Speaker 1: Bloomberg Audio Studios, podcasts, radio news. Katie, you yes drank
Speaker 1: a foam head of Jamie Diamond last week.
Speaker 2: Can I tell you something? Yes, I'm actually going back
Speaker 2: to JP Morgan's Pub tonight.
Speaker 1: Regular someone still with your name on.
Speaker 2: It was supposed to meet a specific person in a
Speaker 2: group and they weren't able to come. So now we're
Speaker 2: going back tonight.
Speaker 1: So tell me more about the JP Morgan pub.
Speaker 2: It was awesome, it was very normal. It's called Moran,
Speaker 2: it's called Morgan's. I had an elevated shepherd's pie like
Speaker 2: they have pub food like it's a menu of pub food,
Speaker 2: but elevated.
Speaker 1: They have a.
Speaker 2: Burger, for example, the person I was dining with had
Speaker 2: a burger that looks delicious. Maybe I'll get it tonight.
Speaker 1: Wait, now I want to come.
Speaker 2: Invite Matt and I to the pub someone from JP Morgan.
Speaker 1: We were okay. So first of all, I was I
Speaker 1: think I was joking about the foam head of Jamie Diamond,
Speaker 1: Like I thought you were anticipating that the latte art
Speaker 1: and the Guinness would include Jamie Diamond's face, but didn't.
Speaker 2: So there's definitely latte art. I believe the two options
Speaker 2: that were offered to the person I was with who
Speaker 2: did drink a Guinness were a latte art of the
Speaker 2: building itself or the M for Morgans, and the drink
Speaker 2: came out with the M for Morgans. But maybe tonight
Speaker 2: I'll see latte art of the building itself because I
Speaker 2: think that sounds really cool. It's a beautiful building. I've
Speaker 2: said that so many times.
Speaker 1: Okay, but so you didn't get a Guinness, which, first
Speaker 1: of all, and second when you are the Aguiness tonight.
Speaker 2: Yeah, Jamie Diamond face, I'm going to ask for it.
Speaker 1: Wait you say it was very normal for a pub
Speaker 1: or for like a lobby.
Speaker 2: Well, it was beautiful because it's on the thirteenth floor,
Speaker 2: so the viewers are awesome. But like it's it felt
Speaker 2: like a standalone thing. It didn't feel like I'm at
Speaker 2: a bar in an office.
Speaker 1: Building stand alone like Irish pub or stand alone like.
Speaker 2: Like elevated Irish pub. Yeah, but they had uh like
Speaker 2: they had televisions with sports on. That's sort of thing.
Speaker 2: I wonder what sports will be playing tonight. I don't
Speaker 2: I love watching it distantly, I really.
Speaker 1: Want to go to Morgan as my regular sports bar.
Speaker 2: Hopefully someone will invite us, and.
Speaker 1: We don't want to. I just want to, like you.
Speaker 1: I know that's the problem. You can't just like drop
Speaker 1: in and have a beer. No floor for j Vi
Speaker 1: Berg and officis.
Speaker 2: But I go on Thursdays now, So if someone wants
Speaker 2: to invite us for next Thursday, I'm free, so is Mad.
Speaker 1: Let's do it. Hello and welcome to the Money Stuff Podcast,
Speaker 1: your weekly podcast where we talk about stuff are that
Speaker 1: is to money. I'm Matt Levine and I write the
Speaker 1: Money Stuff column for Bloomberg Opinion.
Speaker 2: And I'm Katie Greifeld, a reporter for Bloomberg News and
Speaker 2: an anchor for Bloomberg Television.
Speaker 1: Our script says, what are we talking about today.
Speaker 2: Kady oh Man? Do you want to start with stars
Speaker 2: or gold stars? It's more than stars. At this point
Speaker 2: we were to talk about space SpaceX.
Speaker 1: Is doing an IPI possibly on June ninth.
Speaker 2: Yeah.
Speaker 1: To prepare for that IPA Waters reported just before we
Speaker 1: recorded this podcast that they are going to merge with
Speaker 1: x AIH.
Speaker 2: Which is just one man talking to himself. I think no,
Speaker 2: it's like it's more than that.
Speaker 1: It's not not one man talking to himself, but like
Speaker 1: probably x AI and SpaceX each have some very tired
Speaker 1: lawyers who elon musk Is like, let's merge them. They
Speaker 1: have some discussions.
Speaker 2: About smush them together.
Speaker 1: Questions like at what evaluation? And a gazillion a gazillion Right, So,
Speaker 1: I have no idea. I haven't even read the story,
Speaker 1: but there is at least some sense that there are
Speaker 1: merger talks between space X and x I I, which
Speaker 1: I remember not that long ago, when people like Tesla
Speaker 1: should merge with x Ai.
Speaker 2: Well, Tesla, we were.
Speaker 1: Just did an investment, but they actually both SpaceX and
Speaker 1: Tesla both committed to invest in right.
Speaker 2: Yeah, I believe. So I know for sure that Tesla,
Speaker 2: on their earnings day, which was this Wednesday, said that
Speaker 2: it would invest two billion dollars in Xai.
Speaker 1: After a shareholder proposal. They got sort of tappetish support.
Speaker 1: They were like, yeah, I do saw the same stuff.
Speaker 1: It's all I at.
Speaker 2: It's the convergence of the musk verse, which is fun.
Speaker 2: I also love this because I forgot until today that
Speaker 2: XAI merged with x So SpaceX in a sense is
Speaker 2: merging success.
Speaker 1: Twitter, right, yeah, right, Elan Wiss might be re ip
Speaker 1: oing Twitter to be fair and this is not the
Speaker 1: right way to do the math. No, but if he
Speaker 1: bought Twitter for let's say, forty four billion dollars, and
Speaker 1: we'll soon re IPO at a one point five trillion
Speaker 1: dollar valuation, raising fifty billion dollars in the largest ipo ever,
Speaker 1: it'll be like, Okay, you and buddy you in.
Speaker 2: You're right all along.
Speaker 1: Man. He took Twitter private at forty four billion dollars
Speaker 1: and I was like, that's too high. He's taking in
Speaker 1: public again at one point five trillion dollars. That's not
Speaker 1: really what's happening here.
Speaker 2: But it is really beautiful. I'm trying to find the
Speaker 2: rationale as lined out. Yeah, the Reuter's story, it has
Speaker 2: to do with building data centers, data.
Speaker 1: Centers in space. That's definitely the right. The synergies are clear.
Speaker 2: Yeah, it's obvious data centers.
Speaker 1: In space and SpaceX does have space name. Yeah.
Speaker 2: Well, there was an interesting note. According to Reuter's, some
Speaker 2: XAI executives could be given the option to receive cash
Speaker 2: instead of SpaceX stock as part of the deal, which
Speaker 2: I thought was interesting. If you work at XAI, would
Speaker 2: you rather take cash or take SpaceX shares if you
Speaker 2: had the option.
Speaker 1: To Yeah, I mean this is the thing that people
Speaker 1: talk about with with the Musk empire. Right, there's been
Speaker 1: like expanding and contracting, right, Like Tesla did acquire the
Speaker 1: solar company a while back, and then x and XAI emerged,
Speaker 1: So like sometimes the must companies combined and sometimes they
Speaker 1: are new most companies, and in general, it's like a
Speaker 1: good idea to motivate people to work on stuff by
Speaker 1: giving them stock and the stuff they work on. Right,
Speaker 1: It's one reason to have different companies, right, the AI
Speaker 1: people get paid in AI stock, and the car people
Speaker 1: get paid in Tesla stock, and the rocket people gets
Speaker 1: paid in SpaceX stock. And if you mush them all together,
Speaker 1: then like people have you know, less direct impact on
Speaker 1: their own compensation, and so there's may be less motivation.
Speaker 1: So maybe if you're at XAI AI researcher, you're like,
Speaker 1: I don't know anything. I have rockets, I don't get
Speaker 1: paid for like rocket launches. I want to Well I'm
Speaker 1: sure you might think that, but you might just think
Speaker 1: like I want to get paid cash for my AI
Speaker 1: contributions and not have to worry about rockets. Yeah, so
Speaker 1: they have. He reported that they're aiming to go in
Speaker 1: June because on June eighth and ninth, Venus and Jupiter
Speaker 1: will have some sort of conjunction and that would be cool.
Speaker 2: That would be cool.
Speaker 1: Now, June ninth also is is six', nine Which i'm
Speaker 1: SORRY i did got a bigger eye roll, there.
Speaker 2: But, WELL i can't BELIEVE i didn't put that together
Speaker 2: UNTIL i.
Speaker 1: Know, right it's like one of these things where it's
Speaker 1: like planets are lining, up but, like, really we're going
Speaker 1: on six. Nine it's.
Speaker 2: Horrible it's.
Speaker 1: Horrible there's no evidence that they're going. On SO i,
Speaker 1: mean it's just like that's you, Know elon must probably
Speaker 1: chuckled about. It. ANYWAY i will SAY i wrote about
Speaker 1: this AND i was, like you, know it's interesting that
Speaker 1: the position of the stars is Motivating Elon musk's, decisions
Speaker 1: although AS i talk about, It i'm increasingly convinced that
Speaker 1: the numbers six nine is motivating his. DECISIONS i use
Speaker 1: the word, astrology, yeah and someone emailed me to be,
Speaker 1: Like Elon musk is interested in, astronomy but that's not,
Speaker 1: astrology and it's interesting because it's not like signs of the.
Speaker 1: Zodiac astronomy is the science of like looking at where
Speaker 1: the stars are. An astrology is the superstitious belief that
Speaker 1: like human activities are influenced by and like you, should you,
Speaker 1: know make decisions based on the positions of the stars
Speaker 1: and the. Planets AND i feel like it's fair for
Speaker 1: me to say astrology.
Speaker 2: HERE i, mean on this, Podcast i'm declaring you.
Speaker 1: CORRECT i think it's not quite. Superstition it's more like
Speaker 1: jokey fake.
Speaker 2: SUPERSTITION i, MEAN i would posit that the position of
Speaker 2: the stars influences all of our behaviors and we just.
Speaker 1: Don't know would, yeah, right of, course, Right BUT i
Speaker 1: don't Think Elon musk would if you put him to.
Speaker 1: IT i think that he probably doesn't really think, that
Speaker 1: but he will act like he thinks it for the.
Speaker 1: Joke you, know we've.
Speaker 2: Talked about this, before HOW i would love to sit
Speaker 2: someone down and just have an honest conversation.
Speaker 1: With them about.
Speaker 2: Astrology, WELL i would like to, know, like are you
Speaker 2: truly interested in? That in? What in?
Speaker 1: Like REALLY i feel like he's.
Speaker 2: Interested is it about six' nine or is it about
Speaker 2: the alignment of. THE planets i want.
Speaker 1: To BELIEVE that i don't think he CARES like i
Speaker 1: don't think he thinks that like the lignment of the
Speaker 1: planets is a special and we'll therefore get him A better.
Speaker 1: IPO price i think, he's like. Planet's, cool yeah well he's.
Speaker 2: Right, there yeah they.
Speaker 1: Are right it is kind of a motivating factor for
Speaker 1: building a space.
Speaker 2: ROCKET company i also said to you earlier today that
Speaker 2: we're entering the year of.
Speaker 1: The horse, oh yes. That's right, You sorry now we'll
Speaker 1: talk about Your, astrological yeah.
Speaker 2: Thank you i'm. Super psyched is it strictly because you?
Speaker 1: Like horses In the year of? The horse seems like
Speaker 1: something you'd like? Or like is there more?
Speaker 2: ASTROLOGICAL information, i MEAN so i very glancingly know about
Speaker 2: the year of. THE horse i don't want about the
Speaker 2: other years more than the. Other, years, yeah well.
Speaker 1: You're not just like a general connoisseur of, like, no.
Speaker 2: NO no i mean it's served to me all over
Speaker 2: social media that this is going to be the year
Speaker 2: of the horse for. Obvious reasons apparently the year of
Speaker 2: the horse is going to be a lot better than
Speaker 2: the year that we, just exited, WHICH personally i add
Speaker 2: a terrible year of the whatever things are looking up,
Speaker 2: for me Just w but you're the horse in general
Speaker 2: is all about putting that behind you. And excelling at
Speaker 2: least that is my understanding looking at. Social media not,
Speaker 2: An expert i'm sure someone out there listening right now
Speaker 2: is steeped.
Speaker 1: IN this i assume it's good to spend more time,
Speaker 1: with horses but maybe that's.
Speaker 2: NOT true, i, MEAN listen I got i got some
Speaker 2: horses you can hang out with specifically mad, no one not,
Speaker 2: the listeners not the. General audience let's talk. ABOUT gold
Speaker 2: i love. This story tether apparently is buying just tons
Speaker 2: and tons of. Gold LITERAL and i love This because
Speaker 2: teather isn't trying to become. A bank it's trying to
Speaker 2: become a. Central man it's. So Cool the heather.
Speaker 1: Is crazy because like the very basic business of, like takeing,
Speaker 1: you know one hundred, billion dollars almost two hundred billion
Speaker 1: dollars of, investor cash parking it in, t bells clipping
Speaker 1: the coupons of the, t bells doing, nothing else and
Speaker 1: like being insanely rich with like the simplest business model
Speaker 1: in the world is. So, Good yes and, they're, like
Speaker 1: no let's make it. More complicated so like they have reserves. Backing,
Speaker 1: Tethers RIGHT and i was looking at the, reserves today
Speaker 1: they have one hundred and seventy four billion dollars OF
Speaker 1: like us dollars to twether. Liabilities outstanding they have like
Speaker 1: a seven billion dollar, equity cushion so like the reserves
Speaker 1: are like seven billion dollars more than, their liabilities and
Speaker 1: they have seven percent of their reserves so more than
Speaker 1: their equity cushion in. Precious metals so like instead of
Speaker 1: just buying treasury bills just keeping your dollars backed, by dollars,
Speaker 1: they're like let's have some more dollars backed. By, gold
Speaker 1: yeah which, is like in some ways a crazy thing,
Speaker 1: to do because like you don't need to take any.
Speaker 1: Basis risk you can just put it in dollars and
Speaker 1: live a. Nice life but in, any ways, it's, like yeah
Speaker 1: it's like a traditional central banks back some of their liabilities. With,
Speaker 1: gold yeah it's, like FINE so i sort of understand
Speaker 1: where they. Do it those a by, the way some
Speaker 1: of their liabilities are bad, by bitcoin which is. Also
Speaker 1: insane but it's just like if they transcended regular finance
Speaker 1: and become a central bank and, they're, like yeah we
Speaker 1: have some big stash of gold in a Vault, In
Speaker 1: switzerland i'm so.
Speaker 2: INTO it a nuclear Bunker in switzerland that was in,
Speaker 2: the lead SO obviously i was already going to love.
Speaker 2: This story they are the largest known holder of gold
Speaker 2: outside of Banks And. Nation states bloomberg INTERVIEWED, the ceo
Speaker 2: and he said he Predicted that washington's geopolitical rivals would
Speaker 2: launch a gold pack alternative to, the DOLLAR which i.
Speaker 1: Also love one thing that they're doing here is they're
Speaker 1: backing liabilities. With assets, i'm, like yeah. The assets, you
Speaker 1: know you don't need to diverse by, the assets but
Speaker 1: like perhaps you want to for. Some reason but the
Speaker 1: other thing they're doing is they're like skinting where the puck,
Speaker 1: is going and, they're like eventually gold will be the future,
Speaker 1: of currency so we'd better, hold, gold, which, like, OKAY whatever, i,
Speaker 1: mean look.
Speaker 2: Time is a. Flat story to be fair.
Speaker 1: To, them yeah they have been better at predicting the
Speaker 1: future of currency then, FOR example i. Have been so,
Speaker 1: you know if they think it's going to, be gold
Speaker 1: you should listen to.
Speaker 2: That, much yeah maybe, we should, you know not be smiling.
Speaker 2: So much just to put into context how much gold.
Speaker 2: They're buying they bought over seventy tons of gold over
Speaker 2: the course of last year for. Their reserves, all told
Speaker 2: they own around one hundred and forty tons, of gold
Speaker 2: which is. A lot and it's interesting that they stepped
Speaker 2: up their buying and gold has been. Going insane central
Speaker 2: BANKS and etf investors are collectively buying more than fifteen
Speaker 2: hundred tons of. The metal but still you.
Speaker 1: Introduced a, central, bank.
Speaker 2: Yes exactly buying gold sort of price. And sensitive so
Speaker 2: it's definitely a catalyst behind. The, rally yeah, it's great it's.
Speaker 2: SO great i just want to. Say THAT the ceo,
Speaker 2: also said so the former nuclear Bunker, in switzerland it's
Speaker 2: guarded by multiple layers of thick. Steel doors he described
Speaker 2: it As A james bond kind. Of place. IT'S crazy
Speaker 2: i want to.
Speaker 1: Go, THERE well i want there to Be a tether
Speaker 1: gold heist story, because, like okay they're a, central bank
Speaker 1: they're the largest whatever holder, of gold but like, you
Speaker 1: know they have ties to the, mighty ducks like they're
Speaker 1: like a somewhat. Comical organization and For like tether to
Speaker 1: have a nuclear bunker filled with the one hundred and forty tons,
Speaker 1: of gold like that's. Really, Good yeah like the person
Speaker 1: who robs that will not be like.
Speaker 2: It's like at the base of. Some, MOUNTAIN yeah i want.
Speaker 1: To go give me Like A rob. Schneider movie it's
Speaker 1: going to be.
Speaker 2: Really good someone's starting. The screenplay it's cool that They're.
Speaker 2: IN switzerland i, cover ETFs as, you know and a
Speaker 2: lot of the, gold ETFs Including STATE, streets glg which
Speaker 2: is the. Biggest one they have their Vaults. Underneath, london
Speaker 2: yeah and that's also a place you. Can't, go NO
Speaker 2: but i love thinking about where the gold is physically
Speaker 2: stored just. DELIGHTS me i, don't know it's just so
Speaker 2: this is. MOUNTAIN is i don't Know if i've told
Speaker 2: this story on the, podcast BEFORE but i was talking
Speaker 2: to Someone At state street about the vault at the
Speaker 2: time WHEN like gld was seeing, crazy INFLOWS and i,
Speaker 2: was like is the vault? Getting crowded and, they, said
Speaker 2: no gold is. Really small it just weighs. A LOT
Speaker 2: and i, was, like, oh yeah, for sure and then
Speaker 2: had to quickly move.
Speaker 1: ON right i like the idea, of like welcome to
Speaker 1: our enormous pile, of gold and you open the door
Speaker 1: to like a cavernice echoing vault and like in the
Speaker 1: corner there's just like a little pile OF flick i.
Speaker 2: Was, expecting YEAH like i, was Expecting Like harry Potter
Speaker 2: at gringotts where they opened the door and it's just
Speaker 2: like piles and piles.
Speaker 1: Of gold and maybe it Is, for tether.
Speaker 2: YEAH maybe i mean it sounds like they're on a
Speaker 2: mission to, get, There.
Speaker 1: RIGHT like i feel like they would give you Like
Speaker 1: a goblin powered. Car, ride yeah see. Their, gold yeah
Speaker 1: that's part of their transparency, slash comedy like they would.
Speaker 2: DO that i think THAT'S why i find it so
Speaker 2: charming because that's Exactly what, i'm, picturing.
Speaker 1: Right Just from harry that is not going to give
Speaker 1: you no. Like fun it would be. Very. Sober Right
Speaker 1: when tether takes you on a tour of their, gold
Speaker 1: vault they'll be like some loops on, the, track right
Speaker 1: it's going to be like it's going to be a.
Speaker 2: Little exciting maybe a smoke machine. Yeah yeah, also Interesting
Speaker 2: so tether doesn't just want to, buy gold it also
Speaker 2: wants to. Trade it and this. IS interesting i didn't,
Speaker 2: realize this BUT so hsbc it lost to senior gold
Speaker 2: traders Toe. To tether they, hired, them right so they
Speaker 2: have big, ambitions.
Speaker 1: HERE right i think constantly LIKE if i, RAN tether
Speaker 1: i would have so few ambitions because like it just
Speaker 1: gives you billions of dollars a quarter. For, Free yeah,
Speaker 1: like go here's your billions. Of dollars and then you're
Speaker 1: like this is only. Tangentially irrelevant but You Know, brad
Speaker 1: JACOBS the ceo of various logistics COMPANIES. LIKE qxo i
Speaker 1: think they HAVE the x. Of. THEM ye i think
Speaker 1: we've talked about it on. This podcast probably one of
Speaker 1: his amazing things is that he read a Book called
Speaker 1: How to Make A Few, billion dollars which is a.
Speaker 2: Perfect book he's out with.
Speaker 1: A sequel he's out with. A sequel the SEQUEL that i,
Speaker 1: JUST found i, might ask is led How to make
Speaker 1: A few more, billion DOLLARS which i love the conceit
Speaker 1: that you bought his, Previous book you read his, previous
Speaker 1: book you took the advice, to heart you put it,
Speaker 1: into practice, it worked you made a few. Billion dollars
Speaker 1: and here you are with a few billion DOLLARS thinking
Speaker 1: i would make a few more, billion DOLLARS but i
Speaker 1: don't know how to. Make, That yeah And Then brad
Speaker 1: jacobs comes along with another book and, it's like how
Speaker 1: to make a few more, billion dollars and, you're, like,
Speaker 1: oh okay That's how i'll make a Few more like
Speaker 1: the people who made a few billion dollars are not
Speaker 1: really reading this book to make a few more. Billion
Speaker 1: dollars but it's such a, lovely yeah. Conceit anyway tether
Speaker 1: are the people who, are like HOW do i make
Speaker 1: a few more? Billion?
Speaker 2: Dollars, yeah yeah they want to trade it and compete
Speaker 2: with the. Actual banks and just a little bit more
Speaker 2: on the physicality. OF gold i love it. So much
Speaker 2: the company is exploring how to make its process of
Speaker 2: buying gold, more, efficient because according TO, the ceo buying
Speaker 2: one to two tons per week is a very. Sizable,
Speaker 2: amount yeah that, seems. RIGHT right i never think, about it,
Speaker 2: you KNOW.
Speaker 1: Because i never think about how much it would cost
Speaker 1: in transaction costs for me to buy a ton of gold.
Speaker 2: Every week and then transport it to. Your. Bunkers yeah
Speaker 2: what a. Charming story.
Speaker 1: So when companies run into, debt trouble they do what
Speaker 1: people call liability management exercises, or lms where they try
Speaker 1: to reduce. Their debt often the way that works is
Speaker 1: like they go out to some creditors and try to
Speaker 1: pick them OFF that i try to play one set
Speaker 1: of creditors. Against another there are deals to be done
Speaker 1: where one set of creditors gets good new collateral at
Speaker 1: the expense of other sets. Of creditors people sometimes use
Speaker 1: the term lender on lender of violence or credit creditor
Speaker 1: and creditor. Of violence and so what happened at this
Speaker 1: Company called OPTIMUM or ltcusi is that all of the
Speaker 1: creditors signed an agreement saying they wouldn't, do that they
Speaker 1: would all. Work together they would only do a deal
Speaker 1: with a company if two thirds of them voted to
Speaker 1: agree to. The DEAL and ltus or out them and didn't,
Speaker 1: like this and they sued the creditors saying you're not
Speaker 1: allowed to. Do that that's an anti. Trust violation you're
Speaker 1: all agreeing to basically. Fix prices you're all agreeing that
Speaker 1: you won't trade your debt with us at anything less
Speaker 1: than like the price you all, agree, on WHICH like i,
Speaker 1: Don't know i've never been an anti. TRUS expert i
Speaker 1: find that like sort of an intuitive but also like
Speaker 1: very sympathetic with the creditors because when companies run, into
Speaker 1: trouble like the creditors should kind of get together to divvy.
Speaker 1: Things up, BUT anyway i don't know what's gonna happen in.
Speaker 1: The case but it was Brought by optimum's, law firm
Speaker 1: a litigation Boutique Called kelli CanCon but like their main
Speaker 1: Lawyer was kirkland and ellis the giant law firm that
Speaker 1: does a lot of restructuring work and a lot of
Speaker 1: private equity em and. A, work yeah and what happened
Speaker 1: next Is that kirkland has resigned From representing optimum in.
Speaker 1: Its network and the impression that everyone has and there
Speaker 1: have Been Some financial times articles, about this the impression
Speaker 1: Is that kirkland may have been sort of behind. This
Speaker 1: lawsuit kirkland had been suggesting the theory that it's not
Speaker 1: okay for creditors all get together and sign a, cooperation
Speaker 1: agreement and the creditors really didn't, like that and they
Speaker 1: Came to kirkland and said something yeah that might Rhyme,
Speaker 1: with hey if you if you're involved, with this we
Speaker 1: won't work with. You Anymore, and kirkland which gets a
Speaker 1: lot of business from the asset managers in, the complaint
Speaker 1: decided maybe we Can't represent, optimum anymore which is like an,
Speaker 1: interesting like like the alleged problem here is that like
Speaker 1: these creditors have too much market power and they all
Speaker 1: gang up together and, so optimum we. Can't refinance. It's
Speaker 1: set and then and when like, You know outum also loses,
Speaker 1: its lawyers, it's, like oh maybe they did a lot
Speaker 1: of a.
Speaker 2: Market POWER well i was a little bit, confused because as,
Speaker 2: you said so the lawsuit was filed by this. Boutique
Speaker 2: Firm the carters Believe that kirkland had been behind. The
Speaker 2: Lawsuit did kirkland basically say that yes we were if
Speaker 2: they resigned as.
Speaker 1: LEGAL counsel i don't think they said yes, we were
Speaker 1: like they.
Speaker 2: Had like, Or not like directly they said.
Speaker 1: Said in public like creditors should be careful about forming
Speaker 1: these committees because there might be an actual trustress The
Speaker 1: prominent kirkland restructuring partners. Of that and so whether or
Speaker 1: not they, were, like oh we were secretly, behind it
Speaker 1: it's like they might have agreed with some of the.
Speaker 1: LEGAL theories i don't know that they conceded that they
Speaker 1: were the people who pushed for the lawsuit to. Be
Speaker 1: brought but in, any case like working with a company
Speaker 1: that sued all of the big private credit lenders for
Speaker 1: doing this is like maybe whether or not they were behind,
Speaker 1: the lawsuit like if they were pressured to quit, the
Speaker 1: company like that suggests that you're not allowed to work
Speaker 1: for companies that zero creditors.
Speaker 2: Like, that yeah the ft was talking. About this they
Speaker 2: called this a gut check Moment that kirkland blinked when
Speaker 2: the masters of the universe threatened to take their vast.
Speaker 2: Business elsewhere everyone in high finance and big law.
Speaker 1: HAS noticed i used to be at an, investment bank
Speaker 1: and we had lawyers on, our deals and like the companies,
Speaker 1: had lawyers and sometimes the company's lawyers were people who often, represented,
Speaker 1: us right who often worked for banks and sometimes works.
Speaker 1: For companies and if you're, a company, that's, Good right
Speaker 1: like it's good to have a law firm that knows the,
Speaker 1: banks well because like it's, you know the, repeat players
Speaker 1: they know, a lot they like know. The banks but
Speaker 1: it's also a little unnerving because if you're the lawyers
Speaker 1: who regularly work with, the banks you might not work
Speaker 1: that hard on behalf of the company at the expense of,
Speaker 1: the banks because you know you'll be working for the.
Speaker 1: Banks again and there's something like, that, Here, right like
Speaker 1: if you're a company that runs into distress and like
Speaker 1: you hire a big law firm that regularly worked with
Speaker 1: the biggest, Asset, managers like, that's good they, Have connection
Speaker 1: they're like they. Have clout but it's, also like are
Speaker 1: they looking out? For you are they looking out for
Speaker 1: the asset managers who regularly?
Speaker 2: Hire, THEM yeah i have to imagine that's a more
Speaker 2: urgent question for a lot of those. Companies. Now yeah
Speaker 2: in the wake, of This the ft also points out That,
Speaker 2: in december they reported that many of the same private
Speaker 2: capital firms that were Upset at kirkland Over the optimum
Speaker 2: fireworks are also UPSET At jp morgan for providing a
Speaker 2: two billion dollar rescue loan that shifted some of the
Speaker 2: collateral out of reach of The existing. OPTIMUM creditors i
Speaker 2: don't know how YOU Pressure jp morgan though in.
Speaker 1: This. SITUATION yeah i think it's like kind of standard
Speaker 1: for banks to be involved in loans that credit funds.
Speaker 1: FIND annoying i can tell you the class accountswer to
Speaker 1: how you get your revenge on, the banks which, tell
Speaker 1: Me When city group wires you're nine hundred million dollars,
Speaker 1: by accident you give, them money which is the. Same
Speaker 1: thing Like the city worked on a financing that the
Speaker 1: creditors are, the Company, there's revlon the creditors, didn't like
Speaker 1: And then city Accidentally wired bundy to the creditors and, they're,
Speaker 1: like well we're going to. Keep THAT But, jp morgan.
Speaker 2: That's, a really really More, careful yeah that's a really.
Speaker 2: Special situation seems as Unique to city in some.
Speaker 1: Ways SEEING Of. Jp morgan, oh, yeah, yeah.
Speaker 2: YEAH brutal i lost that in my, copious notes so
Speaker 2: don't you tell me.
Speaker 1: About it There's A bloomberg, news story not like, foto
Speaker 1: details BUT Basically, jp morgan senior leadership quote has told
Speaker 1: the firms investment bankers that they need to work harder
Speaker 1: to close the gap, with Rivals Including colmyn sachs on mergers.
Speaker 1: And acquisitions the co Heads Of global banking said that
Speaker 1: the group had underperformed in M and a in twenty
Speaker 1: twenty five and that improvement was needed to start winning back.
Speaker 1: MARKET share i assume that most bankers get some version of.
Speaker 1: The speech, most, yours right you always work a little
Speaker 1: harder seems.
Speaker 2: Pretty, standard YEAH but.
Speaker 1: I read this this week every. So often you good
Speaker 1: stories about banks telling, their bankers actually you need to
Speaker 1: work less hard and do. Fewer, Deals right so sometimes
Speaker 1: that is, like compliance, like right we're Going To swiss
Speaker 1: bank gets in a lot of trouble for bringing in
Speaker 1: a lot of bad clients that have a meeting being
Speaker 1: like maybe bring in. Fewer clients but some of it
Speaker 1: is like there's a lot of wasted work, at banks
Speaker 1: and every, so often like a bank will look around and, be,
Speaker 1: like look you're spinning, your wheels doing a lot of
Speaker 1: unpaid work for small, time clients hoping that one day
Speaker 1: they will give you a small mandate where you'll get a.
Speaker 1: Small fee don't, Do, that like spend more time focusing
Speaker 1: on clients who will actually give you a deal and
Speaker 1: pay you a, big fee and just spend less time spinning.
Speaker 1: Your WHEELS and i always love reading. Those stories but like,
Speaker 1: in practice when you're, a banker and like you don't
Speaker 1: want to put all your eggs in, one, basket right
Speaker 1: and like if you're only trying to get the SpaceX
Speaker 1: ipo and you don't, get it then your year. Is
Speaker 1: ruined but if you've also got five other irons in,
Speaker 1: the fire where like some, you know small utility company
Speaker 1: will pay you half a million dollars to do a,
Speaker 1: credit deal like. That's something and so often you do
Speaker 1: read stories just because they're conterintuitive about bankers being told
Speaker 1: not to work harder to chase. More clients but this
Speaker 1: is the more. Normal version just do.
Speaker 2: More deals maybe the pendulum will swing in a couple.
Speaker 2: Of years.
Speaker 1: Always swings, but YEAH but i think if you're losing,
Speaker 1: market share you gotta just. WORK harder i also love
Speaker 1: that there's no. Differentiated strategy how do you get? More
Speaker 1: deals why you, work harder getting, more planes shake, more.
Speaker 2: Hands focus on This secure maybe is just.
Speaker 1: Do it just do more talking to clients and then
Speaker 1: the deals, will come which is.
Speaker 2: Probably true how psyched do you Think THE goldman M
Speaker 2: and a bankers were reading. This story i'm sure.
Speaker 1: They got a talk, being like you need to. Work
Speaker 1: harder there's no, standing still just yell.
Speaker 2: That, work, harder ye keep feeding.
Speaker 1: The beast maybe, they, think, Oh no morgan is going to. Work,
Speaker 1: harder yeah maybe i'd be.
Speaker 2: Pretty.
Speaker 1: Psyched yeah it's like it's like a three second moment
Speaker 1: of victory and, THEN.
Speaker 2: Yeah i got, a plan pick back up. The, phone
Speaker 2: yeah sometimes that happens. In journalism, you know you're told
Speaker 2: to write, fewer stories write better once.
Speaker 1: It's right do you ever have the, experience of like
Speaker 1: you learned that some competitor has been told to work.
Speaker 2: Harder to keep up, With, You, like no That's, really
Speaker 2: yeah that hasn't happened. To me it sounds like maybe
Speaker 2: it happened.
Speaker 1: To, you no it Happened.
Speaker 2: To, goldman yeah, all right, Good stuff.
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