Apr 29, 2020 - Economy & Business

"Animal Crossing" interest rate cut takes the war on savers to video games

Photo: Nintendo

Nintendo's "Animal Crossing: New Horizons" slashed its in-game interest rates at its Bank of Nook, taking the war on savers virtual, the Financial Times writes.

The state of play: Players are "being driven to speculate on turnips and tarantulas, as the most popular video game of the coronavirus era mimics global central bankers by making steep cuts."

What happened: Players could deposit large sums of the game's bell currency in savings accounts and then "time travel" into the future by tweaking the console’s internal clock.

  • The bank would then pay decades of compounded interest, making them bell millionaires.

The inside scoop: "People familiar with the situation said the Bank of Nook rate cut was an attempt to curb that practice," Lewis and Wigglesworth write. "Nintendo has made no official comment on the matter."

  • Players have now been reduced to earning money through the game’s "stalk" market — "a bourse in which the only commodity is turnips, sold to investors during a single session on Sundays. The root vegetables rot and their value drops to zero after a week."

What's next: "Now that the [Bank of Nook] has cut interest rates to near zero, their next logical step is quantitative easing," Albert Edwards, a strategist at Société Générale, joked.

  • "It’s essential that players try to hook their game up to their printers as it might start churning out money."

Go deeper: Animal Crossing emerges as the game for the coronavirus era

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House Democrats pull FISA reauthorization bill

Speaker Nancy Pelosi. Photo: Saul Loeb/AFP via Getty Images

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Why it matters: The failure to reauthorize the Foreign Intelligence Surveillance Act (FISA) comes as Trump continues to attack the intelligence community, which he claims abused the law to surveil his 2016 campaign and Trump administration officials.

U.S. GDP drop revised lower to 5% in the first quarter

Data: Bureau of Economic Analysis; Chart: Axios Visuals

The U.S. economy shrunk by an annualized 5% in the first quarter — 0.2% worse than initially estimated — according to revised figures released by the government on Thursday.

Why it matters: It's the worst quarterly decline since 2008 and shows a huge hit as the economy was just beginning to shut down because of the coronavirus. Economists are bracing for the second quarter's figures to be the worst ever — with some projecting an annualized decline of around 40%.

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Illustration: Rebecca Zisser/Axios

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Why it matters: A key thing to watch now is whether and how energy giants start providing more granular information on how to transform the pledges into concrete steps.