Bessent's yen bet, cold Argentine data centers set, and the summer box office net

0:00NPR. This is the indicator from planet money. I'm Whalen Wong. I'm Ricky Mulvey and I'm just excited to be here. My name is also Cooper Caspikim, sometimes host, often producer. We are excited to have you two Cooper because it is time for indicators of the week. Our weekly look at the numbers from the news that made us curious about the economy. This week we have the U.S. Treasury Department mucking around in financial markets again. I'll tell you about one of the prettiest places in the world to potentially build some data centers. And we break down the box office take for summer movies. Awesome and now the excuse for me to talk about the Odyssey which I'm seeing for a third time this month. After the break. This message comes from Fixable, a podcast from Ted. Here unfiltered quality advice that will help you solve your work issues quickly from expert hosts, leadership coach and Morris and Harvard Business Professor Francis Fry.

1:03Find Fixable wherever you listen. This message comes from Bloomberg's News Now podcast. Harnessing the power of Bloomberg's journalists and analysts so you know the latest on news, politics, foreign relations, financial markets, technology, global economics and more. Listen wherever you get your podcasts. On Dear Life Kit, our team answers your listener questions with time tested advice from past episodes. But we don't always agree. Opposite, no. That's not what we thought. What if he's the one? Oh my God. What? Listen to the latest juicy episode of Dear Life Kit on the Life Kit podcast in the NPR app or wherever you get your podcasts. This is Indicators of the Week. First up, Wheel and Long. Hello. My indicator is one US dollar to 153.63 yen. That is the current exchange rate between the dollar and the Japanese yen as of this

2:04recording. Okay. You make it a plan. You go on a vacation. No, but I am here to talk about international currency markets just as exciting. The US government has been buying up a lot of Japanese yen. And this week Treasury Secretary Scott Bessent gave some remarks where he basically challenged the market to stop him. I am the house now. So Bessent was speaking at Southern Methodist University in Texas. You bet against me if you want. So he doesn't Scott Bessent known for making some big moves in foreign currency when he was in his hedge fund era. Yeah, he helped pull off this $10 billion bet against the British pound in the 90s. So why does he care so much about the Japanese yen? Well, the yen has been pretty weak vis-a-vis the dollar for years now. These authorities have spent record amounts to support their currency by purchasing yen in foreign exchange markets. And this is a source of worry for the US Treasury and Scott Bessent because Japan's finance ministry may sell some of its US Treasury bonds to fund these purchases.

3:05Ooh, and Bessent doesn't want this. No, because Japan is a major foreign holder of these US government bonds. And if the Japanese finance ministry sold off a big chunk of Treasury, that would make prices on Treasuries go down. That in turn would make yields on US Treasuries go up. And that means borrowing costs for the US go up. Yeah, we just did an episode on how Bessent is buying back Treasury bonds to try to make yields come down. So this seems related. Yeah, Bessent's keeping a very close eye on the Treasury market and he's shown a willingness to step into financial markets. The US Treasury and the Japanese finance ministry carried out a joint intervention to buy yen over the summer and they hadn't done that kind of coordinated action since 2011. And now Bessent is all but daring financial markets to defy him. Stay tuned. Thank you so much, Wailen. Next up, Cooper Katz McKin. My indicator is $25 billion. That's how much an open AI data center could cost to be located in Argentina.

4:05The company signed a letter of intent to explore the project last year. Their partner says they're looking for a site within Patagonia. There is a ton of land down there. There's mountains. There's penguins, glaciers. I know. Grasslands, it's so pretty. So Patagonia is the furthest south you can get in Argentina. A billion dollar data center project from around the world are already taking shape there. A Polish company already leased 500 square miles. But the question remains why Patagonia, Argentina is a big country. Well, yes. As Wailen said, it's got a ton of land. It's got a ton of energy. And the most attractive part, it is really freaking cold. OK, I wondered about that because when I imagine Patagonia, I see glaciers. Yeah, people come from all over to see this region of the world. It's very, very beautiful. So when you're running a bazillion computers, the room gets hot as you can imagine. So you need some kind of cooling. And it is a particularly expensive part of running a data center. Cooling systems can account for like 40% of its electricity consumption to run.

5:10So operating in a cold climate can reduce those costs. Well, we've covered on the show a bunch how Americans actually on both sides of the aisle are not super thrilled with data centers in their backyard right now. So I wonder if that's coming into play here. Yeah, I mean, in the first quarter of this year, local opposition led to the disruption of like billions of dollars worth of projects. Meanwhile, Argentina's president, Javier Malay, has been courting AI leadership in the states for years. And he's saying we'll give you huge tax breaks, we'll give you regulatory certainty. And the people are taking notice. Cooper Wildcat's me Kim, you've talked a lot about potential investments. Are all of these data centers not taking off already? Yeah, so some companies have already put down money, but more want to do just small scale pilots. Because the thing just isn't proven. No data centers actually exist in Patagonia yet. There still needs to be fiber optic cables connected. There's a long ways to go. And Cooper, you covered the story in the indicator newsletter this week.

6:10Yes. And if you haven't signed up, it is a quick hit of the economic news that we don't get to on the show. It's at npr.org slash indicator newsletter. There's a lot more there. All right. Thank you, Cooper and Ricky Boringa's home. My indicator is $4.76 billion. That is the record breaking summer domestic box office number. How much Americans and Canadians spent on movie tickets between May 1st in Labor Day. It is greater than any other summer. Yes, including the years before COVID. It gets more complicated when you account for inflation. But for now, let's have fun at the movies. You probably know the hits that drove this Spider-Man brand new day, the Devil Wears Product 2 obsession, maybe the Odyssey. Were you all supporting this number? Did you see any of these in theaters, Whalen? I saw Delaware's product 2. I've seen the Odyssey twice, and I haven't seen the other ones. So you haven't gotten past the Wikipedia description for obsessions? I can't take it. I'm tired. I have read the Wikipedia Platinum for Obsession multiple times.

7:12I've listened to podcasts about it. I just haven't seen them movie itself. Fair enough. Would you watch it on an airplane? Yes. Or I would watch it chopped up into 10-second TikTok clips, which I also have been getting. That's how it should be considered. Out of order. Okay. Let me give you the story here. It's not just big movies driving this number. See, the average movie ticket cost about $9 in 2019. Today, it's closer to $13. And that spend is partially due to just straight up price increases. But it's also moviegoers spending more for premium formats, like iMacs, which also made record-breaking money this summer, because I mean, who wants to see the regular version of the Odyssey? I mean, Gilcy has charged. I paid premium for those Odyssey tickets. This doesn't tell the whole story. The number of tickets sold are still down about 30% from pre-pandemic levels. Okay. So studios are bringing in lots of money. Are theaters also making a ton of money? So this is a problem. They need people buying popcorn, like take AMC theaters.

8:15Right now, the company generally loses money after paying all of its costs and taxes and showing movies is expensive, selling popcorn rings their cash register. AMC keeps about 81 cents for every dollar spent on food and beverages. So these theater chains need people coming in regularly. Whalen, what snacks are you buying at movies? Are you a snack sneaker or a snack buyer? Half and half, I buy popcorn because I love movie theater popcorn, but don't tell anyone sometimes they sneak in a sparkling water in my purse. It's so innocent. It's the most whalen possible thing to sneak in. But then when I open it, I feel like the psh is so loud. I feel like the assures are going to come swarm me. You wait till it's silent and then you pop that bad boy. I wait until Nicole Kimmin starts talking and then I'm like, I'll just sneak in the opening of the LaCroix. I had someone chewing ice during a showing of Akira. You are not the worst. You are not the worst. You are not the worst, don't you? No, who does that? AMC, other chains, they're trying to solve this traffic problem.

9:16AMC, for example, they want to increase the movie supply. They're starting their own distribution venture. It's called the Lee Wood films. So that's going to go out and buy movies at Film Festivals because right now streamers like Netflix, they're going to Film Festivals. They bid on movies, but then they put those movies straight on their platform. And AMC is basically saying, hi, Arthouse Cinema Director, we will help you with marketing and put your very important movie on a larger screen. You know what I think they should do? And they're already doing this, but I've already seen the shining anniversary screening. And I saw back to the future anniversary screening. And I'm like, let's just rerun all the movies I watch as a teenager. I will go pay to see it again in the theater. You know what I mean? My solution is live sports and movie theaters. I watch figure skating on a big screen. Could be fun. With my La Croix from home. This episode was produced by Angel Careers with Engineering by Jimmy Keely, the fact-checked by Sarah Wattas, and edited by Julia Richie. Kate Concanon is the shows editor and the indicator is a production of NPR.

10:19This message comes from Fixable, a podcast from Ted. Here unfiltered, quality advice that will help you solve your work issues quickly from expert hosts, leadership coach Anne Morris and Harvard Business Professor Francis Frye. Find Fixable wherever you listen. This message comes from Bloomberg's News Now podcast, harnessing the power of Bloomberg's journalists and analysts so you know the latest on news, politics, foreign relations, financial markets, technology, global economics, and more. Listen wherever you get your podcasts.