SK Hynix to the moon, Gen-Z to their rooms, and Connecticut tax reform looms

0:01Julia Ritchey:NPR.

0:05Darcy Kiefer:This is the Indicator for Planet Money. I'm Adrian Ma. And I'm Darian Woods. And joining us today, the premier producer himself, one Cooper Katz-McKim. So kind, so kind.

0:16Corey Bridges:Thank you. I'm here. Super producer Cooper. You know why you're here. We know why you're here.

0:21Darcy Kiefer:It is Indicators of the Week.

0:26Pippa Dwyer:Indicators of the week. It is the day when we talk about our favorite numbers from the news. On today's show...

0:32Darcy Kiefer:Is Kay Hynix?

0:34Pippa Dwyer:Who is she?

0:36Corey Bridges:A lot of adults are moving in with their parents. And a governmental experiment in Connecticut. All of that after the break.

0:45Julia Ritchey:Support for this podcast and the following message come from Vanguard. Every day, shareholders meet to discuss important matters about the companies you invest in. Now you can make your voice heard too. Vanguard Investor Choice makes it easy to set your proxy voting preference for your eligible Vanguard index funds. Visit Vanguard.com slash Investor Choice to learn more. Vanguard investors own shares of their index funds and those funds own shares of the companies they invest in. Vanguard Marketing Corporation Distributor. This message comes from Capella University. You know that feeling when there's a spark building inside you, that you were meant for more?

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1:52Pippa Dwyer:Indicators of the week, Darian Woods, start us off.

1:56Darcy Kiefer:My indicator of the week is septuple. As in, if you'd invested in the South Korean chipmaker SK Hynix a year ago, you would have septupled your money. Wow.

2:06Pippa Dwyer:So it's not a number, but a factor of a number. That's new for us.

2:13Darcy Kiefer:Seven times. So I'll note that there's been a lot of volatility recently with SK Hynix and past performance is never a promise of future performance. But the reason I'm raising this is because this is a company that will be more in the American public's consciousness soon. SK Hynix is listing on the NASDAQ this week. It's selling slices of its company for a total of$28 billion, which is one of the largest listings ever, at least before you adjust for inflation. The largest ever was SpaceX, of course.

2:44Pippa Dwyer:Yeah, this is a company that I hadn't really heard of until recently. So just, I feel like we need a kind of a rundown of who they are.

2:52Darcy Kiefer:They are one of the three big makers of memory chips. You might know that as RAM or DRAM.

2:59Corey Bridges:Okay, so this is one of the things that's making my next laptop purchase worse, just more expensive.

3:06Darcy Kiefer:Yeah, you've probably heard about the memory chip bottleneck, maybe even paid the price for it. SK Hynix's memory chips, along with the ones from Micron and Samsung, go into the NVIDIA graphics processing units or the GPUs that are one of the basic building blocks for the AI data center boom. With all the AI hyperscaling fueling demand, the chips are getting more and more expensive. So companies like SK Hynix are profiting a lot. And that's fueled a lot of speculation. People want that sweet, sweet 7x return. In fact, they're not even satisfied with that. There are these kind of odd types of exchange traded funds or ETFs that only invest in SK Hynix.

3:47Darcy Kiefer:And they arrange the investments so that they double whatever SK Hynix does on a given day, up or down. So if SK Hynix goes up 5%, their investments got 10%. It's very convenient. How does this actually work? It's complex, but basically leverage.

4:03Pippa Dwyer:Well, what could go wrong when you just start throwing more money on top of speculative bets?

4:12Darcy Kiefer:Yeah. Don't forget the losses are doubled to 5 % down. That would also mean 10 % down for those funds. South Korea's markets regulator actually said he regrets allowing this. Okay. Darian Woods, thank you very much.

4:26Pippa Dwyer:Adrian Ma, you are up. My indicator is 49%. Last year, that is the proportion of adults under the age of 30 who said they lived with a parent. That is according to the Federal Reserve's latest survey of household economics and decision making. And this is a big increase from just a few years before. Before the pandemic, it was just 37%.

4:48Darcy Kiefer:Okay, so it's gone up from about a third to half? Yes. So, obviously, the pandemic, I understood a lot of people went back to living with their parents. Absolutely. But we're kind of out of the pandemic era now.

5:01Pippa Dwyer:Totally. So that's a part of it. Of course, so are rising home and rental prices. But here's the thing. According to the Wall Street Journal, adults who live with their parents are not just more common than they used to be, it's actually becoming more socially acceptable.

5:17Darcy Kiefer:Right. Because rightly or wrongly, a lot of Americans used to look at 20 or 30-somethings living with their parents and think that something has gone wrong.

5:25Pippa Dwyer:Right. I mean, I think it's fair to say a lot of people still do. They see it as sort of like failure to launch. But in this story, they talk to a lot of young adults who say, you know, they don't feel embarrassed or ashamed about living with their parents. And they actually appreciate getting to spend time with them. And they feel financially savvy. They're saving money.

5:46Corey Bridges:And I'm sure the parents are very happy about this.

5:49Pippa Dwyer:Well, this is a good point, right? Like, how do the parents feel about it? Well, at least the ones they interviewed in this story said they enjoy the company. It's nice to have some extra help around the house with, you know, technical support sometimes. Although occasionally it can get awkward, like when someone is bringing home a date. What happens when they bring home their prom date at 29? Well, that can be awkward, but it's also, it goes both ways. At least one parent they interviewed in this story talked about how, so she is 52 years old, a widow, and she has two 20-something sons at home.

6:27Pippa Dwyer:She says when she brings home a new boyfriend, it is uncomfortable for all involved. Another knock-on effect with this crazy housing market. Speaking of this crazy housing market, I want to put in a plug for an upcoming special virtual event for NPR Plus supporters. So on July 23rd, we're going to do a live Q &A with Redfin chief economist Daryl Fairweather, where she'll answer all your questions about this wild housing market. If you are already a Plus supporter, check out Planet Money's bonus episode next week for details on how to register. And if you haven't joined NPR Plus yet, you can do so by going to plus.npr.org.

7:06Darcy Kiefer:Very good. Cooper, Casper, Kim, what's your indicator?

7:09Corey Bridges:My indicator is 110. That is how many Connecticut residents are joining in a government experiment starting tomorrow. Sounds sinister. It's actually quite wholesome. According to the website, it is a groundbreaking democratic initiative.

7:25Pippa Dwyer:Okay, that sounds, well, I don't know how to feel about it, given the way that you've introduced this. But what does this mean?

7:32Corey Bridges:So they're trying to take on a problem that's plagued the state for decades. I'll get to what's actually happening in a minute. But first, here's the groundbreaking Democratic initiative part. More than 2 ,000 people applied to be a part of this thing. And the lottery chose 110 people that accurately represent the state to basically take this problem off the politicians' plate.

7:54Darcy Kiefer:And so what's the actual problem here that politicians can't figure out?

7:57Corey Bridges:Money. Specifically, how towns can get it. Right now, the system is not working. Towns there rely mostly on property taxes for their local revenue, their schools, their roads, police, all of it. That's paid for mostly by the taxes people pay on property.

8:15Darcy Kiefer:So sales tax, income tax, that's not a thing for local revenue in Connecticut.

8:19Corey Bridges:Yeah, exactly. The state actually bars towns from taxing that stuff. And it's created this pattern in the state where poorer towns aren't getting the money they need.

8:27Pippa Dwyer:Right, because if the property value is lower, that means property taxes are lower for that community.

8:35Corey Bridges:Politicians have tried to solve this in 20 different ways, but there's always a trade-off someone's unhappy with, so they are officially offloading the problem.

8:43Darcy Kiefer:Okay, what will they have to work with here?