WEBVTT - Revisiting The Strange Story Behind the Beanie Babies Bubble 0:00:09.400 --> 0:00:13.200 Hello, and welcome to another episode of the Odd Thoughts Podcast. 0:00:13.240 --> 0:00:17.520 I'm Tracy Alloway and I'm Joe Wish. Joe, I am 0:00:17.560 --> 0:00:20.560 really sad to say we are coming to the end 0:00:20.720 --> 0:00:23.160 of our bubble series. I thought you were going to 0:00:23.239 --> 0:00:25.720 say we're coming to the end of the podcast overall, 0:00:25.760 --> 0:00:28.400 so I'm actually kind of relieved that were But I 0:00:28.440 --> 0:00:30.880 am sad too. I think I said it last time, like, 0:00:30.920 --> 0:00:34.080 bubbles are just the best. Yeah, I love talking about them. 0:00:34.440 --> 0:00:38.800 We'll probably talk about them again on you know, future episodes, 0:00:39.360 --> 0:00:43.440 but for now we are we're wrapping up, all right. 0:00:43.560 --> 0:00:46.160 So as we wrap up, and as you look over 0:00:46.280 --> 0:00:48.360 a bunch of the different bubbles that we've just been 0:00:48.560 --> 0:00:52.320 um learning about, what stands out for you, like what 0:00:52.400 --> 0:00:56.640 are the lessons that you're actually taking away? Human psychology 0:00:56.880 --> 0:00:59.000 is just so consistent. I think it was the first 0:00:59.040 --> 0:01:03.800 one we talked with Scott Nations about various booms and 0:01:03.840 --> 0:01:07.920 bust throughout US stock market history. There's always the great 0:01:07.959 --> 0:01:11.000 story that goes with them. And so at the kernel 0:01:11.240 --> 0:01:15.319 of every bubble that we talked about, there's some route 0:01:15.360 --> 0:01:19.119 of truth to it. It's not a complete fabrication. Something 0:01:19.200 --> 0:01:22.200 at some point made some sense and then of course 0:01:22.280 --> 0:01:25.480 humans being uh, the animals that we are, we just 0:01:25.560 --> 0:01:29.880 can't put things in perspective and we extrapolate way too far. Yeah, 0:01:30.080 --> 0:01:32.080 that's something that's going to stick with me as well. 0:01:32.120 --> 0:01:36.440 There's always a certain narrative to explain what's happening. The 0:01:36.520 --> 0:01:39.399 other thing I was thinking about is almost every bubble 0:01:39.440 --> 0:01:43.200 that we've spoken about comes or spurs a sort of 0:01:43.280 --> 0:01:48.200 cottage industry around it, Like crazy things like you know, 0:01:48.240 --> 0:01:51.080 the guys that used to stand outside in Florida trying 0:01:51.120 --> 0:01:54.240 to hawk during the lamb bubble Binder boys, that's it. 0:01:54.640 --> 0:01:58.760 Or the baseball card bubble, all the new sets of 0:01:58.800 --> 0:02:03.360 baseball cards that came in. Yeah, that specifically the way 0:02:03.640 --> 0:02:09.880 supply expands when people are in a mania for X. 0:02:09.919 --> 0:02:13.720 Whatever it is, whether it's land, whether it's baseball cards, 0:02:14.360 --> 0:02:18.120 whether it's uh, some sort of equity or whatever, the 0:02:18.160 --> 0:02:21.120 industry will find a way to create supply. The supply 0:02:21.320 --> 0:02:23.200 never just states fixed. And of course, you know we 0:02:23.240 --> 0:02:25.840 talked about the Florida real estates, so you know, people 0:02:25.840 --> 0:02:28.600 have just bought marsh land in the middle of nowhere 0:02:28.880 --> 0:02:31.640 when all the prime real estate like around Miami was 0:02:31.720 --> 0:02:34.120 sold up. So they always find a way to sell 0:02:34.160 --> 0:02:36.680 something new. People don't just sort of say they bought 0:02:36.720 --> 0:02:39.320 it all and now prices will go up. The supply 0:02:39.360 --> 0:02:42.440 eventually swamps demand. The one thing I'm a little bit 0:02:42.480 --> 0:02:45.400 sad that we didn't learn more about is uh the 0:02:45.560 --> 0:02:50.160 catalyst for the bubbles actually bursting. Because if we knew that, 0:02:50.520 --> 0:02:53.640 if we knew that, Joe, we could make so much money. 0:02:53.800 --> 0:02:56.360 We could all be rich. We just have to you 0:02:56.440 --> 0:02:58.600 just see a bubble and just ride it until the 0:02:58.680 --> 0:03:01.680 day before. Yeah. Alright, well, as it is, we have 0:03:01.800 --> 0:03:04.600 to stick with the podcasts and various other things. But 0:03:04.720 --> 0:03:08.800 to celebrate the end of our Bubble series, we are 0:03:09.000 --> 0:03:12.200 going to share with our listeners a rerun of one 0:03:12.240 --> 0:03:16.440 of our most favorite bubbles ever. That's right. So obviously, 0:03:16.480 --> 0:03:18.560 as we're saying, we're probably going to keep doing more 0:03:18.560 --> 0:03:21.000 episodes in the future about bubbles from time to time. 0:03:21.240 --> 0:03:23.960 Of course, we did some even before we started the 0:03:23.960 --> 0:03:27.520 original series, and there was one in particular that really 0:03:27.560 --> 0:03:31.040 stood out there just like totally fits, doesn't it. Yeah, 0:03:31.080 --> 0:03:33.800 this was one of our earliest ever episodes and it 0:03:33.880 --> 0:03:37.120 was so much fun. It was one on the Beanie 0:03:37.200 --> 0:03:40.400 Baby Bubble. So for those of you who are unfamiliar 0:03:40.440 --> 0:03:44.000 with it. In the nines, Beanie Babies, these small stuffed 0:03:44.040 --> 0:03:48.960 animal toys, became a huge cultural phenomenon, and with that 0:03:49.000 --> 0:03:53.440 phenomenon came a lot of speculation, a lot of trading 0:03:53.840 --> 0:03:56.760 that came with it. Right, and you know, they're just 0:03:56.760 --> 0:03:59.720 stuffed animals, But there was this a lot of the 0:04:00.000 --> 0:04:03.680 teams that we discussed in this episode we discussed with 0:04:03.680 --> 0:04:06.640 other Bubbles on later episodes. So the supply thing that 0:04:06.680 --> 0:04:09.720 we just mentioned at one point, you know, the idea 0:04:09.880 --> 0:04:13.560 was that once a line of these stuffed animals was made, 0:04:13.600 --> 0:04:16.719 there would never be another one, but the supply expanded massively. 0:04:17.360 --> 0:04:20.880 Last week, remember we talked about the role that the 0:04:20.920 --> 0:04:24.320 Beckett magazine had in baseball cards, the sort of first 0:04:24.360 --> 0:04:28.920 pricing guide, the price guide. Sure, Beanie Babies, as we 0:04:28.960 --> 0:04:32.880 discussed on that episode, also had their price guide. Very 0:04:32.920 --> 0:04:36.520 similar idea, very similar phenomenon at work. As soon as 0:04:36.560 --> 0:04:40.200 people could see visually that prices were changing every month 0:04:40.279 --> 0:04:43.440 or every week, that made people even more inclined them 0:04:43.480 --> 0:04:46.280 to see them as speculative vehicles. Yeah, and of course, 0:04:46.320 --> 0:04:49.080 in the same way that you were a young boy 0:04:49.120 --> 0:04:52.800 trading baseball cards, I was a young girl trading beanie babies. 0:04:52.800 --> 0:04:55.280 So yeah, it was the same time it was traditional 0:04:55.360 --> 0:05:00.360 gender roles here at Joe. All right, so this episode, 0:05:00.480 --> 0:05:06.239 let's see it aired. It was November, so well almost 0:05:06.279 --> 0:05:08.880 two years ago. It's crazy, all right. So this is 0:05:08.920 --> 0:05:12.440 the beanie baby bubble from November two thousand and fifteen. 0:05:12.480 --> 0:05:16.840 We interviewed Zach Bissinett. He's a prolific author and he 0:05:16.880 --> 0:05:28.599 wrote a fantastic book on this exact topic. Take a listen, Joe. 0:05:28.880 --> 0:05:31.520 I've got a question for you. What were you doing 0:05:31.560 --> 0:05:36.000 to make money in the summer of nine was the 0:05:36.000 --> 0:05:38.599 best summer because I think I made about two thousand 0:05:38.680 --> 0:05:41.440 dollars from just a summer job that I had. But 0:05:41.600 --> 0:05:44.080 then I put that all into stocks because it was 0:05:44.080 --> 0:05:47.880 the Internet bubble, and I basically paid for two years 0:05:47.880 --> 0:05:52.120 of college thanks to essentially what I did that summer. 0:05:52.200 --> 0:05:55.560 So that's amazing. It was. It was a good time. Well, 0:05:55.600 --> 0:05:57.960 I was making money to a little differently. I was 0:05:58.000 --> 0:06:00.799 still in middle school. I was going to garage sales 0:06:00.839 --> 0:06:03.839 and selling old toys and one of the things I 0:06:03.880 --> 0:06:09.640 sold was a tiedyed beanie baby lizard, and I sold 0:06:09.640 --> 0:06:13.000 it for two hundred dollars to a forty year old 0:06:13.040 --> 0:06:15.680 man and at the time me as an eleven year old, 0:06:15.720 --> 0:06:18.080 I thought this was amazing money and I was rolling 0:06:18.080 --> 0:06:20.799 in it. That is amazing money objectively for any age 0:06:20.839 --> 0:06:24.400 selling a stuffed animal for two dollars, right, So why 0:06:24.440 --> 0:06:27.800 are we talking about this today? We're going to delve 0:06:27.839 --> 0:06:32.160 into what can drive seemingly rational people to spend hundreds, 0:06:32.200 --> 0:06:35.680 sometimes thousands of dollars on stuffed animals. We're going to 0:06:35.800 --> 0:06:37.920 talk about the beanie baby bubble, and we're going to 0:06:38.000 --> 0:06:39.840 talk about something more than that. We're going to talk 0:06:39.880 --> 0:06:43.239 about bubbles in general, the Internet bubble, and the psychology 0:06:43.360 --> 0:06:49.040 behind speculative mania. So here with us today is Zach Bissonett. 0:06:49.320 --> 0:06:52.960 He's the author of The Great Beanie Baby Bubble, Mass Delusion, 0:06:53.040 --> 0:06:55.479 and the Dark Side of Cute. It's a book that 0:06:55.520 --> 0:06:57.800 came out earlier this year and I just happened to 0:06:57.839 --> 0:07:10.520 finish it this morning. Zach, and thanks for joining us. 0:07:10.560 --> 0:07:13.200 So why did you write a book about beanie babies 0:07:13.240 --> 0:07:16.559 so animals? I like you. I was in middle school 0:07:16.600 --> 0:07:18.680 when the beanie baby craze hit, and I was kind 0:07:18.680 --> 0:07:20.760 of a nerd, and I was into like old books 0:07:20.760 --> 0:07:22.760 and antiques and that kind of thing. And every weekend 0:07:22.760 --> 0:07:24.560 I would go to this flea market on Cape Cod 0:07:24.640 --> 0:07:27.560 with my mother and we had never heard of beanie babies, 0:07:27.600 --> 0:07:30.040 and then all of a sudden, out of nowhere, that 0:07:30.120 --> 0:07:33.440 flea market was like beanie baby dealers, and they were 0:07:33.480 --> 0:07:36.320 wearing like Fannie packs and visors and talking just really 0:07:36.360 --> 0:07:39.080 really excitedly about how much they were going up in 0:07:39.160 --> 0:07:41.440 value and how this one they just paid five dollars 0:07:41.520 --> 0:07:44.240 for was now worth forty and they're not going to 0:07:44.360 --> 0:07:47.160 sell it this week because next week it'll be worth fifty. 0:07:47.680 --> 0:07:50.560 And that was like that for about two years, and 0:07:50.560 --> 0:07:52.520 then all of a sudden it was gone and no 0:07:52.520 --> 0:07:54.000 one ever talked about it again. I just I just 0:07:54.040 --> 0:07:57.880 want to say, uh, during those same years that my 0:07:57.960 --> 0:08:00.920 mother was dating a guy who was antique dealer, and 0:08:00.960 --> 0:08:03.240 so I also went to a lot of flea markets 0:08:03.280 --> 0:08:05.440 in New England, and I actually saw all the exact 0:08:05.520 --> 0:08:08.120 same thing, where suddenly there were these flea markets where 0:08:08.160 --> 0:08:10.520 that used to be people bringing out their old stuff 0:08:10.520 --> 0:08:12.360 from their barns and then it's just people have stuff 0:08:12.400 --> 0:08:16.400 down and used to be traditionalist antique dealers hated it. Yeah, 0:08:16.960 --> 0:08:18.760 there was there was one guy I talked to who 0:08:18.880 --> 0:08:20.600 who he was so proud of this. He was a 0:08:20.640 --> 0:08:24.600 traditionalist antique dealer who had just railed against beanie babies. 0:08:24.640 --> 0:08:26.840 He would go on CNN, I would say, I'm not 0:08:26.840 --> 0:08:29.640 in kidding. CNN would have these like debates between this 0:08:29.680 --> 0:08:32.920 guy who they called the beanie Meanie and and the 0:08:32.920 --> 0:08:35.960 beanie baby experts who were making millions of dollars selling 0:08:36.320 --> 0:08:38.480 One of them sold a million copies a month of 0:08:38.480 --> 0:08:41.080 a beanie baby magazine that she was publishing, and they 0:08:41.080 --> 0:08:44.040 would have these debates and this, and this traditionalist antique 0:08:44.080 --> 0:08:47.400 dealer was given a group of antique dealers in Indiana 0:08:47.679 --> 0:08:51.200 gave him a crucified skunk beanie baby with a certificate 0:08:51.320 --> 0:08:53.760 thanking him for being a traditionalist who stood up for 0:08:53.800 --> 0:08:57.440 traditional antiques. So this is the amazing thing. Walk us 0:08:57.480 --> 0:09:00.680 through how the beanie baby bubble came in to existence 0:09:00.720 --> 0:09:03.480 and how we at one day actually got to the 0:09:03.480 --> 0:09:06.600 point where people were debating the value of stuffed animals 0:09:06.600 --> 0:09:09.839 on CNN. So it starts out with this this very 0:09:09.880 --> 0:09:13.080 sort of eccentric toymaker named Tie Warner, who dropped out 0:09:13.120 --> 0:09:16.000 of Calamazoo College, tried to become an actor, failed at that, 0:09:16.120 --> 0:09:19.360 then became a toy salesman was wildly successful at that, 0:09:19.400 --> 0:09:21.080 but then he got fired from that and decided to 0:09:21.120 --> 0:09:24.240 start his own stuffed animal company. And he started to 0:09:24.240 --> 0:09:28.000 create these beanie babies initially because he thought at a 0:09:28.040 --> 0:09:30.760 five dollar price point, they would be irresistible and that 0:09:30.840 --> 0:09:32.800 it would help him sort of a foot in the 0:09:32.840 --> 0:09:35.560 door with large accounts, and that he would then be 0:09:35.600 --> 0:09:39.160 able to kind of up sell bigger stores on selling 0:09:39.240 --> 0:09:43.199 his larger stuffed animal line. And it didn't work at all. 0:09:43.960 --> 0:09:46.839 I remember talking to talking to to the sales reps 0:09:46.880 --> 0:09:49.440 for Tye who remembered just there was no interest in 0:09:49.440 --> 0:09:51.600 these bean babies. People worried they were cheap, They thought 0:09:51.600 --> 0:09:53.800 they looked cheap. They worried people would buy the beanie 0:09:53.800 --> 0:09:56.480 babies instead of a more expensive product. He was just 0:09:56.520 --> 0:09:58.559 not getting any interest in them. But Ty Warner, the 0:09:58.559 --> 0:10:01.320 guy created them, really really believed in this product, and 0:10:01.360 --> 0:10:05.240 he combined that belief with an extremely sort of eccentric, 0:10:05.360 --> 0:10:08.960 obsessive approach to the product and the people who who 0:10:09.000 --> 0:10:10.319 had worked with him, which at the beginning was just 0:10:10.400 --> 0:10:12.240 his girlfriend. But but she remembered when I when I 0:10:12.240 --> 0:10:15.280 talked with her, he would keep her up until like 0:10:15.400 --> 0:10:18.839 four in the morning, debating one color of the ribbon 0:10:18.920 --> 0:10:21.200 on a bear should be. And then she'd think they 0:10:21.240 --> 0:10:24.520 would finally be done debating the color, and he would say, well, 0:10:24.520 --> 0:10:26.400 what if it was tied this way instead of the 0:10:26.440 --> 0:10:28.559 other way, And then they would have to go back 0:10:28.600 --> 0:10:31.320 through the iterations of different colors again for hours. So 0:10:31.360 --> 0:10:34.200 he had this really really obsessive approach to the product. 0:10:34.600 --> 0:10:37.920 This is how the retirement came into being, right precisely, 0:10:38.400 --> 0:10:41.520 And so sometimes he would come out with a product 0:10:42.440 --> 0:10:44.400 and then a few months after he chipped a few 0:10:44.440 --> 0:10:46.320 thousand of them, he would like wake up in the 0:10:46.320 --> 0:10:49.200 middle of the night basically and decided that it should 0:10:49.200 --> 0:10:52.720 be a different color. So like one of his first 0:10:53.760 --> 0:10:55.400 beanie baby is not not one of the very first, 0:10:55.440 --> 0:10:57.040 but one of the one of the first was Peanut 0:10:57.120 --> 0:11:00.719 the Elephant, who was originally a royal blue color. And 0:11:00.760 --> 0:11:02.680 then after a few months of that, I think he 0:11:02.800 --> 0:11:05.440 chipped I think like four hundred I can't remember the 0:11:05.520 --> 0:11:08.120 fourteen hundred or so of the of this beanie baby, 0:11:08.200 --> 0:11:10.839 and he decided it shouldn't be royal blue, it should 0:11:10.880 --> 0:11:13.480 be baby blue. And so the fact that they would 0:11:13.480 --> 0:11:15.960 get retired and never made again. There were never more 0:11:16.000 --> 0:11:19.440 than that that's how they became collectible that people would 0:11:19.640 --> 0:11:23.400 see is going up in value entirely accidentally. So because 0:11:23.440 --> 0:11:26.160 this is happening before anyone cares about these, his annual 0:11:26.200 --> 0:11:28.440 sales are like four million dollars a year at this point, 0:11:28.520 --> 0:11:31.760 mostly not from beanie babies. No one cares about beanie babies. 0:11:31.800 --> 0:11:34.840 Then all of a sudden, this small group of people 0:11:34.880 --> 0:11:37.760 in suburban Chicago who lived on one cul de sac 0:11:38.720 --> 0:11:41.440 started collecting beanie babies. They saw them in stores because 0:11:41.440 --> 0:11:43.439 they were near where TY was headquartered, so that he 0:11:43.520 --> 0:11:45.439 had a big presence in stores there. And they decided 0:11:45.440 --> 0:11:48.080 they liked these beanie babies and that they wanted to 0:11:48.080 --> 0:11:51.880 assemble complete collections for their kids. And they became very obsessive. 0:11:52.080 --> 0:11:54.120 These were soccer mons. They came very very obsessive with 0:11:54.160 --> 0:11:57.200 trying to assemble complete collections. And so they would call 0:11:57.360 --> 0:11:59.800 stores and other towns to ask them what beanie babies 0:11:59.840 --> 0:12:03.760 they had. And then, and they remember this the sort 0:12:03.800 --> 0:12:06.400 of very strange converse, they would realize that there would 0:12:06.440 --> 0:12:08.959 be like these weird variations, and these were the ones 0:12:09.000 --> 0:12:11.319 that he had retired, just changed the designer because he 0:12:11.440 --> 0:12:14.360 took a few thousand and then changed entirely accidentally, and 0:12:14.400 --> 0:12:17.720 they started paying each other more for these kind of 0:12:17.720 --> 0:12:20.440 beanie babies, started this small market for them just in 0:12:20.480 --> 0:12:24.199 this town. As this started to happen, As this kind 0:12:24.200 --> 0:12:28.280 of starts in this small town, this woman, Peggy Gallagher, 0:12:28.960 --> 0:12:32.560 and her sister, Dr. Paula Brinko, who was a doctor, 0:12:33.040 --> 0:12:36.400 had this idea, you know, we're just calling stores like 0:12:36.440 --> 0:12:39.439 in the Chicago area where this all started, but if 0:12:39.440 --> 0:12:42.160 we call stores in like other states, we'll be able 0:12:42.160 --> 0:12:44.600 to find beanie babies that are really rare that no 0:12:44.640 --> 0:12:47.280 one else has. So they go to start going local 0:12:47.360 --> 0:12:49.880 chambers of commerce and getting lists of all of the 0:12:49.920 --> 0:12:53.400 gift shops. The woman who's a doctor is at the 0:12:53.440 --> 0:12:55.680 same time that she's doing this, she's she's doing this 0:12:55.760 --> 0:13:00.160 study on women who were like diabetic or something where 0:13:00.200 --> 0:13:03.360 she had to call hospitals to talk to their researchers, 0:13:03.720 --> 0:13:05.760 and after she called the researcher, she would ask to 0:13:05.800 --> 0:13:08.360 be transferred to the gift shop to ask about beanie 0:13:08.400 --> 0:13:10.360 babies so she could try to order the rare one. 0:13:10.480 --> 0:13:12.480 But this is the part of the story that I love, 0:13:12.520 --> 0:13:15.400 because we eventually go from this like small group of 0:13:15.400 --> 0:13:21.240 soccer mom collectors who professionalize themselves as beanie baby dealers 0:13:21.360 --> 0:13:24.120 and beanie baby market experts. I mean one of them 0:13:24.240 --> 0:13:28.520 had a Beanie World magazine. She was a self described 0:13:28.640 --> 0:13:31.960 Chicago suburban soccer mom. She had a magazine with the 0:13:32.000 --> 0:13:34.959 circulation of more than one million million a month and 0:13:35.280 --> 0:13:38.240 more ads per copy than Glamour. These were like thick 0:13:38.320 --> 0:13:41.679 magazines full of ads. So people start seeing the priceless 0:13:41.679 --> 0:13:44.040 for these beanies and they all figure prices are going 0:13:44.080 --> 0:13:47.120 to go up forever. These are good investments, right, well right, 0:13:47.240 --> 0:13:49.880 And the stores that are hearing all of a sudden 0:13:49.920 --> 0:13:52.280 out of nowhere start getting calls from these out of 0:13:52.360 --> 0:13:55.520 state collectors are like, oh my gosh, beanie babies are 0:13:55.520 --> 0:13:58.319 really hot. It starts out as like two people did 0:13:58.320 --> 0:14:00.920 the did the magazine that published the prices? Because I 0:14:00.920 --> 0:14:03.240 remember I used to collect baseball cards when as a kid, 0:14:03.280 --> 0:14:05.360 and there was the Beckett magazine and there was like 0:14:05.400 --> 0:14:08.680 a crucial avenue by which the baseball card bubble which 0:14:08.720 --> 0:14:11.800 also burst. You know, everyone checked the prices each month. 0:14:11.880 --> 0:14:14.120 So did the magazine for bringing beanie babies serve a 0:14:14.160 --> 0:14:17.680 similar purpose hugely, so that there's a reflexivity. I think 0:14:17.800 --> 0:14:21.480 two price guides where they impact prices as much as 0:14:21.520 --> 0:14:24.440 they report on them. And the first priceless which were 0:14:24.440 --> 0:14:27.680 pread about Lady Peggy Gallagher, which she started to circulate. 0:14:27.720 --> 0:14:29.640 She put an ad in like a magazine for other 0:14:29.680 --> 0:14:32.200 collectors saying he sent her self address stamped envelope, she 0:14:32.240 --> 0:14:35.760 would send you this checklist and she was like, well, 0:14:35.800 --> 0:14:38.160 what should I do? Her prices? She just made them up, basically, 0:14:38.200 --> 0:14:40.520 she told me this that she said this one's rare, 0:14:40.520 --> 0:14:42.760 so that one should be worth twenty. These were not 0:14:42.840 --> 0:14:45.520 really based on anything, and then she kind of sat 0:14:45.560 --> 0:14:48.920 back and watched on like the AOL message boards, is 0:14:48.960 --> 0:14:52.560 these priceless she was making up kind of became the 0:14:52.560 --> 0:14:55.320 the price and so talk about that how the Internet 0:14:55.440 --> 0:14:57.640 and those are the early days of the Internet helped 0:14:57.720 --> 0:15:00.360 stoke that bubble, so that this is a be Babies 0:15:00.400 --> 0:15:03.120 were ten percent of ebays sales in the early days 0:15:03.160 --> 0:15:06.400 of ebays. eBay disclosed in the risk factors to its 0:15:06.520 --> 0:15:11.360 sec FI lanes a dependence on the contain crazy fact yes, 0:15:11.680 --> 0:15:15.440 and so people were getting computers and beanie babies more 0:15:15.480 --> 0:15:18.280 than anything. Really gave people a reason to go on 0:15:18.400 --> 0:15:20.640 eBay and to do online trading and actually just e 0:15:20.720 --> 0:15:23.080 commerce in general, not just there was also trader and 0:15:23.120 --> 0:15:24.920 message wards. In the early days of e commerce, there 0:15:24.960 --> 0:15:26.440 were a lot of stories that it was not growing 0:15:26.440 --> 0:15:29.200 as quickly as people thought it would. People weren't comfortable 0:15:29.360 --> 0:15:32.280 with it. Stuff was too expensive to ship with beanie 0:15:32.280 --> 0:15:34.760 babies something that had a kind of weird You weren't 0:15:34.760 --> 0:15:37.960 sure exactly what they were worth. They were easy to ship, 0:15:38.040 --> 0:15:40.960 and they were really hard to find locally. It brought 0:15:41.000 --> 0:15:44.520 people onto e commerce in a way that other more 0:15:44.600 --> 0:15:47.320 mundane products like pets dot Com we're not able to. 0:15:47.960 --> 0:15:51.320 So even though it's a completely pointless bubble of ultimately 0:15:51.360 --> 0:15:54.200 worthless stuffed animals, it actually did help. It had a 0:15:54.240 --> 0:15:57.080 beneficial effect on the development of these Internet markets. Meg 0:15:57.120 --> 0:16:00.480 Whitman has said in interviews that that eBay and I 0:16:00.520 --> 0:16:02.200 think p r om yards had the same thing that 0:16:02.240 --> 0:16:04.160 you know, eBay may not have gotten off the ground 0:16:04.240 --> 0:16:07.120 without beanie babies. Joe, I know, you remember what the 0:16:07.200 --> 0:16:12.240 late nineties were like. Um, when we look back on 0:16:12.320 --> 0:16:14.960 beanie babies, it seems amazing that people spent all this 0:16:15.040 --> 0:16:18.280 money on them all this time. We had one, at 0:16:18.360 --> 0:16:21.840 least one instance of a guy committing murder because of 0:16:21.840 --> 0:16:24.680 a soured Beatie Baby deal. Do you remember how nuts 0:16:24.720 --> 0:16:28.160 it was the late ninety Are you talking about beanie babies? 0:16:28.160 --> 0:16:30.440 Are just the late nineties? And I mean I would 0:16:30.480 --> 0:16:33.960 say they're linked, right, They're absolutely the people who when 0:16:34.000 --> 0:16:36.520 they think back and they talk about the nineties bubble, 0:16:36.560 --> 0:16:39.440 it's often referred to as the tech bubble or the 0:16:39.480 --> 0:16:43.040 Internet bubble or the dot com bubble, it completely misses 0:16:43.080 --> 0:16:47.600 the point. Yes, it was so much bigger. It was 0:16:47.640 --> 0:16:49.680 such a big I like the closest thing I was like. 0:16:50.000 --> 0:16:54.200 It was a sense of optimism about everything all at 0:16:54.240 --> 0:16:57.480 the same time. And so there's so many wonderful stories 0:16:57.520 --> 0:17:01.880 about people completely losing their mind. My ingle favorite story 0:17:01.920 --> 0:17:06.000 of the late nineties bubble was when a car dealership 0:17:06.080 --> 0:17:09.960 in Nevada. It was called Uniprime Capital Acceptance. And I 0:17:10.040 --> 0:17:12.159 remember this very vividly because I was on the message 0:17:12.160 --> 0:17:14.960 boards at the time. It was a penny stock maybe 0:17:14.960 --> 0:17:19.159 you traded trading. I was. They they put out a 0:17:19.160 --> 0:17:22.000 press release that said they had a cure for AIDS. 0:17:22.320 --> 0:17:25.240 A car dealership in Nevada, Like someone we've worked with 0:17:25.400 --> 0:17:28.360 or if we licensed this thing from a scientist. They 0:17:28.440 --> 0:17:30.719 just straight up we have a cure for AIDS, and 0:17:30.840 --> 0:17:34.320 you know, even in the craziest times, like that's kind 0:17:34.359 --> 0:17:37.879 of a skeptical belief, but enough people believed that that 0:17:37.920 --> 0:17:40.800 the stocks surged, it doubled, and then it doubled again 0:17:41.160 --> 0:17:44.160 because just on the possibility that maybe a car dealership 0:17:44.160 --> 0:17:47.080 in Nevada had found a cure for AIDS. People were 0:17:47.160 --> 0:17:53.400 so optimistic of everything that it seemed not a unbelievable 0:17:53.640 --> 0:17:57.119 And people talk about the internet stocks, anything that was 0:17:58.119 --> 0:18:00.919 that breathed on the Internet, people going crazy for One 0:18:00.960 --> 0:18:03.440 of my favorite facts is the fact that k Tell, 0:18:03.640 --> 0:18:06.679 the company that makes really cheesy compilation CDs of like 0:18:06.760 --> 0:18:11.800 seventies DISCOMs, they sold their CDs online, Big whoop. The 0:18:11.880 --> 0:18:15.560 stock grew tenfold at one point, and then over the 0:18:15.600 --> 0:18:18.480 span of a few months, people were losing their minds. 0:18:18.520 --> 0:18:20.679 And then the other fact that I love is the 0:18:20.720 --> 0:18:24.000 fact that the Segue that you know, didn't really take off, 0:18:24.000 --> 0:18:27.080 but people still go tours around. People really thought entire 0:18:27.160 --> 0:18:30.080 cities were going to be redesigned because of how the 0:18:30.119 --> 0:18:32.720 Segue got people around. So basically it was a time 0:18:32.760 --> 0:18:47.600 of just incredible optimism about everything. So, Zach, I'm curious 0:18:47.640 --> 0:18:49.960 in your book you quote a lot from existing, you know, 0:18:50.000 --> 0:18:53.199 economic and financial literature. You quote people like Robert Schiller 0:18:53.320 --> 0:18:56.280 on the optimism that precedes bubbles when it comes to 0:18:56.359 --> 0:18:59.720 beanie babies. If you could kind of pinpoint one thing 0:19:00.440 --> 0:19:03.560 that flipped it into speculative mania, what would it be. 0:19:04.400 --> 0:19:08.399 It's people seeing prices rise. That that is what drives 0:19:08.560 --> 0:19:11.440 what drives speculative bubbles, is that as soon as there's 0:19:11.880 --> 0:19:15.600 you know, this insignificant phenomenon of someone who's trying to 0:19:15.640 --> 0:19:18.760 complete a set for their kid, as soon as they 0:19:18.800 --> 0:19:21.320 pay a hundred dollars for a beanie baby that someone 0:19:21.320 --> 0:19:25.399 paid five dollars for, that's what sets in motion. Or 0:19:25.560 --> 0:19:28.520 these can set in motions certainly this kind of chain, 0:19:28.640 --> 0:19:31.080 because that becomes a story. And beanie babies, and I 0:19:31.119 --> 0:19:34.080 think all bubbles are spread by by narrative, by people 0:19:34.119 --> 0:19:36.280 saying I bought this beanie baby for five dollars and 0:19:36.320 --> 0:19:38.760 sold it for a hundred. Anyone who did that told 0:19:38.760 --> 0:19:40.600 a thousand people about it because it was so weird, 0:19:40.800 --> 0:19:42.240 So hum big did it get in the end? Is 0:19:42.280 --> 0:19:45.159 there an estimate of what the total outstanding value of 0:19:45.200 --> 0:19:48.159 beanie babies was at the TIS annual sales peaked It 0:19:48.200 --> 0:19:51.440 around one point five billion dollars um and that was 0:19:51.520 --> 0:19:56.840 just wholesale other people who there must be but have 0:19:56.960 --> 0:19:58.600 a bunch and held it all the way down and 0:19:58.640 --> 0:20:00.520 now just they live in a hou filled with it. 0:20:00.600 --> 0:20:04.760 There is a retired soap opera star in Arizzona. I 0:20:04.760 --> 0:20:07.000 think I remember what's been so long as I talked 0:20:07.000 --> 0:20:09.520 to him. Um, there's a retired soap opera star who 0:20:09.560 --> 0:20:11.720 lost his kids six figure college funds on them and 0:20:11.800 --> 0:20:14.200 has like thirty thousand of them still in his home. 0:20:15.040 --> 0:20:18.800 That's we talked about how these sort of bubbles began, 0:20:18.840 --> 0:20:20.800 at least in the case of beanie babies, how did 0:20:20.840 --> 0:20:23.720 it end, because it did start to fizzle out in 0:20:25.080 --> 0:20:28.080 and within a couple of years the secondary market value 0:20:28.119 --> 0:20:31.439 of thousands millions of stuffed animals was gone. This was 0:20:31.480 --> 0:20:33.720 one of the funniest things about the reporting on this, 0:20:33.840 --> 0:20:35.919 and I think there's a lot of very similar stuff 0:20:35.920 --> 0:20:39.679 with the reporting on the housing bubble and the Internet 0:20:39.680 --> 0:20:43.360 stock bubble, is that I would kind of pose this 0:20:43.440 --> 0:20:48.880 question to the collectors anti executives about kind of how 0:20:48.920 --> 0:20:52.359 this thing had ended, and they all had these really 0:20:52.520 --> 0:20:56.159 specific explanations for it, these kind of linear cause and 0:20:56.160 --> 0:21:00.600 effect things, you know, like you know, there was one saying, oh, 0:21:00.640 --> 0:21:03.920 you know, the counterfeits really invaded the market and people 0:21:03.920 --> 0:21:05.800 were paying you know, six hundred dollars and if it 0:21:05.840 --> 0:21:08.120 hadn't for pieces they trying to be fake, and if 0:21:08.119 --> 0:21:10.240 it hadn't been for all the fraud this, you know, 0:21:10.280 --> 0:21:13.000 it wouldn't have ended that way. A lot of people felt, 0:21:13.000 --> 0:21:15.560 you know, Ty got greedy and made too many, too 0:21:15.560 --> 0:21:20.560 many styles, um and and and and overproduce them. And 0:21:20.600 --> 0:21:23.840 I'm like, okay, you know, maybe kind of, but you know, 0:21:23.880 --> 0:21:25.960 if he hadn't done that, then being would they still 0:21:25.960 --> 0:21:27.720 be ten per cent and B B based sales and 0:21:27.760 --> 0:21:30.320 we'd all be rich. I Mean, these things end because 0:21:30.320 --> 0:21:33.960