Jessica Mendoza
Appearances
The Journal.
Why Gold Bars Are Flying Over the Atlantic
Welcome to The Journal, our show about money, business, and power. I'm Jessica Mendoza. It's Wednesday, February 26th. Coming up on the show, why billions of dollars worth of gold is flying commercial over the Atlantic. The fact that so much gold is being hauled in passenger planes is a symptom that something is off in the gold market.
The Journal.
Why Gold Bars Are Flying Over the Atlantic
But to understand what's wrong, you have to understand how this market usually works. Who buys gold?
The Journal.
Why Gold Bars Are Flying Over the Atlantic
And then there are the banks, in particular J.P. Morgan and HSBC.
The Journal.
Why Gold Bars Are Flying Over the Atlantic
The gold market is anchored by two cities. One is London.
The Journal.
Why Gold Bars Are Flying Over the Atlantic
So if you want to buy like a physical gold bar, you go to London for that?
The Journal.
Why Gold Bars Are Flying Over the Atlantic
The gold traders at these banks, they're our main characters in this gold-on-a-plane story. They're sitting on billions of dollars' worth of gold bars stored in vaults in London. And Joe says owning all that gold can be kind of risky.
The Journal.
Why Gold Bars Are Flying Over the Atlantic
Here's how it works. Say I'm a gold trader at a bank sitting on a billion dollars worth of gold in London. That gold is worth, say, 2,500 bucks a troy ounce. That's the standard measured for gold, by the way, a troy ounce. But I'm worried that the price of gold is going to fall. I want to lock in that $2,500 price.
The Journal.
Why Gold Bars Are Flying Over the Atlantic
So I head over to New York and I sell gold futures, basically a promise to sell gold at a certain price at a certain time. In this case, I sell futures contracts promising to sell gold at $2,500 an ounce at some later date. I lock in that price.
The Journal.
Why Gold Bars Are Flying Over the Atlantic
So on paper, my billion dollars worth of gold is worth just half a billion.
The Journal.
Why Gold Bars Are Flying Over the Atlantic
Okay, so it's kind of like a seesaw. Like if gold prices are down in London, but I was able to sell futures in New York, that means I'm up in New York.
The Journal.
Why Gold Bars Are Flying Over the Atlantic
That's my colleague Joe Wallace. Would I ever know if gold was on my flight?
The Journal.
Why Gold Bars Are Flying Over the Atlantic
This is a very important caveat. For this seesaw trade to work, gold prices in London and New York need to be pretty much the same. They need to move together. When they don't, the seesaw snaps. And that's what happened late last year.
The Journal.
Why Gold Bars Are Flying Over the Atlantic
Gold traders began to worry, and they began pricing in that worry. On the assumption that gold in the U.S. was about to become a lot more expensive, they started charging more for it. The price of U.S. gold began to climb. How much more expensive is gold in New York versus London right now?
The Journal.
Why Gold Bars Are Flying Over the Atlantic
This was bad news for the gold traders at big banks who'd been relying on that seesaw trade. The price of gold in New York was climbing, which meant that their contracts to sell gold at the earlier, cheaper price were losing money. They were down in New York. But they weren't up enough in London to balance it all out because the price of gold wasn't rising as much in London.
The Journal.
Why Gold Bars Are Flying Over the Atlantic
Recently, planes have been crossing the Atlantic Ocean with some pretty surprising cargo. The flights take off from Europe, bound for New York. They carry the usual passengers, vacationers, business people, and the usual luggage. But along with all those identical black roller bags, they're carrying something else.
The Journal.
Why Gold Bars Are Flying Over the Atlantic
That's true. Are there load balancing issues involved?
The Journal.
Why Gold Bars Are Flying Over the Atlantic
To do nothing and just eat the loss was potentially disastrous. How much money is at stake here? Like how much money could the banks lose?
The Journal.
Why Gold Bars Are Flying Over the Atlantic
Planes. That was the solution. Remember, the traders at the big banks had gold, cheaper gold, sitting in their vaults in London. Traders could use that cheaper gold to pay off their contract holders in New York, where gold was expensive. They could still fix this. All they had to do was get their gold across the Atlantic. But that would be easier said than done. That's after the break.
The Journal.
Why Gold Bars Are Flying Over the Atlantic
The gold traders had their plan, fly gold from London to New York and avoid big losses. But there would be many hurdles along the way, starting with just getting their gold out of the vaults in the first place.
The Journal.
Why Gold Bars Are Flying Over the Atlantic
The Bank of England. It's a gigantic stone edifice at the center of London's historic financial district. Underneath it lie nine vaults containing about 400,000 gold bars.
The Journal.
Why Gold Bars Are Flying Over the Atlantic
Yeah, it's giving like Gringotts from Harry Potter.
The Journal.
Why Gold Bars Are Flying Over the Atlantic
I'm picturing underground vaults, like trains, goblins.
The Journal.
Why Gold Bars Are Flying Over the Atlantic
Bank of England employees have been stressed lately because for months, gold traders have been lining up, trying to get their gold out of their vaults to fly it to New York.
The Journal.
Why Gold Bars Are Flying Over the Atlantic
You may have heard about the gold market. Maybe you even follow it a little bit. But the details of how this market actually works, the actual mechanics of it, can get pretty complicated. It turns out the story of how gold ended up on planes involves vaults deep under the streets of London, Swiss gold refiners, New York gold traders, and one US president.
The Journal.
Why Gold Bars Are Flying Over the Atlantic
Does it have, like, your name stamped on it?
The Journal.
Why Gold Bars Are Flying Over the Atlantic
The queue to get gold out of the central bank got long. Like, Eight weeks long. Which was a problem because these traders had a deadline. Futures contracts run month to month. So traders just had a few weeks to get their gold out of London and into the hands of contract holders in New York.
The Journal.
Why Gold Bars Are Flying Over the Atlantic
According to Joe's reporting, anxious traders were calling up Bank of England officials to try to move things along. The bank told them they had to wait their turn.
The Journal.
Why Gold Bars Are Flying Over the Atlantic
Some lucky traders did manage to get their gold out, only to face a new problem. Their gold bars were the wrong size. They couldn't be traded in New York.
The Journal.
Why Gold Bars Are Flying Over the Atlantic
Those refineries, though, aren't in London. They aren't even in England. Most of them are in Switzerland, which meant some traders had to arrange side trips for their gold bars before they could finally be sent to New York. What's involved in flying it to New York?
The Journal.
Why Gold Bars Are Flying Over the Atlantic
For all the trouble involved in trying to get gold across the Atlantic, for those who could pull it off, it was worth it.
The Journal.
Why Gold Bars Are Flying Over the Atlantic
Not only that, Joe says some people are making money. Soon after almost losing their shirts, some traders have embraced a new strategy, one that takes advantage of gold's price difference in London and New York.
The Journal.
Why Gold Bars Are Flying Over the Atlantic
So it's like the old buy low, sell high. You buy gold for cheap in London, you fly it over to New York and then you sell it high.
The Journal.
Why Gold Bars Are Flying Over the Atlantic
All of which means those transatlantic gold flights probably won't be stopping anytime soon. That's all for today, Wednesday, February 26th. The Journal is a co-production of Spotify and The Wall Street Journal. If you like our show, follow us on Spotify or wherever you get your podcasts. We're out every weekday afternoon. Thanks for listening. See you tomorrow.
The Journal.
What's Going On With the Economy?
So until that happens, if that happens, we should all be braced for a little bit more of this uncertainty.
The Journal.
What's Going On With the Economy?
Before we go, we wanted to tell you that we're thinking about hosting a live journal event. Tell us what you wanna see by taking our survey. There's a link in our show notes. And for updates on our plans, please leave us your email address. That's all for today, Wednesday, March 12th. The Journal is a co-production of Spotify and The Wall Street Journal.
The Journal.
What's Going On With the Economy?
Additional reporting in this episode from Gavin Bade, Josh Dossey, Justin Layhart, Paul Kiernan, Conrad Puzier, and David Uberti. Thanks for listening. See you tomorrow.
The Journal.
What's Going On With the Economy?
Welcome to The Journal, our show about money, business, and power. I'm Jessica Mendoza. It's Wednesday, March 12th. Coming up on the show, what's going on in Trump's economy and why?
The Journal.
What's Going On With the Economy?
When Trump returned to the White House in January, the economy was relatively steady. Here's Deputy Economics Editor Ashby Jones.
The Journal.
What's Going On With the Economy?
In the seven weeks since he took office, Trump has acted swiftly to reshape the economy in his vision,
The Journal.
What's Going On With the Economy?
Trump's firehose approach has involved massive layoffs in the federal government, an immigration crackdown, and a lot of back and forth on tariffs on longtime allies of the U.S. So far, the most significant of those policies are tariffs. At the beginning of February, Trump announced 25% tariffs on Canada and Mexico.
The Journal.
What's Going On With the Economy?
That month went by, and then the tariffs went into effect for about two days. President Donald Trump says time has run out.
The Journal.
What's Going On With the Economy?
One day later, he temporarily exempted automakers from those tariffs, and then paused all the tariffs again for another month. There are tariffs which are already in effect, like on Chinese goods. Trump first imposed 10% tariffs on them, and then a few weeks later, he doubled those to 20%. U.S.
The Journal.
What's Going On With the Economy?
The administration also placed 25% tariffs on steel and aluminum, no matter where they come from. In response, the U.S. has been hit with retaliatory tariffs.
The Journal.
What's Going On With the Economy?
His statement marked a shift in the message coming from the White House. Trump has promised a sweeping transformation of the American economy, one that makes America affordable again. But now, the messaging is that implementing that vision could cause some short-term pain. Here's Treasury Secretary Scott Besant on CNBC.
The Journal.
What's Going On With the Economy?
You've used the word uncertainty, you know, in coverage, the word whiplash comes up as well. So does it feel like at this moment that what's affecting the economy is the way the administration is rolling this out, not necessarily the tariffs themselves for now?
The Journal.
What's Going On With the Economy?
But Ashby says these tariffs themselves are making economists worry about future inflation.
The Journal.
What's Going On With the Economy?
For now, inflation has not been affected. In February, it was at 2.8%, and Ashby says it could take a while for inflation to change based on what happens with the tariffs. The biggest impact so far has been on the stock market. Both the Nasdaq and S&P 500 have dropped since Trump took office, by about 10% and 6% respectively.
The Journal.
What's Going On With the Economy?
An index that tracks fear and volatility on Wall Street is up, and the dollar's value is down. Right now, unemployment remains low. But Ashby is watching Trump's continued cuts to the federal government, which is the largest employer in the country.
The Journal.
What's Going On With the Economy?
On Sunday, President Donald Trump said something surprising on Fox News. He said he wasn't going to rule out a recession. Are you expecting a recession this year?
The Journal.
What's Going On With the Economy?
there are a few early signs that consumers are already spending less. This week, several big airlines predicted lower revenue in the coming quarter because they expect people to pull back on travel.
The Journal.
What's Going On With the Economy?
Do we have any historical context for what shrinking the government does to the economy?
The Journal.
What's Going On With the Economy?
Coming up, how the White House is managing those early cracks in the economy. Yesterday, Press Secretary Caroline Leavitt reiterated that short-term pain is expected in the economy.
The Journal.
What's Going On With the Economy?
Already, the economy is seeing some signs that that pain is here.
The Journal.
What's Going On With the Economy?
I talked to our colleague Brian Schwartz. He's a White House reporter that focuses on economic policy. What did you think when you heard those comments?
The Journal.
What's Going On With the Economy?
Does it seem like Trump believes that some bumps are worth it to make his vision happen?
The Journal.
What's Going On With the Economy?
Some business leaders are less certain about the administration's moves. On Monday, Trump met with some of them, and he did face some pushback to his stop-and-start approach to trade.
The Journal.
What's Going On With the Economy?
Brian, why is there so much unpredictability from the White House? Like, why is there so much whiplash when it comes to these policies?
The Journal.
What's Going On With the Economy?
So it sounds a bit chaotic, but it seems like no one's really saying no to the president.
The Journal.
What's Going On With the Economy?
Is there anything that could change Trump's approach here? By which I mean, is there a future that we could look at that's a little bit more predictable in the way these new policies are being rolled out?
The Journal.
An Eggspensive Dilemma
Right now, at the wholesale suppliers where Daquan usually gets his eggs, he's been quoted prices for the same case that range from $120 to $189.
The Journal.
An Eggspensive Dilemma
Welcome to The Journal, our show about money, business, and power. I'm Jessica Mendoza. It's Tuesday, February 25th. Coming up on the show, cracking the conundrum of egg prices.
The Journal.
An Eggspensive Dilemma
I will take them scrambled, sunny side up, poached. I just love them, just like so many Americans do. Here's the journal's resident egg-spert, Patrick Thomas. How much do Americans love eggs, Patrick?
The Journal.
An Eggspensive Dilemma
The humble egg occupies a dependable rung on what Patrick calls the protein ladder.
The Journal.
An Eggspensive Dilemma
But right now, egg prices at stores across the country are sky high. According to U.S. government data, a dozen eggs cost an average of $5 these days, and in some places it's even higher. Last year, eggs averaged at about $3 a dozen. So what's the one big reason that eggs have gotten so expensive?
The Journal.
An Eggspensive Dilemma
The virus mostly spreads through contact with infected wild birds and their droppings. Farmers have installed things like lasers and sound cannons to keep the wild birds away from their chickens. And the government has provided more than a billion dollars in support. But once the virus does infect a chicken farm, there's been one main strategy for controlling the outbreak.
The Journal.
An Eggspensive Dilemma
Eggs are also in Dae Kwon's pancake batter, his banana nut muffins. They're in the egg wash, the breakfast sandwiches, the signature scramble. Can you actually list off the things that might contain eggs on your menu?
The Journal.
An Eggspensive Dilemma
— Now, there's a growing sense that in the U.S., the outbreak has gotten out of control. The virus has started jumping to other species.
The Journal.
An Eggspensive Dilemma
As of January, there have been nearly 70 confirmed human cases of bird flu in the United States. And a patient admitted to a hospital in Louisiana became the first U.S. death from the virus. But the Centers for Disease Control and Prevention says that the current public health risk is low.
The Journal.
An Eggspensive Dilemma
The patient who died was elderly and had underlying medical conditions, and most of those who were infected worked on poultry or dairy farms. The CDC says it's watching the situation carefully and working with states to monitor people with animal exposure. The persistence of this outbreak has meant that farmers have had to wipe out flock after flock of birds.
The Journal.
An Eggspensive Dilemma
Do we know how many chickens have been culled or put down in this particular outbreak?
The Journal.
An Eggspensive Dilemma
and wiping out millions of egg-laying hens means a lot fewer eggs, which is how we get those higher prices. Has that high price affected demand?
The Journal.
An Eggspensive Dilemma
I asked Daquan, the cafe owner in Richmond, about the possibility of eggless brunch. Have you thought about, I don't know, making food without eggs or finding some kind of substitute for it?
The Journal.
An Eggspensive Dilemma
And Daquan's customers still want their omelets and French toast. That's why he's had to make a tough decision, something breakfast chains like Waffle House and Denny's have also done. Tack on an egg surcharge.
The Journal.
An Eggspensive Dilemma
At the RVA Cafe in Richmond, Virginia, omelet pans are popping. In the kitchen, Daquan Woodbury is cracking, frying, and whisking eggs. Lots and lots of eggs.
The Journal.
An Eggspensive Dilemma
One fix, Patrick says, could be something that the poultry industry has refused to consider for a long time.
The Journal.
An Eggspensive Dilemma
Why not? That's after the break. One possible solution to the rapidly spreading bird flu is a vaccine for poultry. But that idea has faced a lot of opposition for years, and there's two main reasons why. First, it's a logistical nightmare, considering there are 300 million egg-laying hens in the U.S. What does a mass vaccination of chickens even look like for 300 million chickens?
The Journal.
An Eggspensive Dilemma
The bigger concern, though, is that a chicken vaccination program could jeopardize America's $5 billion market for broiler chickens or chicken meat.
The Journal.
An Eggspensive Dilemma
Why wouldn't other countries just embrace the idea of U.S. vaccinated chickens or chicken products? Like, what's the issue there?
The Journal.
An Eggspensive Dilemma
But these concerns affect one part of the poultry industry more than the other, because there are two camps in the chicken business, the egg people and the broiler chicken people. For a long time, these two camps were on the same page. In 2022, they were telling Patrick that any plan to vaccinate chickens would never fly. But today, egg producers are getting desperate.
The Journal.
An Eggspensive Dilemma
Many want to vaccinate the flocks, and it's put them at odds with the broiler industry.
The Journal.
An Eggspensive Dilemma
So there's like a split in the poultry industry over vaccinations?
The Journal.
An Eggspensive Dilemma
And this is giving rise to a new debate. When it comes to vaccines, which industry should come first? The chickens or the eggs? And then earlier this month, the Trump administration signaled it might move away from culling and towards vaccines.
The Journal.
An Eggspensive Dilemma
Shortly after, the head of President Trump's Economic Council talked about solving the egg shortage. Here's Kevin Hassett on CBS's Face the Nation.
The Journal.
An Eggspensive Dilemma
But in the last few months, Daquan's reliance on eggs has become a grade-A problem for his business. The average cost of a dozen eggs has jumped to historic levels.
The Journal.
An Eggspensive Dilemma
And to be clear, even the USDA's conditional approval for a vaccine doesn't mean there are plans to administer doses yet. The vaccine hasn't been authorized for use on farms, and poultry producers can't buy it. The Trump administration says it's committed to safeguarding poultry farms and keeping egg prices affordable. And the USDA plans to roll out a strategy in the coming days.
The Journal.
An Eggspensive Dilemma
Caveats aside, Patrick says vaccination has more momentum than he's ever seen, with many in the egg industry behind it.
The Journal.
An Eggspensive Dilemma
Still, until there's a way to curb this bird flu outbreak or get cheaper eggs from elsewhere, Americans may just have to keep shelling out for pricey eggs. Back in Richmond, Virginia, Daquan Woodbury is thinking about how he's going to deal with these higher prices as time goes on. And he's considering a whole new dining concept.
The Journal.
An Eggspensive Dilemma
The way Daquan is talking, it's like the American breakfast itself is now at a crossroads. Call it an existential crisis. I don't like this future that you're painting for us. That is a dark, I love eggs. Daquan, thank you so much for taking the time to chat with us.
The Journal.
An Eggspensive Dilemma
Before you go, we've updated the episode to clarify the price range for a case of 15 dozen eggs, which can be more expensive at wholesalers than retail. Daquan showed us quotes he received from his vendor that ranged from $120 to $189 from day to day. That's all for today, Tuesday, February 25th. The Journal is a co-production of Spotify and The Wall Street Journal.
The Journal.
An Eggspensive Dilemma
If you like our show, follow us on Spotify or wherever you get your podcasts. We're out every weekday afternoon. Thanks for listening. See you tomorrow.
The Journal.
Tesla Has a Problem: Elon Musk
On Saturday, scores of people converged on a Tesla showroom in Lower Manhattan. Some demonstrators went inside, while others locked arms to block the door. For a while, the showroom was shut down. Demonstrations like this broke out around the country this past week. In Colorado, one Tesla showroom was hit with Molotov cocktails. In Oregon, another location was riddled with bullets.
The Journal.
Tesla Has a Problem: Elon Musk
There's a link in our show notes. And for updates on our plans, please leave us your email address. That's all for today, Tuesday, March 11th. The Journal is a co-production of Spotify and The Wall Street Journal. Additional reporting in this episode by Sean McClain. Thanks for listening. See you tomorrow.
The Journal.
Tesla Has a Problem: Elon Musk
Welcome to The Journal, our show about money, business, and power. I'm Jessica Mendoza. It's Tuesday, March 11th. Coming up on the show, are Elon Musk's politics getting in the way of Tesla's business?
The Journal.
Tesla Has a Problem: Elon Musk
When Elon Musk founded Tesla, he had a mission to help stop climate change by making electric vehicles cool. Here's Musk at one of Tesla's annual meetings.
The Journal.
Tesla Has a Problem: Elon Musk
Tesla's took off. By 2020, the company had become the world's most valuable carmaker. Soon after, Musk became the world's richest person. And he was known as someone who had big ideas and wanted to change the world.
The Journal.
Tesla Has a Problem: Elon Musk
Then in 2022, Musk made a major decision. He bought Twitter and renamed it X. And his big, bold statements started to include more than just his takes on business and tech.
The Journal.
Tesla Has a Problem: Elon Musk
By the time the 2024 presidential campaign was in full swing, Musk had become a major political presence on the right. He began donating to then-candidate Donald Trump, ultimately giving the campaign around $288 million. Musk also started appearing at Trump rallies.
The Journal.
Tesla Has a Problem: Elon Musk
At his first one, he wore a MAGA hat and bounded onto the stage.
The Journal.
Tesla Has a Problem: Elon Musk
After Trump was elected, Musk was appointed the head of the Department of Government Efficiency, or DOGE, and he's frequently been at the president's side. To some customers who'd bought into the original vision of Tesla as an eco-friendly, save-the-world kind of company, Musk's turn has been disillusioning.
The Journal.
Tesla Has a Problem: Elon Musk
Bumper stickers that say things like, I bought this before we knew Elon was crazy, and this Tesla does not endorse Elon Musk. Some people are even getting rid of their Teslas.
The Journal.
Tesla Has a Problem: Elon Musk
Last year, Tesla sales fell 7% in the U.S. and continued to fall into 2025, according to automotive industry analysts. The company has felt the pain internationally, too, as Musk has shown support for a far-eyed party in Germany. Musk has also waded into international politics. How has that sort of shown itself in terms of foreign buyers?
The Journal.
Tesla Has a Problem: Elon Musk
To be clear, Tesla's problems go beyond Musk's politics. The company is also facing growing competition from EV makers domestically and in China, where Tesla sales have taken a hit as well. But since Trump's inauguration, Tesla's stock has plummeted. The company has lost $700 billion, more than half of its value.
The Journal.
Tesla Has a Problem: Elon Musk
Yesterday, Musk acknowledged in an interview with Fox News that his work with the government is taking a toll.
The Journal.
Tesla Has a Problem: Elon Musk
Later, Trump posted on social media that he would buy a Tesla as a show of support for Musk. As Tesla struggles, Wall Street has questioned why he hasn't been around enough to fix things. So what is Musk doing with Tesla? That's after the break.
The Journal.
Tesla Has a Problem: Elon Musk
While it seems Musk hasn't been spending a lot of time getting Tesla out of its sales slump, Becky says he's focused on steering the company in a different direction. For instance, Tesla was set to release what the company called its low-cost car last year. It was supposed to sell for $25,000, giving the company a chance to dramatically increase the number of EVs and Teslas on the road.
The Journal.
Tesla Has a Problem: Elon Musk
These days, Musk sees the future of Tesla as largely in self-driving cars. To make this happen, the company is working on an AI-assisted software that it says will one day fully operate a car.
The Journal.
Tesla Has a Problem: Elon Musk
This software is called Full Self-Driving Supervised, or FSD Supervised. The software is already available, and Tesla owners can use it in a limited capacity. But Musk wants to make the cars fully autonomous.
The Journal.
Tesla Has a Problem: Elon Musk
This blowback against Tesla is coming as the company's CEO, Elon Musk, has risen in the new Trump administration. And people aren't just using signs and slogans to show their disapproval. They're protesting with their wallets.
The Journal.
Tesla Has a Problem: Elon Musk
Tesla investors are used to betting on Musk's vision well before the products exist. That's where they see a lot of value in his companies. And Musk is moving forward on these ideas. He's poured money into a new kind of self-driving car he calls the CyberCab. Tesla unveiled the model in October at a private event on a film lot in Los Angeles.
The Journal.
Tesla Has a Problem: Elon Musk
50 robo-taxis carried guests around movie sets that looked like city streets. And from a stage, Musk addressed the crowd.
The Journal.
Tesla Has a Problem: Elon Musk
Tesla says it'll start producing the CyberCab in 2026. But getting those autonomous cars on the road involves clearing regulatory hurdles.
The Journal.
Tesla Has a Problem: Elon Musk
Musk wants the system to be centralized under a single federal rule. And he wants it sooner rather than later.
The Journal.
Tesla Has a Problem: Elon Musk
He said that if the Department of Government Efficiency was created, he'd try to shift regulations away from the state level. Musk also wants to get rid of certain environmental protections he said is holding back his production facilities at Tesla and his other companies.
The Journal.
Tesla Has a Problem: Elon Musk
Now, Musk is in a much better position to actually make that happen. Musk has gotten very close to President Trump. Will that help him achieve some of these goals?
The Journal.
Tesla Has a Problem: Elon Musk
So when you look at what's happening now, what does this tell you, Becky, about Musk's strategy here?
The Journal.
Tesla Has a Problem: Elon Musk
This episode has been updated. A previous version incorrectly stated that Elon Musk was a founder of Tesla. He's recognized by the company as a co-founder and is the CEO. The episode misidentified FSD as fully self-driving. It stands for full self-driving. Before we go, we wanted to tell you that we're thinking about hosting a live journal event. Tell us what you want to see by taking our survey.
The Journal.
Greenland Has Tons of Minerals. So Where Are All the Miners?
That's all for today, Thursday, March 20th. The Journal is a co-production of Spotify and The Wall Street Journal. If you like our show, follow us on Spotify or wherever you get your podcasts. We're out every weekday afternoon. Thanks for listening. See you tomorrow.
The Journal.
Greenland Has Tons of Minerals. So Where Are All the Miners?
Greenland is an autonomous territory of Denmark. It's the largest island in the world, yet it's home to only 57,000 people. And the small population lives on top of a wealth of minerals, enough minerals to potentially transform the global supply chain. Some mining experts say that Greenland could supply North America and Europe with critical minerals for decades.
The Journal.
Greenland Has Tons of Minerals. So Where Are All the Miners?
That's our colleague Suna Rasmussen.
The Journal.
Greenland Has Tons of Minerals. So Where Are All the Miners?
Welcome to The Journal, our show about money, business, and power. I'm Jessica Mendoza. It's Thursday, March 20th. Coming up on the show, Greenland has the makings of a mining boom. So where is everyone?
The Journal.
Greenland Has Tons of Minerals. So Where Are All the Miners?
Greenland has held the imagination of explorers for centuries. The US started looking into the island's resource potential around the time of the Civil War. And now, as the world's superpowers scramble for resources, Greenland has again become a coveted frontier.
The Journal.
Greenland Has Tons of Minerals. So Where Are All the Miners?
Greenland is an estimated 43 of the 50 critical minerals the U.S. considers vital to national security, including rare earth minerals, which are used to make everything from microchips to fighter jets. So whoever controls Greenland's supply could gain an economic and defensive edge. Right now, the country that dominates the global market for rare earths and other minerals is China.
The Journal.
Greenland Has Tons of Minerals. So Where Are All the Miners?
60% of the world's rare earth minerals are mined there. China is also responsible for 90% of the world's rare earth refining activity. That's the process that turns those minerals into a more useful form.
The Journal.
Greenland Has Tons of Minerals. So Where Are All the Miners?
How much of these minerals does Greenland have?
The Journal.
Greenland Has Tons of Minerals. So Where Are All the Miners?
To witness Greenland's mining potential for himself, Suna flew to the capital, Nuuk. From there, he took another plane, and then a helicopter, and finally a taxi.
The Journal.
Greenland Has Tons of Minerals. So Where Are All the Miners?
The town Suna traveled so far to see is called Narsak.
The Journal.
Greenland Has Tons of Minerals. So Where Are All the Miners?
Suna was sharing the town's only hotel with a group of executives from an Australian mining company called Energy Transition Minerals. The company had been exploring the area since 2007, hoping to eventually build a mine at a site called Kavanah Field. The site sits in the mountains above Narsak and contains an estimated 1 billion tons of minerals.
The Journal.
Greenland Has Tons of Minerals. So Where Are All the Miners?
During his trip, Suna and a photographer embarked on a journey from the town to Kavanah Field. Some executives from Energy Transition Minerals set out on the same trek. The two groups quickly ran into some challenges.
The Journal.
Greenland Has Tons of Minerals. So Where Are All the Miners?
Before this year, how much time did you spend thinking about Greenland?
The Journal.
Greenland Has Tons of Minerals. So Where Are All the Miners?
And access is only half the challenge. There's also a cumbersome licensing process to deal with, and the local labor pool is small. Transporting materials in and out of Greenland is another huge problem.
The Journal.
Greenland Has Tons of Minerals. So Where Are All the Miners?
Then there's the politics. In 2021, the Greenlandic government passed a law banning the mining of minerals that contained a certain amount of the radioactive material uranium.
The Journal.
Greenland Has Tons of Minerals. So Where Are All the Miners?
For energy transition minerals, that uranium law threw a massive wrench into their mining plans.
The Journal.
Greenland Has Tons of Minerals. So Where Are All the Miners?
In response, the company filed an arbitration case against the Greenlandic and Danish governments, demanding either the right to mine Kvanefeld or $11.5 billion in compensation. To put that in perspective, Greenland's entire GDP is around $3 billion. While Energy Transition Minerals wages this legal dispute, it's simultaneously fighting on another front, in Narsac, with the people who live there.
The Journal.
Greenland Has Tons of Minerals. So Where Are All the Miners?
Because of President Trump's interest in Greenland, this past February, Suna finally got to live his dream.
The Journal.
Greenland Has Tons of Minerals. So Where Are All the Miners?
How company executives are trying to win over the locals is next. Upon landing in Narsak, executives from Energy Transition Minerals were confronted by a group of local protesters. They wore brightly colored vests that said, Uranium, no thank you, in Greenlandic.
The Journal.
Greenland Has Tons of Minerals. So Where Are All the Miners?
If the Kavanaugh Field Mining Project moves forward, it would produce a lot of radioactive waste. Energy Transition Minerals has proposed storing 100 million tons of that waste in a mountain lake walled off by two dams. Experts have questioned the safety of that proposal, and some locals are very concerned.
The Journal.
Greenland Has Tons of Minerals. So Where Are All the Miners?
Energy Transition Minerals has insisted that the town will be safe.
The Journal.
Greenland Has Tons of Minerals. So Where Are All the Miners?
During Suna's visit, the company hosted a dinner for Narsac locals who were interested in their project. Executives treated them to a dinner of lamb burgers and craft drinks, distilled from herbs picked from the nearby mountains.
The Journal.
Greenland Has Tons of Minerals. So Where Are All the Miners?
In its messaging, Energy Transition Minerals has leaned into the economic benefits that mining could bring to Narsac. Ever since the town's fishing factory shuttered a decade ago, the population has struggled with higher-than-average unemployment rates. If the mine is built, Energy Transition Minerals has promised 400 jobs during the operation.
The Journal.
Greenland Has Tons of Minerals. So Where Are All the Miners?
Locals who support the mining project see it as an opportunity to get their economy back on track. Another argument in favor of the mining site taps into the widely popular Greenlandic push for independence from Denmark. To become self-sufficient, Greenland would need to harness its mineral wealth. Supporters of the Kavanagh Field Project see it as a step towards advancing that cause.
The Journal.
Greenland Has Tons of Minerals. So Where Are All the Miners?
And what was your impression when you finally went?
The Journal.
Greenland Has Tons of Minerals. So Where Are All the Miners?
How serious is the divide between those who are pro-mining and those who are anti?
The Journal.
Greenland Has Tons of Minerals. So Where Are All the Miners?
While the Kavanaugh Field mining project is a big deal for locals, it also has global implications.
The Journal.
Greenland Has Tons of Minerals. So Where Are All the Miners?
But although Greenland's minerals would diversify the world's reserve, the western portion of the supply chain still stops short of a finished product. Remember, China is behind over 90% of the world's rare earth refining activity.
The Journal.
Why Influencers Say Honey Is Stealing Their Money
In other words, Julie is saying that browser extensions and other affiliate marketers can identify when someone else should get credit for a potential sale. So if a customer clicks on one browser extension, the rest can opt to stand down. The same policy could apply when influencers or anyone else leads customers to a purchase.
The Journal.
Why Influencers Say Honey Is Stealing Their Money
So one of the main allegations facing PayPal Honey is that by taking commissions, when consumers click on their pop-ups, they're taking money that should have gone to creators. That is the allegation. What do you make of that?
The Journal.
Why Influencers Say Honey Is Stealing Their Money
For stand-down policies to really be effective, the affiliate industry needs to play ball, from publishers to networks to advertisers. But standing down is not a law. And that's the challenge for creators who are suing Honey and these other shopping extensions.
The Journal.
Why Influencers Say Honey Is Stealing Their Money
As one advertising lawyer told the Journal, those lawsuits have to prove that those platforms were actually doing something unlawful and that creators were entitled to that money. He says that could be a difficult premise to prove. Still, Devin, or Legal Eagle, says he's in it for the long haul. How long could all this take?
The Journal.
Why Influencers Say Honey Is Stealing Their Money
Honey is owned by PayPal, the online payments company. And Honey's main thing is discount codes and coupons. You download the browser extension, and while you're shopping, you click on Honey's pop-up, and it looks for coupons for you from across the internet. For years, Honey was a darling among YouTubers.
The Journal.
Why Influencers Say Honey Is Stealing Their Money
Why do you think it's worth that effort?
The Journal.
Why Influencers Say Honey Is Stealing Their Money
So you've got your sleeves rolled up for this one.
The Journal.
Why Influencers Say Honey Is Stealing Their Money
That's all for today, Thursday, February 20th. The Journal is a co-production of Spotify and The Wall Street Journal. This episode was reported by me and Alan Rodriguez-Espinosa, with help from Angel Au Young, Megan Graham, and Peter Rudiger. Thanks for listening. See you tomorrow.
The Journal.
Why Influencers Say Honey Is Stealing Their Money
But late last year, a YouTuber posted a video with some big accusations against Honey. He said the browser extension was misleading its customers and stealing from the very same creators it had sponsored. In an email, PayPal disagreed with the allegations.
The Journal.
Why Influencers Say Honey Is Stealing Their Money
And some in the e-commerce business say that Honey is just playing by the industry's rules and that it's long been a standard that the last link clicked gets the credit and the cash. But the video ended up getting millions of views in just a few days, and outraged YouTube creators started sharing their reactions.
The Journal.
Why Influencers Say Honey Is Stealing Their Money
Now, Honey and other services like it are facing several lawsuits. And this dispute is drawing scrutiny toward a multibillion-dollar industry that helps drive how money gets made online. Welcome to The Journal, our show about money, business, and power. I'm Jessica Mendoza. It's Thursday, February 20th. Coming up on the show, whose money is it, honey?
The Journal.
Why Influencers Say Honey Is Stealing Their Money
Honey was launched in 2012 in Los Angeles. And basically, it automates the process of searching for coupons online. Users who download Honey get a pop-up, either offering them a bunch of coupon codes or telling them that Honey didn't find any better deals. And Honey offers that service for free. The platform makes money through commissions from some online purchases.
The Journal.
Why Influencers Say Honey Is Stealing Their Money
There's a bunch of other companies that do this too. Capital One, for example, has something called Capital One Shopping. You may have also heard of Karma or Microsoft Shopping or Rakuten Rewards. For a while, though, it seemed like everyone was talking about Honey. Yub, the gaming YouTuber, says he first heard of Honey in 2016 or so when he started seeing other creators get sponsored.
The Journal.
Why Influencers Say Honey Is Stealing Their Money
And you probably get asked this a ton. Why Yubb?
The Journal.
Why Influencers Say Honey Is Stealing Their Money
The rest of the internet seemed to love Honey too. By 2019, it had 17 million monthly active users. And later that year, PayPal acquired Honey for about $4 billion. By then, Honey was working regularly with influencers, including some of the biggest names on YouTube, like MrBeast and PewDiePie. Yub says Honey paid him $800 to promote the brand in 2019. He made a second deal with them in 2021.
The Journal.
Why Influencers Say Honey Is Stealing Their Money
Then fast forward a few years. This past December, just before Christmas.
The Journal.
Why Influencers Say Honey Is Stealing Their Money
Megalag accused Honey of taking money that should have gone to his fellow YouTubers. He alleged that Honey takes advantage of something called affiliate links. Affiliate links are a common way of making money on the internet. Think about the links you see on a YouTube channel or a review site. If that link leads you to a product, that's probably an affiliate link.
The Journal.
Why Influencers Say Honey Is Stealing Their Money
And if you buy that product, the influencer or website gets a cut for helping to make the sale. The affiliate marketing industry is growing quickly. It's expected to hit $12 billion in the U.S. this year and generate more than a billion dollars in revenue for social media creators. On YouTube, these links are especially popular among creators who review products.
The Journal.
Why Influencers Say Honey Is Stealing Their Money
And it's not your real name, obviously.
The Journal.
Why Influencers Say Honey Is Stealing Their Money
In his video, Megalag showed Honey overriding the influencer's referral and replacing it with its own, in effect taking credit for the sale. He alleged that this happens even when Honey doesn't offer the customer any discounts. PayPal said it does offer value to its customers because it gives them a sense of confidence that they're already paying the best price.
The Journal.
Why Influencers Say Honey Is Stealing Their Money
We tried to replicate what Megalag did. Our producer Alan Rodriguez-Espinosa and I downloaded Honey and then clicked on an affiliate link on a YouTuber's channel. So I'm going to hit that product link, that affiliate link, and it goes to a VPN website.
The Journal.
Why Influencers Say Honey Is Stealing Their Money
I'm not someone who spends a lot of time on YouTube. But recently, a spicy controversy that has to do with how influencers make money had me on a call with a YouTuber.
The Journal.
Why Influencers Say Honey Is Stealing Their Money
Dylan Russell, aka Yub, has about 1.6 million subscribers on his channel, and he's been making a living entirely off YouTube for years. Most of his income comes from ad breaks in his videos.
The Journal.
Why Influencers Say Honey Is Stealing Their Money
After the YouTuber's link took us to a new website, we pulled up the HTML code for that page and looked up the YouTuber's affiliate cookie. That's a piece of code that identifies the YouTuber as the person who sent us to that product page.
The Journal.
Why Influencers Say Honey Is Stealing Their Money
We're in the system. And just like in Megalag's video, when we got to checkout and we clicked on the honey extension... Oh! Where'd he go? The cookie associated with the YouTuber disappeared and was replaced with a cookie associated with Honey. We tried this a few times, and it happened even when there wasn't cashback or a better coupon available. That's the part that got YouTubers heated.
The Journal.
Why Influencers Say Honey Is Stealing Their Money
Yub, who had promoted Honey in the past, says the whole thing felt icky.
The Journal.
Why Influencers Say Honey Is Stealing Their Money
PayPal said that Honey returns to shoppers a large chunk of the commissions it makes as cashback rewards. The company also said Honey cuts back on cart abandonment, which is when a shopper fills up their cart but never actually completes the sale. As Megalag's video made the rounds, it came across the screen of another YouTube creator.
The Journal.
Why Influencers Say Honey Is Stealing Their Money
And he decided that he wouldn't just make a video reacting to the accusations like so many other YouTubers did. He was gonna go a step further. So on behalf of creators everywhere, I have filed a class action lawsuit to stop it. After the break, Honey gets taken to court. So you are a real lawyer. You're not just one who plays a lawyer on YouTube.
The Journal.
Why Influencers Say Honey Is Stealing Their Money
That's Devin Stone, known on YouTube as Legal Eagle. Devin has more than 3.5 million subscribers to his channel. His whole thing is breaking down law in news, in current events, and in pop culture. Do you have a favorite video you've ever made?
The Journal.
Why Influencers Say Honey Is Stealing Their Money
As a lawyer and a creator, Devin was very interested in the Honey accusations, even though he says he'd never worked with Honey himself. What was your first thought when you saw what Honey was being accused of doing?
The Journal.
Why Influencers Say Honey Is Stealing Their Money
Devin, along with a team of other lawyers, kicked off the new year by filing a class action suit in a district court in California, where PayPal is based. The lawsuit names five different YouTube creators, but Devin says he's had over a thousand other people reach out to join the class action. What's the legal basis for this case? What are you saying Honey should not be doing under the law?
The Journal.
Why Influencers Say Honey Is Stealing Their Money
Another common way that Yub and other YouTube creators get paid is through sponsorships, basically promoting products in their videos. One company that sponsored Yub was a service called Honey. In fact, Honey paid a lot of YouTubers to promote it.
The Journal.
Why Influencers Say Honey Is Stealing Their Money
PayPal said, quote, We disagree with the claims in these lawsuits and look forward to defending ourselves. After Devin filed his lawsuit against Honey, others quickly followed. A few of those cases, including Devin's, have since been consolidated into one big class action suit. And litigation has spread beyond Honey to other shopping extensions.
The Journal.
Why Influencers Say Honey Is Stealing Their Money
Capital One Shopping and Microsoft Shopping have also been sued for similar allegations. Capital One said via email, quote, We disagree with the premise of the complaints and look forward to defending ourselves in court.
The Journal.
Why Influencers Say Honey Is Stealing Their Money
Microsoft said that they're reviewing the complaint, but believe that the claims are without merit, and that their service provides shoppers with benefits and follows common industry standards. Those industry standards are at the root of the conflict here. I spoke to several industry insiders in the affiliate marketing world.
The Journal.
Why Influencers Say Honey Is Stealing Their Money
And to varying degrees, they question the ethics of these browser extensions swapping out referrals. But is it unlawful or just not cool? Because in the affiliate marketing business, giving credit to the last referral that a user clicks is just common practice.
The Journal.
Why Influencers Say Honey Is Stealing Their Money
That's Julie Van Allen, the chief revenue officer of Rakuten Rewards, another shopping extension.
The Journal.
Why Influencers Say Honey Is Stealing Their Money
The industry considers last-click attribution as the most straightforward way to track who led a customer to a sale and pay them for it. But it's not a flawless system. Sometimes there are several different actors pushing customers toward a sale, and it can be unclear who really deserves the commission.
The Journal.
Why Influencers Say Honey Is Stealing Their Money
And that's why Julie says the industry has another common practice to prevent people from taking advantage of last-click attribution.
The Journal.
The Botched Software Update That Cost $600 Million
And is that passion enough to turn things around? Like what does Tom Conrad need to do to get confidence back in the brand?
The Journal.
The Botched Software Update That Cost $600 Million
Before we go, we've got exciting news. We're planning a live event for the show and we want to know what you want to see. Take our survey by following the link in our show notes and leave your email address to be the first to know when it's happening. That's all for today, Thursday, March 6th. The Journal is a co-production of Spotify and The Wall Street Journal.
The Journal.
The Botched Software Update That Cost $600 Million
Additional reporting in this episode by Dan Gallagher. Thanks for listening. See you tomorrow.
The Journal.
The Botched Software Update That Cost $600 Million
Sonos has apologized and spent months trying to fix the problem. But customers are still upset. And the issue has hit the company's reputation, led to layoffs and a leadership overhaul, and cost it hundreds of millions of dollars. Welcome to The Journal, our show about money, business, and power. I'm Jessica Mendoza. It's Thursday, March 6th.
The Journal.
The Botched Software Update That Cost $600 Million
Coming up on the show, Sonos and the terrible, horrible, no good, very bad update.
The Journal.
The Botched Software Update That Cost $600 Million
Do you listen to music at home? And what do you listen to?
The Journal.
The Botched Software Update That Cost $600 Million
Oh, my God. When Ben and his daughter listen to those bangers from the Cars soundtrack, their device of choice is not a Sonos.
The Journal.
The Botched Software Update That Cost $600 Million
Tell me about Sonos. What is the company known for?
The Journal.
The Botched Software Update That Cost $600 Million
The idea is you put your Sonos devices on the same Wi-Fi network and they can talk to each other. And you can control all your devices with a single app on your phone.
The Journal.
The Botched Software Update That Cost $600 Million
Or you might want to listen to Taylor Swift in all the rooms, and then you can also do that.
The Journal.
The Botched Software Update That Cost $600 Million
Sonos has been around since 2002, and it won over hardcore audio lovers with its emphasis on quality sound. On its YouTube channel, there are videos about how Sonos users can really perfect their TV sounds. And what the best Sonos speakers for gaming are. Sonos products range from a couple hundred bucks to thousands of dollars for some of their sets.
The Journal.
The Botched Software Update That Cost $600 Million
And although the company is a lot smaller than other tech companies that also sell speakers, like Amazon, Sonos was able to carve out a place for itself in the luxury audio space. By the end of March last year, the company was worth over $2 billion. Then, in April, the company announced that it was upgrading its software.
The Journal.
The Botched Software Update That Cost $600 Million
Or in 2016, when an update to the Nest thermostat left people angry and cold. Their internet-connected thermostats have been malfunctioning ever since they got a software upgrade last month. Or last year, when a CrowdStrike software update caused major travel delays.
The Journal.
The Botched Software Update That Cost $600 Million
The old app was sometimes hard to manage, and the company wanted an update to make it easier for them to release new products. In a statement, then-CEO Patrick Spence said, quote, The new app was released globally on May 7, 2024, as a software update. But lots of customers had problems with it almost immediately. So what was it exactly that happened?
The Journal.
The Botched Software Update That Cost $600 Million
Updating your software. It's one of our modern common chores. Mostly it's annoying, inconvenient, but we do it because it's supposed to make sure our stuff works better. So when a software update somehow makes things worse, people get mad. Like back in 2014, when an iPhone update caused a bunch of people's phones to crash.
The Journal.
The Botched Software Update That Cost $600 Million
The tech problem was complicated. Part of it was that over the years, Sonos had continued to rely on a lot of obsolete code. They'd done a lot of updates, though never a complete overhaul. And they ran into issues when they tried to bring their software up to date to match their hardware ambitions.
The Journal.
The Botched Software Update That Cost $600 Million
Sonos says they looked closely at whether or not to revert back to the old app, deciding eventually it wasn't viable. But they also struggled to fix the new one. And then there was the PR problem. At first, the company defended the update, according to a statement published by a tech news outlet.
The Journal.
The Botched Software Update That Cost $600 Million
Soon after the messy rollout, Sonos started releasing additional software updates to try and fix the bugs. And in July, Spence, the CEO, published a letter of apology. But customers were still mad. A lot of them still couldn't use their devices the way they wanted. In October, more than four months after the app rolled out, Spence released another statement, this time a video.
The Journal.
The Botched Software Update That Cost $600 Million
The video is more than three minutes long, and it's titled, Recommitting to Quality and Customer Experience.
The Journal.
The Botched Software Update That Cost $600 Million
Ben says that for a lot of customers, the response was too little, too late. How has all of this impacted Sonos, the company?
The Journal.
The Botched Software Update That Cost $600 Million
And the company's market cap has plummeted by around $600 million since the app came out.
The Journal.
The Botched Software Update That Cost $600 Million
In the best-case scenarios, companies act fast and fix the problems, and we can all move on. But our colleague Ben Cohen recently wrote about a software update that has plagued a company for months now.
The Journal.
The Botched Software Update That Cost $600 Million
After the break, we asked Sonos directly about the saga. Do you remember what you were doing the day of the app rollout?
The Journal.
The Botched Software Update That Cost $600 Million
No, May 7th, 2024, not... I remember the weeks afterwards with my phone blowing up. That's Eddie Lazarus. He's the chief legal and strategy officer at Sonos. Were you hearing from a lot of different people? people you knew?
The Journal.
The Botched Software Update That Cost $600 Million
Eddie has been with Sonos for about six years, and he was in charge of investigating what happened in the aftermath of the app rollout. You were the one, Eddie, who did the internal audit. Why did it go so badly?
The Journal.
The Botched Software Update That Cost $600 Million
But I guess that's sort of the question that I think has been on a lot of people's minds and was, especially immediately after, was why? Why do so much all at once? This was something that came up a lot on Reddit and on community forums. You know, why did the company decide to roll out such big changes all at one time rather than do it slowly for small groups of users at a time?
The Journal.
The Botched Software Update That Cost $600 Million
Was there a sense that the team or the company underestimated the complexity of what this would take? 100%. Eddie says one reason that Sonos went big with their new app was that they were about to launch new products that would benefit from updated software. A big one was Sonos' first pair of headphones. How was that product launch tied to the timing of the release of the redesigned app?
The Journal.
The Botched Software Update That Cost $600 Million
The new product wasn't enough to boost Sonos. And the company's total units sold, so across all its products, were down by 14% in the back half of last year compared to the year before. Talk to me about what Sonos did to fix the problems with the new app over the course of the weeks and months that followed.
The Journal.
The Botched Software Update That Cost $600 Million
So just to be clear, is the new app fixed?
The Journal.
The Botched Software Update That Cost $600 Million
Sonos has tried to be transparent with its efforts to fix the app, holding Q&As on Reddit and the company's community forum, and sharing a Trello or project management board with the public. But the damage to the company's reputation has been hard to shake.
The Journal.
The Botched Software Update That Cost $600 Million
The company with the software update from hell is Sonos. It makes high-tech speakers that are controlled through its app. And when Sonos updated that app last spring, a lot of users suddenly ran into all kinds of issues. Many couldn't do basic things like connect to their devices.
The Journal.
The Botched Software Update That Cost $600 Million
Internally, the company has also struggled. They've had two sets of layoffs since the app update, losing around 300 employees. Then, at the beginning of this year, the CEO, Patrick Spence, stepped down. Here's our colleague Ben Cohen again.
The Journal.
The New Hit Depression Treatment? A Ketamine-Derived Nasal Spray
A quick heads up before we get started. This episode mentions suicide and discusses depression. Please listen with care. So just to start us off, could you introduce yourself, your name, your age, what you do?
The Journal.
The New Hit Depression Treatment? A Ketamine-Derived Nasal Spray
Spravato's success shows the challenges and opportunities for big pharma when it comes to mental health treatments. And it's also giving hope to companies working in the field of psychedelic research. There are now dozens of startups studying the effects of drugs like LSD and psilocybin on mental health. And last year, the industry seemed poised for another breakthrough.
The Journal.
The New Hit Depression Treatment? A Ketamine-Derived Nasal Spray
The FDA considered approving MDMA for treating PTSD, a condition that affects 13 million Americans. But the agency decided that drug needed more testing. Hosseini, who has now left J&J, told me he thinks that the success of Spravato could mean we see other nontraditional drugs being used as treatments.
The Journal.
The New Hit Depression Treatment? A Ketamine-Derived Nasal Spray
But there are still unanswered questions about the future for patients taking Spravato. A J&J spokesperson told us that over six years of testing, the treatment remained effective and, quote, no new or unexpected safety issues were seen during long-term use. I spoke to one psychiatrist who runs a Spravato clinic, and he raised some concerns about patients taking the drug beyond six years.
The Journal.
The New Hit Depression Treatment? A Ketamine-Derived Nasal Spray
I asked Husseini about this. Would you say Spravato is a long-term or a short-term treatment?
The Journal.
The New Hit Depression Treatment? A Ketamine-Derived Nasal Spray
In January, the FDA went one step further in its approval of Spravato by removing a condition of use. Now, patients are not required to take it with an antidepressant and can use it as a standalone treatment. Today, in Fort Worth, Texas, Sean Fury will do what he does every Friday. He and his wife will get into the car and drive 10 minutes to the clinic where he takes Bravado.
The Journal.
The New Hit Depression Treatment? A Ketamine-Derived Nasal Spray
He'll inhale the medication through his nose and then relax in a reclining chair for two hours. Sean told me that now he's hopeful for the future. He's finished filming his vampire movie and is editing it. He sent us a clip from the final scene. The dialogue is almost verbatim a conversation he had with his wife at the depths of his depression.
The Journal.
The New Hit Depression Treatment? A Ketamine-Derived Nasal Spray
Sean has what's called treatment-resistant depression. And a few years ago, he found out about a new kind of treatment that might help him. It's called Spravato, and it's made by Johnson & Johnson. And Spravato is unique because it's a derivative of ketamine, best known as an illicit club drug. What impact has Spravato had on your life? How would you describe that?
The Journal.
The New Hit Depression Treatment? A Ketamine-Derived Nasal Spray
Well, Sean, thank you so much for your time.
The Journal.
The New Hit Depression Treatment? A Ketamine-Derived Nasal Spray
Before we go, if you're considering self-harm, help is available. Call the Suicide and Crisis Lifeline by texting or dialing 988. That's 988. That's all for today, Friday, March 21st. The Journal is a co-production of Spotify and The Wall Street Journal. The show is made by Katherine Brewer, Pia Gadkari, Rachel Humphries, Sophie Codner, Ryan Knutson, Matt Kwong, Kate Leinbaugh,
The Journal.
The New Hit Depression Treatment? A Ketamine-Derived Nasal Spray
With help from Trina Menino. Our engineers are Griffin Tanner, Nathan Singapak, and Peter Leonard. Our theme music is by So Wiley. Additional music this week from Katherine Anderson, Peter Leonard, Bobby Lord, Nathan Singapak, Griffin Tanner, and Blue Dot Sessions. Fact-checking this week by Najwa Jamal and Mary Mathis. Thanks for listening. See you on Monday.
The Journal.
The New Hit Depression Treatment? A Ketamine-Derived Nasal Spray
Patients with results like Sean's have propelled sales of Spravato. Last year, it exceeded a billion dollars in sales worldwide, becoming a blockbuster drug for J&J. For the pharmaceutical industry, it's amplifying the potential of psychedelics as a treatment for mental health. Welcome to The Journal, our show about money, business, and power. I'm Jessica Mendoza. It's Friday, March 21st.
The Journal.
The New Hit Depression Treatment? A Ketamine-Derived Nasal Spray
Coming up on the show, how a ketamine-derived treatment for depression became a hit for Johnson & Johnson.
The Journal.
The New Hit Depression Treatment? A Ketamine-Derived Nasal Spray
And I'm seeing some, like a very interesting background there for you. You've got a poster. You've got, is that Creature from the Black Lagoon?
The Journal.
The New Hit Depression Treatment? A Ketamine-Derived Nasal Spray
Nearly 30% of adults in the U.S. say they've been diagnosed with depression at some point in their lives, according to a Gallup survey. But even though depression is so prevalent, and in recent years more widely discussed, the way we treat it hasn't evolved for years.
The Journal.
The New Hit Depression Treatment? A Ketamine-Derived Nasal Spray
Dr. Hosseini Manji is a neuroscientist and professor of psychiatry at Oxford University. And for years, he worked at J&J coming up with treatments for depression.
The Journal.
The New Hit Depression Treatment? A Ketamine-Derived Nasal Spray
In the late 80s and early 90s, the pharmaceutical industry made some breakthroughs in the field of mental health treatment with the success of Prozac.
The Journal.
The New Hit Depression Treatment? A Ketamine-Derived Nasal Spray
These drugs are called SSRIs, and they boost serotonin levels in the brain. They're some of the most common treatments for depression, and they're effective, but results vary.
The Journal.
The New Hit Depression Treatment? A Ketamine-Derived Nasal Spray
Sean loves movies, but he doesn't just love to watch them. He makes them too.
The Journal.
The New Hit Depression Treatment? A Ketamine-Derived Nasal Spray
Hosseini wanted a medicine that worked quickly and could help people with treatment-resistant depression. Instead of boosting serotonin levels, he thought a better strategy for dealing with depression was to help the brain cells create new connections. So Hosseini went looking for a substance that could do that. And he found a good option. Ketamine. Ketamine is best known as a psychedelic.
The Journal.
The New Hit Depression Treatment? A Ketamine-Derived Nasal Spray
It's often used illegally at clubs and is popular for its hallucinogenic effects. It can make people feel detached from reality and kind of spacey.
The Journal.
The New Hit Depression Treatment? A Ketamine-Derived Nasal Spray
It is usually snorted or swallowed. The desired effect is euphoria, a dreamlike state. Ketamine is a controlled substance, which comes with a risk of addiction and abuse. but it has also been used legally for decades as an anesthetic.
The Journal.
The New Hit Depression Treatment? A Ketamine-Derived Nasal Spray
In 2008, Hosseini was hired to become the new global head of neuroscience at J&J. He started working to create an effective medication for treatment-resistant depression. Hosseini believed ketamine could provide a breakthrough. But first, he needed to convince J&J.
The Journal.
The New Hit Depression Treatment? A Ketamine-Derived Nasal Spray
Why did you want to make this film?
The Journal.
The New Hit Depression Treatment? A Ketamine-Derived Nasal Spray
How long before you were able to change their minds? Did it take a lot of arguing on your part?
The Journal.
The New Hit Depression Treatment? A Ketamine-Derived Nasal Spray
Knowing these risks, Hosseini and his team worked on minimizing them as much as possible. He came up with the idea of putting a very small amount of a derivative of ketamine into a nasal spray device.
The Journal.
The New Hit Depression Treatment? A Ketamine-Derived Nasal Spray
This device also had the added benefits of getting the dose to the brain faster than taking a pill would and was more convenient than using an IV. What were the challenges of testing this drug on patients? What were the risks involved?
The Journal.
The New Hit Depression Treatment? A Ketamine-Derived Nasal Spray
Because of these side effects, the drug would have to be administered under medical supervision in a clinic. In testing, Hosseini and his team saw real results. He noted how the dissociative feelings wore off after about an hour, but the sensation induced a longer-lasting chemical change in the brain that reduced depressive symptoms.
The Journal.
The New Hit Depression Treatment? A Ketamine-Derived Nasal Spray
The nasal spray had to go through many rounds of clinical testing, with some shown to improve depression, while others showed no improvement over a placebo. In 2019, the FDA approved Spravato for patients with treatment-resistant depression to take along with another antidepressant.
The Journal.
The New Hit Depression Treatment? A Ketamine-Derived Nasal Spray
For Hosseini and his team, the FDA approval was a huge breakthrough.
The Journal.
The New Hit Depression Treatment? A Ketamine-Derived Nasal Spray
Were you popping champagne?
The Journal.
The New Hit Depression Treatment? A Ketamine-Derived Nasal Spray
But Spravato got off to a shaky start. Because it had to be taken in a clinic under supervision, doctors and patients had more of a learning curve than typical medication. And then the pandemic made that sort of in-person treatment even harder. How Spravato turned into a blockbuster is next. When you first heard about a ketamine treatment for depression, what did you think?
The Journal.
The New Hit Depression Treatment? A Ketamine-Derived Nasal Spray
Sean says depression has been part of his life for as long as he can remember. At times, he says, it's been debilitating.
The Journal.
The New Hit Depression Treatment? A Ketamine-Derived Nasal Spray
Sean Fury, who we heard from earlier, was encouraged to try Spravato by his psychiatrist because he was continuing to struggle with his depression. What changed your mind?
The Journal.
The New Hit Depression Treatment? A Ketamine-Derived Nasal Spray
Sean attended his first appointment in 2023. The treatment was covered by his insurance. How did that first session leave you feeling afterwards?
The Journal.
The New Hit Depression Treatment? A Ketamine-Derived Nasal Spray
But Sean went back the next week, and the next, and the next. And how did your body feel after taking it?
The Journal.
The New Hit Depression Treatment? A Ketamine-Derived Nasal Spray
In the two years he's been taking it, Sean says he's only experienced hallucinations twice. He told me about the first time it happened.
The Journal.
The New Hit Depression Treatment? A Ketamine-Derived Nasal Spray
But overall, Sean says Spravato has worked for him.
The Journal.
The New Hit Depression Treatment? A Ketamine-Derived Nasal Spray
Since its slow start, Spravato has steadily grown its sales. J&J offered assistance to doctors who were interested in setting up clinics like the one Sean goes to. And like so many pharma companies, J&J also invested in an ad campaign.
The Journal.
The New Hit Depression Treatment? A Ketamine-Derived Nasal Spray
Since the beginning of 2023, prescriptions for Spravato have nearly doubled in the U.S. to more than 46,000. But with an estimated 3 to 5 million people suffering from treatment-resistant depression, according to J&J, the company has high hopes for the drug's potential. J&J predicts that it could make them $5 billion annually. Here's a company executive from an earnings call in January.
The Journal.
Germany's Economy Is Broken. There's No Plan B.
That's all for today, Friday, February 21st. Alessandra Rizzo, Alan Rodriguez-Espinosa, Heather Rogers, Piers Singhi, Jivika Verma, Lisa Wang, Katherine Whalen, Tatiana Zamise, and me, Jessica Mendoza, with help from Trina Menino. Our engineers are Griffin Tanner, Nathan Singapak, and Peter Leonard. Our theme music is by So Wiley.
The Journal.
Germany's Economy Is Broken. There's No Plan B.
Additional music this week by Katherine Anderson, Peter Leonard, Bobby Lord, Nathan Singapak, and Blue Dot Sessions. Fact-checking this week by Mary Mathis and Kate Gallagher. Thanks for listening. See you on Monday.
The Journal.
Germany's Economy Is Broken. There's No Plan B.
Like many other cities in Germany, Ingolstadt relies on just one company. In this case, it's the luxury car manufacturer Audi. Audi.
The Journal.
Germany's Economy Is Broken. There's No Plan B.
Ingolstadt's fortunes have been tied to Audi for 75 years. In the 60s, the company was acquired by Volkswagen. And since then, most of Audi's cars have been exported. Nearly 90% of Audis are sold outside of Germany. And its biggest foreign market for many years has been China. How reliant was Audi, how reliant were they on exports to China?
The Journal.
Germany's Economy Is Broken. There's No Plan B.
These luxury cars are at the heart of Germany's economy, which is the third largest in the world. Over decades, Germany developed an economic model based on manufacturing and exporting products like these, and it turned the country into a global powerhouse. But that model, which has been so effective for years, is on the verge of falling apart. Our colleague Tom Fairless covers the German economy.
The Journal.
Germany's Economy Is Broken. There's No Plan B.
But over time, China has stopped turning to Germany for as many products.
The Journal.
Germany's Economy Is Broken. There's No Plan B.
Not only is China producing its own cars, it's exporting them, making it a direct competitor to Germany. In 2022, China's auto exports soared past Germany's. Now, with its dominance in electric vehicles, China seems positioned to stay ahead.
The Journal.
Germany's Economy Is Broken. There's No Plan B.
Germany's also facing other issues that are squeezing the auto industry. In particular, high energy costs.
The Journal.
Germany's Economy Is Broken. There's No Plan B.
Right. So energy costs are high, which is being passed on to the manufacturers?
The Journal.
Germany's Economy Is Broken. There's No Plan B.
Audi has been a casualty of these shifts. The company reported a 91% decline in operating profits for its third quarter of 2024. It's been cutting thousands of jobs across Germany. This downturn at Audi has had a ripple effect on Ingolstadt. Audi, through its parent company, has historically been an important source of tax revenue and business for the town. Now, that's changed.
The Journal.
Germany's Economy Is Broken. There's No Plan B.
What does that mean for the town itself?
The Journal.
Germany's Economy Is Broken. There's No Plan B.
Audi declined to comment. There are more challenges for Germany's manufacturers on the horizon. At a press conference this week, President Trump talked about potential tariffs on auto imports into the U.S.
The Journal.
Germany's Economy Is Broken. There's No Plan B.
25 percent would be a massive increase from the status quo. At the moment, the tariff rate on cars is 2.5 percent.
The Journal.
Germany's Economy Is Broken. There's No Plan B.
And further exacerbate what's already going on.
The Journal.
Germany's Economy Is Broken. There's No Plan B.
For decades, Germany has been known as the king of luxury cars.
The Journal.
Germany's Economy Is Broken. There's No Plan B.
That fear may come into play this weekend when the country heads towards a big national election.
The Journal.
Germany's Economy Is Broken. There's No Plan B.
Could a new leader keep Germany's problems from getting worse? That's next.
The Journal.
Germany's Economy Is Broken. There's No Plan B.
Germans head to the polls this weekend to cast their votes for parliament. Our Germany bureau chief Bertrand Benoit says that the top concern among voters is the economy.
The Journal.
Germany's Economy Is Broken. There's No Plan B.
Voters are unhappy with the current government under Chancellor Olaf Scholz. His efforts to turn around the economy haven't worked. Scholz has been making only incremental tweaks, when many economists say what the country needs are big changes.
The Journal.
Germany's Economy Is Broken. There's No Plan B.
With less demand for German exports, one solution, some economists say, is more government investment. What does Germany need to be investing in?
The Journal.
Germany's Economy Is Broken. There's No Plan B.
But these kinds of investments are not what the candidates are talking about. Instead, when it comes to Germany's economic model, even the upstart anti-establishment parties are sticking to traditional economic policies. One of the contenders is Alice Weidel. She represents AFD, a populist right-wing party that's been associated with neo-Nazis.
The Journal.
Germany's Economy Is Broken. There's No Plan B.
And her proposals about how to fix the economy are focused on smaller modifications meant to revitalize Germany's export model.
The Journal.
Germany's Economy Is Broken. There's No Plan B.
Unless there's a turnaround, the fallout will reach far beyond the country's borders.
The Journal.
Germany's Economy Is Broken. There's No Plan B.
According to polls, the AFD is expected to gain a bunch of parliament seats in this weekend's election, though not enough for Vidal to end up running the government. That person is likely to be Friedrich Merz, the head of the CDU, a conservative center-right party. It was the party of Angela Merkel. Bertrand recently interviewed Merz.
The Journal.
Germany's Economy Is Broken. There's No Plan B.
Based on your conversation, what was your impression of his views on the economy?
The Journal.
Germany's Economy Is Broken. There's No Plan B.
How hard would it be to make a big change? Like, if the economy is so dependent on manufacturing and exports and that's starting to not really make sense anymore, why wouldn't the candidates want to do something else completely?
The Journal.
Germany's Economy Is Broken. There's No Plan B.
So what does that mean for Germany? Sounds like the economy is already struggling. You know, the voters are starting to see signs of that in their day-to-day lives. What happens?
The Journal.
Germany's Economy Is Broken. There's No Plan B.
And if that is what happens, what could that mean for Europe, for the EU, and for the rest of the world?
The Journal.
Germany's Economy Is Broken. There's No Plan B.
Welcome to The Journal, our show about money, business and power. I'm Jessica Mendoza. It's Friday, February 21st. Coming up on the show, Germany's economic model is cracking and there's no plan B. Last December, Tom took a reporting trip to a city in the south of Germany called Ingolstadt.
The Journal.
The Fight to Kick Soda Out of Food Stamps
Over the past 20 years, states have tried to get sugary drinks out of the SNAP program. But those efforts have always fizzled. This time, though, Arkansas has a chance. Industry insiders told Laura that if this idea spreads across the country, it could be a real hit to company sales, and soda makers are gearing up for a fight.
The Journal.
The Fight to Kick Soda Out of Food Stamps
Welcome to The Journal, our show about money, business, and power. I'm Jessica Mendoza. It's Friday, March 7th. Coming up on the show, the fight bubbling to get soda out of Snap.
The Journal.
The Fight to Kick Soda Out of Food Stamps
That's former President Lyndon B. Johnson. Back in the 1960s, the U.S. government created a permanent food assistance program for low-income Americans. Today, those eligible for the program get a kind of preloaded debit card from their state through the U.S. Department of Agriculture. They can use that to pay for food at grocery stores, convenience stores, and farmers markets.
The Journal.
The Fight to Kick Soda Out of Food Stamps
When it comes to soda, Laura has recently been looking into a fight that's been brewing in one particular state, Arkansas. There's an effort there now to restrict what people can buy with food stamps, also known as SNAP, the Supplemental Nutrition Assistance Program.
The Journal.
The Fight to Kick Soda Out of Food Stamps
Almost 13 percent of Americans rely on SNAP. And every year, the federal government spends over $100 billion on the program. But soda and other sugary drinks have been a point of tension in the program for decades. Public health experts and lawmakers have raised concerns over the nutritional impact of those kinds of beverages.
The Journal.
The Fight to Kick Soda Out of Food Stamps
In the past, when states like New York and Minnesota have tried to get soda removed from SNAP for their residents, they've gone to the USDA. But the agency rejected their requests, saying the restrictions were too complicated to implement.
The Journal.
The Fight to Kick Soda Out of Food Stamps
There are a lot of different kinds of soft drinks with different levels of sugar content, and it would be tricky to sort out what could and couldn't be bought with food stamps. The agency also said it'd be hard to gauge what kind of impact that effort would have on public health. But under the new Trump administration, the push to ban soda from SNAP has been reignited.
The Journal.
The Fight to Kick Soda Out of Food Stamps
Robert F. Kennedy Jr., the new Secretary of Health and Human Services, has spoken out against sugary foods for a long time. As part of RFK's campaign to improve public health, what he calls MAHA, or Make America Healthy Again, he's specifically gone against soda for its high sugar content.
The Journal.
The Fight to Kick Soda Out of Food Stamps
In an op-ed for The Wall Street Journal last September, RFK said as much, adding it contributes to poor health in America. He also wrote that it's, quote, nonsensical for U.S. taxpayers to spend tens of billions of dollars subsidizing junk. And Brooke Rollins, the head of the USDA, has indicated that she'd support taking soda out of SNAP.
The Journal.
The Fight to Kick Soda Out of Food Stamps
Even with growing momentum to take soda out of SNAP, there are still some hurdles, including from within the Republican Party.
The Journal.
The Fight to Kick Soda Out of Food Stamps
The president of the American Beverage Association, which represents soda companies, told us that Americans should be able to decide what's best for their families. He also said that these proposed changes would not, quote, improve health or save taxpayer dollars. How the soda companies are fighting back? That's after the break.
The Journal.
The Fight to Kick Soda Out of Food Stamps
In Arkansas, Governor Sarah Huckabee Sanders is poised to send a request to the USDA to restrict sugary items from SNAP, potentially including candy, desserts, and soda. Companies like Coca-Cola and PepsiCo are now on high alert. And it's in part because the battle over soda in the SNAP program comes as these companies have been trying to keep up with changing consumer habits.
The Journal.
The Fight to Kick Soda Out of Food Stamps
Coca-Cola, for instance, fully acquired the milk brand Fairlife in 2020. In the past few years, PepsiCo also bought SodaStream and invested in Celsius energy drinks. As the companies move away from traditional sodas, they're also pushing back against the efforts in Arkansas. To do that, they're trying to appeal to one of America's most famous soda drinkers, President Donald Trump.
The Journal.
The Fight to Kick Soda Out of Food Stamps
— Laura says that the president has been skeptical of banning things his supporters like, telling his advisers that bans are unpopular. Beyond that polling, the American Beverage Association also launched an ad campaign. It highlighted that more than half the products Americans buy from soda companies are low or zero sugar drinks.
The Journal.
The Fight to Kick Soda Out of Food Stamps
So if Arkansas does manage to remove soda from SNAP, what will it mean for the people who use that program?
The Journal.
The Fight to Kick Soda Out of Food Stamps
Laura says it could also cause some of the complications that the USDA has referenced in the past, because it's unclear what does and doesn't count as an unhealthy soda.
The Journal.
The Fight to Kick Soda Out of Food Stamps
If Arkansas succeeds, Laura says that it could open the door for other states to do something similar.
The Journal.
The Fight to Kick Soda Out of Food Stamps
Who doesn't drink soda, right? That's our colleague Laura Cooper, who covers the beverage industry.
The Journal.
The Fight to Kick Soda Out of Food Stamps
How worried would you say soda companies are about what's going on?
The Journal.
The Fight to Kick Soda Out of Food Stamps
Before we go, we wanted to tell you that we're exploring a live event. Tell us what you want to see by taking our survey. There's a link in our show notes. And for updates on our plans, please leave us your email address. That's all for today, Friday, March 7th. The Journal is a co-production of Spotify and The Wall Street Journal.
The Journal.
The Fight to Kick Soda Out of Food Stamps
The show is made by Catherine Brewer, Pia Ghedkari, Rachel Humphries, Sophie Kotner, Ryan Knutson, Matt Kwong, Kate Leinbaugh, Colin McNulty, Annie Minoff, Laura Morris, Enrique Perez de la Rosa, Sarah Platt, Alessandra Rizzo, Alan Rodriguez-Espinosa, Heather Rogers, Pierre Singhi, Jivika Verma, Lisa Wang, Katherine Whalen, Tatiana Zamise, and me, Jessica Mendoza, with help from Trina Menino.
The Journal.
The Fight to Kick Soda Out of Food Stamps
Our engineers are Griffin Tanner, Nathan Singapak, and Peter Leonard. Our theme music is by So Wiley. Additional music this week from Catherine Anderson, Marcus Begala, Billy Libby, Bobby Lord, Nathan Singapak, Griffin Tanner, and Blue Dot Sessions. Fact-checking by Mary Mathis. Thanks for listening. See you on Monday.