SYLVIE DOUGLIS, BYLINE: NPR.
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DARIAN WOODS, HOST:
This is THE INDICATOR FROM PLANET MONEY. I'm Darian Woods here with Wailin Wong.
WAILIN WONG, HOST:
It's Friday.
WOODS: It is, indeed. And making a most glorious return to THE INDICATOR, Planet Money's very own Jeff Guo.
JEFF GUO, BYLINE: Oh, my gosh. I'm so excited to be back, guys.
WOODS: Well, Jeff, you're back in time because it's Indicators of the Week. We are here, as always, to bring you the most fascinating snapshots from the week of economic news. And today, we're digging into the embattled company Boeing. We're going to look at a bank jilted by Bilt.
WONG: What are these words you're saying?
WOODS: And just to continue the jargon, we're going to learn about our investments in NANC and KRUZ. You'll learn all about this word salad after the break.
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WOODS: Indicators of the Week. Let's start with Wailin.
WONG: My indicator is three. That is the number of negative news events that plagued Boeing this week alone. I think, at this point, calling the company embattled is a major understatement.
WOODS: I saw that their CEO got grilled on Capitol Hill this week.
WONG: That is right. That is negative news event number one. Outgoing CEO Dave Calhoun answered questions from senators on Tuesday. It's the first time he's gone before Congress since that January incident where the door plug got ripped off an Alaska Airlines flight.
GUO: Ooh.
WONG: And when I say answer questions, they were questions like this one from Republican Senator Josh Hawley of Missouri.
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JOSH HAWLEY: Why haven't you resigned?
DAVE CALHOUN: Senator, I'm sticking this through. I am proud of having taken the job. I'm proud of our...
HAWLEY: Proud of this record?
CALHOUN: ...Safety record, and I am very...
HAWLEY: You're proud of this safety record?
CALHOUN: ...Proud of our Boeing people.
HAWLEY: You're proud...
CALHOUN: Very.
HAWLEY: ...Of this safety record?
CALHOUN: I am proud of every action we have taken.
HAWLEY: Every action you've taken?
CALHOUN: Yes, sir.
HAWLEY: Wow. Wow. There's some news for you.
WOODS: Like, whenever you need some spicy tape from C-SPAN, it is Josh Hawley who will provide it.
WONG: That was just Tuesday. And here is some more news for you. You might remember that there were 737 MAX crashes in Indonesia and Ethiopia back in 2018 and 2019. Three hundred forty-six people were killed. Some of the victims' families were at the hearing to confront the CEO. And then the day after the hearing, an attorney representing the family sent a letter to the Justice Department. This is negative news event number two. According to news reports, the letter called for, quote, "aggressive criminal prosecution," end-quote, of Boeing. And it said Boeing should be fined over $24 billion.
GUO: I'm almost scared to ask what negative, bad headline for Boeing number three is.
WONG: So we learned this week that two NASA astronauts have to extend their stay at the International Space Station because of problems with the Boeing Starliner spacecraft.
WOODS: That sounds like the plane delay from hell.
WONG: Oh, I know. I mean, their mission was only supposed to be about a week long, and it's turning into longer now because the Boeing spacecraft they're using for this round trip had problems while docking at the station. Now Boeing and NASA engineers have to figure out what went wrong so they make sure the journey home is safe.
GUO: They're not trapped, but they just can't go home yet.
WONG: They can't go home yet, but they're veteran astronauts. I think they're - they know what they're doing.
WOODS: All right. So from a more-than-embattled company to a flesh wound for a bank, Jeff.
GUO: My indicator this week has to do with this credit card that has this unique additional feature where you can use it to pay your rent, and there are no fees for doing this. Like, there are no fees for you or for your landlord. In fact, this card, it gives you points on your rent payment.
WONG: Oh, my gosh. What is the APR on it, though? Is it, like, 10 million percent?
GUO: Well, you know, it turns out that someone is losing money on this card, Bilt card.
WONG: OK.
GUO: B-I-L-T. But it is not the renters. It's not the customers.
WONG: Interesting.
GUO: It is the bank behind this card, Wells Fargo.
WONG: Oh, no.
GUO: According to the Wall Street Journal, they reported this week that Wells Fargo is losing, like, $10 million a month...
WONG: A month.
GUO: ...On this card.
WONG: Oh, God (laughter).
GUO: And that is my indicator.
WONG: I mean, how did they get this this wrong?
GUO: Well, as you know, there are two main ways that credit cards bring in money, right? One is they charge fees on every transaction. Those are called interchange fees that - stores usually pay for that. But credit cards typically make a lot more money off of their customers off of interest payments from people who carry balances on their cards. In this case, I think Wells Fargo was hoping they would make all this money back on all the new customers they could attract, some of whom might be carrying a balance.
WONG: OK, so they, like - they just underestimated how many people would sign up. Like, it was, like, almost too successful.
GUO: It seemed like they were hoping to get a lot of new customers, and they were using this, like, rent situation scheme thing to attract a lot of new customers, especially young customers, 'cause, you know, who pays a lot of rent? It's young people who don't own homes. And so that's what they were trying to do, and then they were hoping once, you know, you get the customers in the door, you can - you know, maybe some of them will carry a balance, and you can charge them interest, or some of them will get upsold on other Wells Fargo products or whatever. But in any case, none of that actually worked out according to their calculations.
WONG: It's funny this is Wells Fargo, right? Wells Fargo...
GUO: Yes.
WONG: ...Whose name has also been thoroughly trashed by scandal...
GUO: It's true.
WONG: ...In the last week. It was, like, we were just talking about Boeing, and it's like, well, couldn't have happened to, like, a more scandal-ridden bank.
GUO: I mean, this is what I think is so funny about this particular situation - right? - 'cause Wells Fargo - you just associate their name with all of these ethical scandals, all of the billions of dollars in fines that they've had to pay over the years. And now it's, like, you know, the tables have turned. Now the customers are the ones that are, you know, pulling one over on the bank almost.
WONG: Amazing. Darian, you want to bring it home with a big reveal here?
WOODS: Yes, indeed. My indicator is $1.10.
WONG: (Laughter).
WOODS: And that's how much we have added, pretax, to the PLANET MONEY investment fund.
WONG: I didn't...
GUO: Oh, my God.
WONG: ...Know what you were going to say, but I thought it was going to be higher than what you just said. A dollar - you said...
WOODS: Well, it's been...
WONG: ...$1.10.
WOODS: ...Just over a week, Wailin.
WONG: (Laughter).
WOODS: It hasn't been that long.
GUO: That's pretty good.
WONG: No, but it was such a good week in the markets.
WOODS: With a $65 investment.
GUO: In percentage terms, what was it?
WOODS: Yeah, so I'll run through this. And just to get listeners caught up, this is from our episode earlier in the week where Wailin and I each invested in two funds that tracked how members of Congress trade stocks.
WONG: Right. The funds used data from a guy called Unusual Whales. That's not his given name. That's, like, his nickname. He partnered with a company called Subversive that made the funds. And we had this friendly rivalry. I invested in the trades done by Republican Party members and their families. And, Darian, you invested in the Democratic one.
WOODS: Yes. So there was the excellently named KRUZ fund, K-R-U-Z, for the Republican trades. And mine had the ticker NANC. And we should be clear, we got a note from the portfolio manager after the episode aired. And now we know this should be pronounced NAN-C.
GUO: Ah, like, WALL-E. You've got to pronounce the last letter.
WONG: It was too cash (ph).
WOODS: The appropriate gravitas for this ETF.
WONG: Now, how did each of these funds perform, Darian?
WOODS: So continuing the recent trend, KRUZ did OK, but not amazingly. Wailin, you made 25 cents from your...
WONG: Oh, a whole quarter.
WOODS: ...Nearly $30 investment. As a percentage, that was under 1%. And that is considerably below the overall stock market performance.
WONG: Yeah, I'll say. The stock market did really well in the last week (laughter).
WOODS: During that time, the S&P 500 rose a very high 2.2%.
WONG: You must have done a lot better than I did then.
WOODS: Yeah, so my funds did very well. NANC rose 85 cents from my roughly...
GUO: Oh.
WOODS: ...$35 investment. So that's 2.4%, which beat the S&P 500 by a little.
GUO: And that's because Democratic lawmakers, they're more heavily invested in tech on a tear this week.
WOODS: Yeah, there's just a lot of attention and excitement, rightly or wrongly, about the investments and promise of artificial intelligence. Democrats are more weighted towards these stocks. What's powering all this is Nvidia, which claimed the title as the biggest company in the world this week. Oh, and by the way, we're going to take a look at Nvidia on the show next week.
WONG: We'll have to be sure to disclose our massive holdings in...
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WONG: ...Nvidia via these ETFs.
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WOODS: And if our listeners have been feeling flush with the rising stock market over the last week, we have merch for sale. There is a very special T-shirt with a alligator swimming through the Beige Book that I highly recommend.
GUO: I love that T-shirt.
WOODS: You can go to shopnpr.org/indicator.
WONG: Yeah, Jeff, you've got to get in on this.
GUO: Wait, I don't get a free one?
WONG: This episode was produced by Angel Carreras with engineering by Valentina Rodríguez Sánchez. It was fact-checked by Carlos Garcia (ph). Kate Concannon edits the show, and THE INDICATOR's a production of NPR.
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