SYLVIE DOUGLIS, BYLINE: NPR.
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STACEY VANEK SMITH, HOST:
This is THE INDICATOR FROM PLANET MONEY. I'm Stacey Vanek Smith. And I am here as I am every Friday with Mr. Adrian Ma and Mr. Darian Woods.
DARIAN WOODS, HOST:
Hello. Hello, good to be here.
ADRIAN MA, HOST:
VANEK SMITH: And we are gathered here, of course, because it is time for indicators of the week.
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MA: I think - I mean, you made it feel special when you said, we're gathered here. It's like - it felt like we are gathered here.
VANEK SMITH: Like I'm about to marry someone or (laughter)...
WOODS: The statistical sacrament.
VANEK SMITH: I love the sacrament of statistics.
WOODS: The rights and rituals of the indicator of the week. That's what it is.
VANEK SMITH: Yes. So today's indicators include coal - we are burning a lot of it, spoiler alert - cryptocurrency exchange-traded fund - way more exciting than the description might sound - and WeWork. It's back. Stay with us.
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VANEK SMITH: OK, so Darian Woods, you are up first. What is your indicator of the week?
WOODS: So my indicator of the week is 22%, and that's how much extra coal will be used this year to generate electricity in the U.S. The Energy Information Administration says that this will be the first time there's been an increase in coal-fired power since 2014.
VANEK SMITH: We are burning 22% more coal this year than last year.
MA: What's up with this? I mean, in the year 2021, why are we increasing how much coal we're using in this country?
WOODS: I mean, it doesn't seem like the kind of thing that should be happening in the age of lithium batteries and solar and wind and flights to the Moon. I mean, it's pretty much because of high natural gas prices, which is the other main way that the U.S. generates electricity. Natural gas prices have doubled this year in the U.S., and they've gone up seven times in Europe. And there are a bunch of reasons why natural gas prices are so high. Demand is just way up as countries recover from the initial economic damage of the pandemic. China is also using a lot more natural gas because of their domestic coal shortage. But one slightly concerning aspect is that one of the reasons why there's such low natural gas reserves right now is fueled by climate change itself. There was a hotter-than-usual summer in East Asia, and that meant more natural gas was burnt for electricity for AC. And there was a cooler-than-usual winter in Europe, which meant more natural gas was burnt for heating, so there's a vicious spiral happening for you.
MA: Thanks, Darian. Now I'm going to find it hard to sleep at night. But I mean, there's got to be some little glimmer of good news here, right? What's the silver lining?
WOODS: So there is actually another way of looking at these charts. Coal is pretty clearly on the decline in the long run. The Energy Information Administration forecasts that this year's increase will just be a temporary blip, and coal use will start declining again next year. But as the world gathers in Glasgow next week for the big U.N. Climate Change Conference, it shows how bumpy the transition could be.
VANEK SMITH: OK. Thank you, Darian. Adrian Ma, what is your indicator of the week? I'm hoping it's a little jollier. Do you have a jolly indicator for us?
MA: I think this is probably further along the jolly spectrum but not by much. I'll lay it out here, and you can see how jolly you feel afterwards.
VANEK SMITH: OK.
MA: My indicator of the week is $39. So at the time we're taping this Friday morning, 39 bucks is roughly what it costs to buy one share of the world's first Bitcoin exchange-traded fund or ETF.
VANEK SMITH: OK, so you have to explain what an ETF is...
VANEK SMITH: ...Before we go any further.
WOODS: So ETFs are these things that you can buy and sell like stocks. But there is a big difference from that because when you buy a share of stock, you're buying a piece of one company. When you buy a share of an ETF, you're sort of buying a basket of stuff. And in this case, the basket is filled with Bitcoin futures.
VANEK SMITH: It's like a sampler.
MA: Yeah, it's like a sample platter.
WOODS: Sampler platter - I mean, that sounds like a good gift for the holidays.
VANEK SMITH: (Laughter).
MA: Exactly, so, you know, this ETF isn't based on the price of actual Bitcoin but Bitcoin futures, which are basically these things that let people bet on where the price of Bitcoin is going to be sometime in the future.
WOODS: OK, so for the people that have Bitcoin in their profiles and are really into decentralized finance and these acronyms like HODL, hoddle (ph), I imagine this is pretty good for those people.
MA: Hold on for dear life; is that what that stands for?
VANEK SMITH: Oh, is that what that means? I've been wondering. I thought it was a stock symbol (laughter).
MA: Yeah, totally, so it is big news for those folks. And the reason is that for the past several years, some Bitcoin entrepreneurs have been trying to create a Bitcoin ETF, you know, something that could trade on a government-regulated exchange. And the reason is if you want to trade actual Bitcoin, you have to do that on an unregulated Bitcoin exchange. And for a lot of investors, that might seem a little scary or sketchy. So the thinking with the Bitcoin entrepreneurs is that, hey, if we can find a way to help people make Bitcoin-related trades on, like, the New York Stock Exchange, suddenly, we're legit in a whole new way. You know, Bitcoin futures are regulated by the government. And so this kind of makes it mainstream, and it lets more people pile in.
VANEK SMITH: Hold on for dear life.
VANEK SMITH: (Laughter) OK, so big question - how is it doing so far, this ETF?
MA: Well, caveat again - at the time we're taping this on Friday morning...
VANEK SMITH: (Laughter).
MA: The Bitcoin ETF is roughly 4% lower than where it debuted earlier this week - and kind of worth noting that right after that debut, the price of Bitcoin hit a record high. But since then, it has dropped several percent.
VANEK SMITH: All right, so I have my indicator of the week. I don't even know if it qualifies as jolly, which is, of course, the measuring stick I've been holding you guys to. But it's not not jolly. I'll say that.
VANEK SMITH: My indicator is WeWork. So WeWork went public, started trading on the New York Stock Exchange on Thursday. And you guys might remember WeWork was going to go public back in 2019.
WOODS: Yeah. Like, when WeWork sent out their prospectus last time, and they were basically shown to have some really dodgy investments and kind of ran the company a bit like a frat party.
VANEK SMITH: Yes. I mean, at the time all these disclosures happened, WeWork was the most valuable startup in the U.S. It was worth $47 billion on paper. But once people got a look at how the company was being run and all the spending it was doing and how much debt it had, everything kind of cratered. And the CEO, Adam Neumann, was doing all this really wild stuff, like trying to patent the word we, purchasing homes for himself all over the globe. And he was subsequently thrown out of the company, and everything kind of went quiet with WeWork. I mean, for a while, it was like the hippest investment on the block. But it is back. It debuted on the stock exchange, and this kind of blows my mind. The stock - it went up by 10%, by about a dollar. I mean, it's so interesting to me because this is a company that was, like, totally disgraced in a certain way, right? I mean, it was this really hot commodity. Everyone looked at its actual fundamentals and said, like, oh, my gosh, they're losing money like it's going out of style, and they're spending money in this really irresponsible way. And they come back, and it's a much more modest debut. I think instead of $47 billion, the valuation is now 9 billion, which is still kind of high. And the business model for real estate in the age of remote work - it's interesting.
MA: I kind of thought this was going to be like a phoenix-rising-from-the-ashes story, but it sounds like maybe a smaller kind of bird rising from the ashes.
WOODS: Maybe it's a sparrow rising from the ashes.
VANEK SMITH: Yeah, definitely not a phoenix, but, you know, it's a solid new beginning.
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MA: This episode of THE INDICATOR was produced by Julia Ritchey with help from Josh Newell. It was fact-checked by Taylor Washington (ph). Our senior producer is Viet Le. Our editor is Kate Concannon, and THE INDICATOR is a production of NPR.
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