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Speaker 1: Bloomberg Audio Studios, Podcasts, radio News.

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Speaker 2: Hello and welcome to another episode of the Odd Lots Podcast.

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Speaker 2: I'm Joe Wisenthal.

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Speaker 3: And I'm Tracy Alloway.

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Speaker 2: Tracy, I guess one good thing about market crow, I

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Speaker 2: don't know if it's even good because I like when

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Speaker 2: lines go up no matter what. But you know, people

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Speaker 2: always say, oh, this can't go on forever, and they're

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Speaker 2: talking about some specific trend or here's a scam or

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Speaker 2: here's a bezel in the economy that will exist as

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Speaker 2: long as the lines that go up. Things get revealed

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Speaker 2: in a downturn, Things that were unsustainable are shown to

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Speaker 2: definitively be unsustainable when the downturn hits.

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Speaker 3: Right, what's that old buffet quote when you don't see

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Speaker 3: who's swimming naked until the tide starts to go out.

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Speaker 3: And I think, I think we are probably at that moment.

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Speaker 3: And I got to say, in terms of who likes

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Speaker 3: when lines go down, you know who likes when lines

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Speaker 3: go down? Yeah, short sellars.

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Speaker 2: That's right, they definitely do. Especially what it's been like

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Speaker 2: fifteen years since the line has gone down, and so

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Speaker 2: many short sellers have had such a brutal time. Maybe

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Speaker 2: we'll put swimming naked in the headline of this.

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Speaker 3: Instead of a dead body is floating to the top.

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Speaker 2: Maybe it's a little we'll have to figure out. Anyway,

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Speaker 2: let's just jump right to it. We've had him on

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Speaker 2: the show in the past, someone we always enjoy talking to.

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Speaker 2: He is going to tell us about what bodies are

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Speaker 2: going to float to the service, and those bodies happen

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Speaker 2: to be naked too. He's gonna tell us what naked

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Speaker 2: bodies are floating to the service. Jim Chaeno is founder

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Speaker 2: of chenos In Company, longtime investor, short seller. Thank you

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Speaker 2: for coming back on odd Lots.

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Speaker 4: No, thanks for having me. It's my pleasure.

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Speaker 2: I only recently learned that Scott Bessen. I say recently learned,

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Speaker 2: as if I looked this up. I heard it from

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Speaker 2: you as you were walking into the studio. He worked

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Speaker 2: for you.

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Speaker 4: Yeah, he was my first analyst.

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Speaker 2: Incredible.

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Speaker 4: I taught him everything he knew up to a point,

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Speaker 4: I guess to a point.

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Speaker 3: Okay, all right, I'm just going to ask basic questions

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Speaker 3: to start. But what has the past week or so.

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Speaker 3: Let's see, we're recording this on April ninth at eight am. Yeah,

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Speaker 3: we have to be that specific on the time now

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Speaker 3: because things change so quickly. What has the past week

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Speaker 3: been like for you?

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Speaker 4: Well, we're not in the business of running outside money anymore,

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Speaker 4: so that ended a couple of years ago, but we

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Speaker 4: do advise clients and of course run our own money.

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Speaker 4: So since nineteen ninety six we've always been hedged. But

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Speaker 4: we've seen obviously substantial alpha in the last couple of weeks. Ie,

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Speaker 4: the stuff we're short has gone down much more than

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Speaker 4: the market. We tend to be long in the market passively,

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Speaker 4: and that usually happens right when the market shifts gears.

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Speaker 4: A lot of the more questionable story stocks, frauds, hypes

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Speaker 4: begin to underperform. And that was not the case until

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Speaker 4: really about the tariff, the Liberation day, and now it's

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Speaker 4: really kicked in.

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Speaker 2: If I'm a equity, if I'm an asset allocator, is

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Speaker 2: that why I allocate to someone who specializes in short selling,

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Speaker 2: Not because they are going to give me positive returns

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Speaker 2: a month after month after month, but that it allows

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Speaker 2: me to be more comfortably long risk assets in my

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Speaker 2: other investments because I have this knowledge that I'll get

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Speaker 2: outside return outside returns from you when they go down.

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Speaker 4: Yeah, in our business model over forty forty years. Basically

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Speaker 4: it morphed into the idea that fundamental shorts allow you

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Speaker 4: to be more long. Yeah, and that's really at the

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Speaker 4: end of the day, your shorts are financing your long portfolio.

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Speaker 4: If your shorts don't go up or go down, enables

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Speaker 4: you to have a long portfolio that actually will outperform. Yeah.

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Speaker 3: I mean, it is true that before this month, being

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Speaker 3: a short seller did not seem that fun for like

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Speaker 3: the past ten years, and we've done episodes on the

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Speaker 3: hard life of being a short seller. Are the games

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Speaker 3: now enough to offset like a decade of lines going up?

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Speaker 4: Well, again, the lines are going up. But it was

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Speaker 4: all a matter of if you're selling insurance as I

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Speaker 4: was and advised people do do now, the idea is

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Speaker 4: the insurance working, and the insurance was working really for

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Speaker 4: even post global financial crisis for quite a while, and

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Speaker 4: then starting about twenty eighteen, twenty nineteen, and right into

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Speaker 4: the Game Stop episode in the first quarter of twenty

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Speaker 4: twenty one, it didn't work at all. But it has

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Speaker 4: worked since Game Stop and even though the market's made

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Speaker 4: new highs, you know, recently, I think is January, the

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Speaker 4: short site has not been too bad. I mean, Bloomberg

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Speaker 4: has an index the most shorted basket, which you can

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Speaker 4: take a look at if you're a Bloomberg subscriber. Thank

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Speaker 4: you for the plug, my pleasure, and it has it

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Speaker 4: has done relatively well relative to the market since since

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Speaker 4: early twenty twenty one.

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Speaker 2: Let's talk about some areas of the market. Let's just

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Speaker 2: jump right into it. I think actually the last time

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Speaker 2: we had you on I'm looking at this was FTX

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Speaker 2: November or was it it wastually That's.

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Speaker 3: Right, it was actually before FTX imploded officially, but after

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Speaker 3: we did the infamous box episode.

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Speaker 2: But you know what, the last time we talked to

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Speaker 2: was November twenty third, twenty twenty two, right as FTX

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Speaker 2: was uploading. But there's just another point in the history

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Speaker 2: here that's important. November thirty of twenty twenty two was

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Speaker 2: when chaed GPT came out, and then we got this

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Speaker 2: incredible AI wave and people started piling everything into Nvidia

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Speaker 2: and all these data center plays, et cetera. And in

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Speaker 2: previous odd lads, and I don't remember what that was.

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Speaker 2: You've talked about data centers before. In some brutal data

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Speaker 2: center economics are terrible. One of the things that we've

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Speaker 2: seen in this downturn. See I'm putting this all together.

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Speaker 2: This is not totally incoherent. One of the things that

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Speaker 2: we've seen in this downturn is some really like sharp

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Speaker 2: reversals for the big AI plays that were baked. Those

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Speaker 2: were just so hot. And so I'm curious now, like

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Speaker 2: you know, you've talked about data centers, et cetera, tell

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Speaker 2: us where you're seeing some of this stuff right now.

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Speaker 4: So the AI bet is an uncertain bet. We don't

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Speaker 4: know what the returns on this massive investment is going

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Speaker 4: to be yet, and even the mag seven will tell you, yeah,

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Speaker 4: well it's uncertain. We think it's going to be worth

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Speaker 4: the risk, but it's an uncertain payot and I'll leave

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Speaker 4: that up to people who are much more well versed

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Speaker 4: in technology than I am. Our view was that the

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Speaker 4: old legacy data centers that were built to basically handle

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Speaker 4: the cloud, not AI. We're in trouble and we're a

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Speaker 4: bad business to begin with. It have gotten only worse.

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Speaker 4: And that was that was the bet. It's still the bet.

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Speaker 4: I think it's a really I've called it one of

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Speaker 4: the worst business models I've ever seen. Because the cap

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Speaker 4: x is enormous. You've got to keep replacing the air

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Speaker 4: conditionings and the racks and the networking equipment and to

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Speaker 4: keep these centers running, and the returns on capital are

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Speaker 4: just abysmally low. So we kind of said, oh, right,

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Speaker 4: AI is a thing. It's an uncertain thing. Market loved it.

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Speaker 4: Now market's questioning it. But we do know that the

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Speaker 4: old data centers, the ones that have been around now

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Speaker 4: twenty years, yeah, Equinas to Digital Realty, Digital Bridge, those

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Speaker 4: have really challenged business models.

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Speaker 3: So one of the things that happened recently is Core

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Speaker 3: We've did its IPO and it had initially targeted two

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Speaker 3: point seven billion and it came in at one point

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Speaker 3: five five billion. And the interesting thing to me is

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Speaker 3: part of that was a really big order from in Vidia,

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Speaker 3: and in Vidia is very interwoven with Core weaves model.

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Speaker 3: Since we're already talking about floating bodies and people swimming naked,

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Speaker 3: I'm going to try to be as distasteful as I can,

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Speaker 3: but how incestuous is the relationship between Core Weave and Nvidia.

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Speaker 4: So for those of us that are a little bit

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Speaker 4: older than you two, I mean, we remember some of

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Speaker 4: the round tripping that was going on in telecom equipment

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Speaker 4: back in nineteen ninety two thousand, with Nortel and Lucent

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Speaker 4: providing financing for its customers and then selling things into

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Speaker 4: those customers on cheap terms, and the whole thing unwound

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Speaker 4: very quickly when the dot com bubble and telecom bubble imploded.

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Speaker 4: I put a tweet out that got some notice where

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Speaker 4: I saw it in Nvidia not only was doing the

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Speaker 4: core weave kind of just but had just bought a

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Speaker 4: distributor there, and that that was also a little worrisome. Now,

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Speaker 4: it's only a small part of their business, it's not material.

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Speaker 4: But when you start to see this stuff on the margin,

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Speaker 4: where the companies are increasingly round tripping with their customers,

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Speaker 4: or financing their customers, or buying in their inventory via distributors,

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Speaker 4: you begin to wonder. You know, if it's just on

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Speaker 4: the margin, that's fine. But as we all know, on

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Speaker 4: the margin is everything right. If you miss your earnings

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Speaker 4: by a couple of pennies, your stock can be devastated.

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Speaker 4: And if they're doing deals like this to basically, you know,

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Speaker 4: make sure they make or beat numbers, you know, then

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Speaker 4: we have the old We have the old nineteen ninety eight,

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Speaker 4: ninety nine, two thousand, dynamic at work where companies are

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Speaker 4: stretching to make numbers. That has not been the case

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Speaker 4: up until now. Right through twenty twenty three, twenty twenty four,

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Speaker 4: demand's been amazing. Yeah, blowout numbers, but it's something to

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Speaker 4: keep an eye on at the shift.

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Speaker 2: So in other words, like the insinuation here is not

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Speaker 2: that there's something like per se bad, but history says

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Speaker 2: that when you see stuff like this, to keep the.

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Speaker 4: Real aggressively aggressive aggressive moves with your customers and your distributed.

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Speaker 2: Because that's what everyone's been wondering, right, And I guess

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Speaker 2: like all of this stuff with the trade turmoil has

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Speaker 2: like like we actually it's kind of amazing because I

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Speaker 2: think we've gone two weeks without talking about AI, which

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Speaker 2: may something maybe it's something that we could be a

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Speaker 2: little bit thankful for in some sense. But we're the

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Speaker 2: trade trade war to go away tomorrow. Yeah, and we

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Speaker 2: were returned to what we were talking about in January.

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Speaker 4: I saw your post earlier today about if tariffs run

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Speaker 4: away like this and all the other stuff that is

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Speaker 4: suddenly should.

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Speaker 2: Be a concern.

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Speaker 4: Yeah. I look on the margin again, on the margin

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Speaker 4: I think these numbers are not material that they're deal

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Speaker 4: with Core Week the distributor their bought, but it's something

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Speaker 4: to keep an eye.

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Speaker 2: On, Tracy, I just want to do, by the way,

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Speaker 2: some of these names are just for listeners digital realties below.

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Speaker 2: Where it was like at its twenty twenty peak, after

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Speaker 2: having plunged from about one ninety five to one thirty three,

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Speaker 2: named Cornweave was actually just slightly above its IPO price

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Speaker 2: of forty That was a czy day. It's anging in

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Speaker 2: the the said forty one thirty five right now. So anyway,

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Speaker 2: So one.

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Speaker 3: Of the things that happened in the early two thousands

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Speaker 3: with the telecoms and Internet bubble is I think people

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Speaker 3: a lot of people expected some of these companies to fail,

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Speaker 3: but I guess the bet was maybe a handful of

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Speaker 3: them would be huge winners from the development of the Internet.

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Speaker 3: And it's true. You know, we have like Google come

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Speaker 3: out of this. If you invested in Amazon, you made

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Speaker 3: a lot of money. Is there any possibility of that

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Speaker 3: happening when it comes to AI. Do you see a winner?

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Speaker 4: Oh? I mean, I think there's going to be a

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Speaker 4: lot of winners if it's as revolutionary as a technology

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Speaker 4: as it appears to be, we'll see all kinds of

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Speaker 4: new business models and probably a company that we might know,

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Speaker 4: like in video where ever succeeding, or maybe a couple

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Speaker 4: of companies we don't know yet that we'll take advantage

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Speaker 4: of it. The flip side to be the glass half

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Speaker 4: empty guy, is that what everyone also forgets about the

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Speaker 4: Internet was that it destroyed as many businesses as it

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Speaker 4: brought forward, you know, and any business that was in

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Speaker 4: the analog business that went digital, so you actually had

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Speaker 4: a physical product that went digital was absolutely devastated, like

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Speaker 4: Kodak or Blockbuster Video or the Yellow Pages, what have you.

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Speaker 4: And I suspect that AI will be very similar. We'll

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Speaker 4: see just you know you're a hater. No, No, I'm

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Speaker 4: open minded about it. I think if it really is

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Speaker 4: an amazing technology, and I think it just you're going

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Speaker 4: to have to see both sides of the coin for

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Speaker 4: capitalism with it. It'll probably it'll probably devastate a number

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Speaker 4: of business models as well.

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Speaker 3: What's the path to bundetization for these AI companies, because

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Speaker 3: you already pointed out the cost of capital is really high.

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Speaker 4: Uh, I don't know, and that's we still haven't seen

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Speaker 4: the the aha moment as we did with the Internet,

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Speaker 4: with with online retailing and communities like America Online where

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Speaker 4: suddenly you know your aunt was on it, and then

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Speaker 4: getting email money and paying money, paying money for it

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Speaker 4: and getting emails.

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Speaker 3: And you have mail.

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Speaker 2: Let's pivot because you have been fond over the years

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Speaker 2: to talk about this sort of myth that private equity

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Speaker 2: is something more than just adding leverage to companies and

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Speaker 2: that there's this perceived stability. Yeah, it's very nice. You

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Speaker 2: don't have to look at your marks every day that

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Speaker 2: it really is just leverage. And you know, I'm looking

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Speaker 2: at a share price. The shares of like Apollo, for example,

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Speaker 2: I guess maybe the Good Credit that was at one

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Speaker 2: eighty nine thirty on December ninth, that's at one oh nine.

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Speaker 2: Blackstone shares look pretty similar. We're talking like forty percent

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Speaker 2: declined air that was at two hundred. It's at one

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Speaker 2: eighteen right now. That's belower it was in late twenty

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Speaker 2: twenty one. Private assets are like the story that Tracy

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Speaker 2: and I keep coming back to. What is your takeaway

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Speaker 2: from this, like really intense selling of these names.

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Speaker 4: Yeah, I mean, I'm a little surprised at how intense

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Speaker 4: the selling has been so quickly. But look, I mean,

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Speaker 4: I agree with with the cliff Asnas who's done a

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Speaker 4: great job talking about this. This is volatility laundering, and

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Speaker 4: the idea that these funds don't have the same risks

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Speaker 4: as equity funds have is to me preposterous. You're buying

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Speaker 4: businesses on leverage, and we're now seeing that as it's

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Speaker 4: becoming increasingly hard for these deals, for them to bring

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Speaker 4: these deals public or get exits. And again on the margin,

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Speaker 4: you're seeing a little bit of odd behavior some of

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Speaker 4: the private equity funds in trying to entice their investors

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Speaker 4: to stick around. We'll have to see. I mean, up

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Speaker 4: until now, for the last fifteen years, getting back to

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Speaker 4: the beginning of our conversation, sell offs have been relatively

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Speaker 4: short and sharp. So if you held off on marking

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Speaker 4: your portfolio down, you generally were rewarded by not having

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Speaker 4: to take the mark right. The markets kept going, and

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Speaker 4: the nightmare scenario for private equity and arguably private credit

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Speaker 4: will be a long period of lackluster or no equity

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Speaker 4: returns with higher interest rates.

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Speaker 2: Can you actually just when you said, oh, at the margins,

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Speaker 2: we're starting to see some jinky behavior with regards to

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Speaker 2: their partner LPs. You what's going on.

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Speaker 4: There was a story I think on Bloomberg just yesterday

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Speaker 4: or the day before where one of the funds was

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Speaker 4: asking investors if they wanted to sell their LP investment

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Speaker 4: in one of the funds or transfer it, they had

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Speaker 4: to get permission from the GP. In order to get permission,

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Speaker 4: they had agree to put money into the next one.

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Speaker 4: And that story caught my eye, And so you know

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Speaker 4: when you start to see that, And now we're starting

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Speaker 4: to see time series of fun performance that are starting

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Speaker 4: to become more lackluster right rolling ten year returns and

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Speaker 4: private equity are beginning to converge with that of the

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Speaker 4: regular equity market.

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Speaker 3: To your point about the length of the selloff, I mean,

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Speaker 3: we've established that one of the competitive advantages of doing

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Speaker 3: private credit versus public is you're not forced to take

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Speaker 3: the marked market losses so soon you can hold on

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Speaker 3: for longer. Theoretically, we're seeing a lot of people right

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Speaker 3: now talk about, you know, emergency moves from the Fed,

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Speaker 3: maybe a cut sooner than the market had expected a

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Speaker 3: week or two ago. Do interest rates matter for private

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Speaker 3: credit at the moment? How much of a buffer for

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Speaker 3: what lower rates actually provide.

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Speaker 4: Here. Well, I think spreads matter, okay, so and we've

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Speaker 4: seen we've seen them widening out of credit spreads. So

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Speaker 4: I think that one of the reasons people think the

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Speaker 4: FED is going to ease is because of that right weakness,

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Speaker 4: not not because of low inflation. And so you're seeing

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Speaker 4: a relatively very quick increase in credit spreads over the

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Speaker 4: past two weeks. I mean, it's really moved. So I

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Speaker 4: don't think that that that's the panacea that people are expecting,

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Speaker 4: at least not yet. Even with a FED ease, because

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Speaker 4: junk credit is rates are going up.

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Speaker 2: Right, they could the FED could do something just about

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Speaker 2: like the sheer mechanical breakdown. If it's happening the plumbing,

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Speaker 2: the plumbing people love to talk about the plumbing of

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Speaker 2: the treasury market.

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Speaker 4: The base is straight. I read something. I read something

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Speaker 4: today about the basis.

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Speaker 3: Thank you, thank you for reading.

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Speaker 2: Listen, pause right there, listeners. Jim Chandos is a reader

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Speaker 2: of the Odd Launch newsletter, which means you should be

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Speaker 2: to what is it What does a GP of a

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Speaker 2: private fund do when the IPO window is slammed shut

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Speaker 2: when there really is not a lot of M and A.

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Speaker 2: So basically very few opportunities for liquidity or distribution or

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Speaker 2: anything like that. What kind of move do they make?

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Speaker 4: You? Better? Better practice your writing of a heartfelt apology

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Speaker 4: letters to your LPs, because the IRRs you've been telling

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Speaker 4: them that the fund has been getting prior to its

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Speaker 4: wind up are going to turn out to be way

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Speaker 4: overstated to the actual returns. So look, it's it's problematic.

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Speaker 4: I mean, investors are going to get back stakes in

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Speaker 4: private companies that they might not want. Oh so distributions

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Speaker 4: in kind, yeah, exactly, and so if you can't cash

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Speaker 4: out and so yeah, I think it's going to be

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Speaker 4: problematic for a number of funds. I mean, I'm sure

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Speaker 4: there'll be plenty that'll do fine. But the days of saying, well,

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Speaker 4: I'm going to earn fourteen fifteen percent with very little volatility,

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Speaker 4: so this is a free lunch, I think are over.

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Speaker 3: The other narrative that pops up from time to time

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Speaker 3: is this idea of dry powder. There are a bunch

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Speaker 3: of funds out there who have been holding cash for

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Speaker 3: a long time, just waiting to snap up distressed assets

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Speaker 3: once everything finally crashes. Is that real?

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Speaker 4: I don't know. I mean, you have to get into

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Speaker 4: the sort of weeds of every specific fund, but I mean,

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Speaker 4: if they've been holding cash for years and years and years,

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Speaker 4: they certainly weren't earning that fourteen and fifteen percent investors

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Speaker 4: were hoping for. So I don't know, I don't know

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Speaker 4: how the accounting works on that, but I'm sure. Look,

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Speaker 4: there is some unused capacity in the private equity world.

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Speaker 4: But on the other hand, that doesn't get you your returns.

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Speaker 4: You know, buying companies and adding value to them is

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Speaker 4: where the returns are. So if there were funds and

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Speaker 4: firms holding dry powder and asset prices get marked down

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Speaker 4: a lot, that should be good thing for them.

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Speaker 2: It just seems I mean, the issue to me, and

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Speaker 2: I've sort of talked about this in various ways, is

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Speaker 2: that for the last fifteen years, you're a dummy if

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Speaker 2: you had dry powder, right the market has told you

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Speaker 2: over and over again, right like, So this is why

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Speaker 2: I'm always kind of skeptical that there could even possibly

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Speaker 2: be much And it's interesting, you know, look like we're

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Speaker 2: like two weeks into or no, it's been a week

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Speaker 2: since Liberation Day, but you go a few weeks before

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Speaker 2: that obviously the weakness started picking up, and now we're

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Speaker 2: seeing you know, we've seen this sort of dislocation and treasuries.

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Speaker 2: It seems like if you have fifteen years of people

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Speaker 2: telling you you're a moron for holding, for being under levered, Yeah,

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Speaker 2: then a downturn in just sort of normal investments can

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Speaker 2: metastasize into financial problems very quickly.

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Speaker 4: Well, it also depends, tracy, how you define dry powder.

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Speaker 4: A lot of firms defined dry powder as the ability

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Speaker 4: to capital call on their limiteds. It's not actually cash

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Speaker 4: sitting in a bank acount. Yeah. Yeah, and I think

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Speaker 4: that will become much more problematic in a downturn.

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Speaker 2: I've got to pick up the phone.

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Speaker 4: Yeah yeah, look, yeah, so.

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Speaker 3: You're primarily a markets guy, but you are no stranger

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Speaker 3: to Macro. Talk to us a little bit about I

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Speaker 3: guess the relationship between what we're seeing in markets and

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Speaker 3: the real economy right now.

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Speaker 4: Yeah, I mean, the transmission mechanism via tariffs will happen

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Speaker 4: pretty quickly, I think. I mean, you saw Walmart warn today,

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Speaker 4: Delta has pulled their guidance. Both of those were just today.

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Speaker 4: I mean, it's kind of stunning. How if you think

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Speaker 4: about the nuts and bolts of these tariffs and how

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Speaker 4: they work. Despite what our president says, the importing entity

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Speaker 4: pays the tariff, right, it's not a tax on China.

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Speaker 4: And so you're a small and medium businessman. You just

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Speaker 4: got one hundred thousand dollars worth a product that landed

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Speaker 4: at Long Beach Port from China, and your broker is saying, yeah,

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Speaker 4: just come down with a cashiers check for one hundred

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Speaker 4: thousand dollars for the governments and will release your product.

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Speaker 4: Businesses don't have that, yeah, And so I mean there's

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Speaker 4: practical aspects these tariffs that I don't think we kind

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Speaker 4: of know all the implifications and how it will ripple

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Speaker 4: through the economy. And I suspect you'll start by May

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Speaker 4: getting some pretty decent real time feedback on from businesses saying,

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Speaker 4: you know, we're cutting out profit guidance because if they

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Speaker 4: can't pass it on completely, and study after study shows

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Speaker 4: they can't, usually then profit margins, which, by the way,

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Speaker 4: let us not forget all right, all time highs are

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Speaker 4: going to hit an air pocket.

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Speaker 3: We have seen some companies pulling their forward guidance already, right.

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Speaker 2: Jack, Yeah, Delta, Delta this morning, Walmart, Walmart when their

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Speaker 2: chart came out. When Donald Trump pulled out the chart

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Speaker 2: on Liberation Day and the market immediately tanked. The view

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Speaker 2: from a lot of people is like, if people actually

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Speaker 2: understood the size of what's what these numbers are, the

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Speaker 2: market would be a down lot more. Do you stands?

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Speaker 2: And again, anything could happen by the time there's but

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Speaker 2: on April ninth that there is still an element of

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Speaker 2: disbelief that this could actually be where our turn.

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Speaker 4: Oh. I think there definitely is a level of disbelief.

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Speaker 4: I mean the stock market is still twenty times latest

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Speaker 4: twelve month earnings, and I mean they're coming down, but

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Speaker 4: people still think earnings are going to be up ten

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Speaker 4: percent this year. And I don't know what planet they're on,

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Speaker 4: and so I think that that that's number one. And

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Speaker 4: the size of the tariffs was stunning. I remember it

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Speaker 4: was watching the press conference after the market closed, and

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Speaker 4: I don't have the best eyest in the world. I

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Speaker 4: had to get close to the TV to make sure.

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Speaker 2: Reading the numbers show was that fifty or five percent?

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Speaker 4: Yeah?

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Speaker 3: Yeah, I mean that says a lot like the idea

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Speaker 3: that it could be fifty or five percent at all

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Speaker 3: is pretty nuts. The point you were making about profit margins,

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Speaker 3: I think is really important, and a lot of the

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Speaker 3: macro impact of the tariffs depends on how corporations actually

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Speaker 3: react to the tariffs. Do they choose to absorb the

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Speaker 3: additional costs themselves or do they pass it on to customers.

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Speaker 3: What's your sense of flexibility there? And then more generally,

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Speaker 3: where do you see inflation going from here? Because obviously

435
00:24:09,840 --> 00:24:13,560
Speaker 3: there is tension between prices going up in the immediate

436
00:24:13,640 --> 00:24:17,440
Speaker 3: term because of the tariffs and demand being destroyed and

437
00:24:17,640 --> 00:24:18,720
Speaker 3: US getting deflation.

438
00:24:18,920 --> 00:24:23,399
Speaker 4: I think Walmart's warning this morning was maybe instructional in

439
00:24:23,480 --> 00:24:26,000
Speaker 4: that they went out of their way to say that

440
00:24:26,080 --> 00:24:30,320
Speaker 4: they were pulling their profit guidance, I believe, but told

441
00:24:30,400 --> 00:24:33,960
Speaker 4: people that their revenue growth guidance was still intact for

442
00:24:34,040 --> 00:24:37,080
Speaker 4: this year, which seems to me to imply that they're

443
00:24:37,160 --> 00:24:40,080
Speaker 4: not going to pass on these tariffs since they get

444
00:24:40,160 --> 00:24:42,680
Speaker 4: so much other stuff from China, right eat it, They're

445
00:24:42,680 --> 00:24:45,800
Speaker 4: going to eat it, and because otherwise they would say, well,

446
00:24:45,840 --> 00:24:48,320
Speaker 4: we're going to hike prices fifteen twenty percent and our

447
00:24:48,320 --> 00:24:50,159
Speaker 4: revenue is going to be up fifteen to twenty percent.

448
00:24:50,560 --> 00:24:53,199
Speaker 4: They didn't say that, they said three to four percent,

449
00:24:53,600 --> 00:24:56,960
Speaker 4: but margins. You know, we don't know on margins yet. Yeah.

450
00:24:57,040 --> 00:24:59,639
Speaker 2: I think this is really important because I think if

451
00:24:59,680 --> 00:25:01,879
Speaker 2: you were to go back six months ago, before the election,

452
00:25:02,119 --> 00:25:04,800
Speaker 2: so much of the TERRORFF conversation was this very simple

453
00:25:04,880 --> 00:25:07,160
Speaker 2: minded what does it mean for inflation in the FED?

454
00:25:07,800 --> 00:25:10,240
Speaker 2: And now the sort of deeper question of like, are

455
00:25:10,280 --> 00:25:13,920
Speaker 2: you uniquecapping corporate profitability in America and what does that

456
00:25:14,000 --> 00:25:15,199
Speaker 2: mean for all these different I.

457
00:25:16,240 --> 00:25:18,000
Speaker 4: Think that's the bigger risk that inflation.

458
00:25:18,119 --> 00:25:21,000
Speaker 3: If you remember the past few years, the reason we

459
00:25:21,080 --> 00:25:24,399
Speaker 3: had record corporate profits was because companies were able to

460
00:25:24,480 --> 00:25:28,760
Speaker 3: pass on inflation to customers. The whole price over volume

461
00:25:28,920 --> 00:25:30,359
Speaker 3: idea that we've been talking about.

462
00:25:43,400 --> 00:25:47,840
Speaker 2: Let's talk about a guy, uh Elon Musk. For many years,

463
00:25:47,840 --> 00:25:51,399
Speaker 2: you were famously the BFF, your BFF, Elon Musk. We

464
00:25:51,480 --> 00:25:55,119
Speaker 2: did an episode recently with Nick Denton, founder of Gawker Media,

465
00:25:55,359 --> 00:25:58,359
Speaker 2: and he said he said, he said, the fall of

466
00:25:58,440 --> 00:26:01,280
Speaker 2: Elon Musk is a story that a new journalist should

467
00:26:01,320 --> 00:26:03,479
Speaker 2: come out of retirement for it may be the biggest

468
00:26:03,520 --> 00:26:07,960
Speaker 2: story of our lives. He's been pronounced, you know, done

469
00:26:08,160 --> 00:26:11,919
Speaker 2: dead many times, and Tesla is always is this different

470
00:26:12,000 --> 00:26:13,760
Speaker 2: this time? In your view, I don't look.

471
00:26:13,840 --> 00:26:16,359
Speaker 4: I mean, he's tied himself to the administration in a

472
00:26:16,400 --> 00:26:21,679
Speaker 4: way that is frankly kind of to me amazing and

473
00:26:21,720 --> 00:26:24,560
Speaker 4: shocking at the same time. So he is tied tied

474
00:26:24,640 --> 00:26:27,919
Speaker 4: now politically, you know, in a way that he never was.

475
00:26:28,320 --> 00:26:33,320
Speaker 4: That's number one. But to me, Tesla is beyond Elon Musk.

476
00:26:33,920 --> 00:26:38,119
Speaker 4: Tesla is a real sort of benchmark stock for me

477
00:26:38,400 --> 00:26:42,879
Speaker 4: because of the way in which Elon effortlessly sells the

478
00:26:42,920 --> 00:26:46,040
Speaker 4: story of the future to investors. And I've always said,

479
00:26:46,560 --> 00:26:49,600
Speaker 4: I've always said that in bull markets, people put a

480
00:26:49,600 --> 00:26:52,280
Speaker 4: premium on promises, and in bear markets, they put a

481
00:26:52,280 --> 00:26:56,080
Speaker 4: discount on reality. And this is a stock that's still

482
00:26:56,640 --> 00:26:59,280
Speaker 4: there's a handful of others that's still traded, you know,

483
00:26:59,320 --> 00:27:02,880
Speaker 4: forty fifty times revenues, where people still believe, they still

484
00:27:02,920 --> 00:27:07,720
Speaker 4: believe in the promise of robotics and AI and robotaxis.

485
00:27:07,800 --> 00:27:12,160
Speaker 4: And he's captured the imagination of a whole set of investors,

486
00:27:12,160 --> 00:27:16,800
Speaker 4: particularly retail investors, who just are rabid with the idea

487
00:27:16,880 --> 00:27:19,919
Speaker 4: that this is the company of the future. And so

488
00:27:20,800 --> 00:27:26,160
Speaker 4: that's number one. Number two, I mean, ultimately he's going

489
00:27:26,200 --> 00:27:29,639
Speaker 4: to have to deliver on these promises, and because you

490
00:27:29,680 --> 00:27:31,880
Speaker 4: know what the car business he's got right now, ain't

491
00:27:31,920 --> 00:27:36,439
Speaker 4: all that Margins are imploding, profits are down now for

492
00:27:36,440 --> 00:27:38,840
Speaker 4: three or four years in a row. He's going to

493
00:27:38,880 --> 00:27:41,360
Speaker 4: have down, I think down sales this year in terms

494
00:27:41,359 --> 00:27:45,000
Speaker 4: of units. So I remember when the es is where

495
00:27:45,040 --> 00:27:48,240
Speaker 4: we're all going to be driving Tesla's in twenty thirty, right,

496
00:27:48,400 --> 00:27:51,720
Speaker 4: that's not happening. And so it'll be curious to see

497
00:27:51,720 --> 00:27:54,440
Speaker 4: when the robotaxis are rolled out this summer in Austin.

498
00:27:56,280 --> 00:27:58,679
Speaker 4: How exciting is that? And then of course you know

499
00:27:59,200 --> 00:28:02,400
Speaker 4: the big one is we're all going to have you knows,

500
00:28:02,720 --> 00:28:07,480
Speaker 4: Rosie the robot from the Jets in our house doing

501
00:28:07,520 --> 00:28:12,520
Speaker 4: our tasks from Tesla. And again, I being the skeptic,

502
00:28:12,600 --> 00:28:15,560
Speaker 4: I think I don't see the robotics, the humanoid robotics

503
00:28:15,560 --> 00:28:18,080
Speaker 4: market being a whole lot different from the car market. Right,

504
00:28:18,960 --> 00:28:22,639
Speaker 4: it's utility. People will have one. It'll be thirty to

505
00:28:22,640 --> 00:28:27,040
Speaker 4: fifty thousand dollars, there'll be fifteen companies making them, and

506
00:28:27,640 --> 00:28:31,399
Speaker 4: margins will be it'll be a manufacturing margin business. You know,

507
00:28:31,480 --> 00:28:34,479
Speaker 4: cars have tons of software and them tons of chips

508
00:28:34,480 --> 00:28:39,080
Speaker 4: in them. They're amazing utility for the consumer, but they're cars.

509
00:28:39,080 --> 00:28:41,080
Speaker 4: They have a low margin and a lot of people

510
00:28:41,120 --> 00:28:42,720
Speaker 4: make them, and I think it's going to be the

511
00:28:42,720 --> 00:28:43,720
Speaker 4: same with robotics.

512
00:28:44,240 --> 00:28:47,960
Speaker 3: I always wonder how much rope the tech believers are

513
00:28:48,000 --> 00:28:51,840
Speaker 3: giving companies to fulfill their promises. And I remember I

514
00:28:51,880 --> 00:28:54,560
Speaker 3: asked Kathy Wood about this, like what is her time

515
00:28:54,640 --> 00:28:58,200
Speaker 3: frame for actually making a profit. Because there's a premium

516
00:28:58,280 --> 00:29:01,120
Speaker 3: on good stories. You can keep selling a good story

517
00:29:01,320 --> 00:29:04,160
Speaker 3: for a pretty long time and a certain set of

518
00:29:04,160 --> 00:29:08,160
Speaker 3: investors will believe it. What's the catalyst for that actually

519
00:29:08,320 --> 00:29:09,320
Speaker 3: starting to change?

520
00:29:09,680 --> 00:29:12,480
Speaker 4: Well again, I mean I think that the number one,

521
00:29:12,680 --> 00:29:16,480
Speaker 4: interest rates have a big determined on those kinds of stories,

522
00:29:16,520 --> 00:29:20,000
Speaker 4: because if we believe at least some of the rudiments

523
00:29:20,040 --> 00:29:23,920
Speaker 4: of finance, you're willing to you're willing to pay more

524
00:29:24,040 --> 00:29:27,520
Speaker 4: for profits and cash flow ten years in the future

525
00:29:28,240 --> 00:29:31,080
Speaker 4: than when rates are higher. That's number one. And for

526
00:29:31,160 --> 00:29:34,640
Speaker 4: all these companies like this, ninety five percent of the

527
00:29:34,720 --> 00:29:38,520
Speaker 4: value is in the terminal value. That's number one. Number two,

528
00:29:39,680 --> 00:29:43,160
Speaker 4: it's look, it's castles in the sky. I mean in

529
00:29:43,200 --> 00:29:46,280
Speaker 4: bull markets. People believe these stories and that's as old

530
00:29:46,320 --> 00:29:50,400
Speaker 4: as human nature. And when things get get tight, I

531
00:29:50,400 --> 00:29:53,120
Speaker 4: mean we kind of forget Tesla was one hundred dollars

532
00:29:53,120 --> 00:29:55,680
Speaker 4: a couple of years ago, down from five hundred, and

533
00:29:55,880 --> 00:30:01,000
Speaker 4: it dropped eighty percent in twenty twenty two. It varies.

534
00:30:01,680 --> 00:30:03,800
Speaker 2: Twenty twenty two feels like a long time ago. All right,

535
00:30:03,840 --> 00:30:05,640
Speaker 2: I want to talk about ELON, but from a different

536
00:30:05,680 --> 00:30:11,000
Speaker 2: angle for a second. When DOGE was announced, yeah, people

537
00:30:11,040 --> 00:30:12,920
Speaker 2: didn't really know what it was, and then like it

538
00:30:13,080 --> 00:30:16,120
Speaker 2: sort of start over. Once it started going, it looked like, oh,

539
00:30:16,160 --> 00:30:18,600
Speaker 2: these cuts like have these moves have not seem to

540
00:30:18,640 --> 00:30:22,120
Speaker 2: have any rhyme or reason other than decapping the federal government.

541
00:30:22,440 --> 00:30:24,520
Speaker 2: And a lot of guys are like, look, I'm all

542
00:30:24,560 --> 00:30:26,680
Speaker 2: in favor of cutting waste, but I'm not so sure

543
00:30:26,720 --> 00:30:29,000
Speaker 2: about this anyway. I was probably one of those guys.

544
00:30:29,080 --> 00:30:31,320
Speaker 2: I'll cop to it. But we did an episode a

545
00:30:31,400 --> 00:30:35,560
Speaker 2: while back with this professor at Boston University on Medicare fraud,

546
00:30:35,880 --> 00:30:37,720
Speaker 2: and I thought to myself, Okay, if there's one area

547
00:30:37,760 --> 00:30:40,080
Speaker 2: that maybe some of these cracked data scientists could go

548
00:30:40,240 --> 00:30:43,640
Speaker 2: into and find some evidence and really like make some

549
00:30:43,680 --> 00:30:47,600
Speaker 2: efficiencies and so forth, this would be Medicare. However, this

550
00:30:47,680 --> 00:30:51,800
Speaker 2: week I saw a headline that says health insurers cheer

551
00:30:52,000 --> 00:30:54,959
Speaker 2: increase of Medicare advantage payments. I don't know what Medicare

552
00:30:55,000 --> 00:30:56,920
Speaker 2: advantages yet. I know I'm supposed to look this up.

553
00:30:57,000 --> 00:31:00,840
Speaker 2: Health insurers that offer Medicare advantage plants. The seniors cheered

554
00:31:00,880 --> 00:31:05,520
Speaker 2: a Trump administration's decision announced Monday to increase federal reimbursement

555
00:31:05,640 --> 00:31:09,680
Speaker 2: rates by twenty five billion dollars next year. What's medicure?

556
00:31:09,920 --> 00:31:13,520
Speaker 2: This is in the Albanion Times Union. What is Medicare advantage?

557
00:31:13,880 --> 00:31:15,040
Speaker 2: Why are they cheering this?

558
00:31:15,200 --> 00:31:16,920
Speaker 4: You're asking the old guy, right, Yeah.

559
00:31:16,800 --> 00:31:18,880
Speaker 2: No, No, I think it's because you know about these

560
00:31:18,920 --> 00:31:21,400
Speaker 2: companies very well. And what does it say that the

561
00:31:21,440 --> 00:31:24,360
Speaker 2: reimbursement rates came in so much higher than expecting? Joe?

562
00:31:24,400 --> 00:31:26,680
Speaker 3: If you if you watch cable news, you would know

563
00:31:26,840 --> 00:31:28,400
Speaker 3: all about Medicare advent.

564
00:31:28,240 --> 00:31:31,880
Speaker 4: Yes, yes you would. So I tweeted out when Doge

565
00:31:31,920 --> 00:31:34,800
Speaker 4: started out, I said, if they don't go after Medicare advantage,

566
00:31:34,840 --> 00:31:37,560
Speaker 4: you know right away then you know they're not that serious, Okay,

567
00:31:37,600 --> 00:31:40,240
Speaker 4: And so that kind of tells you where I'm coming

568
00:31:40,280 --> 00:31:43,800
Speaker 4: out on this. Medicare advantage has been just a windfall

569
00:31:43,880 --> 00:31:46,840
Speaker 4: for the insurers. It's it's basically for people that are

570
00:31:46,960 --> 00:31:50,600
Speaker 4: eligible for Medicare. It's supplemental, and it's also all it

571
00:31:50,600 --> 00:31:53,560
Speaker 4: can be all inclusive, meaning that you you you have

572
00:31:53,600 --> 00:31:57,520
Speaker 4: a carrier treat you for not only that which Medicare covers,

573
00:31:57,600 --> 00:32:01,840
Speaker 4: but but additional things. The problem becomes it's what we

574
00:32:01,920 --> 00:32:05,160
Speaker 4: call upcoding, and that's where the fraud has occurred because

575
00:32:05,440 --> 00:32:09,240
Speaker 4: the government has will give Medicare advantage carriers a tiered

576
00:32:09,280 --> 00:32:12,320
Speaker 4: set of payments depending on how sick their patient is

577
00:32:12,920 --> 00:32:17,560
Speaker 4: coming into the program. So, you know, I could be

578
00:32:17,600 --> 00:32:20,880
Speaker 4: relatively healthy. I don't know how they're going to code

579
00:32:20,920 --> 00:32:23,560
Speaker 4: me when they go to the government for their reimbursement

580
00:32:23,760 --> 00:32:26,040
Speaker 4: to say, mister chaenhas is very sick and blah blah

581
00:32:26,040 --> 00:32:29,200
Speaker 4: blah blah. So we get, you know, X thousand dollars

582
00:32:29,240 --> 00:32:32,280
Speaker 4: from him per year as opposed to y thousand dollars

583
00:32:32,600 --> 00:32:36,240
Speaker 4: for him per year. And that's that's a big problem.

584
00:32:36,800 --> 00:32:39,280
Speaker 4: There were some public companies that were purely in Medicare

585
00:32:39,280 --> 00:32:41,440
Speaker 4: advantage that we were short, and a lot of them

586
00:32:41,480 --> 00:32:45,160
Speaker 4: were bought up by companies like CBS and others, and

587
00:32:45,200 --> 00:32:47,480
Speaker 4: we just couldn't believe it because if you did any

588
00:32:47,560 --> 00:32:49,920
Speaker 4: kind of due diligence on these companies, you realize that

589
00:32:50,880 --> 00:32:52,800
Speaker 4: they were they were upcoding.

590
00:32:53,200 --> 00:32:56,080
Speaker 2: I guess implicitly, if you're shorting them, that's a bet

591
00:32:56,080 --> 00:32:59,360
Speaker 2: that someone takes this issue seriously in the public sector.

592
00:32:59,720 --> 00:33:01,720
Speaker 2: And it looks like at least here's a guy who

593
00:33:01,760 --> 00:33:04,560
Speaker 2: came into cut spending and he now we're.

594
00:33:05,840 --> 00:33:08,440
Speaker 4: Yeah, I mean they're going they're going after the small stuff,

595
00:33:08,440 --> 00:33:10,760
Speaker 4: they're going after the I'm a bear on DOGE. I

596
00:33:10,800 --> 00:33:13,800
Speaker 4: mean they they they're going after the political stuff. They're

597
00:33:13,800 --> 00:33:16,960
Speaker 4: going after this ridiculous thing from two weeks ago about

598
00:33:17,000 --> 00:33:19,920
Speaker 4: the number of Social Security numbers going to you know,

599
00:33:20,080 --> 00:33:23,600
Speaker 4: illegals and and things like that. This is all political

600
00:33:23,640 --> 00:33:27,880
Speaker 4: theater and and the real the real cuts are are

601
00:33:27,880 --> 00:33:32,040
Speaker 4: in areas that that they haven't touched. And so we'll

602
00:33:32,080 --> 00:33:34,920
Speaker 4: have to see. But it didn't get past me. That

603
00:33:35,560 --> 00:33:38,400
Speaker 4: Musk basically now is all but saying he's going to

604
00:33:38,440 --> 00:33:42,040
Speaker 4: be gone from DOGE in May. You know, he four

605
00:33:42,080 --> 00:33:45,880
Speaker 4: months and so and Vivic never got going. And so

606
00:33:46,720 --> 00:33:50,000
Speaker 4: I think that that this is they're finding out that

607
00:33:50,080 --> 00:33:53,160
Speaker 4: what they thought was fraud in ways, it's turning out

608
00:33:53,280 --> 00:33:56,240
Speaker 4: to be, you know, authorized programs that you might not

609
00:33:56,280 --> 00:34:00,040
Speaker 4: agree with politically, but we're authorized, right and and and

610
00:34:00,680 --> 00:34:05,360
Speaker 4: need legislative prescriptions. So I think they're not even going

611
00:34:05,400 --> 00:34:07,640
Speaker 4: to come close to their target of a trillion dollars

612
00:34:07,680 --> 00:34:11,000
Speaker 4: and two trillion dollars. I think that's just pipe dreams.

613
00:34:11,239 --> 00:34:14,480
Speaker 3: I completely forgot about Vivek, but you're right he did.

614
00:34:15,080 --> 00:34:19,359
Speaker 4: Yeah, yeah, he didn't didn't even get to day one.

615
00:34:19,440 --> 00:34:21,080
Speaker 4: Yeah yeah, Jim.

616
00:34:21,120 --> 00:34:23,440
Speaker 3: Hopefully you won't mind me asking this question, but I

617
00:34:23,480 --> 00:34:27,040
Speaker 3: think it's fair to say you are a financial markets veteran.

618
00:34:29,040 --> 00:34:33,160
Speaker 3: You've seen, You've seen a lot of stuff happen over

619
00:34:33,200 --> 00:34:37,480
Speaker 3: the years. Are there any historical parallels or analogies to

620
00:34:37,600 --> 00:34:38,879
Speaker 3: our current moment in time?

621
00:34:39,160 --> 00:34:42,880
Speaker 4: No, I mean, given what's driving markets as we sit here,

622
00:34:43,560 --> 00:34:45,760
Speaker 4: I don't think we've ever seen anything like this where

623
00:34:46,320 --> 00:34:50,360
Speaker 4: where a global hedgemond has willingly said I'm going to

624
00:34:50,520 --> 00:34:53,840
Speaker 4: basically shoot myself in the foot and get rid of

625
00:34:53,840 --> 00:34:57,640
Speaker 4: the exorbitive privilege that we've had as being the global

626
00:34:57,640 --> 00:35:01,719
Speaker 4: hedgemon with the reserve currency. They're trying to dismantle that

627
00:35:01,800 --> 00:35:04,319
Speaker 4: as we speak, and I think that just has all

628
00:35:04,440 --> 00:35:06,719
Speaker 4: kinds of impacts that none of us have lived through.

629
00:35:07,239 --> 00:35:10,080
Speaker 4: So we'll have to see unless it gets reversed. And

630
00:35:10,160 --> 00:35:14,040
Speaker 4: so I don't know what the you know what the

631
00:35:14,080 --> 00:35:17,239
Speaker 4: analog for this is we're just gonna have to let

632
00:35:17,280 --> 00:35:19,520
Speaker 4: everybody else take it day by day. But you know,

633
00:35:19,600 --> 00:35:22,239
Speaker 4: the idea that that that markets are now going to

634
00:35:22,280 --> 00:35:26,279
Speaker 4: react to you know, tweets, and as as someone I

635
00:35:26,320 --> 00:35:28,800
Speaker 4: follow said, you know, this is still a vibes market,

636
00:35:28,880 --> 00:35:31,600
Speaker 4: not a math market, and and and that as it

637
00:35:31,640 --> 00:35:34,040
Speaker 4: relates to the equities, And I think that's well said.

638
00:35:34,960 --> 00:35:38,080
Speaker 4: I think that that this stuff just goes back and forth,

639
00:35:38,239 --> 00:35:40,279
Speaker 4: and I think that's kind of no way to run

640
00:35:40,280 --> 00:35:42,160
Speaker 4: an economy and no way to run markets.

641
00:35:42,719 --> 00:35:44,760
Speaker 2: That was a great place to leave, But I'm gonna

642
00:35:44,840 --> 00:35:47,640
Speaker 2: go end on like a more boring question on the

643
00:35:47,680 --> 00:35:49,600
Speaker 2: medicare advantage stuff.

644
00:35:49,680 --> 00:35:51,800
Speaker 4: Yeah, and all these.

645
00:35:51,600 --> 00:35:53,359
Speaker 2: People can come in here and talk to us about

646
00:35:53,440 --> 00:35:56,239
Speaker 2: upcoading and a fraud. Where did in your view when

647
00:35:56,280 --> 00:35:58,480
Speaker 2: you've looked into this and why these companies end up

648
00:35:58,480 --> 00:36:01,160
Speaker 2: getting bought out in the short stonn't work. Where is

649
00:36:01,160 --> 00:36:06,560
Speaker 2: the force coming from that prevents whether it's the you know,

650
00:36:06,840 --> 00:36:09,080
Speaker 2: HHS or whatever, from actually taking.

651
00:36:08,880 --> 00:36:12,000
Speaker 4: There, So there's actually there's actually arms of the government.

652
00:36:12,560 --> 00:36:15,000
Speaker 2: This isn't like none of this was like new. Why

653
00:36:15,400 --> 00:36:17,800
Speaker 2: why does it in your view? Does it not get addressed?

654
00:36:17,840 --> 00:36:19,920
Speaker 4: I don't know. And you know, I've called this the

655
00:36:19,960 --> 00:36:22,400
Speaker 4: Golden Age of fraud, and and you know, it just

656
00:36:22,440 --> 00:36:26,840
Speaker 4: seems that that we have a willingness in the corporate

657
00:36:26,920 --> 00:36:29,400
Speaker 4: sector and elsewhere, and in the nexus of government and

658
00:36:29,440 --> 00:36:32,640
Speaker 4: corporate of just not holding people to account for this

659
00:36:32,719 --> 00:36:36,319
Speaker 4: stuff in the white collar crime area. And and I

660
00:36:36,360 --> 00:36:40,399
Speaker 4: think medicare is is just a wonderful example of that

661
00:36:40,640 --> 00:36:45,279
Speaker 4: in the in the our budget, the federal budget. And

662
00:36:45,360 --> 00:36:47,680
Speaker 4: so the fact that that they haven't even gone after

663
00:36:47,719 --> 00:36:50,720
Speaker 4: this or addressed this yet for DOGE is really telling

664
00:36:50,760 --> 00:36:53,880
Speaker 4: to me, because it's there. It's it's low hanging fruit.

665
00:36:54,600 --> 00:36:57,120
Speaker 4: And you know, if you look at the if you

666
00:36:57,160 --> 00:36:59,399
Speaker 4: look at the ten k's of these companies that we

667
00:36:59,400 --> 00:37:03,160
Speaker 4: were short, I mean there's there's criminal investigation after state

668
00:37:03,239 --> 00:37:08,240
Speaker 4: level investigation listed in their legal proceedings, and yet most

669
00:37:08,239 --> 00:37:10,440
Speaker 4: of them, when they get caught, they pay a fine

670
00:37:11,000 --> 00:37:15,120
Speaker 4: and nobody goes to jail. And it's so disgusting.

671
00:37:15,280 --> 00:37:18,120
Speaker 2: Even if they reversed as trade tradery, there's so much rot.

672
00:37:18,480 --> 00:37:22,000
Speaker 2: I'm so angry right now. Jim Chandos, thank you so much.

673
00:37:22,320 --> 00:37:25,479
Speaker 2: This was a very satisfying episode. I found this very fun.

674
00:37:25,520 --> 00:37:27,760
Speaker 3: Thank you for coming in therapeutic.

675
00:37:29,040 --> 00:37:29,560
Speaker 4: My pleasure.

676
00:37:30,719 --> 00:37:47,000
Speaker 2: Thank you for coming on oblains my pleasure, Tracy. I

677
00:37:47,040 --> 00:37:48,120
Speaker 2: love talking to Jim.

678
00:37:48,840 --> 00:37:51,120
Speaker 3: Yes, although that was bleak and I had.

679
00:37:51,040 --> 00:37:54,240
Speaker 2: To say, you know what, you know what, Yeah, it's bleak,

680
00:37:54,320 --> 00:37:58,200
Speaker 2: and but Jim knows ball and I enjoy talking to

681
00:37:58,239 --> 00:37:59,279
Speaker 2: a ball nowhere like Jim.

682
00:37:59,520 --> 00:38:02,520
Speaker 3: I have to say for our listeners, I rarely see

683
00:38:02,640 --> 00:38:05,640
Speaker 3: Joe in a bad mood, and he is actually in

684
00:38:05,680 --> 00:38:08,359
Speaker 3: a bad mood this morning. Usually Joe has to put

685
00:38:08,440 --> 00:38:10,120
Speaker 3: up with me being cranky.

686
00:38:09,840 --> 00:38:11,719
Speaker 2: And yeah, did we switch this week?

687
00:38:11,800 --> 00:38:14,719
Speaker 3: Yeah? I think we switched. No, but I mean it's bad.

688
00:38:14,880 --> 00:38:17,640
Speaker 3: I feel bad too, And it is just crazy to

689
00:38:17,719 --> 00:38:23,279
Speaker 3: think that one man could end it all with just

690
00:38:23,640 --> 00:38:27,360
Speaker 3: a simple announcement or even like some words of comfort

691
00:38:27,719 --> 00:38:28,520
Speaker 3: and indication.

692
00:38:29,719 --> 00:38:30,480
Speaker 4: Cool, be cool.

693
00:38:30,520 --> 00:38:34,319
Speaker 2: And unfortunately, when I hear the words term be cool,

694
00:38:34,400 --> 00:38:37,680
Speaker 2: I just think of the scene in pulp fiction everybody

695
00:38:37,719 --> 00:38:40,399
Speaker 2: be cool. I'm not going to say the rest. Yeah,

696
00:38:40,400 --> 00:38:41,759
Speaker 2: he said be cool. It didn't work.

697
00:38:42,160 --> 00:38:45,280
Speaker 3: Yeah, And if only he did something or said something

698
00:38:45,400 --> 00:38:47,200
Speaker 3: at the very least, we could all go back to

699
00:38:47,239 --> 00:38:51,719
Speaker 3: worrying to your point about AI and yeah, stuff like that.

700
00:38:51,800 --> 00:38:54,480
Speaker 2: Yeah, shall we leave it there, Let's leave it there.

701
00:38:54,640 --> 00:38:57,120
Speaker 3: This has been another episode of the Odd Thoughts podcast.

702
00:38:57,239 --> 00:39:00,000
Speaker 3: I'm Tracy Alloway. You can follow me at Tracy al.

703
00:39:00,400 --> 00:39:03,360
Speaker 2: And I'm Jill Wisenthal. You can follow me at The Stalwart.

704
00:39:03,680 --> 00:39:07,000
Speaker 2: Follow our guest Jim Chanos, He's at Real Jim Chanos.

705
00:39:07,040 --> 00:39:10,279
Speaker 2: Follow our producers Carmen Rodriguez at Carmen armand dash Ol

706
00:39:10,280 --> 00:39:13,839
Speaker 2: Bennett at dashbot In, Kale Brooks at Kale Brooks. More

707
00:39:13,840 --> 00:39:17,080
Speaker 2: odd Lots content, go to Bloomberg dot com slash odd Lots,

708
00:39:17,080 --> 00:39:19,680
Speaker 2: where we have our daily newsletter and all of our episodes,

709
00:39:19,880 --> 00:39:21,840
Speaker 2: and you can chat about these topics twenty four to

710
00:39:21,840 --> 00:39:25,960
Speaker 2: seven in our discord Discord dot gg slash od Lots.

711
00:39:26,000 --> 00:39:28,480
Speaker 3: And if you enjoy odd Lots, if you like it

712
00:39:28,520 --> 00:39:33,080
Speaker 3: when we talk to veteran investors like Jim Chanos, then

713
00:39:33,120 --> 00:39:36,759
Speaker 3: please leave us a positive review on your favorite podcast platform.

714
00:39:37,040 --> 00:39:39,799
Speaker 3: And remember, if you are a Bloomberg subscriber, you can

715
00:39:39,840 --> 00:39:43,319
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716
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Speaker 3: Apple Podcasts and follow the instructions there. Thanks for listening,

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00:40:10,480 --> 00:40:10,960
Speaker 3: Benea