The Best One Yet - 🥶 “Bitcoin Blizzard” — Coinbase’s bankruptcy scare. The RealReal’s re-Gucci. Baby Formula’s shelfless-ness.

Episode Date: May 12, 2022

If you wanna know what’s up with crypto right now, just look at Coinbase — 1 single line from their earnings freaked everyone out yesterday. But there’s one company that’s actually growing right now: TheRealReal is finding the Gucci over Fucci. And the newest entry in the Hoarder’s Almanac is Baby Formula — a case study in market failures.$BTC $COIN $REAL $ABT $COINFollow us on Instagram, Twitter, and Tiktok: @tboypodAnd now watch us on YoutubeWant a Shoutout on the pod? Fill out this formGot the Best Fact Yet? We got a form for that tooLearn more about your ad choices. Visit podcastchoices.com/adchoices Hosted on Acast. See acast.com/privacy for more information.

This is Nick. This is Jack. It's Thursday, the new Friday, May 12th, and today's pod is the best one yet. Two days left for the election of Bestie versus Yeti. Bestie versus Yeti poll update. Jack, how are we looking? Still extremely close. Big change.

We've got an October surprise, Jack. A new third option has emerged. A third party. Bettys, a combination of Bestie and Yeti. Let's not go with Bettys. Yeah, let's not go with Betty. Besties and Yettes. Those are still the options.

First story, what do we got you? For our first story. If you want to know what's up with crypto right now, look no further than Coinbase. Crypto Winter is in a Bitcoin blizzard. For our second story, the one company actually growing right now is the real real. The real real, because on the one hand, inflation, on the second hand. There you go. I see what you did that. For our third and final story, the latest issue of the hoarder's almanac is baby formula.

Formula, it is a painful case study on market failures. But before we hit that fantastic mess. Wonderful. I love this mix, Jack. Dearly beloved, we are gathered here today to mourn the passing of our forefather. We want to say goodbye to the iPod. After 22 years, Apple has made its final iPod. Shocker. Apple announced this week they are phasing out the iPod touch, which is the very last version of the iPod.

We know what you're thinking? They're still making iPods? Like the fall of the Romans, the final four low. or the Seinfeld finale, season nine. RIP to IPOD. Now, best season yetis, the height of the iPod was really 2006. Oh, when Nick and I were in high school, the iPod was nearly half of Apple's revenues back. My carefully curated collection of burned CDs became obsolete overnight when that thing landed. Did you have one of those things that held them on the visor in your car?

It was like a piece of furniture. More real estate was taken up by CDs. The best invention after the iPod was the FM. transmitter that let you cast the iPod to your car. Jack, just set this thing to 88.3 FM. Unless you had the auxiliary cord, your fancy, uh, civic. If you don't have an ox cord, you can't ride with us. But without the iPod, there wouldn't have been an iPhone.

No, and no iPod, no iPad. No iPod. No podcasts. No T-boy. So the iPod is our audio ancestor. Pour out some cold brew for the iPod. iPod, we will miss you. Yeah, but not really because the iPod's basically built

to every electronic Patrick. We will miss you. Let's MP3 our three stories. Fifteen years before this song, two boys from the Northeast met in the dorm. They had an idea that caused a cultural storm.

It's the best one yet, but the best is an norm. That's it is. 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. Start the show. For our first story, Coinbase, just fell 27% because of one single line in its earnings. Mid-Crypto winter, we are buried in a Bitcoin Blizzard right now. Jack, you do not need a bored ape to know that Bitcoin is struggling right now.

You just have to look at Coinbase's earnings. Ben, the Bitcoin, it's like he took a Napocino. He won't even get up. He's like Marty McFly at the end of Back to the Future. He's half disappeared. I know what you mean. I can picture that. But Coinbase, Jack, Coinbase, the biggest crypto exchange in the U.S., the biggest publicly traded...

crypto exchange on planet Earth. This is the crypto stock. It is. And they just revealed in their earnings that the amount of crypto trading on Coinbase is about half as much last quarter as the quarter before. Now, a fundamental reason for this is pretty simple, right, Jack? Crypto prices are down. Yeah, your buddy's not brag posting about his crypto gains, so fewer people are fomoing into crypto. Right. Because Coinbase's business is pretty much directly correlated with crypto prices. Yeah, so facto, Coinbase is making fewer fees. on the smaller transactions as you buy less crypto. Add it all up and Coinbase stock is down 85% since going public last year.

But what fascinated Jack and me about this Coinbase earnings was a single line that freaked people out yesterday. Lawyers must have written this. Classic lawyers. Because it was like really bad for public consumption. Yeah, the PR team, not so much into this. Here's what it's at. If Coinbase goes bankrupt, you might lose the crypto that you have invested through Coinbase.

Yeah. Now, understandably, that caused a whole lot of panic yesterday. Yeah, not exciting to hear you might lose your crypto if Coinbase has issues. But Jack and I should sprinkle on a little context here. Coinbase is nowhere near going bankrupt, not even close. The CEO should sprinkle on some contacts. He rushed a tweet out there to like... Get that tweet out. Pour water on the panic fire that was going on.

I mean, Jack, how much cash does Coinbase actually have? It's got $6 billion in cash. So it's nowhere near bankruptcy. It's a lot of cash. That cash, that's one-third of a lift. But that line that lawyers insisted Coinbase Right was still a reality check for some retail investors that cryptocurrencies, they're not cash and they're not stocks that are regulated either. Okay, let's compare this to cash. If your bank goes bankrupt, the FDIC will insure up to $250,000

of the cash you have in the checking and savings accounts. Thank you, Uncle Sam. And if your brokerage firm goes bankrupt, the SIPC will probably protect up to $500,000 worth of assets in your account. Must be nice, but it's not the same situation with your doge coin. No, crypto is a young industry. And they don't have those system-wide insurance policies that would make your father-in-law proud. So, Jack, what's the takeaway for our buddies who are all in crypto, which includes us?

In the middle of a crypto winter, this is a Bitcoin blizzard. A crypto winter defined by CoinDesk as a period of prolonged fall in crypto prices like now. Like seasons, crypto winters have come and gone. before. Yeah, I can remember the 2014 crypto winter. In 2018, Bitcoin prices fell by like 80%. 2020. We're in a Bitcoin winter right now. Bitcoin's down 58% since Thanksgiving. But this isn't just a crypto winter. We're seeing a crypto blizzard happening right now. Because it's not just crypto prices falling. It's everything crypto falling. NFTs are down. Crypto stocks are down. Even stable coins are down. Stable coins. In the middle of a crypto winter right now,

we're buried in a Bitcoin blizzard. For our second story, despite everything you're seeing in the economy right now, one company has sales that are surging. It's the real real real. The real real real. The real real real. The real real. Because the real real real real real does well when everything else doesn't.

Perfect timing. Jack, last weekend, walked into the real real shop in Marin, felt like Anna Wintour's Powder Room. You're going to have to send me a picture. I have no idea what Anna Wintour's Powder Room with my question. It has a lot of coffee table books. The Real Real. It went public last year. Focused on luxury resale. Secondhand Eve St. Laurent.

Exactly. And the key, the key to the Real Real, is that they authenticate everything that they resell. Right. If you're thinking about buying a handbag on Gucci for like $2,000, they're going to verify with a human being that it's a Gucci, not a Fucci. No, no, no, not a Fucci. No Fokley's allowed on the Real Real Real. But unfortunately, the Real Real stock, it's down 80% since then, like, you know, every single

stock seems to be these days. But its latest business growth, it would make Calvin Klein blush. Sales over at the Real Real jumped 48% in the first quarter, and they're expecting that same growth to continue this year. In this economy, 48% ain't that. No, it ain't. So the Real Wheel, it is growing while everyone else is slowing, and we identified three key reasons why. First, the CEO said that luxury is resilient, and the Real Real sells luxury products. Quinneth's not sweating that gas, $4.50 a gallon. No, she's not. She's doing just fine. She'll be all right. The second reason the Real Real's thriving is the Yolo economy.

Yeah, you realize life from the pandemic is short. So, you're reaching for the fancier brands. Jack, can I interest you in the Prada bag? Why not? Marquis'A's address. Give me that! Golchi and Gabon, I get that right now. There's also some serious revenge socializing because you might be at like a swaray for the first time in a couple years.

You get anybody into a lot of soirees over there, Jack? Is that on the other? And it with George's closet's calling. I don't know, man. That would be a sullet. But if you're a swareing or you're going to a wedding, you want to make a first impression. And what do you want that first impression to be, Jack? A brand whose name you can't pronounce.

Yeah, exactly. So, Jack, what's the takeaway for our buddies over at The Real Real? The economy sickness is resell's strength. Okay, besties and yeties. A dominant theme right now. Everything is more expensive. Everything is out of stock. We're all sick and tired of paying extra for things, and we're sick and tired of waiting extra

long for those extra expensive things to arrive. But here's the wild thing. All of that makes resale clothing even more appealing than ever. Because resale clothing is inherently cheaper than new clothing. It is. And resale clothing is already here. Resale clothing is not stuck on some ship in zero COVID Chinese harbor. On the one hand, the economy's got some shortages right now.

On the second hand, it doesn't. And now we're at our sponsor, Robin Hood. We see ads all the time. All over the place, $10 bucks off this $5 promo code for that, Jack. You can buy three suits, you can get one free. But something we always thought was cool about Robin Hood, the free stock promo. Yeah, this was wild. The promo isn't like some X amount of dollars.

It's one stock. If you signed up for Robin Hood, they'd thank you with a single share in a publicly traded company on the house. And that free stock promo, it actually helped drive Robin Hood's growth and got new users in the stock market right away. One of the most creative moves in promotional history. So when Robin Hood became our sponsor, naturally Jack and I said, we got to do the free stock giveaway. If you're not on Robin Hood yet, you want to get started, go to robin hood.com slash t-boy and get cash to select your free stock.

That's Robinhood.com slash TBOY. Certain limitations apply. All investments involve risk. Robin Hood Financial LLC, member SIPC, Robin Hood is no longer affiliated with us or the podcast. For our third and final story, it's hoarder's alman. Week 111, we're running out a baby formula. This isn't just a hoarding issue. It's a case study in a free market failure. Anyone listening right now, if you go on eBay and search for baby formula, you're going to find that it's available, but not for $20.

Baby formula on eBay for $238. As of this past Sunday, 43% of places in this country that sell baby formula are out of stock of baby formula. Over at Walgreens, they're limiting the amount of baby formula you can buy to three per a child. And that's why there's a black market on eBay for $238 baby formula right now. Now, not everyone listening has kids, but baby formula is a choice for some mothers to feed their babies. But baby formula is a necessity for some working moms whose jobs don't allow breastfeeding or pumping. So when Jack and I saw this story, we saw that this wasn't a typical shortage.

This has hit a national crisis level. parents are stuck diluting formula, watering it down to make it last longer because they know they can't get it. And then, Jack, what did you see what's happening with other parents who are going on like Facebook for formula? They're going on Facebook where they see formula that's for sale, and they're getting scammed by awful people ripping them off. Now, interesting development. A key reason for this baby formula shortage is a company called Abbott Laboratories. Abbott Laboratories is a publicly traded science company. They make pediolite so you stay hydrated. you might have taken one of their COVID-19 test recently.

I just took one last weekend. And they also make three brands of leading popular baby formula. Now, when it comes to Abbott's three brands of baby formula, they unfortunately just had to recall them. Yeah, in February, they recalled all the baby formula coming from their factory in Michigan. And they still haven't restarted production of baby formula there. And that's on top of the fact that we already had a baby formula shortage because of like your usual supply chain issues.

But the scare that Abbott has recalled their baby formula. baby formula, that triggered some panic hoarding among parents. And then here is the saddest part of the whole thing. Based on the data we saw, there could be enough baby formula still for everybody if only there wasn't panic buying and hoarding. So, Jack, what's the takeaway for all our buddies who may need baby formula right now? This is a market failure and maybe a government failure too. Okay, a fundamental belief to free markets is this principle. Profit incentives will drive companies to make the products we demand. Now, every economist knows that markets, yeah, they fail sometimes like we're seeing right now with baby form. Yeah, that same profit incentive. It's got some retailers jacking up

prices and profiteering off terrified families. But here's the thing. When markets fail, the government typically intervenes. In this case, it would be the FDA who would intervene. But that hasn't really happened either, unfortunately. Yeah. And we've had shortages for baby formula since January. And Abbott's recall happened in February. Well, it's May. The free markets and the government still haven't solved the baby formula failure. Jack, can you whip up the T-boy takeaways for us for the new Friday? Coinbase stock depends on high crypto prices, so it stocks down right now.

Because this isn't a crypto winter. This is Bitcoin Blizzard. The real, real stock is down too, but its sales are still surging. Because the economy's sickness is the reseller's strength. Our third and final story, we have a bad shortage of baby formula. And this is a market failure and a government failure, too. By the way, if you have extra formula or want to donate, your local food shelf might be able to help. Or you can donate to your local new mother support center too.

Now, time for the best fact yet. This one's sent in by the voice of one Dylan Carroll from lovely Ridgewood, New Jersey with lacrosse team. Did you know that one man is responsible for over 20% more than $30 billion of current U.S. agricultural exports? Between 1904 and 1928, an administrator of the USDA named David Fairchild traveled the world and introduced more than 200,000 new kinds of plant crops to bolster the U.S. economy. Some of these crops include soybeans, pistachios, kale, lemon, avocados, and watermelons. A list of just 12 crops that Fairchild introduced accounts for 30 of the $140 billion U.S. agricultural export market. Avocados, I thought I knew you. I actually wanted to know what our native crops.

Crops of America? Yeah. Basically nothing. No, there's some. Anything in like a Thanksgiving, like ensemble? Jack, the number one crop in America? Strawberry Pop-Tarts. Besties or Yetis, Yettys, or Besties, you look fantastic today.

And if you see someone, the best way you can help grow this pot is ask. H-Y-H-T-O-Y. Have you had the best one yet? If you know, you know. Nick and I'll see you tomorrow. Can't wait. And before we go, a happy birthday. and a shout out to Jia Chi-Ren in Shanghai, China right now.

They're listening under lockdown. We wish you the very best. And a happy birthday to Grace Louis just down the street in South San Francisco. And happy birthday to Sahigal-Rishankar in Naperville, Illinois. And Luke Polidore, happy birthday. And thank you for not missing a pot in one and a half years in Philadelphia. And huge happy birthday to Chris Lamke, who's getting a degree and turning 60 over in Michigan. And Adrian Almeda is getting that NBA.

over in Nebraska. And to anyone else celebrating something today, make it a T-boy. Celebrate the wins. This is Jack, Nick owned stock of Apple and The Real Real, and we both own stock of Robin Hood and we both on some Bitcoin. Now, a word from our sponsor, Robin Hood. So four years ago, we sold our company and we joined Robin. A lot of people asked, when did we decide that selling was the right move?

So it was actually in our meeting with the co-founders, that's what sold us. Vlad and Bejou, also former roommates, also met in college, Also, we're hanging out in New York City's East Village after the financial crisis. And they just figured out how the financial system works. So, Vlad and Bejou saw that Wall Street bigwigs, they were getting their fees waived. And they figured out a way to waive commissions for everyone else, too. So we saw a big, bold vision and decided to join these guys. That's where we spent the last three years until now.

It makes sense now that Robin Hood would sponsor our newly independent podcast. If you're not investing in Robin Hood yet, you can get started by going to robin hood.com slash T-boy choosing a free stock. That's Robinhood.com slash TBOY. Certain limitations apply for a list of other fees. View the fee schedule at RBNhd.co slash fees. All investments involve risk. Robin Hood Financial LLC, member SIPC.

By the way, Robin Hood is no longer affiliated with us or this podcast. Dude, that was really funny. The Swari line was so funny. You got to some Swar. Kendall's going through a lot of Swares. I said Anna Wintour's closet. Is that what we had originally said? Oh, you said it.

room. So it's actually still, it's perfect, it's perfect. Because then it's like, yeah, you're right, that would be a sware. You're getting invited to Anna Wintourne's closet? That is a suoray if I've ever seen one.