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Speaker 1: Hello, and welcome to another episode of The Odd Lots Podcast.

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Speaker 1: I'm h and I'm Tracy Halloway. So, Tracy, it's a

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Speaker 1: been quite a year. Huh, that's one way of putting it. Yes,

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Speaker 1: a lot of a lot of things happened this year

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Speaker 1: that probably people wouldn't have necessarily predicted coming into this year.

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Speaker 1: I think we can be a bit stronger than that.

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Speaker 1: I think we can say a lot of crazy things

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Speaker 1: happened this year. All right, Yeah, I think you're right.

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Speaker 1: I think maybe I was understating a little bit, but

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Speaker 1: I just wanted to be I just wanted to be

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Speaker 1: on the right side of things. I wanted to be

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Speaker 1: sort of conservative. But yeah, it was pretty wild year.

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Speaker 1: And I feel confident in saying that for several years

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Speaker 1: down the road, people are going to be talking about

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Speaker 1: various events that transpired in the year. Yeah, the history

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Speaker 1: books will be looking back just like us, and there

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Speaker 1: probably all the historians are probably gonna be listening to

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Speaker 1: the Odd Lots Podcast really really get a sense of

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Speaker 1: what happened, don't you think, Yeah, we should bury this

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Speaker 1: in a time capsule, right, Yeah, I agree. So there's

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Speaker 1: obviously the obvious stories, you know, Brexit, Trump all that,

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Speaker 1: but they're probably also a lot of facets to these

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Speaker 1: stories and stories that people missed that we don't want

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Speaker 1: those historians to pass over and miss That's right, So

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Speaker 1: we are going to um do the historians work for them,

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Speaker 1: I guess, and try to dig up some of the

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Speaker 1: lesser known stories that happened this year, some things that really,

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Speaker 1: um maybe taught us a lesson or entertained us or

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Speaker 1: amused us in some way, or that we thought were

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Speaker 1: very important. So who do we have? So We've brought

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Speaker 1: together a bunch of folks from Bloomberg News who cover

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Speaker 1: various aspects of our world day in and day out.

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Speaker 1: It cover stories better than just about anyone in the world.

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Speaker 1: I guess I'm gonna I'll go around and introduce them,

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Speaker 1: and then we're going to talk to them about their

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Speaker 1: favorite stories of the year, so we can catch all

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Speaker 1: the stories that we might have missed. All right, So

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Speaker 1: let me, uh, let me go around the room. I'll start.

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Speaker 1: Ed Hammond is with us, Hey, Ed, how are you doing?

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Speaker 1: He covers deals at Bloomberg. We have Mike Reagan, who

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Speaker 1: is a veteran coverer. I don't think that's a word

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Speaker 1: journalists covering the market, particularly the stock market for a

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Speaker 1: long time. Who's leading a new blog venture here at Bloomberg.

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Speaker 1: Thanks for coming, Mike, Thanks for having me. Max Abelson

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Speaker 1: Wall Street, Wall Street, Uh, Wall Street whisper Wall Street reporter,

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Speaker 1: he gets a Wall Street to speak his mind, st

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Speaker 1: legend Wall Street. He stumbled on the word yeah, I

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Speaker 1: was going there was Wall Streets. Max A. Wolson Dan

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Speaker 1: Moss are top editor for economics coverge great to be

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Speaker 1: made a great prediction going into this year, which we'll

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Speaker 1: talk about, um what probably one of the best predictions

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Speaker 1: of the year. And Megan Murphy who led all of

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Speaker 1: Bloomberg's politics coverage this year and is now on a

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Speaker 1: new venture leading Business Week magazine. So thanks for joining us, Megan,

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Speaker 1: Thanks for having me. All right, So now that we

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Speaker 1: have all that out the way, let's talk about our

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Speaker 1: favorite stories this year. And uh, Ed, Let's start with you.

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Speaker 1: What was your favorite story of I'm not going to

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Speaker 1: go with the deal story. I was sort of tempted

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Speaker 1: to self grandize and go with the deal that we

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Speaker 1: had broken by I decided instead to go with the

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Speaker 1: story from July, which I partly like because it was

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Speaker 1: kind of in the summer when everything was quiet, and

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Speaker 1: it was the story of Brett Barner, who was the

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Speaker 1: hedge fund manager um at Louis Bacon's fund, and he

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Speaker 1: trashed his mansion out in the Hampton's and it was

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Speaker 1: just it was one of these classic you know, we

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Speaker 1: all sort of no hedge fund guys like that, and

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Speaker 1: they all pretend desperately that they're not a tool like that,

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Speaker 1: and they're actually very responsible and they do all this

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Speaker 1: charity stuff. But he did exactly what we all know

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Speaker 1: they really do, which was go to a mansion, spray

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Speaker 1: people with champagne, throw midgets in a swimming pool, um,

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Speaker 1: I think, leave the mansion in a pretty despicable state.

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Speaker 1: And then obviously he went on to NBC and defended

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Speaker 1: himself and said that it was all good fun, it

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Speaker 1: was harmless, that the midgets weren't actually there was sort

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Speaker 1: of paid entertainment. They were friends of his family. Uh.

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Speaker 1: And Louis macn um eventually fired him and I think

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Speaker 1: put out a statement which was sort of ridiculous, that's

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Speaker 1: something like his behavior was not consistent with the personal

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Speaker 1: views of the fun and it was just one of

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Speaker 1: these great, you know moments where it all kind of

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Speaker 1: it was all, um, what we think about these guys,

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Speaker 1: and as I say, they worked very hard to beat

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Speaker 1: anything but that, and it became incredibly public and it

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Speaker 1: was very foolish of him, I think, to go on

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Speaker 1: to the NBC and m making very limp case in

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Speaker 1: his defense. It was actual Wolf of Wall Street, right,

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Speaker 1: I think it was billed at the time. You know

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Speaker 1: what what's ironic about each using that story, ed, is

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Speaker 1: that one of the best stories of two thousand and

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Speaker 1: fifteen was his boss, Louie Bacon's unbelievable brawl with his

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Speaker 1: neighbor out in I think it was like the Bahamas,

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Speaker 1: Peter Peter and I guard and it was, oh man,

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Speaker 1: their fight was awful. You guys remember this. They accused

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Speaker 1: each other of murder, being in the Ku Klux Klan,

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Speaker 1: try dealing drugs. Louie Bacon and his neighbor really want

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Speaker 1: after each other. And uh that story And wasn't it

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Speaker 1: all because one was having potties like off the midnight?

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Speaker 1: It was? Indeed. Yeah. The other interesting thing about this

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Speaker 1: story is it's also kind of a story of about

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Speaker 1: like modern media and social media because it was all

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Speaker 1: over Instagram, right, so there probably is a time when

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Speaker 1: they could have had this party and then just paid

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Speaker 1: the owner of the house the clean up fee and

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Speaker 1: maybe some extra fee, and that would have been it.

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Speaker 1: But the fact that all these people came to the

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Speaker 1: party and posted about it on social media. Uh, and

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Speaker 1: so that that those images live forever really makes um

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Speaker 1: really makes it hard for these stories to remember. The

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Speaker 1: hashtag spray than which apparently is a thing, right who knew?

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Speaker 1: But apparently all these guys doing a sprayer thon, and

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Speaker 1: it was this kind of this great disconnect between the

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Speaker 1: behavior of the people there are apparently with the people there,

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Speaker 1: and what they were doing it for, which was apparently

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Speaker 1: to raise money for I think was it an animal

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Speaker 1: shelter like I Lost dog shelter or something, And yet

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Speaker 1: they were obviously doing things that were seen as some

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Speaker 1: overly debauched even by their employers standards. It was a

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Speaker 1: rental house too, I believe didn't you didn't you rent

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Speaker 1: the house? It was? And I think the sort of

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Speaker 1: the alternate version of the story, the one that Mr

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Speaker 1: Barnard came out with, was that the owner of the

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Speaker 1: house was just trying to shake him down for more money,

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Speaker 1: and the person who rented in the house and asked

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Speaker 1: for like twenty dollars in cash up front, and was

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Speaker 1: this kind of dodgy guy and had all these other

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Speaker 1: things going on. I think it was. It did come

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Speaker 1: out that the guy who rented in the house had

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Speaker 1: some problems of his own, But anyway, it was just

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Speaker 1: one of these great stories in the middle of the

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Speaker 1: summer and everything is normally quite quiet and flat, and

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Speaker 1: it's sort of it brightened up my July. And none

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Speaker 1: of us were invited. Is the worst part? That is?

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Speaker 1: That is the real worst part. Speak for yourself. Do

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Speaker 1: you think part of the reason why that story took

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Speaker 1: off was look in the middle of a campaign season,

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Speaker 1: you know, Wall Street vilified by more than one candidate,

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Speaker 1: and you know, just the midget throwing. It's almost like

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Speaker 1: a cliche. It's almost like, could this really be true? Wow,

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Speaker 1: it is actually true. I believe the official name of

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Speaker 1: the sport is dwarf tossing, not midget throwing. I just

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Speaker 1: want just for the record for the historians. Traditionally, this

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Speaker 1: kind of debauchery takes place at market tops, right, and

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Speaker 1: everyone just is so so flush with cash that they

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Speaker 1: decided to spend it on rented midgets or dwarves or um,

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Speaker 1: whatever term we choose. Well, what was the date, because

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Speaker 1: the bond market did peak on July eight, so maybe

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Speaker 1: we could go back to uh, maybe maybe that was

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Speaker 1: in fact the bottom of ten year yields. That would

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Speaker 1: be a great one. This was July seven. He got fired.

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Speaker 1: He got fired on the seventh. I think the party

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Speaker 1: was the weekend before. But why, in the political climate

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Speaker 1: that you know prevailed for much of this year, and

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Speaker 1: really the post financial crisis landscape, why would you give

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Speaker 1: your foes something like this to grab hold off. I

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Speaker 1: don't get it. That is that's the huge blunder. All right, Max,

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Speaker 1: let's stay on the Wall Street theme and uh, let's

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Speaker 1: talk to you. What was your favorite story of Business Week?

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Speaker 1: Does a good thing called the envy List where everyone

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Speaker 1: has to pick an article by someone outside of Bloomberg,

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Speaker 1: which is good because you know, if you flat of

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Speaker 1: your colleagues too much, you see it as a sucker.

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Speaker 1: So I picked some stories outside of Bloomberg that I

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Speaker 1: admired very much. One of them was about something that

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Speaker 1: I just I don't think I even really knew existed

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Speaker 1: before private prisons. Mother Jones did this four month investigation

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Speaker 1: into private prisons that was so good that basically the

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Speaker 1: Department of Justice within a few weeks after it was like, yeah,

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Speaker 1: we're not going to use private prisons any longer. And

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Speaker 1: the stock plummeted. And the amazing thing for me, besides

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Speaker 1: the fact that the story was just an incredible story,

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Speaker 1: because that it had all this effect and that, but

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Speaker 1: on the other hand, Trump won the election, of course

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Speaker 1: the stock went right back up to where it was

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Speaker 1: before for the Mother Jones investigation and private prisons came out. Yeah, Joe,

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Speaker 1: I remember we wrote that story right like the day

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Speaker 1: after Trump's win. We wrote the prison private prison stocks

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Speaker 1: were surging and the idea was maybe, um, the Justice

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Speaker 1: Department was going to back down on all of this.

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Speaker 1: It's it's incredible. I wonder what the writer, whose name

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Speaker 1: is Shane Bauer, I wonder what he thinks that he spent.

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Speaker 1: What he did is he got a job in a

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Speaker 1: private prison run by c c A. It's that the

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Speaker 1: Corrections Corporate America, although actually they just they just changed

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Speaker 1: their name to too Much. It has like it's called

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Speaker 1: like civics now something it's gotten very probably it has

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Speaker 1: very benign sounding name. So you know, afterwards, the Department

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Speaker 1: of Justice, the Inspector General Report came out with a

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Speaker 1: report that basically agreed with this guy's investigation. He got

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Speaker 1: a job in one of these prisons, and it is

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Speaker 1: it's a dark I really recommend everyone reads it very

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Speaker 1: very very depressing. It sounds like something from the wire.

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Speaker 1: It's really really bleak portrait of how untrained these guards are.

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Speaker 1: And you know, I assume the stock market pop because

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Speaker 1: Trump is going to reverse that decision and they're going

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Speaker 1: to go back to it. Yeah, those stocks really went

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Speaker 1: nuts the day after the election. On the other hand,

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Speaker 1: I just have to say two downs sixteen was such

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Speaker 1: a good year for business. Jersalm. I want to give

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Speaker 1: a quick shout out to a couple of other things

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Speaker 1: that I've loved. So because I'm a classy guy surrounded

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Speaker 1: by English people, I want to mention the London Review

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Speaker 1: of Books had a beautiful, beautiful piece about Satoshi and

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Speaker 1: it was by a guy named Andrew O'Hagan, the bitcoin founder.

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Speaker 1: The bitcoin founder. Though the question is what was this

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Speaker 1: guy the bitcoin founder. It's like the size of a novel.

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Speaker 1: It's like forty thou words. I think it must have

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Speaker 1: taken up all of the l RB that week. Also

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Speaker 1: a beautiful, beautiful story that's similar to that first one.

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Speaker 1: A little bit dissatisfying because you get to the end

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Speaker 1: of this monster monster piece and you're not quite sure

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Speaker 1: which way is up. But that's I think that's sort

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Speaker 1: of an accurate that's only you know, no one knows

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Speaker 1: which way is up in in bitcoin anyway. I mean,

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Speaker 1: I quickly have to say, my former New York Observer

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Speaker 1: colleague Gabe Sherman just went bonkers this year writing about

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Speaker 1: Fox Fox News, I mean basically single handedly costs the

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Speaker 1: top man his job. That's like a good example of

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Speaker 1: someone who just like owned a story for a long

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Speaker 1: time and then just like went to town and just

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Speaker 1: totally dominated it. And unless you had been following Fox

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Speaker 1: News as a beat for years, you could never have

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Speaker 1: done what he did. What's cool for me as a

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Speaker 1: journalist is that Gabe wrote a book about Fox News

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Speaker 1: a couple of years ago that said that Roger Ales

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Speaker 1: was basically creepy with women. But then the thing is,

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Speaker 1: nothing happened. The book sort of disappeared, and he stayed

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Speaker 1: on the beat for years after the book came out,

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Speaker 1: which you know, I whant to write a story, even

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Speaker 1: if I've only spent a couple of weeks on it

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Speaker 1: and it doesn't do well. I want to like, I

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Speaker 1: want to die. I want to crawl up under my

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Speaker 1: bed and not work ever again. But he's got sued

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Speaker 1: over that didn't something I don't. I don't think gig

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Speaker 1: got suit. No, Okay, well we've had to kind of

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Speaker 1: wall streety politics see things. Why don't we go over

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Speaker 1: Let's let's do Mike and let's have him maybe maybe

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Speaker 1: bring us a market story. I don't know, Mike, what

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Speaker 1: do you have for us? Well, this one's a little

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Speaker 1: bit out of left field, and and Max is going

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Speaker 1: to make me feel like a suck up here for

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Speaker 1: actually choosing a Timberg Business Week story. But it really

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Speaker 1: was my favorite story of the year, by Matthew Campbell

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Speaker 1: and Kit chill l It was about a Goldman Sachs

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Speaker 1: trader in Libya. He went to Tripoli and it was

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Speaker 1: right when sort of Libya's markets were ringing up. And

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Speaker 1: the story, if I were to pick one story of

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Speaker 1: the year that would sort of you could make a

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Speaker 1: feature film out of, this would be it. And it

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Speaker 1: starts off describing like you know what a lousy place

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Speaker 1: Libya is for a banker to do business. You know,

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Speaker 1: there's not many five star hotels, not many courbet restaurants,

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Speaker 1: but there is a sixty billion dollar sovereign Wealth fund UM.

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Speaker 1: And this trader, Yusef Cabbaje cozied up to the sovereign

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Speaker 1: Wealth fund and it was a good salesman. They the

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Speaker 1: story describes him as Goldman's basically their biggest rainmaker. He

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Speaker 1: got the Sovereign Wealth Fund to invest in a lot

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Speaker 1: of very risky equity, uh, derivative synthetic equity derivatives in

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Speaker 1: positions in banks, and the timing was really unfortunate. It

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Speaker 1: was right before the financial crisis, and very quickly these

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Speaker 1: positions just went south and uh he handed up losing

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Speaker 1: the sovereign wealth and ended up losing about one point

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Speaker 1: two billion dollars uh. And this guy basically had to

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Speaker 1: flee for his life out of Tripoli. And the reason

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Speaker 1: I think this year it's kind of interesting is because

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Speaker 1: the story came out at the same time as a

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Speaker 1: big discussion in the US about the fiduciary standard. Uh,

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Speaker 1: you know, should you hold brokers accountable obviously for mom

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Speaker 1: and pop retirees, and this case went to court this year.

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Speaker 1: Actually Goldman won the case. And you know, the argument

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Speaker 1: was should a sixty billion dollars sovereign wealth fund, you know,

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Speaker 1: shouldn't they be sophisticated enough to know what they're dealing with.

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Speaker 1: They they claimed that Goldman had sort of led them

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Speaker 1: astray with these uh, with these investments. UM. So fascinating story.

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Speaker 1: I encourage everyone to google it and hopefully it will

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Speaker 1: be a motion picture someday, if there's anyone from Hollywood listening.

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Speaker 1: So Goldman in the end, Um, they didn't get in

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Speaker 1: trouble for it, right they Yeah, they were cleared. Yeah,

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Speaker 1: they won the case. I mean it. You know, it's

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Speaker 1: dragged on for years. Obviously Kadafi was ousted and then

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Speaker 1: that that complicated things. But the verdict came uh police

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Speaker 1: it was in the fall around October, uh, and Goldman

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Speaker 1: actually prevailed. So fascinating. You know what I love about

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Speaker 1: stories like this is when we think of trading in

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Speaker 1: the year sixteen or seen. You just think of someone

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Speaker 1: behind a terminal looking at lots of screens with numbers

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Speaker 1: blinking green or red, uh, looking at charts and lines

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Speaker 1: on charts and going through spreadsheets, but any story that

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Speaker 1: involves legwork and having to say, hey, here's a huge

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Speaker 1: pile of money somewhere. It's in Libya, and I'm going

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Speaker 1: to get on a plane and try to get some

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Speaker 1: of it. And anything you know that's it's sort of

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Speaker 1: real is a good reminder that there is in finance,

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Speaker 1: there's still this sort of uh, you know, well literal

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Speaker 1: frontier market but sort of wild west frontier aspect to

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Speaker 1: it that if you have the sort of get on

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Speaker 1: a plan and try and get some of it, that

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Speaker 1: you can make money that way. Yeah. Matt Levine wrote

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Speaker 1: a column about it that was pretty interesting, basically saying

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Speaker 1: the sort of the salesmanship has been sucked out of

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Speaker 1: Wall Street because of computerized automated trading. Uh. And here's

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Speaker 1: an example of a good salesman, right for better or worse?

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Speaker 1: You know this what's and also what's fascinating to me

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Speaker 1: is this guy went from being considered, you know, Goldman's

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Speaker 1: top rainmaker too when everything went south, he was sort of,

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Speaker 1: you know, the biggest goat in the Goldman you know.

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Speaker 1: And and it's it's interesting how quickly your fortunes can

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Speaker 1: change on Wall Street. You know, one day, you're at

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Speaker 1: the top and then something goes wrong and you're you're

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Speaker 1: quickly find your way on the bottom. I wonder what

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Speaker 1: the hero or anti hero of that story would make

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Speaker 1: of the hotel scene in Tripoli right now. I mean

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Speaker 1: that was back when Libya had a government, right right,

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Speaker 1: So probably as rough as it is, that than significantly

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Speaker 1: rougher ye exactly accuately, the would be a few more opportunities.

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Speaker 1: That's a good point. I don't know what the golden

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Speaker 1: will to send an army over to investigate. We'll see,

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Speaker 1: all right. Megan Murphy, you had probably the most important

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Speaker 1: beat often as a leader of Bloomberg's politics coverage, obviously

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Speaker 1: the election of being the defining story of the year.

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Speaker 1: So as you look back at what was your favorite story,

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Speaker 1: I have to say this, just because I'm on with

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Speaker 1: with with Joe and Tracy, that I have picked out

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Speaker 1: a market's theme. Thank you. Um, it's probably like our

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Speaker 1: first one. So for me that it was really the

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Speaker 1: Mexican pay so because here's why, you know, when as

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Speaker 1: the politics editor of the cycle, I have to admit

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Speaker 1: that people will come to me with all sorts of crab.

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Speaker 1: You know, Oh, we're seeing a reaction and you know,

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Speaker 1: various different esoteric corners of the market as the sort

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Speaker 1: of Trump and Clinton uh punch off sort of lumbered along,

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Speaker 1: and we and we have to be you know, we

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Speaker 1: would always say to people that you know, even as

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Speaker 1: late as the summer, we weren't really seeing that much

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Speaker 1: impact in the market. We we felt that markets were

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Speaker 1: very late and sort of thinking about a Trump presidency

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Speaker 1: and pricing in the reality of this, and that market

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Speaker 1: seemed relatively calm, and so I have to admit that

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Speaker 1: we would we constantly sort of back back. I think

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Speaker 1: Tracy and I were probably some of the people that

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Speaker 1: came to random stories. But the one, sorry, Megan, the

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Speaker 1: one thing that was actually real was the Mexican pay

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Speaker 1: so and and just that sort of with you know

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Speaker 1: of Mexican uh, you know, exports going into the US

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Speaker 1: and watching that currency and watching how much I went

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Speaker 1: back this morning and actually was looking back at some

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Speaker 1: of the moments. So I'm talking moments when sort of

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Speaker 1: Trump's groping tape gets released. It's like Mexican PAYSA strengthens,

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Speaker 1: and there's all these bloomer headlines. It's like Mexican pasa

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Speaker 1: strengthens as groping video. It's released, and and and it

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Speaker 1: was fascinating to me because you know, I did the

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Speaker 1: election that coverage and on the night, you know, I

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Speaker 1: think the pay so fo what was it? And just watching,

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Speaker 1: you know, watching that and again it was it was

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Speaker 1: almost you know, it became such a barometer and such

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Speaker 1: a fun, I hate to say that, a very fun

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Speaker 1: indicator of where we were going after the debates and

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Speaker 1: every little moment in the Trump campaign when I think

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Speaker 1: about it, and became a running joke on my desk

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Speaker 1: is where's the Mexican pay So There's two things I

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Speaker 1: really like about the fact that the pace so became

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Speaker 1: the ultimate barometer for how the election was going. One, obviously,

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Speaker 1: I just amused at all these politics reporters having to

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Speaker 1: follows in my hands, but more importantly, not only politics

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Speaker 1: reporters having to follow a currency, but learning that when

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Speaker 1: the Mexican paceo goes down, the line on the chart

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Speaker 1: is going up, which must have known a bunch of

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Speaker 1: people's minds, because of course, the convention and currencies is

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Speaker 1: that in most cases are three exceptions. The dollar comes first,

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Speaker 1: so it's US d m x N, which means that

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Speaker 1: the traditional way you characterize that is to the dollar

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Speaker 1: rallying against the pace. So so I'm so happy that

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Speaker 1: all these politics reporters that have never thought about this

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Speaker 1: learned an important aspect of quote currency quoting conventions because

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Speaker 1: of this election. And some were very skeptical. Some were

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Speaker 1: very skeptical. Some were very skeptical. There's also a bit

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Speaker 1: of irony in that that weaker currency was, you know,

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Speaker 1: probably a really a good thing for Mexico's economy. Ultimately,

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Speaker 1: you know how many Americans are checking out Cabo now

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Speaker 1: for for spring break because it's so true. Mexico's manufacturing

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Speaker 1: competitiveness having increased because the currency plunged on Trump's wind

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Speaker 1: is the ultimate irony. And these were very, very sophisticated views.

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Speaker 1: I visited our colleagues in Mexico City Bureau in August,

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Speaker 1: and you know, almost without question, the economists, the officials,

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Speaker 1: the investors that we met, they all knew far more

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Speaker 1: about what had transpired in the campaign that day than

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Speaker 1: I did. Be going to breakfast at an investment bank

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Speaker 1: at seven o'clock, they had all read five thirty eight,

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Speaker 1: they had all read the daily two oh two. They

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Speaker 1: were all set for the day that well, I guess that.

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Speaker 1: I mean that gets to one of the interesting things,

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Speaker 1: um that I was thinking when we were watching them

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Speaker 1: pay so, is like I get how it became a

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Speaker 1: barometer for the election outcome. But on the other hand,

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Speaker 1: there's it was kind of weird that people just settled

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Speaker 1: on this one asset as the thing that they were

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Speaker 1: going to trade, um, the election with, right, because you

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Speaker 1: could have chosen all sorts of things you could have chosen,

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Speaker 1: you know, the betting market, for instance, is a more

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Speaker 1: direct thing, or bank stocks or drugs docks or anything. Well,

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Speaker 1: the Mexican paso is the most liquid, most actively traded

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Speaker 1: emerging market currency, so it kind of becomes a proxy

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Speaker 1: for emerging markets generally. And look the other country that

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Speaker 1: was in the crosshairs of Donald Trump, China. Not a

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Speaker 1: lot you can do with that market. Good point. Another

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Speaker 1: one other point that I want to make about this,

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Speaker 1: and this speaks exactly to what Tracy was saying, is

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Speaker 1: in markets, you can get to a point where the

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Speaker 1: underlying reality is not that important. And what happens is,

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Speaker 1: you know Cain's talked about this in uh, you know,

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Speaker 1: his concept of the beauty contest, which I think we've

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Speaker 1: talked about before on this on this podcast, which is

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Speaker 1: that markets are not really about figuring out who is

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Speaker 1: the most beautiful person in the beauty contest, but in

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Speaker 1: trying to figure out who the people you're competing against,

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Speaker 1: trading against who they think will be the most beautiful

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Speaker 1: person in the contest. And then there's endless layers of that.

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Speaker 1: So everybody else knows that that's how everyone is playing

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Speaker 1: the game. So at some point you settle on this

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Speaker 1: idea that the Mexican pasto is the proxy for the election,

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Speaker 1: And even if there's not necessarily any particular object to

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Speaker 1: it as being the best, the fact that we've all

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Speaker 1: settled on it as the proxy makes it a reality nonetheless.

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Speaker 1: And in my view, that's when markets get more interesting,

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Speaker 1: get at their peak interestingness, when they sort of become

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Speaker 1: almost purely expressions of group psychology very end, get further

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Speaker 1: and further divorced from underlying reality. So I love I

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Speaker 1: love this, call Megan, great choice. All right, Dan Moss,

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Speaker 1: what was your favorite story of We're going to go

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00:23:32,000 --> 00:23:38,840
Speaker 1: to Japan and a more economic landscape? So on July one,

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Speaker 1: two of our colleagues in Tokyo published a story citing

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00:23:44,000 --> 00:23:47,400
Speaker 1: people familiar with the discussions as saying that an increasing

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00:23:47,560 --> 00:23:53,119
Speaker 1: number of b o J insiders concerned about the sustainability

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00:23:53,960 --> 00:23:57,800
Speaker 1: of what was then the monitary policy framework in Japan,

437
00:23:58,760 --> 00:24:02,720
Speaker 1: which was the road to throw everything at the kitchen sink.

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00:24:03,240 --> 00:24:06,000
Speaker 1: Quei as far as the I can see, just keep

439
00:24:06,080 --> 00:24:08,560
Speaker 1: hitting it and hitting it and hitting it in the

440
00:24:08,640 --> 00:24:12,160
Speaker 1: hopes that that inflation target can get up to two.

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00:24:12,720 --> 00:24:16,280
Speaker 1: What our reporters we're hearing was WHOA inside the building,

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00:24:16,640 --> 00:24:19,640
Speaker 1: there's increasing concern about, look, where are we going here?

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00:24:20,320 --> 00:24:24,040
Speaker 1: And sure enough, a week later, when the bj was

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00:24:24,080 --> 00:24:29,400
Speaker 1: expected to do a large easing, they announced a policy review.

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00:24:29,600 --> 00:24:31,200
Speaker 1: Things are going to be on hold for a couple

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00:24:31,280 --> 00:24:33,200
Speaker 1: of months, that we're going to think about it over

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00:24:33,240 --> 00:24:35,600
Speaker 1: the summer, and they're going to come back. And when

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00:24:35,600 --> 00:24:38,800
Speaker 1: they came back, what they had was a whole new framework.

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00:24:39,200 --> 00:24:42,199
Speaker 1: They were instead going to target various points on the

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00:24:42,320 --> 00:24:49,080
Speaker 1: yield curve rather than a quantitative amount of money. Big shift.

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00:24:51,040 --> 00:24:53,720
Speaker 1: That is it unusual to get that sort of you know,

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00:24:53,800 --> 00:24:58,280
Speaker 1: inside the palace holes type of gossip from the b

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00:24:58,440 --> 00:25:01,840
Speaker 1: o J. And also is it an unusual situation in

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00:25:01,880 --> 00:25:04,440
Speaker 1: the United States where every member of the Fed goes

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00:25:04,440 --> 00:25:08,159
Speaker 1: off on their own little speaking tour between events, you know,

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00:25:08,160 --> 00:25:12,199
Speaker 1: and which sort of approach do you think makes more sense. Well,

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00:25:12,280 --> 00:25:15,879
Speaker 1: let's take the second one first. There are quite a

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Speaker 1: large number of members of the Bank of Japan's Monetary

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00:25:19,440 --> 00:25:22,920
Speaker 1: Policy Committee who makes speeches in various parts of the country.

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00:25:23,280 --> 00:25:26,000
Speaker 1: They just tend not to make the headlines. They tend

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00:25:26,040 --> 00:25:28,720
Speaker 1: to be more cautious than what they say, and in

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00:25:28,800 --> 00:25:32,879
Speaker 1: some of Kuroda's biggest decisions, the votes were split and

463
00:25:32,880 --> 00:25:36,960
Speaker 1: it was really only his vote that carried the day.

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00:25:37,000 --> 00:25:40,400
Speaker 1: So you know, it's not a monolithic thing. They are

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00:25:40,440 --> 00:25:43,280
Speaker 1: in various parts of the country making speeches, but for

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00:25:43,320 --> 00:25:47,920
Speaker 1: some reason they tend not to resonate outside Japan. But

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00:25:48,200 --> 00:25:52,119
Speaker 1: the dissension is real, and it's there now. The flip

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00:25:52,160 --> 00:25:54,359
Speaker 1: side of your question was is it a problem that

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00:25:54,400 --> 00:25:58,040
Speaker 1: there's too many fair officials speaking in too many places,

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00:25:58,040 --> 00:26:02,600
Speaker 1: saying too many different things. The trick there, and we

471
00:26:02,680 --> 00:26:07,000
Speaker 1: wrestle with this daily, is trying to figure out which

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00:26:07,040 --> 00:26:12,360
Speaker 1: officials matter the most at anyone given point in the cycle.

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00:26:13,160 --> 00:26:16,520
Speaker 1: No names, but for example, if there's someone who's a

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00:26:16,680 --> 00:26:21,040
Speaker 1: chronic dissenter known as a hard money person with a

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00:26:21,200 --> 00:26:27,800
Speaker 1: track record of being predisposed against further easing. It's important

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00:26:27,800 --> 00:26:31,160
Speaker 1: to take that into account when understanding what that person says,

477
00:26:32,000 --> 00:26:34,560
Speaker 1: and the markets do struggle with that, I think sometimes,

478
00:26:35,200 --> 00:26:38,199
Speaker 1: and I can understand it so down. I love that

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00:26:38,280 --> 00:26:41,080
Speaker 1: you chose this story because I think a lot of

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00:26:41,080 --> 00:26:43,920
Speaker 1: people maybe not forget, but this doesn't get as much

481
00:26:43,920 --> 00:26:46,800
Speaker 1: attention as it should. The Bank of Japan was, of

482
00:26:46,840 --> 00:26:52,280
Speaker 1: course at the forefront of easy monetary policy and experimental

483
00:26:52,359 --> 00:26:56,160
Speaker 1: monetary policy, and the fact that they kind of um

484
00:26:56,400 --> 00:27:01,720
Speaker 1: started rethinking that strategy this year speaks to the rest

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00:27:01,760 --> 00:27:04,760
Speaker 1: of the world and really the efficacy of things like

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00:27:04,880 --> 00:27:08,399
Speaker 1: quantitative easing and of things like negative interest rates. Right,

487
00:27:09,240 --> 00:27:13,000
Speaker 1: You're absolutely right, and privately officials will tell you. Yet, look,

488
00:27:13,040 --> 00:27:15,960
Speaker 1: we know we're a laboratory. We're not that proud of it,

489
00:27:16,720 --> 00:27:19,359
Speaker 1: but we were out there first. And the things that

490
00:27:19,440 --> 00:27:24,359
Speaker 1: Japan has been wrestling with, demographic change, a burst, property bubble,

491
00:27:25,560 --> 00:27:28,840
Speaker 1: these are things that are no longer just a Japanese issue.

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00:27:29,280 --> 00:27:33,280
Speaker 1: The big difference is while Japan has a shrinking labor

493
00:27:33,320 --> 00:27:37,480
Speaker 1: market a shrinking population, there is not a robust embrace

494
00:27:37,560 --> 00:27:42,440
Speaker 1: of immigration. I also I agree with Tracy that there's

495
00:27:42,480 --> 00:27:45,359
Speaker 1: a great story because yea, as as Tracy put it,

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00:27:45,400 --> 00:27:48,199
Speaker 1: we're seeing a lot of these same rethinks throughout the

497
00:27:48,240 --> 00:27:51,439
Speaker 1: world this year. The strategy of buy a bunch of

498
00:27:51,480 --> 00:27:57,000
Speaker 1: stuff and said an inflation target is arguably worked, or

499
00:27:57,880 --> 00:28:00,760
Speaker 1: has been mediocre at best, or is maybe just worked

500
00:28:00,800 --> 00:28:03,040
Speaker 1: a little bit not as as strong as people thought.

501
00:28:03,400 --> 00:28:05,919
Speaker 1: Great story that we'll keep watching. All right, Well, I

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00:28:05,920 --> 00:28:09,240
Speaker 1: want to thank all you guys for giving your favorite

503
00:28:09,280 --> 00:28:15,280
Speaker 1: stories of fantastic list. Ed Hammond, our Deal's reporter, thank you,

504
00:28:15,680 --> 00:28:21,160
Speaker 1: Thank you, Mike Reagan, Markets Maven, thank you, Max Abelson

505
00:28:21,320 --> 00:28:25,000
Speaker 1: great uh great stories from showing some great range on

506
00:28:25,040 --> 00:28:27,800
Speaker 1: that and giving some shout outs to some non Bloomberg folks.

507
00:28:28,440 --> 00:28:31,880
Speaker 1: Thank you so much. Megan Murphy loved your call, Thank you,

508
00:28:32,160 --> 00:28:46,520
Speaker 1: and Dan Moss thanks a lot. Okay, Joe, Well, that

509
00:28:46,640 --> 00:28:51,560
Speaker 1: was our special hindsight episode. I guess I mean in

510
00:28:51,600 --> 00:28:54,480
Speaker 1: all seriousness, I really love talking about the stories that

511
00:28:54,680 --> 00:28:58,800
Speaker 1: are fellow journalists um loved this year or found interesting

512
00:28:58,920 --> 00:29:03,040
Speaker 1: or important. It's good to get a range from different perspectives, right,

513
00:29:03,120 --> 00:29:06,520
Speaker 1: not just markets people. Totally I think I loved I

514
00:29:06,560 --> 00:29:09,880
Speaker 1: had totally forgotten about the spray Athon party because in

515
00:29:09,920 --> 00:29:15,440
Speaker 1: the year which so much huge earth moving events happened.

516
00:29:15,880 --> 00:29:19,800
Speaker 1: It's easy to have forgotten about a party that got

517
00:29:19,800 --> 00:29:23,080
Speaker 1: a plastered all over Instagram with a silly hashtag. But

518
00:29:23,760 --> 00:29:26,200
Speaker 1: maybe maybe in retrospect that will have been the most

519
00:29:26,200 --> 00:29:30,720
Speaker 1: important story of the year, right because of the market link.

520
00:29:30,800 --> 00:29:34,040
Speaker 1: But I mean, you brought up the point about social media,

521
00:29:34,200 --> 00:29:38,040
Speaker 1: and I think probably for almost all of the stories

522
00:29:38,080 --> 00:29:41,520
Speaker 1: that we just spoke about, there is a social media angle,

523
00:29:41,720 --> 00:29:44,960
Speaker 1: and we've been talking about this on the podcast a lot.

524
00:29:45,040 --> 00:29:48,560
Speaker 1: But like the degree to which social media has changed

525
00:29:48,600 --> 00:29:53,000
Speaker 1: the landscape of everything from politics to economics, to markets,

526
00:29:53,040 --> 00:29:56,360
Speaker 1: to the way finance works, um to the possibility of

527
00:29:56,400 --> 00:29:59,960
Speaker 1: some hedge fund guy getting his party outed much fast

528
00:30:00,080 --> 00:30:04,280
Speaker 1: or than he would otherwise, it's just phenomenal. Yeah, I'm

529
00:30:04,320 --> 00:30:07,160
Speaker 1: actually of the view that for as much as we

530
00:30:07,200 --> 00:30:09,320
Speaker 1: talk about social media, and we've talked about a lot

531
00:30:09,360 --> 00:30:12,080
Speaker 1: on this podcast and people talk about it all the time,

532
00:30:12,560 --> 00:30:16,080
Speaker 1: we arguably don't talk about social media enough overall in

533
00:30:16,160 --> 00:30:21,240
Speaker 1: this because I think the ramifications on every aspect of

534
00:30:21,240 --> 00:30:23,800
Speaker 1: our life of everyone being able to communicate with each

535
00:30:23,800 --> 00:30:27,200
Speaker 1: other and have their opinion on everything maybe even a

536
00:30:27,200 --> 00:30:31,080
Speaker 1: bigger deal than we realize. So all right, Well, we'll

537
00:30:31,120 --> 00:30:35,040
Speaker 1: do more social media podcasts in all Right. This has

538
00:30:35,080 --> 00:30:37,960
Speaker 1: been another edition of the odd Loads podcast. Thank you

539
00:30:38,120 --> 00:30:41,800
Speaker 1: so much to our listeners who joined us in sen

540
00:30:42,360 --> 00:30:46,040
Speaker 1: We'll be back with another fresh slate of episodes in

541
00:30:47,880 --> 00:30:50,520
Speaker 1: I'm Joe Wisn't Thought. You can follow me on Twitter

542
00:30:50,720 --> 00:30:53,800
Speaker 1: at the Stalwarts and I'm Tracy Alloway. I'm on Twitter

543
00:30:53,920 --> 00:31:03,040
Speaker 1: at Tracy Alloway. Thanks for listening a