Marketplace - The loan demand balancing act

Episode Date: October 20, 2026

On Tuesday morning, lenders like KeyCorp, Mercantile Bank, and Atlantic Union Bank turned in their earnings reports. Those types of regional banks make plenty of loans, especially to midsize companies. In this episode, we look at how they might start getting pickier if rates increase. Also, we’ll look at retailers fighting to offer value to customers, how AI is being used in publishing, Magic: The Gathering driving growth at Hasbro, a wild game processing company, and the booming horror industry.Every story has an economic angle. Want some in your inbox? Subscribe to our daily or weekly newsletter.Marketplace is more than a radio show. Check out our original reporting and financial literacy content at marketplace.org — and consider making an investment in our future.Read the stories in today’s episode:Midsize lenders thrived in the third quarter. Can it last?Walmart is offering a new membership bundle in fight for valueAI (still) has the publishing industry in a tizzyMagic: The Gathering is driving growth at HasbroHunters have to hunt for a place to turn wild game into foodHorror is good business — not just during Halloween

We got some earnings, we got some AI, and we got some toys from American public media. This is Marketplace. In Los Angeles, I'm Kyle Rizzdahl. It is Tuesday, today, 20 October, good as it always is. Have you along, everybody. Hey, does anybody remember Silicon Valley Bank? No? What about Signature or Silvergate?

They were, emphasis on the past tense. the three biggest name regional banks that went under back in the spring of 2023. The Wall Street biggies get all the press, of course, here included. But my point is that one ignores the regionals at one's peril, which is why we are going to start with them today. Some of the big banks reported weaker than expected revenue from their trading desks last week, if you remember that, and from advising companies on mergers and acquisitions. And both of those lines of business have indeed been volatile this year,

which is a long way of saying we got earnings reports from Kee Corp and Mercutel Bank and Western Alliance, among others this morning, which leads us to Justin Ho and the state of the economy at the regional bank level. Regional banks don't advise many big corporate deals or trade much stock or many bonds, but they do make plenty of loans, especially to mid-sized companies. It's going to be the big health care companies in town or it's going to be large regional employers. That's Nate Tobay. the founder of complete bank data. Several regional banks have reported that loan demand from those kinds of companies has been strong lately.

Tobik says that's in part because companies borrowed a lot right after the pandemic, back when rates were low. Typically commercial loans have a five-year reset period. And so that enormous bubble of initial financing is all coming up on its reset right now. That means borrowers are going to have to refinance those loans at much higher interest rates. But Jeffrey Roach, Chief Economist, with LPL Financial says many banks have been trying to keep their rates competitive to win over new customers. Which suggests that banks are willing to take on a little bit of that risk and seeing that the demand is stable and the corporate sector is stable. Roach says companies are feeling stable because

consumer demand has been stable. We have not seen an increase in unemployment, so we really haven't seen pressure on the income side. Hence, you still see a fairly healthy demand. But remember, these earnings reports we're talking about only cover the third quarter of this year. And it didn't fully incorporate the effects of the Federal Reserve raising rates. Myra Rodriguez-V-Ares runs MRV associates, which advises lenders on risk. If the Fed continues to raise rates, even if it doesn't do so before the elections, let's say it does so afterward or in 2027, you're going to start to see loan demand going down. And she says banks might start getting pickier about the borrowers they want to lend to.

I'm Justin Howe for Marketplace. It wasn't just regional banks reporting today. SpaceX, which I remind you is an artificial intelligence company with a rocket subsidiary, said after the bell it had just had its first profitable quarter as a publicly traded company. Netflix, the OG Streamer Service, reported a 12% jump in revenue last quarter. Not bad. But that was its lowest revenue growth in three years. not good. Elsewhere, at the corner of Wall Street and Broad and Lower Manhattan, blue chips up,

the rest of them flat-ish. We will have the details when we do the numbers. There's news today of Big Box retail in the form of Walmart and Sam's Club, which Walmart actually owns. Sam's Club, of course, after Sam Walton, the founder of the whole thing. Anyway, the two have, at least from the outside, operated mostly separately, but the head office announced today it's going to start bundling subscriptions for Walmart Plus and Sam's Clubs Plus, $120 a year should you be interested. At first glance, it is a play to take on Amazon and Costco, yes. In this era of dyspeptic consumers and rising inflation, though, it may well be about something else entirely. Marketplaces Kristen Schwab has more on the importance of value in retail right now.

Generic products are maybe the ultimate example of consumers' newfound passion for value. Just a few decades ago, they were something shoppers hid at the bottom of the their grocery carts. It was the store brand, but it was like the black and white can that said beer on it. Aaron Cheris leads the global retail practice at Bain & Company. Right, like that it was not really a brand and it was clearly the sort of the knockoff product and you were, you knew you were sort of making a sacrifice. Today, there's less stigma around store brands like Trader Joe's and Aldi, because consumers have demanded better options as they've demanded more value. Values number one. I think let's be honest, customers, no matter where they are on the income scale, feel like value is the most important thing now.

Value is even prized among higher income shoppers. I mean, an upper middle class humble brag is something like wearing $19. Costco sweatpants on a vacation flight to Italy. It's become a badge of honor. Wendy Leibman is CEO at WSL Strategic Retail. She says value is naturally something. something people prioritize more when their budgets shrink. But the definition of value has changed over time.

Yes, it's about price. Yes, it's about quality, but also accessibility and convenience. You need to order something for the kids. Craft Project, click here. Value is also a good advertising strategy for companies. Jag Mahan Raju is a marketing professor at Wharton. It also in the long run differentiates the store from others. Raju says these days with inflation pushing up prices basically everywhere, it's one of the few ways retailers can stand out. Because lowering the price of a particular product is hard.

They're selling the same thing as someone else and these are popular brands. Selling a curated assortment or a large package of items at a discount or offering curbside pickup, it helps consumers feel like they're making the right choices. At the end of the day, people want to shop smart. I'm Kristen Schwab for Marketplace. How and when you can use artificial intelligence in your work is still, for many, a shall we say, thorny topic. For scientists manipulating huge data sets, maybe not such a big deal. For creative types, though, writers and the publishers they work with just as an example,

it is a much bigger and much more confusing deal. Books have been canceled, reputations called into question, and AI policies from a whole lot of publishers are works in progress. So if you are a writer or a reader, what is the AI state of play? Jane Friedman covers the publishing industry. Thanks for coming on the program. Great to be here. Thank you. Could you as concisely as possible because it's obviously a huge topic and we'll dig in in

the second. But what is the current state of AI and publishing? Confusing, overwhelming, anger-inducing. Pick the negative emotion. It's one of those. I imagine it very much depends on what side of the, publishing equation you are on. Let's talk about some nuts and both things then. First of all, copyright law is a huge factor in AI in publishing, yes? It is. AI really messes up with copyright

because the copyright office and copyright law does not grant protection to machine-generated books. Right. And if a book is found to be somewhat AI-generated, or AI assisted, then some part of that work is not going to be protected under law, which means publishers and authors will have trouble licensing it properly because they can't guarantee the resulting work and the resulting licensed work will be protected. Should a publisher of fiction discover their work is, to some degree, AI generated, assisted, whatever unacceptable variant you have on that, I mean, there is money on the line. There is. I would say that what publishers and agents are kind of struggling with behind the scenes is what percentage of AI assistance crosses the line into we could lose more money than we stand to make.

Let's be clear, the biggest publishers all have said they're using AI in some way, shape, or form behind the scenes for their own business operations. But at the same time, they are saying, we want to protect human creativity and, authors, by the way, you have to submit work that's eligible for copyright protection. And everyone's trying not to offend the general public or the readership or the bookstores or, you know, all of the people in the literary community who are, I think it's fair to say they're not well disposed to AI. It was interesting to me to read in your FAQ that writers are insisting on contracts or clauses in their contracts that say the publishing companies can't. use their work to train AI models? Yes. So the publishers themselves are not interested in having work trained on. However, I would say that, again, this is really applies to the biggest publishers, the ones that have the resources to do this. They are creating proprietary models, models for themselves

just by use inside the publishing company. And you can, or at least I can imagine some executives or some brand marketers thinking, well, you know, when our next big name author passes away, wouldn't it be nice to train on all of their books and keep publishing them? But of course, an author would have to agree to something like that. And I do think publishers are probably having some conversations like that with some of their big names. You better believe they are. One hates to end this on an even more dystopian note. But, you know, like in 10, 15 years, is it going to be okay to have A.I.

generated work out there? I think we're going to see communities forum around the answer to that question. I mean, I don't want to be crass about it, but just like today, you have people who are only going to consume organic produce. I think there are going to be people who only want to consume human content that has not been touched by AI, and other people are going to be quite fine with the introduction of AI. There's going to be a whole range of things from wholly AI generated to, to entirely human created.

Jane Friedman covers the publishing industry, writes on AI and publishing on her FAQ on her website, totally interesting. Jane, thanks a lot. I appreciate your time. Thank you. There is a rhythm to each earnings season. You start off with banks, many of which we heard from last week. Justin had the regionals earlier, as we talked about.

Also this week comes the fun stuff, by which I mean toys. Hasbro, purveyor of, among other things, Play-Doh and Transformers, reported this morning revenue increased 15% in its third quarter over the same period last year. The big driver of that growth, it turns out, was a card game called Magic the Gathering. As Marketplace's Stephanie Hughes reports, the formula for success seems to be one part fandom, one part nostalgia, and one part behavioral economics. At Canton Games, a store in Baltimore, Magic the Gathering cards are lined up behind the cash register. They include some of the wizard classics, along with new cards that have pop culture tie-ins like Marvel superheroes. The store's owner, Dan Hoffman, who goes by Legend Dan, says these familiar characters are bringing lots of new players to the game. You know, magic is kind of a niche product.

If you don't play the game, you're not necessarily going to jump in and take the risk. But now you go into the store and you're like, ooh, A Spider-Man card game, let me try that. And you can use the cards together. It's kind of like if you were playing Monopoly, and in addition to the shoe and the wheelbarrow, Black Panther and Gandalf wander onto the board. Sometimes they work together in really cool ways.

A starter pack of cards goes for about $25, though some collectors are willing to spend a lot more. Assistant manager Stephanie Tompkins once sold a single magic card for $5,000. Somebody just casually walked in and was like, oh, I want that. throw in a $600 card while you're at it. A lot of magic customers are grown-ups, and, according to data from Sarkana, households without any children accounted for over half of toy sales in the first half of the year. Lindsay Dutch is an analyst with Bloomberg Intelligence.

These adult-led collectors are really driving growth in the toy industry, you know, this year. Toymakers, in addition to Hasbro, are benefiting. Dutch says puzzles and puzzles. building sets like Legos are also big. One major draw. Games are a lot cheaper than a night out on the town. Garrick Johnson is an analyst at Seaport Research Partners. He says adults are likely to keep spending on things like magic cards.

The older, the cohort, the longer the trend lasts. Kids grow out of things. Adults, not too much. In Baltimore, I'm Stephanie Hughes from Marketplace. Coming up. A much better bet than like throwing a couple hundred million at Stephen Spielberg. If you've got a couple of hundred million dollars to throw, yeah.

First, though, let's do the numbers. Down industrial is up 529 today. More than 1% closed at 52,495. The NASDAQ basically flat, 26,424. The S&P 500 added 21 points, about 3 tenths percent, 77 and 12. Kristen was talking about retail. Walmart, down about 7 tenths percent on the day. Amazon, up almost a 10th percent.

10th percent. Costco, down almost the same amount. Netflix talked about a second ago, down a percent and a half during the session, and another 5.6 percent after the bill. SpaceX, flat during the session, up 7.6 percent. After hours, that's the way capitalism works, gang. Bonds up yield on the tenure. T-note down 5.1 percent. You're listening to Marketplace. This is Marketplace. I'm Kai Risdahl. Specifics vary depending on where you are. and, of course, check with your local fish and game officials. But in many parts of the country, we are in open season for wild game. Think deer and elk and moose. The hunt, though, is just the beginning of a process. The carcass has to be handled the right way to prevent bacterial growth.

And then somebody's got to butcher it, slice it up, but turn it into steaks and burgers and whatnot. Some hunters do do that themselves. Many, though, seek professional help, a wild game processor. The catch is out in rural, areas where a lot of hunting happens, those services are few and far between. Marketplaces, Caitlin Tan, went in search of. One of the few storefronts on the two-lane highway into Big Piney, Wyoming is Campfire Meats, and that's Campfire with a K. Owner Chase Keenan walks into his

outdoor meat locker. We keep it between 30 and 40 degrees, and this is just where all the animals hang until we get to them. How many animals do you think are in here? Probably 30 or 40 maybe. Keenan grabs two 60-ish-pound hunks of meat, and we weave back through a maze of animals. Inside the main building, Keenan plops some venison on his butcher block

and snags his big knife. Now I'm just trimming off the aged meat that won't give it a good flavor. It's going into the grinder to become burger. Heenan processes one animal at a time to guarantee hunters get their own animal back, not someone else's. It's really hard work, he says, and not for everyone. Elk quarters weigh 40 to 60 pounds, sometimes heavier than that, and you're carrying them and moving them all day. And it's long hours.

Obviously, I'm doing seven days a week. While we're talking, three hunters dressed in camo walk in. You guys call about the deer? Yes. Keenan follows them to a white pickup. Antlers poke out of the truck bed. Jason Coberley shot the deer in the nearby mountains. Yeah, like two hours ago. We were just road hunting and found it eventually. It'll feed Coberly for the year, but he needs Keenan to turn it into meat he can eat.

You want to carry it over the cooler and we'll grab a weight off. Then the hunters shuffle into Keenan's office. How thick do you want your stakes for the backstract? I'm probably doing an inch or so. Also, some summer sausage and snack sticks, kind of like slim jims. It'll set the hunters back about $600 and add a few more hours to Keenan's hefty workload. But he doesn't mind the non-stop pace. The lifelong hunter is 36 and has dreamed of this for years.

It was looking like more and more the older guy got that it was never going to happen. So the fact that it happened is great. He says it took a detour to work in the oil. field, a butcher shop apprenticeship, finding the right building, and $400,000 in loans. Yeah, it's huge and it's scary. They're not 20-year loans either, so they're eight-to-ten-year loans. People come from all over the world to hunt deer and elk in western Wyoming, but Keenan's most important customers aren't tourists. They're his neighbors. They know a good big-game processor when they see one. What can I do for you?

Do you want a sample of our maple bacon snack six? Sure. Potential customer, Melissa Lish, strolls in to check out Keenan's operation. She's planning to shoot a deer and elk this year to fill her freezer. I'm just tired of processing my own animal. I'm at that age. Oh, sweet. Thank you.

Yeah, a lot of work. And frankly, I don't have enough time to do it myself anymore. Keenan can't do it alone either. He's hired an employee. And lately his phone. which has a fitting ringtone is keeping him on his toes. Was that an elf vehicle? Yeah.

Can't buy her meat. Businesses the only guy in the area processing wild game is good. He's even turning some customers away. In Big Piney, Wyoming, I'm Keatlin Tan for Marketplace. Regular listeners to this program will know that I just don't do scary. zombies, monsters of any kind, horror in general, you name it, I ain't doing it. Pity for me then that horror as a genre is increasingly big business. Andrew Webster is the entertainment editor at The Verge who wrote the other day about how and why horror is taken over.

Andrew, thanks for coming on the program. Thanks for having me. As I set up in the introduction, I'm obliged by my professional ethics now to report on the business of horror, even though I don't do horror. it's having a moment like everywhere. It is. It's across games, film, television. I think you can probably see that best with Resident Evil, which is like blowing up to box office at the moment.

And at the beginning of the air, also had a best-selling game. So it's just like hitting all the different notes. So let's get to the brass tacks of the business of this thing. Why are so many studios, so many gaming, companies making horror. It's got to be just good business, right? There's better ROI?

Yeah, I mean, like, horror has always been known as a thing that's, like, relatively cheap to produce and at least compared to other, most other genres. I think as things have just gotten so much more expensive, you know, in games and film, you know, making a movie that costs $10 million like backrooms, it has the potential to make half a billion dollars is a much better bet than like throwing a couple hundred million dollars at Stephen Spielberg or someone. Right. Backrooms and what was the other one that came out of nowhere? Obsessions, right?

Obsession, yeah. And both of those were made by, you know, kids who kind of got their start on YouTube and had this built-in audience as well. So there's a whole bunch of reasons why they're good investments. This is going to sound pejorative, but I don't mean it to. You know, horror used to be a little schlocky. and it's not now. I mean, there's, you know, it's, it's, you know, respectful. I think the term is elevated horror that they like to use.

I mean, it still is a little shawky, but I think it's also just, you know, these are like real filmmakers. It's not, you know, Curry Barker didn't make obsession because he wanted to move on to other things. He liked horror and wanted to make a good horror movie. Right, right. We're going to see it now, I suppose, more and more.

as Netflix gets squeezed to produce good content and all the other movie houses, I mean, we're just gonna get more of it. Yeah, I mean, you see it in streaming already. Like, I mean, it's hard to know how successful it is there since they're so opaque with their numbers. But like October, every streaming service had some kind of horror series or more than one.

And, you know, like Apple's critical darling this year is Widows Bay, which is an extremely good and extremely funny horror series. Yeah, and a couple of Emmys, later, right? Everybody knows what it is. Exactly. Yeah. What about you? You're a horror guy or no? I mean, I do my best. I like movies because I can look away.

Horror games are tough for me because if I stop, so does the character and nothing progresses. Oh, man. I hear that. I hear that. Andrew Webster, he's the entertainment editor at the verge. Andrew, thanks a lot. I appreciate your time. Of course. Thank you. What surprised you to hear, I guess, that Halloween is my least favorite time of year. Anyway, this final note on the way out today in which, please don't shoot the messenger, we've talked a lot about the housing market, and there was some not great supply demand news today.

Data from the Census Bureau this morning shows the number of new single-family homes on which construction was begun, fell last month to the lowest level in a year, and more troubling the number of construction permits applied for, dropped to its lowest level in three and one half years. Not enough supply. Too much the man, right? Jordan Manjee-Zanail Maharaj, Janet Winn, Olga Oxman, and Virginia K. Smith are the digital team. I'm Kai Rizzdahl. We will see you tomorrow, everybody.

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