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This is an audio transcript of the FT News Briefing podcast episode: Inflation bites Biden

Marc Filippino
Good morning from the Financial Times. Today is Thursday, November 11th, and this is your FT News Briefing.

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Marc Filippino
US inflation rose at its fastest pace in more than 30 years, and an electric vehicle maker not named Tesla caught investors’ eyes yesterday. Plus, Colombia’s president wants cocaine users to know that their drug habit is actually bad for the environment.

Michael Stott
So he wants people to think twice before they snort, if you like.

Marc Filippino
Our Latin America editor Michael Stott has the details. I’m Marc Filippino and here’s the news you need to start your day.

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Marc Filippino
The latest US inflation report came out yesterday, and boy, it was a doozy. Consumer prices in October rose more than six per cent compared to the same time last year. That’s the fastest pace since 1990. It’s not good news for consumers, and it’s not good news for President Joe Biden, either. Here’s the FT’s Colby Smith.

Colby Smith
This is certainly not something the Biden administration wants to be seeing. The pace of price gains is pretty significant. In a lot of ways the Biden administration is gonna be on the defensive here to have to explain why it is, you know, Americans are seeing prices rise at this rapid clip. And what exactly, you know, they’re thinking about doing in order to to contain some of these price pressures.

Marc Filippino
So Colby, could this throw a wrench in the administration’s efforts to pass its next big spending package, the 1.75 trillion dollar social spending and climate one that Biden’s hoping to pass by the end of the month?

Colby Smith
I definitely think that it’s gonna make the debate a lot more tense. We already heard from Joe Manchin, the Democratic senator from West Virginia, who has been, you know, one of the people that has proven most resistant to additional spending. He made the point yesterday that elevated inflation is really getting worse, and it’s from the grocery store to the gas pump is what he said, that Americans are feeling what he called an inflation tax. So in a lot of ways, I think this does potentially jeopardise, you know, the scope and scale of the latest spending package and will definitely heap additional pressure on the Biden administration as it seeks to push that bill through.

Marc Filippino
So anything Biden can actually do here?

Colby Smith
There have been some fixes that the Biden administration has tried to prioritise here. So they have made a concerted effort to ease some of the bottlenecks that have built up in many of the nation’s largest ports, whether it’s in Georgia or California, let’s say. So they’re doing some very site-specific type initiatives to help ease those constraints there. But you’re definitely getting the sense that it’s quite difficult to contain some of these price pressures, especially after they’ve started to build up. One of the things the Biden administration does like to focus on, though, is the fact that the infrastructure bill that was recently passed and the spending bill that’s under consideration now, a lot of those longer term programmes will actually help to bring down inflation in the long run. Now that does nothing for the situation at the moment now, but at least the thinking is that from a capacity standpoint, things will look better if we’re ever in a situation like this again.

Marc Filippino
That’s the FT’s US economics editor, Colby Smith.

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Marc Filippino
The electric truckmaker Rivian went public yesterday, and it was a roaring success. The stock began trading at nearly $107 a share. That’s 37 per cent higher than the initial public offering price. Not bad for a company that’s never made any meaningful revenue. To find out what the investor excitement is all about, I spoke to our correspondent Dave Lee in San Francisco.

Dave Lee
Rivian has this enormous order from Amazon. Amazon wants a 100,000 of Rivian’s electric delivery vans to go into Amazon’s logistics network, and so obviously that’s going to be extremely lucrative if they can pull that off over the next few years. And then the other side of this is, you know, Rivian has already gained a reputation of making a very stylish electric pick-up truck and also an SUV. And there’s a hope among many investors that, you know, this is a kind of free Tesla moment where Rivian can track this market and become the kind of adventure brand of electric vehicles, then that could be incredibly lucrative as well. You know, if they can pull both those things off, then they’re gonna have a hugely successful company. And that’s why I think we saw such an incredible debut, which valued the company at more than Ford, which seems pretty incredible given, as you say, the lack of revenue so far. It’s had deep, deep losses as well. And it’s still got an awful lot to prove.

Marc Filippino
But can it live up to the hype? I mean, what do sceptics say about all this?

Dave Lee
Well, I think people say, you know, look at this challenge they have in front of them. They’ve got to now deliver on this enormous project. Any automaker would find it difficult to launch a new vehicle, let alone a brand new automaker trying to set up a production line to, you know, fulfil more than 50,000 pre-orders of the truck and the SUV. And as I mentioned, 100,000 vans for Amazon. Yeah, and it does this against a backdrop of supply chain constraints. It’s hard to get hold of chips to go in these cars. And this is a brand new company that hasn’t yet got a track record of being able to pull this off. And of course, famously, Tesla did find this difficult to meet the sky high expectations of when those vehicles would be delivered. I think investors are gonna be looking at any sign to kind of gauge whether production is on schedule and more importantly, the quality of these vehicles is as high as Rivian promises. One of the things it has to do if it’s gonna succeed is make a better pick-up truck than Ford, which is making its own electric version of the F-150, which is already an incredibly popular line of trucks that’s gonna be cheaper than Rivian’s. And so Rivian really has to meet that quality to justify the extra cost.

Marc Filippino
Dave Lee is our San Francisco correspondent.

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Marc Filippino
Cocaine, believe it or not, is one of the biggest causes of destruction to the Amazon rainforest. Cocaine production, to be specific. Colombia’s President Iván Duque made this point in Glasgow. He was there for the COP26 climate conference. He spoke to the FT’s Michael Stott about cocaine and the environment. Michael joins me now to talk more about this. Hey, Michael.

Michael Stott
Hello, Marc.

Marc Filippino
So is this true? Is cocaine production a main contributor to the destruction of the Amazon?

Michael Stott
It’s one of the biggest causes Marc. Yes. When I spoke to Duque, I asked him to explain how this works, and he put it in perspective for me

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In order to produce one hectare of coca, almost two hectares of tropical jungle are destroying in Colombia. But also in narco trafficking has become the main trigger of the assassination of environmental and social leaders in Colombia.

Marc Filippino
So what’s Duque’s point in bringing all this up, what does he wanna do here?

Michael Stott
I think what Duque wants to do here is try to make Westerners more aware of the fact that when they take recreational drugs like cocaine, it has a serious environmental impact. It’s not something that people can enjoy without thinking about the consequences. So he wants people to think twice before they snort, if you like.

Marc Filippino
Think twice before they snort. Wow. Michael, what has Duque been doing to stop deforestation and narco trafficking?

Michael Stott
So, Duque’s been sending people out to destroy coca plantations across Colombia manually, using, you know, machetes and so on. But of course, that’s a very slow, dangerous and complicated process. And one of the big problems here is that these are grown often in remote areas by countryside people who have very little money. And of course, coca produces a lot more money than alternative crops. So what tends to happen is when the crops are ripped up or destroyed, the peasants in the area just end up setting them back again, or even worse, cutting down forests and other areas and selling them.

Marc Filippino
How does climate change more broadly play into Colombia’s domestic politics?

Michael Stott
I mean, I would say that climate change is probably not top of most Colombians’ priorities. I think there’s much greater environmental awareness in Colombia now than there used to be. But for a lot of people in Colombia, the bread and butter concerns about just making a living every day, avoiding violence, tend to be much more important.

Marc Filippino
Michael Stott is the FT’s Latin America editor. Thank you, Michael.

Michael Stott
Thank you, Marc.

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Marc Filippino
Before we go, a last bit of earnings news. Disney reported yesterday, and it looks like the magic is fading for the company’s streaming service. Disney Plus subscription growth slowed in the latest quarter. That disappointed Wall Street and raised concerns that Disney Plus has plateaued. The company’s shares fell more than four per cent in after-hours trading.

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Marc Filippino
You can read more on all of these stories at FT.com. This has been your daily FT News Briefing. Make sure you check back tomorrow for the latest business news.

This transcript has been automatically generated. If by any chance there is an error please send the details for a correction to: typo@ft.com. We will do our best to make the amendment as soon as possible.

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