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EP1160: Money and Whale Poop (or Vomit)

Why whale vomit is so expensive with Mak and G
Money with Mak & G

SHOW NOTES

Today, Mak and G look at the wonderful world of whale vomit, why anyone would want to buy it,

why it’s so expensive, and what’s it used for anyway…

 

In this episode, Mak and G look at the expensive and sometimes lucrative world of buying and

selling whale vomit.

 

We talk about how supply and demand affects prices and how this has made whale vomit so expensive.

 

So who is buying all this whale vomit, and why would anyone want to buy such a thing? Stay

tuned to find out…

 

“An entire industry can rise and fall quickly.” – Mak

 

Time Stamps:

00:28 – Supply and demand and how this affects pricing.

01:05 – Moby Dick, ambergris, and the cost of whale vomit.

02:19 – Whales diet, the sheer amount of food, and how it makes ambergris.

03:03 – Why do people want to buy whale vomit? Are they crazy?

03:59 – Different things a whale can be used for. Yikes.

04:59 – The damage we did to whale populations from overhunting.

 

Connect with Ben Jones:

 

TRANSCRIPT

MAK: What an exciting week.  Dad said the Stocks and Bonds course we’ve been working on for months is completed.  It’s pretty cool, and it was fun learning more about investing. 

GRANT: Plus, we got to wear a couple of crazy outfits. It was hard work, but I had a lot of fun.  

MAK: I agree.  But, you know there were a couple of things we spoke about that I wanted to check out a bit more.  I think the first was….

GRANT: Whale vomit?  Was that what you were going to say?

MAK: Yeah.  How’d you know?

GRANT: We mentioned it in the course and it just stuck with me. Even with all our talk about money, it never ceases to amaze me how economies change and new industries rise.

MAK: You’re right. If someone needs or wants something, and there is a supply, then supply and demand take over.  An increase in demand or decreased supply can drive the price up. Whale vomit is no different.  But, it’s hard to think that people want the stuff.

GRANT: Ok, maybe we should take a deeper dive in that ocean.  See what I did there?

MAK: Yep, I got it. Ocean….whales.  So you know the book, Moby Dick?  It’s about a whale right?  Chapter 91 mentions ambergris, and the entire following chapter dives deeper into it.

GRANT: Ok, why are you talking about some word I’ve never heard….. ambergris? Moby Dick is about Captain Ahab’s obsession with the white sperm whale that bit off his leg. Cool.

MAK: That’s it. It’s a classic.  Ambergris is whale vomit.  In one article I found, it’s described as a dead gray, solid, wax-like material created in the intestines and digestive system of a whale. Since it’s gray, the word “Gris” (gree) is french for gray.

GRANT: Ok, that sounds pretty nasty.  So, all the sperm whales get together and go out on a night of drinking and then throw up anything in their stomachs or in their digestive system?

MAK: Ok, that was kinda funny.  Imagining a whale drinking with its tiny fins.  There’s no way they could hold a beer and pour it into their mouths.  It just wouldn’t happen.

GRANT: Nice one Mak. So, tell me what really happens.

MAK: It’s interesting, but many scientists and marine biologists “BELIEVE” it comes out their mouths.  Some others say it comes out the other way. I guess it’s the old question….

GRANT: Is it a burb or a fart. Ha! Well, I guess no one has ever seen a whale do either. 

MAK: Well, first of all not all sperm whales will have ambergris. It’s estimated only 1% make it.

GRANT: I read that sperm whales eat a ton of squid.  They can stay underwater for 90 minutes and can eat over 300 pounds on a dive. Squid have a hard beak to chop up their dinner to be able to swallow fish and stuff. However, the beaks are sharp and can’t be digested by a whale. So, it releases a fatty substance to cover the sharp beaks to protect their intestines from injury.

MAK: Now look who’s doing their research. It takes years to form ambergris. It has to come out the front or back part of the whale. It’s like a small boulder and can float in the ocean for years.

GRANT: It smells like poop at first. It’s said to start out soft and get harder. Who wants that?

MAK: Well, someone who wants something called a “fixative”, that’s who.

GRANT: Isn’t that what makes you go to the bathroom when you can’t?

MAK: No, that’s a laxative. Big difference. A fixative is a compound that makes “smells” last longer.

GRANT: So you’re telling me it holds on to its natural smell longer?

MAK: Actually, the chemicals in it, can make a GOOD smell last longer. After some time, it can smell like tobacco, wood, oriental spices. It’s said to be “complex”.  Who would want that?

GRANT: I’m going out on a limb here, but a perfume company? Don’t they want complex smells to last a long time?

MAK: That’s absolutely right. Believe it or not, but it’s so rare and such a good fixative, it can go for over $7,000/lb. The pieces can be very big, and be difficult to be expelled by the whale that Scientists think it can actually kill the whale if it gets stuck.

GRANT: That would lead to a massive stomach ache if it doesn’t come out. And OUCH if it did.

MAK:  Agree. Whales have been hunted for 100’s of years because it could be used for many things.  After the blubber was processed, it was used for lubricants on machines and oil.

GRANT: Since whale oil could burn with less smoke and odor than before, it was a big deal if burning oil inside your home.  At its peak in the 1850’s sperm oil sold for $1.77/gallon and they produced almost 15 million gallons of whale oil and train oil.

MAK: It’s crazy that one whale could make 4 tons of oil. After oil was discovered on land in 1859, things changed and a whole new industry started.  But, the damage was done.

GRANT: Kerosene could be produced from the black gold that came out of the ground.  It smelled better than whale oil and didn’t go bad like whale oil did.

MAK: It just goes to show that an entire industry can rise and fall quickly, and the economy is affected. People demanded better smelling, cheaper oil for their lamps, so the new oil took off.

GRANT: Makes sense. Mak, you mentioned that the damage was done, what did you mean?

MAK: Many whales were killed. Some estimates say we have 20% of the numbers we had.  Now, you can’t kill, use a whale that died of natural causes or sell parts in the US. It’s illegal.

GRANT: It sounds like no more ambergris.

MAK: Well, not all countries have the same rules. And, there was a news article of a whale in Yemen that had died only a couple of months ago, floating in the Gulf of Aden.

GRANT: So what happened?

MAK: Well, 35 fishermen took the whale and cut it open, and found 280 POUNDS of ambergris still inside. Since some countries consider it whale waste, you’re allowed to buy and sell it.

GRANT: Wait a second.  If you have 280 lbs at a top price of $7,000/lb that’s almost $2 million.

MAK: That didn’t get that high of a price, but they did get $1.5 million.  Since these were very poor people, it changed their lives. But, they first gave money to those poorer than themselves.

GRANT: That’s amazing, and I love ending on a high note. So, let’s stop there. Thanks for being here.

MAK: And, we’ll see you next time for more…

GRANT/MAK: Money with Mak & G.  Bye!!

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