Bessent's yen bet, cold Argentine data centers set, and the summer box office net

0:01NPR.

0:06This is the Indicator from Planet Money. I'm Waylon Wong. I'm Ricky Mulvey. And I'm just excited to be here. And my name is also Cooper Katsby-Kim, sometimes host, often producer. We are excited to have you too, Cooper, because it is time for Indicators of the Week. Our weekly look at the numbers from the news that made us curious about the economy. This week, we have the U.S. Treasury Department mucking around in financial markets again. I'll tell you about one of the prettiest places in the world to potentially build some data centers. And we break down the box office take for summer movies.

0:41Awesome. Another excuse for me to talk about The Odyssey, which I'm seeing for a third time this month. After the break.

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1:43With WISE, you can send, spend, and receive money in over 40 currencies at the mid-market rate. Learn more at WISE.com. T's and C's apply. This is Indicators of the Week. First up, Whelan Wong. Hello. My indicator is one U.S. dollar to 153.63 yen. That is the current exchange rate between the dollar and the Japanese yen as of this recording. Okay, you making a plan? You going on vacation? No, but I am here to talk about international currency markets, just as exciting. The U.S. government has been buying up a lot of Japanese yen. And this week, Treasury Secretary Scott Besant gave some remarks where he basically challenged the market to stop him.

2:29I am the house now. Besant was speaking at Southern Methodist University in Texas. Isn't Scott Besant known for making some big moves in foreign currency when he was in his hedge fund era? Yeah, he helped pull off this$10 billion bet against the British pound in the 90s. So why does he care so much about the Japanese yen? Well, the yen has been pretty weak vis-a-vis the dollar for years now. Japanese authorities have spent record amounts to support their currency by purchasing yen in foreign exchange markets. And this is a source of worry for the U.S. Treasury and Scott Besant because Japan's finance ministry may sell some of its U.S.

3:09Treasury bonds to fund these purchases. Ooh, and Besant doesn't want this. No, because Japan is a major foreign holder of these U.S. government bonds. And if the Japanese finance ministry sold off a big chunk of treasuries, that would make prices on treasuries go down. That, in turn, would make yields on U.S. treasuries go up. And that means borrowing costs for the U.S. go up. Yeah, we just did an episode on how Besant is buying back treasury bonds to try to make yields come down. So this seems related. Yeah, Besant's keeping a very close eye on the treasury market, and he's shown a willingness to step into financial markets.

3:45The U.S. Treasury and the Japanese Finance Ministry carried out a joint intervention to buy yen over the summer, and they hadn't done that kind of coordinated action since 2011. And now Besant is all but daring financial markets to defy him. Stay tuned. Thank you so much, Waylon. Next up, Cooper Katz-McKinn. My indicator is$25 billion. That's how much an open AI data center could cost to be located in Argentina. The company signed a letter of intent to explore the project last year. Their partner says they're looking for a site within Patagonia. There is a ton of land down there. There's mountains, there's penguins, glaciers.

4:25I know. Grasslands. It's so pretty. So Patagonia is the furthest south you can get in Argentina. Billion-dollar data center projects from around the world are already taking shape there. A Polish company already leased 500 square miles. But the question remains, why Patagonia? Argentina is a big country. Well, yes, as Waylon said, it's got a ton of land, it's got a ton of energy, and the most attractive part, it is really freaking cold. Okay, I wondered about that, because when I imagine Patagonia, I see glaciers. Yeah, people come from all over to see this region of the world. It's very, very beautiful.

5:00So when you're running a bazillion computers, the room gets hot, as you can imagine. So you need some kind of cooling, and it is a particularly expensive part of running a data center. Cooling systems can account for like 40 % of its electricity consumption to run. So operating in a cold climate can reduce those costs. Well, we've covered on the show a bunch how Americans, actually on both sides of the aisle, are not super thrilled with data centers in their backyard right now. So I wonder if that's coming into play here. Yeah, I mean, in the first quarter of this year, local opposition led to the disruption of like billions of dollars worth of projects.

5:37Meanwhile, Argentina's president, Javier Malay, has been courting AI leadership in the States for years. And he's saying we'll give you huge tax breaks, we'll give you regulatory certainty, and the people are taking notice. Cooper Wildcats McKim, you've talked a lot about potential investments. Are all of these data centers not taking off already? Yeah, so some companies have already put down money, but more want to do just small-scale pilots because the thing just isn't proven. No data centers actually exist in Patagonia yet. There still needs to be fiber optic cables connected. There's a long ways to go.

6:13And Cooper, you cover the story in the Indicator newsletter this week. Yes, and if you haven't signed up, it is a quick hit of the economic news that we don't get to on the show. It's at npr.org slash Indicator newsletter. There's a lot more there. All right. Thank you, Cooper. And Ricky, bring us home. My indicator is$4.76 billion. That is the record-breaking summer domestic box office number. How much Americans and Canadians spent on movie tickets between May 1st and Labor Day. It is greater than any other summer. Yes, including the years before COVID. This gets more complicated when you account for inflation.

6:50But for now, let's have fun at the movies. You probably know the hits that drove this. Spider-Man Brand New Day, The Devil Wears Prada 2, Obsession, maybe The Odyssey. Were you all supporting this number? Did you see any of these in theaters, Waylon? I saw Devil Wears Prada 2. I've seen The Odyssey twice. And I haven't seen the other ones. So you haven't gotten past the Wikipedia description for Obsession. I was kidding. You've taken the dive. I have read the Wikipedia Plot Summer for Obsession multiple times. I've listened to podcasts about it. I just haven't seen the movie itself. Fair enough.

7:23Would you watch it on an airplane? Yes. Or I would watch it chopped up into 10-second TikTok clips, which I also have been getting. That's how it should be considered. Out of order. Okay, okay. There's more to the story here. It's not just big movies driving this number. See, the average movie ticket cost about$9 in 2019. Today, it's closer to$13. And that spend is partially due to just straight-up price increases. but it's also moviegoers spending more for premium formats like IMAX, which also made record-breaking money this summer because, I mean, who wants to see the regular version of the Odyssey?

7:59I mean, guilty as charged. I paid premium for those Odyssey tickets. This doesn't tell the whole story. The number of tickets sold are still down about 30 % from pre-pandemic levels. Okay, so studios are bringing in lots of money. Are theaters also making a ton of money? So this is a problem. They need people buying popcorn. Like, take AMC Theaters. Right now, the company generally loses money after paying all of its costs and taxes, and showing movies is expensive. Selling popcorn rings their cash register. AMC keeps about 81 cents for every dollar spent on food and beverages, so these theater chains need people coming in regularly.

8:38Waylon, what snacks are you buying at movies? Are you a snack sneaker or a snack buyer? Half and half. I buy popcorn because I love movie theater popcorn, but don't tell anyone. Sometimes I sneak in a sparkling water in my purse. It's so innocent. It's the most Waylon possible thing to sneak in. But then when I open it, I feel like the psh is so loud. I feel like the usher is going to come swarm me. You wait until it's silent and then you pop that bad boy. I wait until Nicole Kidman starts talking and then I'm like, I'll just sneak in the opening of the LaCroix. I had someone chewing ice during a showing of Akira.

9:15So Waylon, you are not the worst. You are not the worst. No, who does that? AMC, other chains, they're trying to solve this traffic problem. AMC, for example, they want to increase the movie supply. They're starting their own distribution venture. It's called the Leawood Films. So that's going to go out and buy movies at film festivals. Because right now, streamers like Netflix, they're going to film festivals. They bid on movies. But then they put those movies straight on their platform. And AMC is basically saying, hi, Art House Cinema Director, we will help you with marketing and put your very important movie on a larger screen.

9:48You know what I think they should do? And they're already doing this, but like, I've already seen like the Shining anniversary screening and I saw Back to the Future anniversary screening. And I'm like, let's just rerun all the movies I watched as a teenager. Like, I will go pay to see it again in the theater. You know what I mean? My solution is live sports and movie theaters. I would watch figure skating on a big screen. Could be fun. With my LaCroix from home. This episode was produced by Angel Carreras with engineering by Jimmy Keeley. It was fact-checked by Sarah Juarez and edited by Julia Ritchie.

10:20Kate McCannon is the show's editor and The Indicator is a production of NPR. This message comes from Edward Jones, where they believe rich is about taking care of what gives your life meaning. That's why your financial advisor personalizes your plan, to help you preserve your progress and create something that lasts. Let's find your rich. Edward Jones, member SIPC. This message comes from Mint Mobile. If you're tired of spending hundreds on big wireless bills, bogus fees, and free perks, Mint Mobile is for you. Shop plans at mintmobile.com slash switch. Taxes and fees extra. See Mint Mobile for details.

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