Make Me Smart March 16, 2022 transcript

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Kai Ryssdal: Oh, there we go. There we go. Hey, everybody. I’m Kai Ryssdal, welcome back to Make Me Smart making today make sense is what we do.

Kimberly Adams: And I am Kimberly Adams. Thank you –

Kai Ryssdal: Most days, all days, all days. Sorry. We do it all days except weekend.

Kimberly Adams: Okay. I’m Kimberly Adams. Thank you for joining us on this Whaddya Want to Know Wednesdays since clearly we want to know on what days we make everyone be smart. I guess today, hopefully, that’s today?

Kai Ryssdal: Sorry.

Kimberly Adams: Alright, so it’s Whaddya Want to Know Wednesday, where we answer your questions from the past week. If you have a question that you think we should answer, you can leave us a voicemail at 508-827-6278. Or you can send us an email. Makemesmart@marketplace.org.

Kai Ryssdal: All right, let’s go. Who’s driving today? Drew Jostad, let’s hit it.

Sam: Hi, my name is Sam from Ventura, California. And I was wondering if you can make me smart on gas prices and why it seems they’re so volatile and quick to respond to price changes in the price of crude oil. Aren’t those gallons of fuel at the corner bought months ahead at those prices? And why are they so quick to change? Thanks for making me smart.

Kai Ryssdal: Good question. You want that one, or do you want me to take that one?

Kimberly Adams: Sure. I’ll do that one. Um, okay. I guess it really depends on who you ask. I mean, I know lots of people just want to say, “oh, it’s oil company greed.” But gas prices are pretty volatile. For a lot of different factors you have what we’ve been talking about, disruptions to crude oil supplies, refinery operations, even like gas deliveries can cause the prices to change. And sometimes even with the season, because you may have heard about a switch to like a summer blend of gas in warmer months. Now, in terms of when gas stations buy it, right, most gas stations, or at least many gas stations only have like two or three days worth of gas on hand. So the price reflects what it would cost them or what they think it’s going to cost them to replenish their tanks. And, you know, the it takes a while for the oil that you know is traded on the market to get to a refinery to be processed and then turn into what goes into your tanks. And so those prices are very quick to reflect the fear of how much it’s going to cost them in the future and much slower and have been historically to reflect prices going down. I’ve seen – who was it tweeting earlier that you retweeted that they. What was the tweet that you shared earlier, it had a really nice way of saying it?

Kai Ryssdal: Don’t know I saw that one too. But But look with oil going down gas prices are eventually gonna go down. But but it you know, oil prices, they go up really fast. And what is it they rise like something and fall like a feather.

Kimberly Adams: Feather? Yeah, that’s what I’m trying to think of. It’s rise like a something fall like a feather. Somebody is gonna say it in the chat. Right anyway. Right. We’ll think of it later.

Kai Ryssdal: All right. Yes. That’s that’s the deal with oil prices. Right. Next Drew, go.

Chase: Hi, this is Chase from San Diego, America’s Finest City. I was balancing the books at the end of the month. And I always get a chuckle out of the pennies of interest that the bank gives out. But I noticed compared to last month that the interest rate actually went down. How does this jive with the interest rate hikes that you’ve been talking about? Thanks, make me  smart.

Kai Ryssdal: Yeah, really good question. So the interest rates that we talked about that most, you know, economic journalists talk about is a single interest rate. It’s called the federal funds rate. And it’s the rate for overnight lending at the Federal Reserve. Because that is the interest rate that the Fed controls. It’s the rate that they raised today. The range now is a quarter of a percentage point to half a percentage point. So as relatively teeny, but very symbolic move up in the cost of money. Banks and other depository institutions, whether it’s JP Morgan down to the corner bank to the savings and loan to the credit union to what have you, they raise and lower their rates independent of what the Fed does every single day, but for their own reasons, right. And it has to do with what rates they get on their deposits. So a penny up or a penny down or whatever the percentage change is doesn’t directly correlate to the Federal Reserve’s federal fund rates, but the other thing that happens is the larger interest rate level, broad interest rate level on things like car loans, mortgages, home improvement loans, those things, those do rise, proportionally not identically, but proportionally to the federal funds rate. So local rates, much more variable, large, broader rates, much more aligned with what the Fed does. Hope that helps.

Kimberly Adams: Bridget found your tweet from earlier you were retweeting Catherine Rampell who said they go up like a rocket down like a feather.

Kai Ryssdal: Yes. Yes. That’s brilliant. Catherine Rampell. The very brilliant Catherine Rampell. Yeah, for sure.

Kimberly Adams: So, yeah. So here’s a listener who has a slightly different question about the rate hikes this week. And I guess all the ones that are coming in the future.

Kelly: This is Kelly from Orlando, Florida. So I have heard that the Fed is going to be increasing rates anywhere from 25 to 50 basis points. But what’s up with a basis points? Like, I know that it’s secret code for a quarter of a percentage or half of a percentage. But why don’t they just say that? Thanks, guys.

Kimberly Adams: You are – I’m gonna leave you to this one. You’re all Fed, all the time.

Kai Ryssdal: All Fed, all the time. It’s my life, It’s a great, great question. And and so here’s the deal. So people like Jay Powell, and central bankers, talk about basis points. And analysts talk about basis points, because it comes from the bond market, and from traders who are trading instruments that can vary in really tiny degrees of value, not a neat and tidy quarter of a percentage point or a half a percentage point, you can be talking to a bond trader, and he’s gonna say, you know, this rate’s gonna change by you know, 13 basis points, 13 one hundredths of a percentage point, or 97 basis points, right. 97 one hundredths of a percentage point. And so that lingo has transferred into the broader context, because that’s where all the central bankers and people come from, right? They come from that environment. It’s either academia, and they just get co-opted, or it’s like Jay Powell, which comes from who comes from private equity, and the investment world. And that’s how it happened. That’s why it’s secret code. So just to be clear, a basis point is one hundredth of percentage point 25 basis points, which the Fed raised today is a quarter of a percentage point. And it’s just kind of a lingo-y sort of thing. That really is it. That really is it. Truly.

Kimberly Adams: Thanks.

Kai Ryssdal: Anytime, anytime. Here’s Bons. Hey Bons, c’mere. Bons! There she is. There she is. Alright. Sorry. Go ahead.

Kimberly Adams: Right, so we have another question coming to us in response to our deep dive last Tuesday on the Russia-Ukraine information war.

Dominic: Hi, this is Dominic calling from Honolulu, Hawaii. And I’m wondering how much can we trust the images and videos being shared on social media coming out of Ukraine? Things like Russian soldiers supposedly captured and calling their mom on the cell phone? How much can we trust this of the information war? Thanks.

Kimberly Adams: I mean, look, just default to super skeptical is is my M.O. on this. Anything you see AND definitely before you share it, just check it, check it and check it again. And the easiest way to make sure what you’re sharing is true is to kind of rely on a news organization that, you know, very carefully vets these things, there was an interesting story in the Washington Post, I guess it was like last week about the team of forensic analysts they have verifying photos and making sure that they can trace it back to where it says it came from and what time it says the image was taken. And you kind of do need a big news organization with a lot of resources to do that. And so check where it’s coming from makes sure that the tweet or the post, or the image that you’re seeing that is shared from that news organization was really shared by that news organization. So check to make sure that the URL is real and that the account is actually you know, at marketplace and not you know, at marketplace Spongebob or something like that, or that –

Kai Ryssdal: Don’t go to that length.

Kimberly Adams: Or, you know, that the, you know, just trust your gut a little bit there like, huh, it’s really strange that they said President Biden said this really, really outlandish thing. Everything President Biden ever says is recorded, you know, in public, so let me see if there’s actually a video of him saying it that’s being shared by a reputable, reputable news organization so that I know it’s not a deep fake. So we’re going to have a bunch of resources for this on the show page. But basically, you have to start thinking like a fact checker. And there are several websites. One of them is Ukrainefacts.org, that is actually just keeping a running list of all of these debunked images and statements and videos that are getting shared. And so if you’re skeptical about something, and certainly before you share it, if you’re on the fence, check some of these fact checking organizations that are doing a lot of work to make sure that you know, we know what’s true and what isn’t. But it’s hard. It really is. I mean, I rarely am resharing, or posting images coming out of Ukraine, because I’m paranoid about exactly this. I’m kind of leaving it to the people who are way deeper into the story and have more resources at their disposal.

Kai Ryssdal: Yeah, look, I totally agree. And here’s the other thing, right? If it confirms all your priors, right, if it confirms what you already believe, just take a second and really think it through. And oh, and also, if it turns out, you’ve shared something, and it turns out to be wrong, own it, right. Delete the tweet, delete the post and say why you’re doing it. You know? Yeah, honestly. Honestly,

Kimberly Adams: Yeah. And some may delete a tweet, they maybe do a screenshot of it.

Kai Ryssdal: Screenshot, right.

Kimberly Adams: So people know what you’re talking about, but you don’t –

Kai Ryssdal: Without resharing it.

Kimberly Adams: Yeah, yeah. Or if you find out that something is not true, don’t retweet or reshare that content to debunk it, screenshot it, and then share your fact check if you happen to find a resource that says it’s wrong, so that you’re not perpetuating that misinformation.

Kai Ryssdal: You know what we should do a Tuesday segment on this. Okay. Yeah, I think we should I mean, we should, you know, get more coherent thoughts, other than you and me just, you know, thinking it through, but –

Kimberly Adams: I mean, my thoughts are very organized on this, because when I was teaching a class, I actually did, like, a whole, a whole class on this.

Kai Ryssdal: Yeah. I don’t know. We’re just talking about it. Bridget, you know. But but so here’s the thing about about that kind of factual journalism, and this is gonna sound like a, you know, sort of a cringy pivot, but it’s actually true, right? There is so much uncertainty, so much chaos, so much bad information out there. That what we do, we believe, has value and we hope you do too. So this is the time of year, when we’re coming to you and saying, “Look, if you can, we’d love some support.” marketplace.org/give smart, we have all kinds of swag and all the rest of that jazz, or you can just contribute. And look, we know y’all do because you have in the past. And you know what? This service that we provide both here on this podcast and on Tech and on Marketplace, and in the morning show what value they have and their times of the year, we have to ask for help. And this is one of them.

Kimberly Adams: And, you know, Kai and I and Bridget and Marissa and everybody else on the team. We spend so much time trying to make sure that we collect and gather information and fact check it ourselves to help make you smart and it does take work and it does take resources and so if you can help out we’d really appreciate it. And you know, Kai was talking about the swag and all the things but one of them we have right now. If you’re able to give $5 a month, you can get one of our most popular thank you gifts at the moment which is just cracks me up. It’s a set of Marketplace pens with a tagline with but with a bunch of different taglines including one that says well actually, you should say it Kai.

Kai Ryssdal: I’m not I’m I’m not doing it. It’s not a toy. I don’t. It’s not party game. It’s not a party game.

Kimberly Adams: Well, I’m gonna do it. “It says from American Public Media. This is a pen.”

Kai Ryssdal: Killing me, killing me.

Kimberly Adams: Anyway, like I said, marketplace.org/givesmart. I’m sorry Kai. No, I’m not.

Kai Ryssdal: That’s all right.

Kimberly Adams: Okay, that’s it for us today. And that’s that’s my daily dose of torturing Kai. Thank you for listening. We will be back –  See that’s segment too, daily dose of torturing Kai.  – for hollowed out shell of a Thursday.

Kai Ryssdal: Please do those. Send us your questions for Whaddya Want to Know Wednesday? You can email us makemesmart@marketplace.org. You all know that already or leave us a voicemail. 508-UB-SMART. We’ll get it on the pod. We’d love to hear from you. My goodness. This podcast make me smart is produced by Marissa Cabrera and Marque Greene. With of course production help from our intern Tiffany Bui.

Kimberly Adams: Today’s show was engineered by Drew Jostad, Ben Tolliday and Daniel Ramirez composed this wonderful theme music and our senior producer is Bridget Bodnar. I’m sorry Kai, I really do bully you sometimes.

Kai Ryssdal: It’s all good. I get it.

Kimberly Adams:  You’re so long suffering.