Intro
In this episode of the Planet Money podcast, the hosts delve into a trucker hat mystery and explore the curse of September in the stock market. They also answer other intriguing listener questions. Join them as they uncover the fascinating stories behind these phenomena.
Main Takeaways
Mystery of the Trucker Hat Trend
- Justin noticed a lot of Bass Pro Shop hats in Keto, Ecuador, where there are no stores.
- The popularity of the hats is random and not limited to a specific group.
- Justin’s students don’t even know what Bass Pro Shop is.
- The hosts question how a brand can gain popularity in a place where it doesn’t exist.
- The Bass Pro Shop hat trend is popular in the US and Latin America, and was started by a Canadian comedian, Curtis Conner.
- The trend has evolved and become popular among Latinos due to a new fashion trend.
- Exchange students in Inquito, Ecuador brought the trend to the area, and locals started getting into it.
- Velico is a fashion trend in Ecuador where men wear items inspired by narco culture, including an ear hat, a white hand top, a large necklace, and sunglasses.
- The trend is popularized in a song called Teco Mn by Van called Fuerza Regina, which references the Bass Pro Shop Hat.
- Despite there being no Bass Pro Shop stores in South America, publicly available export data shows that there have been shipments from Bass Pro Shops to Central and South America, but none of them were hats.
- The trend is mainly spread through exchange students who bring or mail the hats from the United States, as well as through knockoffs sold on Instagram and TikTok.
- Velico has become popular among Gen Z in Ecuador and has blown up in Latino music and fashion.
The Curse of September in the Stock Market
- September is historically the worst month for the stock market.
- The Curse of September refers to this phenomenon.
- The stock market reacts faster to good news than bad news.
- The market for bad news is smaller, causing negative news to travel more slowly.
- September effect: bad news travels slow during summer vacations, causing a slowdown in market reaction to negative news.
- Lily’s theory: September is a long hangover period where all the bad news from the summer is slowly priced in, causing stocks to go down.
- Holiday effect: similar patterns seen in other stock markets around the world during major holidays.
- September curse may be fading away due to technology advancements and algorithms in trading.
The FedNow Instant Payment System
- FedNow is a new instant payment system recently rolled out by the Federal Reserve, modernizing the outdated money transfer system in the US.
- The current system operates on a batch process, causing processing delays that could take days.
- Private apps like Venmo or PayPal feel instant, but are not, and require a fee to transfer money to a bank account.
- Slow payment system assumes everyone has $1,000 or more in their bank and results in overdraft fees.
- FedNow eliminates 30-60% of overdraft fees, but only fewer than 100 banks and credit unions have signed up to use it due to a lack of incentive for banks to switch to the new system.
- The Federal Reserve needs to mandate real-time payment systems to make FedNow work.
Casinos as Financial Institutions
- Casinos can store money on account and follow bank-like regulations for dealing with money.
- Casinos are not banks and cannot offer checking accounts, mortgages, or small business loans.
- Banks make money by taking in deposits and loaning it out, while casinos have mathematical advantages in games.
- Casinos are not a risk-taking enterprise, and if run properly, will make a designated profit.
- Casinos are moving away from relying solely on gambling to make money and now offer hotel rooms, resort fees, shows, nightclubs, and bottle service.
- Big Las Vegas casinos are like fancy resorts with some slot machines.
Summary
Mystery of the Trucker Hat Trend
The hosts explore the curious phenomenon of the Bass Pro Shop hat trend, which has gained popularity in places where the brand doesn’t even exist. They trace its origins to a Canadian comedian and its evolution among Latinos due to a new fashion trend. The trend has spread through exchange students and knockoffs sold on social media platforms like Instagram and TikTok. Velico, a fashion trend in Ecuador, has embraced the Bass Pro Shop hat and become popular among Gen Z.
The Curse of September in the Stock Market
September has historically been a challenging month for the stock market, known as the Curse of September. The hosts discuss how the stock market reacts faster to good news than bad news, resulting in a slower transmission of negative news during the summer vacation period. They explore theories and patterns related to the September effect and the holiday effect. However, advancements in technology and trading algorithms may be diminishing the September curse.
The FedNow Instant Payment System
The hosts shed light on the new instant payment system called FedNow, introduced by the Federal Reserve to modernize the outdated money transfer system in the US. They explain the limitations of the current system, which operates on a batch process and causes processing delays. FedNow aims to eliminate overdraft fees and provide real-time payments. However, the adoption of FedNow by banks and credit unions is currently limited due to a lack of incentives.
Casinos as Financial Institutions
The hosts delve into the financial aspects of casinos, highlighting their ability to store money on account and follow bank-like regulations for dealing with money. However, unlike banks, casinos cannot offer traditional banking services such as checking accounts, mortgages, or small business loans. They discuss the differences between casinos and banks in terms of making profits and managing risks. Casinos are expanding their revenue streams beyond gambling by offering various entertainment and hospitality services.
Conclusion
From the mystery of the trucker hat trend to the curse of September in the stock market, this episode of Planet Money uncovers intriguing stories and answers listener questions. It reveals the power of fashion trends, the complexities of stock market behavior, the need for modernized payment systems, and the evolving nature of casinos as financial institutions. Tune in to gain insights into these captivating topics.
