The Best One Yet - 💎 “Big Lab Bling” — Diamonds’ lab equilibrium. Tokyo’s subway IPO. Goldman’s deal party.

Episode Date: October 16, 2024

Japan’s biggest IPO in 6 years is the Tokyo subway… the most profitable subway on earth.All the Big Bank stocks are popping right now thanks to deals… Wining & dining is back, baby.Noticed engagement rings are getting bigger?... It’s because lab-grown diamonds are beating natural.Plus, Game of Thrones just auctioned off $21M of props… but we found an Iron Throne dupe.$GS $MS $BAC—-----------------------------------------------------GET ON THE POD: Submit a shoutout or fact: https://tboypod.com/shoutouts FOR MORE NICK & JACK: Newsletter: https://tboypod.com/newsletter Connect with Nick: https://www.linkedin.com/in/nicolas-martell/ Connect with Jack: https://www.linkedin.com/in/jack-crivici-kramer/ SOCIALS:Instagram: https://www.instagram.com/tboypod TikTok: https://www.tiktok.com/@tboypodYouTube: https://www.youtube.com/@tboypod Anything else: https://tboypod.com/  Hosted on Acast. See acast.com/privacy for more information.

This is Nick. This is Jack. It's Wednesday, soviche Wednesday, October 16th. And today's pod is the best one yet this is a T-boy. The top three pop business news stories you need to know today. Jack, if you can make it here, you can make it anywhere. Yeties, yesterday we had a billboard up in Times Square announcing the launch of our new show. I literally called my parents and said, you got to take a different commute home. We're going through Times Square today. You got to see this thing. Actually, wait, we have it all week, right? We do. We're going to be in Times Square all week, our logo of the show, Jack, the new show. Time Square. It's got an olive garden and it's got a T-boy logo. All you can eat pasta and all you can eat podcast. Thanks to all the Yetis who supported the launch of our new show, the best idea yet. It's now at the crossroads of the world.

You can see it. Step outside. Let us know if you see it, Yeties. If any Yetis are in Times Square, you got to snap a picture of our TBIY billboard and tag us on the gram. Thanks to our partner Wondery. awesome work by everyone and Yetis. Jack, what an amazing moment. You ready for the first story, Nick? Jack, three stories for today's show. What have we got, man?

For our first story. Japan's biggest IPO in six years is the Tokyo subway, and it happened yesterday. Because Tokyo's subway system is the most profitable train on earth. For our second story, Goldman Sachs and all the big bank stocks are popping right now. Because big money whining and dining is back, baby. And our third and final story. For the first time ever, lab-grown diamonds are about to pass natural diamonds in the jewelry aisle. But the result is something that no one ever expected.

Spoiler, huge rocks. We're talking huge rocks. It's a bling of ploos out there. Great point, check. But yeties, before we hit that wonderful mix of stories. Fantastic mix of stories. Love the mix, Jack. As Circey Lannister once said, in the Game of Thrones,

you either win or you die. Or you can sell the throne at an auction. That is a third option, Searcy. Because get this, Yetis, someone just paid one and a half million dollars to buy the Iron Throne from Game of Thrones. Where are my dragons? Unfortunately, they are not for sale right now.

It's a true story. HBO just auctioned off the most prize props from their legendary series Game of Thrones. And the bidding almost caused a war north of the wall. Circe's red velvet dress sold for 100. $200,000. The black cloak that John Snow wore as a member of the Knights Watch sold for $200,000. One of the random Valerian steel swords? $400,000. Although we should point out, Jack, no one bought Sam Tarty's books, you know? Shame. Shame. Shame. Shame. Yeah, it is Game of Thrones. It ended five years ago. But this HBO auction brought in $21 million this week.

Because HBO is looking for money wherever they can get it, Jack. It's not TV. The only thing missing from this auction, though, it was Tyrion Lannister's wine goblet. He probably took that with him. But don't worry yet. If you didn't get to bid on the actual Iron Throne, Jack and I got your backs. We found one on Etsy for $3,000. That's right.

Jack and I found an Iron Throne dupe on Etsy for three grand. One percent of the price, 80 percent of the realm. Little price, little finger. Jack, let's hit our three stories. Fifteen years before this song, two boys from the next. North East met in the dorm. They had an idea to cause a cultural storm. It's the best one yet, but the best is a norm.

Jack Nick, that's it. I don't even think they need to practice. 50% that's a fat tip. Tea boy city on your at list. If you know, you know, because we're ready to go. We can't wait no more, so just start the show. First, a quick word from our sponsor. Our first story, the nation of Japan just IPOed their biggest city subway system.

It's the biggest Japanese IPO in years, and it's the Tokyo Metro. The Tokyo Metro. Now, Jack, we should begin this story by pointing out, world's best subway system. That feels subjective, Jack. It is subjective. But I know you have thoughts for what subway system is the best in the world. I mean, Jack, I grew up on the 4-5-6 train in New York. You know, I took it to school.

I took it to life. The New York subway has personality. It has a smell. It has a flare. It has a vibe, really. She's also got some rats running around the rails down. Rats are friends, rats are friends. Japan's subway system are like a Michelin-starred meal, Jack.

Never been. But I hear it's quiet, it's clean, it's efficient. You'd want to have guests over at the Japanese subway station. Jack, the conductors bow to you, and if you're pregnant, they give you a sticker so people get up just by seeing your sticker. Japanese people, they have reverence for the rail. Yeties, the German trains are known to arrive on the minute, but Japanese trains are known to arrive on the minute. But Japanese trains are known to arrive on the second. Because Yetis, while the USA sprawled into the suburbs after World War II, Japan built the world's best subway.

Today, Tokyo has two metro systems, but they operate practically as one. One of those systems, Tokyo Metro, just IPOed yesterday. And that subway stock is now worth around $5 billion. Yes, that is more than one left. And get this, it was the biggest IPO in Japan since SoftBank's, years ago. Massa. In fact, this IPO is bigger than all other IPOs in Japan this year.

Combined! No, Yeti's Jack and I got fascinated with the story for obvious reasons. It is the first time we have covered a subway on this pod. So we jumped in T-Boy's style to the numbers. Yeti's Tokyo is the biggest city in the world. It's got 37 million people. This metro moves six and a half million of those people every day, which is more than double the movement of New York City subway.

It's got nine lines, 180 stations, and it moves 2.7 billion people every single year. This is an engineering marvel and a national treasure for Japan. Yes, it is. And the Japanese, they treat that national treasure as such in two specific ways. The first is TLC. In Tokyo Subway, they do maintenance every night. All lines, all cars, they're all inspected every day. And that move by the company staves off major repairs, which saves cost long term. The second way the Japanese revere their subway system is that they follow the rules. Now, all subways across the world have etiquette rules, but the Japanese customers of the Japanese subways actually follow those rules.

And the result, you get a clean, quiet, and downright, pleasant experience on the D-Train. Jack, if you drop a roll of sushi on the floor on the Japanese subway, you could pick it up and eat it. It was so clean. But you wouldn't because eating's not allowed on the subway, so nobody has sushi out. You wouldn't even be in that situation in the first place. But the biggest shocker about the Tokyo subway of all is actually financial. The Tokyo Metro, even though it's government-owned, is profitable. It's not just a little bit profitable.

It's got $500 million in profit last year. Which is why everyone now wants a piece of this brand-new Tokyo metro stock. If we were on the subway right now in Tokyo, that would actually be too loud the way said that. You can only talk really quietly. Take it down a notch. Jack, take it down a notch. And look, you can't eat. Sh, Jack, Jack, Jack. So, Jack, what's the takeaway for our buddies over?

At the Tokyo Subway. The public-private partnership. It's a beautiful thing. Yeties, the Tokyo Metro is actually 100% government-owned going into its big IPO this week. And by all measures, it's done really well under that government control. But now, the Tokyo Subway is raising $2 billion

with this IPO, which you can use. to improve the system and repay some debts. After the IPO, it's going to be 50% owned by the government and 50% owned by private investors who own the stock, which could be you and me. Now, here's that balance. With the public side, the subway will maintain fairness of trying to equitably serve all citizens.

But it's also going to have private investors who will demand efficiency and put pressure on the system to reduce waste where they can. Honestly, Bessies, Jack and I have never seen a public-private partnership on this scale. A 50-50 venture on the Tokyo subway, it's pretty epic. And honestly, we think there is a big future in this kind of relationship. Because both sides benefit from the best of the other side.

The public-private partnership. It's a beautiful thing, and the Tokyo Subway will show us how. For our second story, it's officially big bank earning season. And there is one single theme that we noticed across the entire finance industry. Here it is. Wheeling and dealing, it's back, baby. whining and dining, baby. Oh, one sec, Jack, one sec, one sec.

Hey, Jerry, turn on the Bloomberg terminal. Bank earnings are happening. It's time for big bank earnings. Yetis, in the past few days, six of America's biggest eight banks have reported their quarterly earnings for the summer period. First, you got the New York Giants out there.

JPMorgan Chase, Goldman Sachs, and Citibank. And then you got the commuter banks out there. Bank of America, PNC, and Wells Fargo. They all announced earnings. since Friday. But here's the funny thing, besties. It is rare for Jack and I to find one single theme across the earnings of all six major banks. And yet this time, we found a single theme. And what is that theme, Jack? Deal making is back, baby. Whining and dining is happening on Wall Street again. But before we hit all that, Yeties, there's one universal truth in this economy.

We all hate fees. Yeah, we should sprinkle on this context that banks, they love fees. Oh, yeah, they do. The overdraft fee, the foreign transaction fee, the ATM fee, and of course the fee fee. And the one fee, though, that's bigger than all the rest of the banking fees is the investment banking fees. Ah, the investment banking fee. J.P. Morgan made $2.3 billion in investment banking fees just last quarter. Goldman Sachs and Bank of America, they made $2 billion each last quarter. And the reason they're making so much money on investment banking fees is that investment banks do big deals. Across finance, there are more deals happening than last year. We're talking billion-dollar deals. IPOs, bond issuances, mergers, acquisitions, all of those are big investment bank and deals.

And the investment banks that advise the companies on those deals, they take a nice 1% fee. That is key to the business model. So, Jack, let's whip up an example here. Let's talk about the latest deal from Boeing. Just yesterday, Boeing announced that they're issuing $25 billion worth of stocks and bonds to raise money for their troubled company. So if the investment banks advising them on that deal take 1% of $25 billion, Jack? That's a lot of chatter, Nick. Oh, sit down, stand up, and write us a check, please. It's the biggest 1% I've ever seen, because the banks will be splitting $250 million in fees on that one single Boeing deal.

One deal, quarter billion dollars in fees, not too shabby. But Yeties, the return of dealmaking is just one fun part of this economy that is back, baby. Oh, and you know dealmaking is back when you can't get a reservation of carbon, by the way. Teresey is the new nobu. So, Jack, what's the takeaway for our buddies over at the big banks? Winter is over. We're seeing it across the economy. Yadies, on September 17th, our central bank met and decided to cut interest rates for the first time in three years.

Our takeaway back then? Winter is over. Ned Stark, you had it all wrong. Winter was the period of high interest rates that was needed to crush inflation. but it slowed down the economy, although it did crush inflation. Yeah, it worked. It was a little painful, but it worked. Well, now we are seeing a financial spring. As borrowing rates go down, more fun is happening on Wall Street. Stock markets have returned to soaring never seen before all-time highs.

Companies are issuing bonds and stock to finance new investments. Soon, homeowners will refinance mortgages to lower rates. And VCs will invest again, and startups will IPO again. And yes, bankers will take fees on every day. we just said. They're taking fees on all of it, baby. Interest rates down, deals up. It's another sign that our three-year winter is over. Now a quick word from our sponsor. For our third and final story, this one's wild. Actually, a wild milestone was just hit in the diamond industry. Half of all diamonds sold today were grown in a lab. But the way consumers are reacting is the

opposite of what you'd expect. Now, Yeties, if your boyfriend is dragging his feet right now, you may want to send him this story. In fact, definitely send him this story. You heard it from us. Yeties, if you know someone who just had to buy an engagement ring, they had to make a big decision. Yeah, do they want to spend the rest of their lives with this person? Oh, that's not what I'm talking about. Yeah, do you want a lab-grown diamond or a natural diamond? A lab grown or a natural? That is the big ring buying question. Well, get this, Yetis. For the first time ever, 50% of buyers chose lab-grown diamonds. That's right. One-half of all diamonds

grown and purchased were from a lab. We call it the equilabrium. Yeah, the equilabrium. That's what we call it. That's what we do. There's an equal chance that a diamond bought today is natural or lab-grown. Now, Jack, we should sprinkle on a little sparkly context, please. A lab-grown diamond is a real diamond. It was just created in a lab with heat and pressure over the course of one month. And natural diamonds were also created with heat and pressure. But the natural diamonds took a billion years to create. Yeah, they have to, like, sit next to a volcano for a billion years. Now, Pandora, the $12 billion jewelry chain, is only selling lab diamonds now.

They say that lab-grown diamonds are more sustainable than naturally mined diamonds are. But lab-grown is seen as less valuable than natural. So lab-grown diamonds sell for a lower price. And since labs are creating a huge new supply of diamonds right now, the price of diamonds is falling. But here's what Jack and I found fascinating about this story. Did you notice your buddy's engagement ring looked a little bit bigger? To quote Sir Mix a lot, oh my God, Becky, look at her ring.

It is so big. She looks like one of those rap guys' girlfriends, literally. Yeties, we've got the data. And yes, diamonds are actually getting bigger. According to Axios, diamonds are 55% larger than the one sold for you. years ago. Tolkien had it all wrong. These are the rings of power. And they're not just bigger. The average spent on diamonds is growing too, which is counterintuitive to everything we said to start the story. Pause the pod for a second, because that is at odds with what we just said, right, Jack?

We just finished saying that the flood of lab-grown diamonds is lowering the price of diamonds overall. So why would spending be up if more of the diamonds purchased are the cheaper lab-grown diamonds? Here's the answer. Instead of spending less for a lab-grown diamond, we're spending the same amount. We're just getting a bigger diamond overall. That's right, Jack, the average size of a natural diamond bought this year was 1.4 carrots. But the average size of a lab-grown diamond bought this year is two full carrots. So the average price of a lab diamond is down 30% in the last four years,

but the average size purchased is up 60%. So we're spending the same to get more diamond thanks to lab-grown diamonds. Jack, did you see Becky's engagement ring? Is that lamb grown or is that natural? I don't know, but it's huge. I don't care. It looks fantastic. So, Jack, what's the takeaway for our buddies getting engaged?

We are now entering the blingassants. Yeties, the most famous ad campaign of all time was this. Diamonds are forever. It was 1947 and the De Beers Diamond Empire taught an entire generation that diamonds take billions of years to be created. They're unique. But now that Debears is competing with lab-grown diamonds, they're promoting something else. They're saying, real is rare. Real is rare.

Yeah. That's less compelling. It is less compelling. Good point, check. And that's why 46% of diamonds sold in the U.S. this year are not natural diamonds. Since there's so much easier to obtain, lab-grown diamonds will soon make up a large majority of all diamonds sold. So if you've got $5,000 for a ring and the jeweler offers you a small natural one or a huge, lab-grown one. Well, Jack, in this

economy, millennials are going to go for size over storing. And that's good news for the lab-grown diamond industry. So the way we see it, the next era of jewelry is the blingasance. Jack, could you whip up the takeaways for us for Sabiche Wednesday? The Tokyo

Metro just went public on Japanese stock markets. It's now worth $5 billion. The Tokyo Metro is a 50-50 public-private partnership, and that is a beautiful thing. For our second story, it's big investment banks. They just showed that deals are back. And so are deal fees. Winter is over. The return of deals is just one way we're seeing it. And finally, lab-grown diamonds now make up

half of diamonds sold in the U.S. We're not saving money, though. We're just buying bigger ones. And that's why Jack and I think we are entering the blingesance. It's a bling renaissance. But Yeties, this pod's not over yet. Here's what else you need to know today. First, Walgreens announced they're closing 1,200 stores, which is 14% of their U.S. footprint. Ever since Walgreens invested in Theranos, things have been going downhill. They actually say a quarter of their Walgreens locations in America are unprofitable. So they're closing a lot of them. Second, multiple reports say that Tesla's Optimus robots from that event last week were actually

controlled by humans backstage. We told you how Tesla's humanoid robots were serving drinks to people at the event on Thursday. We all presumed that it was artificial intelligence operating those arms and limbs. But it may have been a room of Tesla employees operating the limbs and fingers while they made you that in a groaning. Basically with a

remote controller in the back. And finally, Taylor Swift's Ares Tour has found another way to commercialize the product with a book. A 256 page coffee table book is now going to commemorate the highest grossing concert tour of all time.

It's available exclusively on Target on Black Friday, November 29th, and apparently it is already a New York Times best seller. Not even going to fact check that. I think you're right. I think you're right. I don't eat the fact check. Now time for the best fact yet. This one sent in by Al Rubio from Guadalajara, Mexico. On Monday, we mentioned that spring breakers are considering alternative locations for their spring break vacations. One of those alternative locations was Ulaan Vatar in Mongolia, the capital, of Mongolia. Did you know that Ulan Batar is the coldest capital in the world?

We repeat, Ulan Batar, Mongolia gets an average temperature of 29 degrees Fahrenheit and can reach as low as negative 40 degrees Fahrenheit. 29 degrees as your average temperature, you're going to want to wear layers. Spring break. Spring and broke my finger off. Yeah, spring. Spring frostbri. Yetis, you look fantastic for Saviche Wednesday.

And remember, if you are strolling through Times Square today, look up. What are you going to see, Jack? Well, here's the details. If you're at 47th Street and 7th Avenue in Times Square, look up because TBIY, the best idea yet, is going to flash. It's going to be flashing up there like every 25 minutes, right, Jack? Yep. On the 25th minute and the 53rd minute of each hour all week. It's pretty good.

Pretty cool. 125, 253, they're both good times to check out the best idea yet in Times Square. If you happen to be there, we would love to see a pick. Send us a pick of the best idea yet from Times Square. We'll give you a shout out on the pod. And we'll get you a free hot dog on the corner. No promises on that last bet. Extra relish.

Jack and I will see you tomorrow. Celebrate the wins. And before we go, a congratulations to Yeti Veronica Angulo down in Colombia. She's sailing from Cartagena to Panama with her digital nomad business. called Noma, and she's bringing her clients along for the ride. And a shout out to Nicole Goldman in Norwalk, Connecticut, who's going on a bachelorette party in Portugal. Nick, the theme? Coastal Grandma. Best batch yet. And Brenton and Jordan Finan, down in Houston, Texas, have got a fantastic

four-year anniversary. And a huge, happy birthday shout-out to Ahmad Alismail in Katie, Texas. He's turning nine years old while doing Coden and Taekwanda. And he's the best fort. nighter yet. And a happy 51st birthday to Dolly Parton's song, Jolene, Jolene, Jolene, Jolene, turning 51. And to anyone else celebrating something today, Nick it a T-boy. Celebrate the wins. This is Jack. Nick and I don't own any stocks mentioned in today's pot, although I'm curious about that Tokyo subway stock, Jack.