Chapter 1: What is Trump's plan to lower mortgage rates?
Chemical elements 50, 79, 29, and 47. The economics thereof. From American Public Media, this is Marketplace. In Los Angeles, I'm Kyle Rizdahl. It is Thursday. Today, this one is the 15th of January. Good as always to have you along, everybody.
Our entry point into the economy today, this one and the global one, comes via the commodities markets, metals in particular, which, and I believe this is the technical Wall Street term, have been ripping this year. Gold, nickel, tin, and copper have all hit record highs the past couple of weeks. Silver, just as a for instance, is up 200% year over year.
That's happening in part because another particular asset isn't ripping. The U.S. dollar, and really all fiat currencies, but especially the U.S. dollar, seems to be getting debased at relatively high rates. Stephen Gleason is the CEO of Money Metals Exchange. The dollar is down 7% over the past year. It has been debased, in other words. That is actually a technical Wall Street term.
So one reduces one's exposure to those volatile U.S. dollars... How? Diversify into hard assets. Hard assets like real estate, maybe, but more easily gold, silver, also platinum. It's really just stored value and one that is not susceptible to debasement like a government-issued or Federal Reserve-issued currency is. Hey, there's that word again, debasement.
Juan Carlos Artigas is global head of research, also regional CEO for the Americas for the World Gold Council. It's not just the weakening dollar, though, also the broader political agita.
I think that is a combination of so many things happening that creates uncertainty amongst investors. And because they don't know exactly how much of that is going to translate into real impact into the global economy, they utilize assets like gold to hedge.
And it ain't just gold. Tin is at a record, too. Why, I hear you ask? Do not at me on this one, gang, but it's all about artificial intelligence. What is tin really useful for? Soldering. What needs lots of soldering? Computer chips. What needs lots of computer chips? You see where I'm going, right? Also, let us not forget copper, industrially critical as it is.
Should you want to get in on that action, though, best forget the commodity markets. We are seeing a lot of folks wanting to buy copper, physical copper. And actually, one of the best ways to do that, at least on the retail side, is the old pre-1983 pennies, which are, I believe, 95% copper. Put that one in there just for the numismatists among you.
Our visit to commodities ends with oil crude tumble today.
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Chapter 2: How do mortgage-backed securities work?
Both benchmarks down more than 4%. It's one of those good news for the rest of us is bad news for the markets things. There seems to be less Iran tension brewing. Don't know. Equities, you do know the drill. We'll have the details when we do the numbers. Cryptocurrency might, possibly, eventually, someday be actual useful money.
You know, a medium of exchange, a store of value, those traditional ways we think about the money that we use now. Eventually, but not yet. That does not mean, though, that there isn't a ton of backing and forthing about how to regulate the stuff before we get to our monetary future. And one slice of that fight, it's between banks and cryptocurrency companies, boils down to interest payments.
Banks, of course, do make those payments, interest on deposits, right? The question at hand is whether crypto firms can offer something similar for people who hold what are called stable coins. Marketplaces of Revenishore has the ins and outs of that one. You have money, you put it in a bank, you get interest. That's how that works. But what about crypto, specifically stablecoins?
This is a kind of crypto that doesn't go up or down in value much. It's really just a way to pay for things. The companies that issue stablecoins wanted to offer interest on them the same way that banks do on deposits. But Congress has already said no. We don't regulate stablecoin issuers nearly as extensively as banks, and we deliberately said they can't do all the things that banks can do.
Timothy Massad is a research fellow at Harvard's Kennedy School and former chair of the Commodity Futures Trading Commission.
The question now is, can other people? pay a reward or interest if you deposit your stable coins with them.
Can a trading platform like Coinbase, where people hold their crypto, offer you a reward or interest for keeping your stable coins with them? Banks say no, and they want a law that says that. The fear is that money would leave depository institutions. Rob Nichols is president of the American Bankers Association.
Why keep your money in a bank if you can get a higher reward stashing it as stable coins?
And then that money, which normally is lent into the economy for mortgage loans, auto loans, education, etc., would be parked in a payment mechanism, but it wouldn't create economic growth.
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Chapter 3: Why are banks selling mortgages to Fannie Mae and Freddie Mac?
Our preference most of the time is going to be to sell those loans to Fannie Mae. Fannie Mae and Freddie Mac buy up truckloads of mortgages and package them into bonds called mortgage-backed securities.
And that mortgage-backed security is sold into the international capital markets.
That's Nancy Wallace, a professor at UC Berkeley. She says investors love mortgage-backed securities because their steady stream of income from all of those mortgage payments is considered almost as safe as U.S. treasuries, and they tend to pay slightly more interest.
We have a huge international market that has a very high incentive to purchase mortgage bonds from the United States.
The Trump administration is asking Fannie and Freddie to go back to doing something they did up until the financial crisis, buy the very bonds they're selling. Wallace says there'd be more demand for mortgage-backed securities, so Fannie and Freddie would need even more mortgages to go into those securities. And that means?
As a bank, you can originate your mortgage and expect to sell the mortgages that you originate at a reasonable price. And you're going to be very willing to originate a lot of mortgages.
And the theory goes, originate them at lower interest rates. Mike Frattantoni is chief economist of the Mortgage Bankers Association.
You are seeing more and more mortgage lenders offering rates below 6%. And that's really something we haven't seen very much at all, really, since 2022.
The MBA reports that applications to refinance mortgages jumped 40% in the last week.
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Chapter 4: What impact does Trump's directive have on mortgage rates?
Now, that number struck a lot of the lawyers I spoke to as hard to imagine, but everyone told me that they are seeing a pretty sharp uptick in young couples getting prenups, including young couples who don't have a lot of assets. Well, that's what keyed into me when I read this piece. You know, it's usually traditionally about division of assets at the end of a marriage.
That is not necessarily the case now with these younger people. No, they're concerned about all sorts of things. So one of the companies that I profiled is called Hello Prenup, and they have an app that's quite popular with young people. And that app offers something called a social image clause.
So that says that after a divorce, you are not allowed to disparage your ex on Instagram or TikTok, for instance. Really? Yeah, and if you do, you can assign... a financial penalty. So, you know, $20,000 per, you know, subtweet. Wow. Okay. Wow. Right. I mean, yeah. Also though, these younger folks, a lot of them now have student debt. Yes. So that's a big concern.
What happens to student debt in the event of a divorce? And that really differs state by state. But I talked to one scholar in Louisiana, a law scholar in Louisiana, and she told me that if you come into a marriage with lots of student loan debt and you and your spouse while you and your partner are together, you know, during the marriage, you're paying off some of those student loans.
Because it's money earned during marriage, it's considered community property. So when you get divorced, your ex can ask you for some of the money back. All right. So this is none of my business. And ordinarily, I wouldn't ask this of somebody that I'm interviewing because it's somewhat personal. But since you wrote about it, I don't know your marital status. I don't know anything.
But is this something that's on your radar? I was saying to someone, it's really funny. People keep asking me, well, would you get a prenup? I'm not even seeing anyone. And yet I have thoughts about it. I have strong feelings about it. I do think that You learn a lot about yourself even just reading through some of the questions that these apps ask you. What feels fair to me?
What kind of relationship I'm looking for? How are we going to handle money in that relationship? I am thinking about that now in a way that I wasn't quite before. And maybe that's why I'm divorced.
Yeah.
So I did not have a prenup. Did not have a prenup on my first.
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Chapter 5: How is venture capital funding changing in 2025?
Jennifer, thanks a lot. I appreciate your time. Thank you so much. Coming up, we may see a decline in the number of acres that are kept in forests. Missing the economic forest for the trees. But first, sure, why not? Let's see the numbers. Dow Industrials gained 292 points today, about six-tenths of one percent, closed at 49,442. The Nasdaq added 58 points, about a quarter percent, 23,530.
The S&P 500 up 17 points, also a quarter percent, 69 and 44. Justin was just talking about the mortgage market. So, some of the big lenders today. Rocket Companies, which owns the digital-first Rocket Mortgage, climbed 3.4%. UWM Holdings Corporation, that is, in case you didn't know, the home of United Wholesale Mortgage, surged 6.4% today. Loan Depot picked up 1.9%.
The world's biggest computer chip maker, the Taiwan-based TSMC, is increasing its capital spending by as much as 40% this year. Why, you ask? Well, because they had a net profit of $15 billion last quarter. That's why TSMC up 4.4% on the day. Lack of snow out west this year is keeping skiers off the slopes.
Vail's visitor traffic was down 20% last year at its resorts in Colorado, Utah, and British Columbia. Even if the snow comes back, Vail is cutting its outlook for 2026. Vail Resorts, ticker symbol, this one's a little tricky. Nothing with a V in it. It's MTN. Pretty good. Right down 2.4%. You're listening to Marketplace.
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This is Marketplace. I'm Kai Risdom. Venture capital, should you have been wondering, is back. Last year, $340 or so billion of capital was ventured. That's at least $100 billion more than in any of the previous three years. The data comes courtesy of PitchBook and the National Venture Capital Association. So where have all those VCs been hiding and who's getting their money now?
Here's Marketplace's Daniel Ackerman. The last spike in venture capital funding was back in the low interest rate, easy money days of 2021.
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Chapter 6: What role does AI play in the venture capital landscape?
Josh Lerner of Harvard Business School says it was like... A drunken frenzy where venture capitalists gave a lot of money to a lot of people at very high valuations. But he says after any wild party... It's inevitable you're going to have a hangover. in the last three years, have definitely been that of a hangover. Now though, the VC spending party is back on.
And Seth Kaplan of the University of Chicago says you'll be shocked, just shocked, to learn where all that money is going. Not surprisingly, it's AI. Half of all VC dollars last year went to just 0.05% of all VC deals. The money got hoovered up by the handful of firms building the most powerful AI models, like the ones developed by OpenAI, Anthropic, and XAI.
Shiloh Tilleman-Dick is with the National Venture Capital Association.
These foundational models are a base that so many other companies are able to build value off of, and they're attracting so much capital as a result of that.
Tillman-Dick says venture capital has long been something of a winner-take-all industry, but the level of concentration right now? I think this is unusual. He says one reason, besides just the general hype around AI, is that it does require a good deal of capital.
You have some really expensive talent and you have some really expensive hardware and energy costs to go with it.
And this VC AI spending spree is likely to continue, says Steve Kaplan of the University of Chicago, because the stock market is strong and interest rates are on their way down. In those situations, you tend to see venture capital spending being robust. The hard part is knowing, you know, when you've gone too far. Bubble? Question mark? I'm Daniel Ackerman for Marketplace.
Let's talk trees here for a second. Actually, let's talk forestry, which is, broadly speaking, the industry of trees. If you measure it by total timber harvest, the amount of private timberland and tree product exports, that's pulp and paper and logs, Georgia is the number one forestry state in the country. That's all well and good until you can't get people to buy what you are selling.
Nearly a dozen paper mills have closed across the American South in the past couple of years. That while the industry was already struggling with low timber prices and trees lost to hurricanes. So some landowners are trying to find a market for the carbon that their forests can store, as Emily Jones from WABE and Grist reports.
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Chapter 7: Why are young people increasingly opting for prenups?
Kathy Fallon is with the Clean Air Task Force, which published a report last year showing that most forest carbon offset programs fall short. They often don't account for change to carbon storage over time or overestimate how much storage a forest project really adds.
It's critical that the credits deliver an equivalent emissions reduction benefit. Otherwise, we're both delaying real emissions reduction and potentially doing more harm than good to the atmosphere.
The forest carbon industry has gone through a reckoning in recent years as participants and outside advocates like Fallon try to ensure carbon credits aren't just greenwashing. The forest carbon team in Georgia says that's their goal too, not just preserving the current forests, but making sure they store even more carbon in the future. In Savannah, Georgia, I'm Emily Jones for Marketplace.
This final note on the way out today, a serendipitous follow-up to yesterday's observation about inflation in the streaming space, Netflix and HBO Max and all the rest. It's up 19.5% November to December. The Hollywood Reporter discovered that. Here is today's audio analog. Spotify is raising its prices, too, a buck to $12.99 a month. Look at it this way, though. That is a mere 8.3%.
I don't know. I think the Fed's got to raise rates. I'm just saying. Our production team includes Libby Burdett, Andy Corbin, Maria Hollenhorst, Sarah Leeson, Sean McHenry, Michaela Sia, and Sophia Terenzio. Will Story is the supervising senior producer. And I'm Kyle Rizdal. We will see you tomorrow, everybody. This is APM. Hey everybody, it's Kyle Rosdahl, the host of Marketplace.
It has been a year since the fires here in Los Angeles, and businesses that burned are still struggling.
You know, I won't lie, I've looked. I've looked at, you know, hey, maybe we move the store. It just, it wouldn't be the same hardware store.
On the ground reporting on what the year ahead has in store for business owners still recovering. Listen to Marketplace on your favorite podcast app.
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