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Speaker 1: Bloomberg Audio Studios, podcasts, radio news. Katie, you yes drank

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Speaker 1: a foam head of Jamie Diamond last week.

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Speaker 2: Can I tell you something? Yes, I'm actually going back

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Speaker 2: to JP Morgan's Pub tonight.

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Speaker 1: Regular someone still with your name on.

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Speaker 2: It was supposed to meet a specific person in a

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Speaker 2: group and they weren't able to come. So now we're

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Speaker 2: going back tonight.

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Speaker 1: So tell me more about the JP Morgan pub.

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Speaker 2: It was awesome, it was very normal. It's called Moran,

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Speaker 2: it's called Morgan's. I had an elevated shepherd's pie like

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Speaker 2: they have pub food like it's a menu of pub food,

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Speaker 2: but elevated.

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Speaker 1: They have a.

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Speaker 2: Burger, for example, the person I was dining with had

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Speaker 2: a burger that looks delicious. Maybe I'll get it tonight.

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Speaker 1: Wait, now I want to come.

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Speaker 2: Invite Matt and I to the pub someone from JP Morgan.

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Speaker 1: We were okay. So first of all, I was I

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Speaker 1: think I was joking about the foam head of Jamie Diamond,

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Speaker 1: Like I thought you were anticipating that the latte art

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Speaker 1: and the Guinness would include Jamie Diamond's face, but didn't.

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Speaker 2: So there's definitely latte art. I believe the two options

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Speaker 2: that were offered to the person I was with who

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Speaker 2: did drink a Guinness were a latte art of the

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Speaker 2: building itself or the M for Morgans, and the drink

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Speaker 2: came out with the M for Morgans. But maybe tonight

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Speaker 2: I'll see latte art of the building itself because I

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Speaker 2: think that sounds really cool. It's a beautiful building. I've

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Speaker 2: said that so many times.

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Speaker 1: Okay, but so you didn't get a Guinness, which, first

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Speaker 1: of all, and second when you are the Aguiness tonight.

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Speaker 2: Yeah, Jamie Diamond face, I'm going to ask for it.

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Speaker 1: Wait you say it was very normal for a pub

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Speaker 1: or for like a lobby.

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Speaker 2: Well, it was beautiful because it's on the thirteenth floor,

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Speaker 2: so the viewers are awesome. But like it's it felt

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Speaker 2: like a standalone thing. It didn't feel like I'm at

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Speaker 2: a bar in an office.

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Speaker 1: Building stand alone like Irish pub or stand alone like.

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Speaker 2: Like elevated Irish pub. Yeah, but they had uh like

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Speaker 2: they had televisions with sports on. That's sort of thing.

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Speaker 2: I wonder what sports will be playing tonight. I don't

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Speaker 2: I love watching it distantly, I really.

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Speaker 1: Want to go to Morgan as my regular sports bar.

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Speaker 2: Hopefully someone will invite us, and.

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Speaker 1: We don't want to. I just want to, like you.

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Speaker 1: I know that's the problem. You can't just like drop

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Speaker 1: in and have a beer. No floor for j Vi

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Speaker 1: Berg and officis.

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Speaker 2: But I go on Thursdays now, So if someone wants

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Speaker 2: to invite us for next Thursday, I'm free, so is Mad.

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Speaker 1: Let's do it. Hello and welcome to the Money Stuff Podcast,

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Speaker 1: your weekly podcast where we talk about stuff are that

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Speaker 1: is to money. I'm Matt Levine and I write the

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Speaker 1: Money Stuff column for Bloomberg Opinion.

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Speaker 2: And I'm Katie Greifeld, a reporter for Bloomberg News and

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Speaker 2: an anchor for Bloomberg Television.

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Speaker 1: Our script says, what are we talking about today.

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Speaker 2: Kady oh Man? Do you want to start with stars

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Speaker 2: or gold stars? It's more than stars. At this point

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Speaker 2: we were to talk about space SpaceX.

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Speaker 1: Is doing an IPI possibly on June ninth.

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Speaker 2: Yeah.

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Speaker 1: To prepare for that IPA Waters reported just before we

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Speaker 1: recorded this podcast that they are going to merge with

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Speaker 1: x AIH.

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Speaker 2: Which is just one man talking to himself. I think no,

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Speaker 2: it's like it's more than that.

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Speaker 1: It's not not one man talking to himself, but like

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Speaker 1: probably x AI and SpaceX each have some very tired

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Speaker 1: lawyers who elon musk Is like, let's merge them. They

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Speaker 1: have some discussions.

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Speaker 2: About smush them together.

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Speaker 1: Questions like at what evaluation? And a gazillion a gazillion Right, So,

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Speaker 1: I have no idea. I haven't even read the story,

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Speaker 1: but there is at least some sense that there are

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Speaker 1: merger talks between space X and x I I, which

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Speaker 1: I remember not that long ago, when people like Tesla

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Speaker 1: should merge with x Ai.

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Speaker 2: Well, Tesla, we were.

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Speaker 1: Just did an investment, but they actually both SpaceX and

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Speaker 1: Tesla both committed to invest in right.

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Speaker 2: Yeah, I believe. So I know for sure that Tesla,

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Speaker 2: on their earnings day, which was this Wednesday, said that

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Speaker 2: it would invest two billion dollars in Xai.

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Speaker 1: After a shareholder proposal. They got sort of tappetish support.

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Speaker 1: They were like, yeah, I do saw the same stuff.

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Speaker 1: It's all I at.

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Speaker 2: It's the convergence of the musk verse, which is fun.

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Speaker 2: I also love this because I forgot until today that

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Speaker 2: XAI merged with x So SpaceX in a sense is

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Speaker 2: merging success.

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Speaker 1: Twitter, right, yeah, right, Elan Wiss might be re ip

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Speaker 1: oing Twitter to be fair and this is not the

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Speaker 1: right way to do the math. No, but if he

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Speaker 1: bought Twitter for let's say, forty four billion dollars, and

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Speaker 1: we'll soon re IPO at a one point five trillion

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Speaker 1: dollar valuation, raising fifty billion dollars in the largest ipo ever,

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Speaker 1: it'll be like, Okay, you and buddy you in.

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Speaker 2: You're right all along.

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Speaker 1: Man. He took Twitter private at forty four billion dollars

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Speaker 1: and I was like, that's too high. He's taking in

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Speaker 1: public again at one point five trillion dollars. That's not

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Speaker 1: really what's happening here.

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Speaker 2: But it is really beautiful. I'm trying to find the

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Speaker 2: rationale as lined out. Yeah, the Reuter's story, it has

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Speaker 2: to do with building data centers, data.

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Speaker 1: Centers in space. That's definitely the right. The synergies are clear.

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Speaker 2: Yeah, it's obvious data centers.

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Speaker 1: In space and SpaceX does have space name. Yeah.

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Speaker 2: Well, there was an interesting note. According to Reuter's, some

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Speaker 2: XAI executives could be given the option to receive cash

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Speaker 2: instead of SpaceX stock as part of the deal, which

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Speaker 2: I thought was interesting. If you work at XAI, would

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Speaker 2: you rather take cash or take SpaceX shares if you

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Speaker 2: had the option.

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Speaker 1: To Yeah, I mean this is the thing that people

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Speaker 1: talk about with with the Musk empire. Right, there's been

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Speaker 1: like expanding and contracting, right, Like Tesla did acquire the

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Speaker 1: solar company a while back, and then x and XAI emerged,

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Speaker 1: So like sometimes the must companies combined and sometimes they

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Speaker 1: are new most companies, and in general, it's like a

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Speaker 1: good idea to motivate people to work on stuff by

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Speaker 1: giving them stock and the stuff they work on. Right,

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Speaker 1: It's one reason to have different companies, right, the AI

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Speaker 1: people get paid in AI stock, and the car people

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Speaker 1: get paid in Tesla stock, and the rocket people gets

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Speaker 1: paid in SpaceX stock. And if you mush them all together,

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Speaker 1: then like people have you know, less direct impact on

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Speaker 1: their own compensation, and so there's may be less motivation.

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Speaker 1: So maybe if you're at XAI AI researcher, you're like,

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Speaker 1: I don't know anything. I have rockets, I don't get

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Speaker 1: paid for like rocket launches. I want to Well I'm

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Speaker 1: sure you might think that, but you might just think

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Speaker 1: like I want to get paid cash for my AI

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Speaker 1: contributions and not have to worry about rockets. Yeah, so

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Speaker 1: they have. He reported that they're aiming to go in

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Speaker 1: June because on June eighth and ninth, Venus and Jupiter

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Speaker 1: will have some sort of conjunction and that would be cool.

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Speaker 2: That would be cool.

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Speaker 1: Now, June ninth also is is six', nine Which i'm

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Speaker 1: SORRY i did got a bigger eye roll, there.

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Speaker 2: But, WELL i can't BELIEVE i didn't put that together

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Speaker 2: UNTIL i.

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Speaker 1: Know, right it's like one of these things where it's

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Speaker 1: like planets are lining, up but, like, really we're going

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Speaker 1: on six. Nine it's.

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Speaker 2: Horrible it's.

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Speaker 1: Horrible there's no evidence that they're going. On SO i,

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Speaker 1: mean it's just like that's you, Know elon must probably

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Speaker 1: chuckled about. It. ANYWAY i will SAY i wrote about

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Speaker 1: this AND i was, like you, know it's interesting that

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Speaker 1: the position of the stars is Motivating Elon musk's, decisions

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Speaker 1: although AS i talk about, It i'm increasingly convinced that

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Speaker 1: the numbers six nine is motivating his. DECISIONS i use

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Speaker 1: the word, astrology, yeah and someone emailed me to be,

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Speaker 1: Like Elon musk is interested in, astronomy but that's not,

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Speaker 1: astrology and it's interesting because it's not like signs of the.

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Speaker 1: Zodiac astronomy is the science of like looking at where

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Speaker 1: the stars are. An astrology is the superstitious belief that

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Speaker 1: like human activities are influenced by and like you, should you,

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Speaker 1: know make decisions based on the positions of the stars

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Speaker 1: and the. Planets AND i feel like it's fair for

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Speaker 1: me to say astrology.

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Speaker 2: HERE i, mean on this, Podcast i'm declaring you.

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Speaker 1: CORRECT i think it's not quite. Superstition it's more like

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Speaker 1: jokey fake.

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Speaker 2: SUPERSTITION i, MEAN i would posit that the position of

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Speaker 2: the stars influences all of our behaviors and we just.

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Speaker 1: Don't know would, yeah, right of, course, Right BUT i

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Speaker 1: don't Think Elon musk would if you put him to.

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Speaker 1: IT i think that he probably doesn't really think, that

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Speaker 1: but he will act like he thinks it for the.

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Speaker 1: Joke you, know we've.

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Speaker 2: Talked about this, before HOW i would love to sit

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Speaker 2: someone down and just have an honest conversation.

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Speaker 1: With them about.

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Speaker 2: Astrology, WELL i would like to, know, like are you

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Speaker 2: truly interested in? That in? What in?

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Speaker 1: Like REALLY i feel like he's.

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Speaker 2: Interested is it about six' nine or is it about

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Speaker 2: the alignment of. THE planets i want.

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Speaker 1: To BELIEVE that i don't think he CARES like i

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Speaker 1: don't think he thinks that like the lignment of the

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Speaker 1: planets is a special and we'll therefore get him A better.

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Speaker 1: IPO price i think, he's like. Planet's, cool yeah well he's.

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Speaker 2: Right, there yeah they.

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Speaker 1: Are right it is kind of a motivating factor for

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Speaker 1: building a space.

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Speaker 2: ROCKET company i also said to you earlier today that

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Speaker 2: we're entering the year of.

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Speaker 1: The horse, oh yes. That's right, You sorry now we'll

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Speaker 1: talk about Your, astrological yeah.

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Speaker 2: Thank you i'm. Super psyched is it strictly because you?

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Speaker 1: Like horses In the year of? The horse seems like

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Speaker 1: something you'd like? Or like is there more?

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Speaker 2: ASTROLOGICAL information, i MEAN so i very glancingly know about

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Speaker 2: the year of. THE horse i don't want about the

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Speaker 2: other years more than the. Other, years, yeah well.

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Speaker 1: You're not just like a general connoisseur of, like, no.

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Speaker 2: NO no i mean it's served to me all over

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Speaker 2: social media that this is going to be the year

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Speaker 2: of the horse for. Obvious reasons apparently the year of

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Speaker 2: the horse is going to be a lot better than

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Speaker 2: the year that we, just exited, WHICH personally i add

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Speaker 2: a terrible year of the whatever things are looking up,

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Speaker 2: for me Just w but you're the horse in general

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Speaker 2: is all about putting that behind you. And excelling at

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Speaker 2: least that is my understanding looking at. Social media not,

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Speaker 2: An expert i'm sure someone out there listening right now

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Speaker 2: is steeped.

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Speaker 1: IN this i assume it's good to spend more time,

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Speaker 1: with horses but maybe that's.

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Speaker 2: NOT true, i, MEAN listen I got i got some

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Speaker 2: horses you can hang out with specifically mad, no one not,

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Speaker 2: the listeners not the. General audience let's talk. ABOUT gold

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Speaker 2: i love. This story tether apparently is buying just tons

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Speaker 2: and tons of. Gold LITERAL and i love This because

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Speaker 2: teather isn't trying to become. A bank it's trying to

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Speaker 2: become a. Central man it's. So Cool the heather.

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Speaker 1: Is crazy because like the very basic business of, like takeing,

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Speaker 1: you know one hundred, billion dollars almost two hundred billion

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Speaker 1: dollars of, investor cash parking it in, t bells clipping

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00:11:06,880 --> 00:11:09,640
Speaker 1: the coupons of the, t bells doing, nothing else and

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Speaker 1: like being insanely rich with like the simplest business model

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Speaker 1: in the world is. So, Good yes and, they're, like

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Speaker 1: no let's make it. More complicated so like they have reserves. Backing,

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Speaker 1: Tethers RIGHT and i was looking at the, reserves today

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Speaker 1: they have one hundred and seventy four billion dollars OF

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00:11:26,200 --> 00:11:29,640
Speaker 1: like us dollars to twether. Liabilities outstanding they have like

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Speaker 1: a seven billion dollar, equity cushion so like the reserves

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00:11:33,880 --> 00:11:37,600
Speaker 1: are like seven billion dollars more than, their liabilities and

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00:11:38,120 --> 00:11:41,880
Speaker 1: they have seven percent of their reserves so more than

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00:11:41,920 --> 00:11:46,040
Speaker 1: their equity cushion in. Precious metals so like instead of

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Speaker 1: just buying treasury bills just keeping your dollars backed, by dollars,

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Speaker 1: they're like let's have some more dollars backed. By, gold

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Speaker 1: yeah which, is like in some ways a crazy thing,

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Speaker 1: to do because like you don't need to take any.

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00:11:55,280 --> 00:11:57,800
Speaker 1: Basis risk you can just put it in dollars and

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Speaker 1: live a. Nice life but in, any ways, it's, like yeah

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Speaker 1: it's like a traditional central banks back some of their liabilities. With,

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Speaker 1: gold yeah it's, like FINE so i sort of understand

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Speaker 1: where they. Do it those a by, the way some

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00:12:07,640 --> 00:12:09,640
Speaker 1: of their liabilities are bad, by bitcoin which is. Also

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Speaker 1: insane but it's just like if they transcended regular finance

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Speaker 1: and become a central bank and, they're, like yeah we

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Speaker 1: have some big stash of gold in a Vault, In

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Speaker 1: switzerland i'm so.

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Speaker 2: INTO it a nuclear Bunker in switzerland that was in,

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Speaker 2: the lead SO obviously i was already going to love.

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Speaker 2: This story they are the largest known holder of gold

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Speaker 2: outside of Banks And. Nation states bloomberg INTERVIEWED, the ceo

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Speaker 2: and he said he Predicted that washington's geopolitical rivals would

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Speaker 2: launch a gold pack alternative to, the DOLLAR which i.

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Speaker 1: Also love one thing that they're doing here is they're

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Speaker 1: backing liabilities. With assets, i'm, like yeah. The assets, you

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Speaker 1: know you don't need to diverse by, the assets but

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Speaker 1: like perhaps you want to for. Some reason but the

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Speaker 1: other thing they're doing is they're like skinting where the puck,

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Speaker 1: is going and, they're like eventually gold will be the future,

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Speaker 1: of currency so we'd better, hold, gold, which, like, OKAY whatever, i,

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Speaker 1: mean look.

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Speaker 2: Time is a. Flat story to be fair.

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Speaker 1: To, them yeah they have been better at predicting the

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Speaker 1: future of currency then, FOR example i. Have been so,

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Speaker 1: you know if they think it's going to, be gold

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Speaker 1: you should listen to.

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Speaker 2: That, much yeah maybe, we should, you know not be smiling.

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Speaker 2: So much just to put into context how much gold.

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Speaker 2: They're buying they bought over seventy tons of gold over

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Speaker 2: the course of last year for. Their reserves, all told

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Speaker 2: they own around one hundred and forty tons, of gold

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Speaker 2: which is. A lot and it's interesting that they stepped

275
00:13:26,360 --> 00:13:30,640
Speaker 2: up their buying and gold has been. Going insane central

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Speaker 2: BANKS and etf investors are collectively buying more than fifteen

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Speaker 2: hundred tons of. The metal but still you.

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Speaker 1: Introduced a, central, bank.

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Speaker 2: Yes exactly buying gold sort of price. And sensitive so

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Speaker 2: it's definitely a catalyst behind. The, rally yeah, it's great it's.

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Speaker 2: SO great i just want to. Say THAT the ceo,

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Speaker 2: also said so the former nuclear Bunker, in switzerland it's

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00:13:55,240 --> 00:13:59,480
Speaker 2: guarded by multiple layers of thick. Steel doors he described

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00:13:59,480 --> 00:14:02,199
Speaker 2: it As A james bond kind. Of place. IT'S crazy

285
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Speaker 2: i want to.

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00:14:03,200 --> 00:14:05,440
Speaker 1: Go, THERE well i want there to Be a tether

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00:14:05,600 --> 00:14:09,120
Speaker 1: gold heist story, because, like okay they're a, central bank

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00:14:09,120 --> 00:14:12,400
Speaker 1: they're the largest whatever holder, of gold but like, you

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00:14:12,440 --> 00:14:14,520
Speaker 1: know they have ties to the, mighty ducks like they're

290
00:14:14,559 --> 00:14:20,120
Speaker 1: like a somewhat. Comical organization and For like tether to

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00:14:20,240 --> 00:14:23,280
Speaker 1: have a nuclear bunker filled with the one hundred and forty tons,

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00:14:23,320 --> 00:14:26,720
Speaker 1: of gold like that's. Really, Good yeah like the person

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00:14:26,760 --> 00:14:28,120
Speaker 1: who robs that will not be like.

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Speaker 2: It's like at the base of. Some, MOUNTAIN yeah i want.

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00:14:30,320 --> 00:14:33,160
Speaker 1: To go give me Like A rob. Schneider movie it's

296
00:14:33,200 --> 00:14:33,520
Speaker 1: going to be.

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00:14:33,560 --> 00:14:36,720
Speaker 2: Really good someone's starting. The screenplay it's cool that They're.

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Speaker 2: IN switzerland i, cover ETFs as, you know and a

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00:14:40,760 --> 00:14:44,280
Speaker 2: lot of the, gold ETFs Including STATE, streets glg which

300
00:14:44,320 --> 00:14:48,600
Speaker 2: is the. Biggest one they have their Vaults. Underneath, london

301
00:14:49,040 --> 00:14:52,160
Speaker 2: yeah and that's also a place you. Can't, go NO

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00:14:52,440 --> 00:14:56,160
Speaker 2: but i love thinking about where the gold is physically

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00:14:56,200 --> 00:14:59,640
Speaker 2: stored just. DELIGHTS me i, don't know it's just so

304
00:15:00,040 --> 00:15:01,680
Speaker 2: this is. MOUNTAIN is i don't Know if i've told

305
00:15:01,680 --> 00:15:03,480
Speaker 2: this story on the, podcast BEFORE but i was talking

306
00:15:03,520 --> 00:15:06,560
Speaker 2: to Someone At state street about the vault at the

307
00:15:06,600 --> 00:15:09,640
Speaker 2: time WHEN like gld was seeing, crazy INFLOWS and i,

308
00:15:09,680 --> 00:15:12,480
Speaker 2: was like is the vault? Getting crowded and, they, said

309
00:15:12,520 --> 00:15:15,600
Speaker 2: no gold is. Really small it just weighs. A LOT

310
00:15:15,760 --> 00:15:18,000
Speaker 2: and i, was, like, oh yeah, for sure and then

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00:15:18,040 --> 00:15:18,920
Speaker 2: had to quickly move.

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00:15:18,960 --> 00:15:22,440
Speaker 1: ON right i like the idea, of like welcome to

313
00:15:22,480 --> 00:15:25,680
Speaker 1: our enormous pile, of gold and you open the door

314
00:15:25,720 --> 00:15:28,160
Speaker 1: to like a cavernice echoing vault and like in the

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00:15:28,200 --> 00:15:30,680
Speaker 1: corner there's just like a little pile OF flick i.

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00:15:30,720 --> 00:15:33,920
Speaker 2: Was, expecting YEAH like i, was Expecting Like harry Potter

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00:15:34,000 --> 00:15:36,800
Speaker 2: at gringotts where they opened the door and it's just

318
00:15:36,880 --> 00:15:38,240
Speaker 2: like piles and piles.

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00:15:38,280 --> 00:15:39,960
Speaker 1: Of gold and maybe it Is, for tether.

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00:15:40,240 --> 00:15:42,000
Speaker 2: YEAH maybe i mean it sounds like they're on a

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00:15:42,000 --> 00:15:43,040
Speaker 2: mission to, get, There.

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00:15:43,160 --> 00:15:44,840
Speaker 1: RIGHT like i feel like they would give you Like

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00:15:44,880 --> 00:15:49,320
Speaker 1: a goblin powered. Car, ride yeah see. Their, gold yeah

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00:15:49,880 --> 00:15:52,960
Speaker 1: that's part of their transparency, slash comedy like they would.

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00:15:53,000 --> 00:15:54,640
Speaker 2: DO that i think THAT'S why i find it so

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00:15:54,720 --> 00:15:56,800
Speaker 2: charming because that's Exactly what, i'm, picturing.

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00:15:56,560 --> 00:15:59,120
Speaker 1: Right Just from harry that is not going to give

328
00:15:59,120 --> 00:16:02,480
Speaker 1: you no. Like fun it would be. Very. Sober Right

329
00:16:02,800 --> 00:16:04,440
Speaker 1: when tether takes you on a tour of their, gold

330
00:16:04,480 --> 00:16:06,360
Speaker 1: vault they'll be like some loops on, the, track right

331
00:16:06,400 --> 00:16:07,720
Speaker 1: it's going to be like it's going to be a.

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00:16:07,720 --> 00:16:11,880
Speaker 2: Little exciting maybe a smoke machine. Yeah yeah, also Interesting

333
00:16:12,040 --> 00:16:15,200
Speaker 2: so tether doesn't just want to, buy gold it also

334
00:16:15,280 --> 00:16:18,040
Speaker 2: wants to. Trade it and this. IS interesting i didn't,

335
00:16:18,080 --> 00:16:22,200
Speaker 2: realize this BUT so hsbc it lost to senior gold

336
00:16:22,200 --> 00:16:26,120
Speaker 2: traders Toe. To tether they, hired, them right so they

337
00:16:26,160 --> 00:16:27,600
Speaker 2: have big, ambitions.

338
00:16:27,080 --> 00:16:30,600
Speaker 1: HERE right i think constantly LIKE if i, RAN tether

339
00:16:30,760 --> 00:16:33,160
Speaker 1: i would have so few ambitions because like it just

340
00:16:33,200 --> 00:16:36,560
Speaker 1: gives you billions of dollars a quarter. For, Free yeah,

341
00:16:36,680 --> 00:16:39,120
Speaker 1: like go here's your billions. Of dollars and then you're

342
00:16:39,160 --> 00:16:43,400
Speaker 1: like this is only. Tangentially irrelevant but You Know, brad

343
00:16:43,480 --> 00:16:47,440
Speaker 1: JACOBS the ceo of various logistics COMPANIES. LIKE qxo i

344
00:16:47,480 --> 00:16:49,200
Speaker 1: think they HAVE the x. Of. THEM ye i think

345
00:16:49,200 --> 00:16:51,080
Speaker 1: we've talked about it on. This podcast probably one of

346
00:16:51,200 --> 00:16:52,880
Speaker 1: his amazing things is that he read a Book called

347
00:16:53,360 --> 00:16:55,120
Speaker 1: How to Make A Few, billion dollars which is a.

348
00:16:55,160 --> 00:16:56,440
Speaker 2: Perfect book he's out with.

349
00:16:56,440 --> 00:16:58,840
Speaker 1: A sequel he's out with. A sequel the SEQUEL that i,

350
00:16:58,880 --> 00:17:01,160
Speaker 1: JUST found i, might ask is led How to make

351
00:17:01,160 --> 00:17:04,840
Speaker 1: A few more, billion DOLLARS which i love the conceit

352
00:17:05,119 --> 00:17:08,399
Speaker 1: that you bought his, Previous book you read his, previous

353
00:17:08,400 --> 00:17:10,600
Speaker 1: book you took the advice, to heart you put it,

354
00:17:10,640 --> 00:17:13,399
Speaker 1: into practice, it worked you made a few. Billion dollars

355
00:17:13,640 --> 00:17:15,480
Speaker 1: and here you are with a few billion DOLLARS thinking

356
00:17:16,000 --> 00:17:17,879
Speaker 1: i would make a few more, billion DOLLARS but i

357
00:17:17,920 --> 00:17:20,200
Speaker 1: don't know how to. Make, That yeah And Then brad

358
00:17:20,240 --> 00:17:21,879
Speaker 1: jacobs comes along with another book and, it's like how

359
00:17:21,880 --> 00:17:23,399
Speaker 1: to make a few more, billion dollars and, you're, like,

360
00:17:23,480 --> 00:17:25,760
Speaker 1: oh okay That's how i'll make a Few more like

361
00:17:26,400 --> 00:17:28,159
Speaker 1: the people who made a few billion dollars are not

362
00:17:28,200 --> 00:17:29,920
Speaker 1: really reading this book to make a few more. Billion

363
00:17:29,960 --> 00:17:33,480
Speaker 1: dollars but it's such a, lovely yeah. Conceit anyway tether

364
00:17:33,600 --> 00:17:35,119
Speaker 1: are the people who, are like HOW do i make

365
00:17:35,160 --> 00:17:35,919
Speaker 1: a few more? Billion?

366
00:17:35,960 --> 00:17:39,640
Speaker 2: Dollars, yeah yeah they want to trade it and compete

367
00:17:39,680 --> 00:17:42,240
Speaker 2: with the. Actual banks and just a little bit more

368
00:17:42,240 --> 00:17:44,200
Speaker 2: on the physicality. OF gold i love it. So much

369
00:17:44,520 --> 00:17:46,919
Speaker 2: the company is exploring how to make its process of

370
00:17:46,960 --> 00:17:50,200
Speaker 2: buying gold, more, efficient because according TO, the ceo buying

371
00:17:50,320 --> 00:17:53,560
Speaker 2: one to two tons per week is a very. Sizable,

372
00:17:53,600 --> 00:17:56,320
Speaker 2: amount yeah that, seems. RIGHT right i never think, about it,

373
00:17:56,400 --> 00:17:56,640
Speaker 2: you KNOW.

374
00:17:56,680 --> 00:18:01,600
Speaker 1: Because i never think about how much it would cost

375
00:18:02,320 --> 00:18:05,240
Speaker 1: in transaction costs for me to buy a ton of gold.

376
00:18:05,000 --> 00:18:10,200
Speaker 2: Every week and then transport it to. Your. Bunkers yeah

377
00:18:10,320 --> 00:18:28,720
Speaker 2: what a. Charming story.

378
00:18:26,359 --> 00:18:29,800
Speaker 1: So when companies run into, debt trouble they do what

379
00:18:29,840 --> 00:18:33,120
Speaker 1: people call liability management exercises, or lms where they try

380
00:18:33,160 --> 00:18:35,760
Speaker 1: to reduce. Their debt often the way that works is

381
00:18:35,800 --> 00:18:38,080
Speaker 1: like they go out to some creditors and try to

382
00:18:38,119 --> 00:18:40,320
Speaker 1: pick them OFF that i try to play one set

383
00:18:40,320 --> 00:18:42,760
Speaker 1: of creditors. Against another there are deals to be done

384
00:18:42,760 --> 00:18:45,879
Speaker 1: where one set of creditors gets good new collateral at

385
00:18:45,880 --> 00:18:48,760
Speaker 1: the expense of other sets. Of creditors people sometimes use

386
00:18:48,800 --> 00:18:52,639
Speaker 1: the term lender on lender of violence or credit creditor

387
00:18:52,680 --> 00:18:58,280
Speaker 1: and creditor. Of violence and so what happened at this

388
00:18:58,359 --> 00:19:03,600
Speaker 1: Company called OPTIMUM or ltcusi is that all of the

389
00:19:03,640 --> 00:19:06,919
Speaker 1: creditors signed an agreement saying they wouldn't, do that they

390
00:19:06,920 --> 00:19:09,920
Speaker 1: would all. Work together they would only do a deal

391
00:19:09,920 --> 00:19:11,720
Speaker 1: with a company if two thirds of them voted to

392
00:19:11,760 --> 00:19:15,960
Speaker 1: agree to. The DEAL and ltus or out them and didn't,

393
00:19:16,040 --> 00:19:19,280
Speaker 1: like this and they sued the creditors saying you're not

394
00:19:19,359 --> 00:19:22,040
Speaker 1: allowed to. Do that that's an anti. Trust violation you're

395
00:19:22,080 --> 00:19:25,600
Speaker 1: all agreeing to basically. Fix prices you're all agreeing that

396
00:19:25,640 --> 00:19:27,960
Speaker 1: you won't trade your debt with us at anything less

397
00:19:28,000 --> 00:19:30,919
Speaker 1: than like the price you all, agree, on WHICH like i,

398
00:19:30,920 --> 00:19:33,320
Speaker 1: Don't know i've never been an anti. TRUS expert i

399
00:19:33,320 --> 00:19:35,960
Speaker 1: find that like sort of an intuitive but also like

400
00:19:36,680 --> 00:19:40,680
Speaker 1: very sympathetic with the creditors because when companies run, into

401
00:19:40,680 --> 00:19:43,840
Speaker 1: trouble like the creditors should kind of get together to divvy.

402
00:19:43,920 --> 00:19:45,879
Speaker 1: Things up, BUT anyway i don't know what's gonna happen in.

403
00:19:45,920 --> 00:19:49,400
Speaker 1: The case but it was Brought by optimum's, law firm

404
00:19:49,960 --> 00:19:53,720
Speaker 1: a litigation Boutique Called kelli CanCon but like their main

405
00:19:54,160 --> 00:19:57,199
Speaker 1: Lawyer was kirkland and ellis the giant law firm that

406
00:19:57,240 --> 00:19:59,080
Speaker 1: does a lot of restructuring work and a lot of

407
00:19:59,119 --> 00:20:03,120
Speaker 1: private equity em and. A, work yeah and what happened

408
00:20:03,400 --> 00:20:08,040
Speaker 1: next Is that kirkland has resigned From representing optimum in.

409
00:20:08,080 --> 00:20:12,520
Speaker 1: Its network and the impression that everyone has and there

410
00:20:12,520 --> 00:20:14,840
Speaker 1: have Been Some financial times articles, about this the impression

411
00:20:14,920 --> 00:20:18,159
Speaker 1: Is that kirkland may have been sort of behind. This

412
00:20:18,240 --> 00:20:21,520
Speaker 1: lawsuit kirkland had been suggesting the theory that it's not

413
00:20:21,560 --> 00:20:24,080
Speaker 1: okay for creditors all get together and sign a, cooperation

414
00:20:24,160 --> 00:20:28,960
Speaker 1: agreement and the creditors really didn't, like that and they

415
00:20:29,000 --> 00:20:33,359
Speaker 1: Came to kirkland and said something yeah that might Rhyme,

416
00:20:33,440 --> 00:20:38,119
Speaker 1: with hey if you if you're involved, with this we

417
00:20:38,160 --> 00:20:41,399
Speaker 1: won't work with. You Anymore, and kirkland which gets a

418
00:20:41,400 --> 00:20:45,120
Speaker 1: lot of business from the asset managers in, the complaint

419
00:20:45,800 --> 00:20:50,679
Speaker 1: decided maybe we Can't represent, optimum anymore which is like an,

420
00:20:50,720 --> 00:20:54,399
Speaker 1: interesting like like the alleged problem here is that like

421
00:20:54,440 --> 00:20:56,840
Speaker 1: these creditors have too much market power and they all

422
00:20:56,880 --> 00:20:59,200
Speaker 1: gang up together and, so optimum we. Can't refinance. It's

423
00:20:59,200 --> 00:21:02,000
Speaker 1: set and then and when like, You know outum also loses,

424
00:21:02,000 --> 00:21:03,719
Speaker 1: its lawyers, it's, like oh maybe they did a lot

425
00:21:03,760 --> 00:21:03,919
Speaker 1: of a.

426
00:21:03,960 --> 00:21:06,200
Speaker 2: Market POWER well i was a little bit, confused because as,

427
00:21:06,200 --> 00:21:09,720
Speaker 2: you said so the lawsuit was filed by this. Boutique

428
00:21:10,200 --> 00:21:13,359
Speaker 2: Firm the carters Believe that kirkland had been behind. The

429
00:21:13,440 --> 00:21:17,280
Speaker 2: Lawsuit did kirkland basically say that yes we were if

430
00:21:17,280 --> 00:21:18,040
Speaker 2: they resigned as.

431
00:21:18,160 --> 00:21:20,800
Speaker 1: LEGAL counsel i don't think they said yes, we were

432
00:21:20,920 --> 00:21:21,240
Speaker 1: like they.

433
00:21:21,160 --> 00:21:22,960
Speaker 2: Had like, Or not like directly they said.

434
00:21:22,920 --> 00:21:26,280
Speaker 1: Said in public like creditors should be careful about forming

435
00:21:26,320 --> 00:21:28,560
Speaker 1: these committees because there might be an actual trustress The

436
00:21:29,440 --> 00:21:32,840
Speaker 1: prominent kirkland restructuring partners. Of that and so whether or

437
00:21:32,880 --> 00:21:35,080
Speaker 1: not they, were, like oh we were secretly, behind it

438
00:21:35,080 --> 00:21:36,679
Speaker 1: it's like they might have agreed with some of the.

439
00:21:36,760 --> 00:21:40,560
Speaker 1: LEGAL theories i don't know that they conceded that they

440
00:21:40,600 --> 00:21:43,840
Speaker 1: were the people who pushed for the lawsuit to. Be

441
00:21:43,960 --> 00:21:48,560
Speaker 1: brought but in, any case like working with a company

442
00:21:48,640 --> 00:21:51,439
Speaker 1: that sued all of the big private credit lenders for

443
00:21:51,480 --> 00:21:54,680
Speaker 1: doing this is like maybe whether or not they were behind,

444
00:21:54,720 --> 00:21:57,080
Speaker 1: the lawsuit like if they were pressured to quit, the

445
00:21:57,080 --> 00:21:59,480
Speaker 1: company like that suggests that you're not allowed to work

446
00:21:59,480 --> 00:22:00,880
Speaker 1: for companies that zero creditors.

447
00:22:00,880 --> 00:22:06,000
Speaker 2: Like, that yeah the ft was talking. About this they

448
00:22:06,040 --> 00:22:08,600
Speaker 2: called this a gut check Moment that kirkland blinked when

449
00:22:08,640 --> 00:22:11,320
Speaker 2: the masters of the universe threatened to take their vast.

450
00:22:11,320 --> 00:22:14,240
Speaker 2: Business elsewhere everyone in high finance and big law.

451
00:22:14,280 --> 00:22:17,160
Speaker 1: HAS noticed i used to be at an, investment bank

452
00:22:17,280 --> 00:22:22,960
Speaker 1: and we had lawyers on, our deals and like the companies,

453
00:22:23,000 --> 00:22:29,320
Speaker 1: had lawyers and sometimes the company's lawyers were people who often, represented,

454
00:22:29,400 --> 00:22:31,400
Speaker 1: us right who often worked for banks and sometimes works.

455
00:22:31,400 --> 00:22:33,840
Speaker 1: For companies and if you're, a company, that's, Good right

456
00:22:33,880 --> 00:22:36,159
Speaker 1: like it's good to have a law firm that knows the,

457
00:22:36,200 --> 00:22:38,760
Speaker 1: banks well because like it's, you know the, repeat players

458
00:22:38,760 --> 00:22:40,679
Speaker 1: they know, a lot they like know. The banks but

459
00:22:40,720 --> 00:22:44,320
Speaker 1: it's also a little unnerving because if you're the lawyers

460
00:22:44,320 --> 00:22:47,560
Speaker 1: who regularly work with, the banks you might not work

461
00:22:47,600 --> 00:22:49,919
Speaker 1: that hard on behalf of the company at the expense of,

462
00:22:49,920 --> 00:22:51,520
Speaker 1: the banks because you know you'll be working for the.

463
00:22:51,520 --> 00:22:54,080
Speaker 1: Banks again and there's something like, that, Here, right like

464
00:22:54,119 --> 00:22:59,159
Speaker 1: if you're a company that runs into distress and like

465
00:22:59,200 --> 00:23:02,720
Speaker 1: you hire a big law firm that regularly worked with

466
00:23:02,760 --> 00:23:05,520
Speaker 1: the biggest, Asset, managers like, that's good they, Have connection

467
00:23:05,720 --> 00:23:08,760
Speaker 1: they're like they. Have clout but it's, also like are

468
00:23:08,800 --> 00:23:10,600
Speaker 1: they looking out? For you are they looking out for

469
00:23:10,600 --> 00:23:11,840
Speaker 1: the asset managers who regularly?

470
00:23:11,960 --> 00:23:14,440
Speaker 2: Hire, THEM yeah i have to imagine that's a more

471
00:23:14,600 --> 00:23:18,040
Speaker 2: urgent question for a lot of those. Companies. Now yeah

472
00:23:18,080 --> 00:23:20,720
Speaker 2: in the wake, of This the ft also points out That,

473
00:23:21,240 --> 00:23:23,639
Speaker 2: in december they reported that many of the same private

474
00:23:23,640 --> 00:23:26,520
Speaker 2: capital firms that were Upset at kirkland Over the optimum

475
00:23:26,600 --> 00:23:29,879
Speaker 2: fireworks are also UPSET At jp morgan for providing a

476
00:23:29,920 --> 00:23:32,439
Speaker 2: two billion dollar rescue loan that shifted some of the

477
00:23:32,440 --> 00:23:36,040
Speaker 2: collateral out of reach of The existing. OPTIMUM creditors i

478
00:23:36,080 --> 00:23:39,439
Speaker 2: don't know how YOU Pressure jp morgan though in.

479
00:23:39,480 --> 00:23:43,120
Speaker 1: This. SITUATION yeah i think it's like kind of standard

480
00:23:43,160 --> 00:23:46,920
Speaker 1: for banks to be involved in loans that credit funds.

481
00:23:47,240 --> 00:23:50,000
Speaker 1: FIND annoying i can tell you the class accountswer to

482
00:23:50,040 --> 00:23:51,720
Speaker 1: how you get your revenge on, the banks which, tell

483
00:23:51,840 --> 00:23:54,480
Speaker 1: Me When city group wires you're nine hundred million dollars,

484
00:23:54,480 --> 00:23:57,600
Speaker 1: by accident you give, them money which is the. Same

485
00:23:57,600 --> 00:23:59,399
Speaker 1: thing Like the city worked on a financing that the

486
00:23:59,440 --> 00:24:02,720
Speaker 1: creditors are, the Company, there's revlon the creditors, didn't like

487
00:24:02,800 --> 00:24:06,000
Speaker 1: And then city Accidentally wired bundy to the creditors and, they're,

488
00:24:06,040 --> 00:24:10,480
Speaker 1: like well we're going to. Keep THAT But, jp morgan.

489
00:24:10,320 --> 00:24:13,280
Speaker 2: That's, a really really More, careful yeah that's a really.

490
00:24:13,280 --> 00:24:16,720
Speaker 2: Special situation seems as Unique to city in some.

491
00:24:16,600 --> 00:24:21,240
Speaker 1: Ways SEEING Of. Jp morgan, oh, yeah, yeah.

492
00:24:21,359 --> 00:24:24,600
Speaker 2: YEAH brutal i lost that in my, copious notes so

493
00:24:24,760 --> 00:24:25,240
Speaker 2: don't you tell me.

494
00:24:25,280 --> 00:24:27,879
Speaker 1: About it There's A bloomberg, news story not like, foto

495
00:24:27,960 --> 00:24:32,480
Speaker 1: details BUT Basically, jp morgan senior leadership quote has told

496
00:24:32,520 --> 00:24:34,960
Speaker 1: the firms investment bankers that they need to work harder

497
00:24:34,960 --> 00:24:38,120
Speaker 1: to close the gap, with Rivals Including colmyn sachs on mergers.

498
00:24:38,119 --> 00:24:41,760
Speaker 1: And acquisitions the co Heads Of global banking said that

499
00:24:41,800 --> 00:24:43,600
Speaker 1: the group had underperformed in M and a in twenty

500
00:24:43,640 --> 00:24:46,040
Speaker 1: twenty five and that improvement was needed to start winning back.

501
00:24:46,080 --> 00:24:52,240
Speaker 1: MARKET share i assume that most bankers get some version of.

502
00:24:52,280 --> 00:24:54,640
Speaker 1: The speech, most, yours right you always work a little

503
00:24:54,640 --> 00:24:55,560
Speaker 1: harder seems.

504
00:24:55,560 --> 00:24:57,399
Speaker 2: Pretty, standard YEAH but.

505
00:24:57,600 --> 00:25:00,160
Speaker 1: I read this this week every. So often you good

506
00:25:00,240 --> 00:25:04,879
Speaker 1: stories about banks telling, their bankers actually you need to

507
00:25:04,920 --> 00:25:07,879
Speaker 1: work less hard and do. Fewer, Deals right so sometimes

508
00:25:08,160 --> 00:25:11,000
Speaker 1: that is, like compliance, like right we're Going To swiss

509
00:25:11,040 --> 00:25:12,639
Speaker 1: bank gets in a lot of trouble for bringing in

510
00:25:12,680 --> 00:25:15,000
Speaker 1: a lot of bad clients that have a meeting being

511
00:25:15,080 --> 00:25:17,560
Speaker 1: like maybe bring in. Fewer clients but some of it

512
00:25:17,600 --> 00:25:19,679
Speaker 1: is like there's a lot of wasted work, at banks

513
00:25:20,200 --> 00:25:24,639
Speaker 1: and every, so often like a bank will look around and, be,

514
00:25:24,720 --> 00:25:28,600
Speaker 1: like look you're spinning, your wheels doing a lot of

515
00:25:29,280 --> 00:25:32,880
Speaker 1: unpaid work for small, time clients hoping that one day

516
00:25:32,920 --> 00:25:34,960
Speaker 1: they will give you a small mandate where you'll get a.

517
00:25:35,000 --> 00:25:38,760
Speaker 1: Small fee don't, Do, that like spend more time focusing

518
00:25:38,760 --> 00:25:41,399
Speaker 1: on clients who will actually give you a deal and

519
00:25:41,440 --> 00:25:44,040
Speaker 1: pay you a, big fee and just spend less time spinning.

520
00:25:44,080 --> 00:25:46,919
Speaker 1: Your WHEELS and i always love reading. Those stories but like,

521
00:25:47,080 --> 00:25:49,360
Speaker 1: in practice when you're, a banker and like you don't

522
00:25:49,359 --> 00:25:51,000
Speaker 1: want to put all your eggs in, one, basket right

523
00:25:51,040 --> 00:25:53,640
Speaker 1: and like if you're only trying to get the SpaceX

524
00:25:53,680 --> 00:25:55,399
Speaker 1: ipo and you don't, get it then your year. Is

525
00:25:55,480 --> 00:25:58,080
Speaker 1: ruined but if you've also got five other irons in,

526
00:25:58,119 --> 00:26:00,800
Speaker 1: the fire where like some, you know small utility company

527
00:26:00,800 --> 00:26:03,280
Speaker 1: will pay you half a million dollars to do a,

528
00:26:03,400 --> 00:26:07,600
Speaker 1: credit deal like. That's something and so often you do

529
00:26:07,680 --> 00:26:10,959
Speaker 1: read stories just because they're conterintuitive about bankers being told

530
00:26:11,240 --> 00:26:14,800
Speaker 1: not to work harder to chase. More clients but this

531
00:26:14,840 --> 00:26:16,639
Speaker 1: is the more. Normal version just do.

532
00:26:16,680 --> 00:26:19,120
Speaker 2: More deals maybe the pendulum will swing in a couple.

533
00:26:19,119 --> 00:26:19,520
Speaker 2: Of years.

534
00:26:19,800 --> 00:26:22,480
Speaker 1: Always swings, but YEAH but i think if you're losing,

535
00:26:22,480 --> 00:26:24,560
Speaker 1: market share you gotta just. WORK harder i also love

536
00:26:24,600 --> 00:26:28,840
Speaker 1: that there's no. Differentiated strategy how do you get? More

537
00:26:28,880 --> 00:26:32,119
Speaker 1: deals why you, work harder getting, more planes shake, more.

538
00:26:32,000 --> 00:26:34,280
Speaker 2: Hands focus on This secure maybe is just.

539
00:26:34,440 --> 00:26:37,120
Speaker 1: Do it just do more talking to clients and then

540
00:26:37,480 --> 00:26:38,600
Speaker 1: the deals, will come which is.

541
00:26:38,600 --> 00:26:41,680
Speaker 2: Probably true how psyched do you Think THE goldman M

542
00:26:41,720 --> 00:26:44,200
Speaker 2: and a bankers were reading. This story i'm sure.

543
00:26:44,080 --> 00:26:45,480
Speaker 1: They got a talk, being like you need to. Work

544
00:26:45,520 --> 00:26:50,040
Speaker 1: harder there's no, standing still just yell.

545
00:26:49,960 --> 00:26:51,959
Speaker 2: That, work, harder ye keep feeding.

546
00:26:51,960 --> 00:26:55,240
Speaker 1: The beast maybe, they, think, Oh no morgan is going to. Work,

547
00:26:55,240 --> 00:26:57,000
Speaker 1: harder yeah maybe i'd be.

548
00:26:57,440 --> 00:26:57,720
Speaker 2: Pretty.

549
00:26:57,720 --> 00:27:01,040
Speaker 1: Psyched yeah it's like it's like a three second moment

550
00:27:01,080 --> 00:27:01,800
Speaker 1: of victory and, THEN.

551
00:27:02,000 --> 00:27:04,520
Speaker 2: Yeah i got, a plan pick back up. The, phone

552
00:27:04,600 --> 00:27:07,840
Speaker 2: yeah sometimes that happens. In journalism, you know you're told

553
00:27:07,880 --> 00:27:10,240
Speaker 2: to write, fewer stories write better once.

554
00:27:11,960 --> 00:27:17,239
Speaker 1: It's right do you ever have the, experience of like

555
00:27:17,440 --> 00:27:20,040
Speaker 1: you learned that some competitor has been told to work.

556
00:27:19,920 --> 00:27:22,480
Speaker 2: Harder to keep up, With, You, like no That's, really

557
00:27:22,640 --> 00:27:25,080
Speaker 2: yeah that hasn't happened. To me it sounds like maybe

558
00:27:25,080 --> 00:27:25,480
Speaker 2: it happened.

559
00:27:25,480 --> 00:27:26,919
Speaker 1: To, you no it Happened.

560
00:27:26,960 --> 00:27:30,960
Speaker 2: To, goldman yeah, all right, Good stuff.

561
00:27:36,600 --> 00:27:39,240
Speaker 1: And that Was The Money. Stuff Podcast I'm matt Levine

562
00:27:39,520 --> 00:27:39,800
Speaker 1: And I'm.

563
00:27:39,880 --> 00:27:41,560
Speaker 2: Katie greifeld you can find.

564
00:27:41,359 --> 00:27:44,920
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565
00:27:44,760 --> 00:27:48,080
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566
00:27:48,160 --> 00:27:51,280
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567
00:27:51,520 --> 00:27:52,159
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568
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569
00:27:54,600 --> 00:27:57,560
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570
00:27:57,680 --> 00:27:58,399
Speaker 1: might answer it on.

571
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575
00:28:07,440 --> 00:28:10,000
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576
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577
00:28:14,480 --> 00:28:15,760
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578
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579
00:28:19,400 --> 00:28:21,400
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