have expressed at least the sort of openness to raising the retirement age, which could help solidify the program a little bit. Not if everyone withdraws early. It's a race. It's a run on Social Security. So that's my indicator. Something to look forward to, I guess. Thanks for the cheerful math. Yes. Well, maybe we should all disassociate with some good old fashioned Hollywood entertainment.

8:16That's what my indicator is about. My indicator is 52. That is the number of film productions that are getting tax credits from the state of California to shoot their movies locally. The California Film Commission announced the projects this week, and this was the first round of credits awarded since the state government doubled its incentive program. So it went from$330 million to$750 million. Right, we've talked about this before. Los Angeles has been losing a lot of film and TV projects to other states and countries with their own tax incentive programs. And this has created somewhat of a crisis for Hollywood.

8:53Yeah. The state says that these 52 projects will employ around 9 ,000 cast and crew. And that's really the idea behind these tax incentive programs, right? Studios promise to spend money locally, and then they get some money back from the government as a reward. 52 is a lot of projects. That's one project a week. Are there any on the list that you're excited about? I will tell you the one that I am super pumped about. And this one is Heat 2. It's the follow up to the Michael Mann action movie Heat from 1995. It stars Robert De Niro and Al Pacino. And there's actually an econ lesson in the movie.

9:32So I'm going to play this for you guys. This is Robert De Niro robbing a bank. We want to hurt no one. We're here for the bank's money, not your money. Your money is insured by the federal government. You're not going to lose Amazing. FDIC. Yes, Robert De Niro in the midst of robbing a bank takes time for a little PSA about FDIC deposit insurance. But I have more than$250 ,000 in my checking account. Yes, well, Robert De Niro didn't have time for the fine print. He was too busy taking that bank for all it was worth and then doing a super stressful, extremely violent shootout in the streets of Los Angeles.

10:09So, yes. So, I mean, that's the whole thing. like the original movie was shot on location in California, and this shootout in downtown L.A. is absolutely iconic. So hopefully the sequel has some equally iconic California scenes. Some learning and some action. I know. What more do you need? This episode was produced by Angel Carreras with engineering by Debbie Daughtry. It was fact-checked by Julia Ritchie. Kate Kincanon edits the show, and The Indicator is a production of NPR. This message comes from Vanguard. Capturing value in the bond market is not easy. That's why Vanguard offers a suite of over 80 institutional quality bond funds, actively managed by a 200-person global team of sector specialists, analysts, and traders.

10:54They're designed for financial advisors looking to give their clients consistent results year in and year out. See the record at Vanguard.com slash audio. That's Vanguard.com slash audio. All investing is subject to risk. Vanguard Marketing Corporation Distributor. This message comes from NPR sponsor Charles Schwab with its original podcast on investing. Each week, hosts Lizanne Saunders, Schwab's Chief Investment Strategist, and Kathy Jones, Schwab's Chief Fixed Income Strategist, along with their guests, analyze economic developments and bring context to conversations around stocks, fixed income, the economy, and more.

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