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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 Joe Wisn't All, and I'm Tracy Alloway. Tracy, I

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Speaker 1: can't tell whether I feel bad for you, uh that

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Speaker 1: you're in Hong Kong and missing out on US trading

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Speaker 1: hours these days, or whether I'm really jealous of you

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Speaker 1: that you're in Hong Kong and missing out on US

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Speaker 1: trading hours these days. Feel bad for me? I feel

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Speaker 1: bad for me. I would love to be in New

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Speaker 1: York during like the most dramatic moments of some of

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Speaker 1: the recent US market action that we've seen. Yeah, no,

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Speaker 1: I do feel bad for you. I mean it is

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Speaker 1: really fun, Like I've definitely never before had a whole

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Speaker 1: like Bloomberg monitor just devoted to the real time price

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Speaker 1: of game Stop. So that's pretty cool. On the other hand,

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Speaker 1: you are missing out blessedly just truly awful takes about

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Speaker 1: all this, and every cable news channel and pundit and

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Speaker 1: everything is like pontificating about what all this means. And

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Speaker 1: I'm not um, I don't feel bad that you're missing that. Okay,

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Speaker 1: So it's true. I haven't seen a lot of what

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Speaker 1: the US television channels are saying I will I will

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Speaker 1: say though, I'm on Twitter basically at nighttime in the US,

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Speaker 1: and so I get a lot of cranks and crazy

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Speaker 1: e's around, you know, the hours of like midnight to

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Speaker 1: four am, So I do see some of the conspiracy

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Speaker 1: theories stuff. I get enough of that, Yeah, exactly, But um,

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Speaker 1: I get the sense that I'm missing something in the

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Speaker 1: whole Game Stop commentary that that has been annoying you. Yes, So,

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Speaker 1: I mean, look, I love this story and I don't

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Speaker 1: really want it to end any time soon. Let's get

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Speaker 1: that out. And I've learned. I've already like learned a

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Speaker 1: bunch just like over the last week about how the

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Speaker 1: markets were, Like it's been very educational. But I do

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Speaker 1: think there is this proclivity of everyone who has an

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Speaker 1: agenda to find a way to like work it in.

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Speaker 1: And you have like Donald Trump Jr. Talking about it,

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Speaker 1: and Ted Cruise and AOC and Dave Portnoy and the

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Speaker 1: winkle Foss brothers and like Glenn Greenwald and Mad Stoler

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Speaker 1: and like literally anyone who has an opinion on anything,

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Speaker 1: the Game Stop trade bolsters their view. So I totally

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Speaker 1: agree with that agenda point. There's something for everyone in

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Speaker 1: the game Stop story, whether it's true or not. But

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Speaker 1: but I do think the fact that it's this sort

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Speaker 1: of raw, sharsh test for a bunch of people talking

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Speaker 1: about it, like, I think that is part of the

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Speaker 1: game Stop phenomenon, and so I think you have to

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Speaker 1: talk about it and you have to recognize its importance. Yeah,

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Speaker 1: And a big question too, is like is there some

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Speaker 1: thing like political, like because they're a big class warfare

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Speaker 1: element of this, and like, obviously the enter is kind

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Speaker 1: of yes, and people like on the Wall Street bets

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Speaker 1: love the idea that they're like sticking it to the bankers.

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Speaker 1: On the other hand, you know, you have these people

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Speaker 1: like this is finally the mission of Occupy Wall Street

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Speaker 1: is now but fulfilled. And like, my eyes just roll

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Speaker 1: out the side of my head when I see stuff

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Speaker 1: like that. So we're gonna try to figure out, like

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Speaker 1: what does this mean? Is there a political message? Is

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Speaker 1: this Occupy Wall Street two point oh? Or is this

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Speaker 1: just something fun? Is it just a trade? Like what

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Speaker 1: does this all mean? All right, Um, this is gonna

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Speaker 1: be an interesting episode. Let's let's do it. And we

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Speaker 1: should note we have we have not one, but two

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Speaker 1: guests because it's such a such a polarizing topic, I suppose. Yeah,

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Speaker 1: we're gonna have a debate, although I'm worried that our

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Speaker 1: guests are going to be too friendly and then it's

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Speaker 1: just gonna be me and you fighting against each other.

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Speaker 1: That's okay. But I'm very excited about our two guests today,

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Speaker 1: two of our absolute favorite uh people here to the

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Speaker 1: sharpest people who understand markets and market structure and finance

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Speaker 1: and even politics. Very excited. Um, We're gonna be speaking

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Speaker 1: with George Perks, he is a macro strategist at Bespoke

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Speaker 1: Investment Group. And Jill Carlson, she is a partner at

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Speaker 1: Slow Ventures and does a lot. We've talked to her

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Speaker 1: in the past about bitcoin and blockchain stuff and money,

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Speaker 1: and they've also they've both written, um, I guess you

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Speaker 1: could say takes for the last week. George has a

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Speaker 1: great piece up on Business Insider that you should check out,

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Speaker 1: and Jill has a great piece on Coin Desk that

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Speaker 1: you should check out. Um. And so we're gonna we're

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Speaker 1: gonna hopefully get the full range of perspective here. So

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Speaker 1: George and Jill, thank you very much for joining us. Yeah,

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Speaker 1: thank you. And and I will know the irony that

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Speaker 1: both George and I have now contributed to the sea

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Speaker 1: of bad takes and are continuing to do so. No,

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Speaker 1: both of you are, both of your takes, both you,

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Speaker 1: both of your takes are the only good takes. Sometimes

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Speaker 1: the best take is that the takes are bad, and

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Speaker 1: you know, we we can't have when having someone saying that.

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Speaker 1: And I think both joll and I tried to do

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Speaker 1: a little bit of that this past week. The ultimate

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Speaker 1: meta take, the Meda take. That's what, that's what. That's

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Speaker 1: my role, the Meda take. Okay, um, let's start and

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Speaker 1: maybe we'll get on some opening statements for me west

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Speaker 1: Aret with George, George, what you're you're more on the view,

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Speaker 1: it's like this is a trade to an interesting trade.

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Speaker 1: It probably does not fit into anyone's political narrative to well,

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Speaker 1: what's your what's your take? So the sort of way

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Speaker 1: that this has been described by a lot of people

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Speaker 1: is that these are sort of neck beardy editors who

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Speaker 1: are all in their basements and spending their stimulus checks

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Speaker 1: their last few dollars on out of the money calls

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Speaker 1: and uh margin bets on Jimmy, and that's you know,

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Speaker 1: somehow a revenge against the big bad hedge funds and

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Speaker 1: one percenters and billionaires that have been stepping on the

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Speaker 1: necks of this class of people for a long time.

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Speaker 1: And it's just really hard to take that with a

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Speaker 1: straight face. Um, the single biggest holder of game Stop

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Speaker 1: is the guy that pioneered sub prime model finance. He's

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Speaker 1: a billionaire named Donald Fossive of the company. Um, Like,

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Speaker 1: I'm sorry, Just that fact alone, forget anything else. Just

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Speaker 1: that fact alone suggests that, oh, this is a proletarian

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Speaker 1: revolution of the day traders. Is the wrong take straight up? Um,

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Speaker 1: If you look at the composition of the sort of

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Speaker 1: folks that are that are in game Stop, I mean,

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Speaker 1: the the guy that has benefited the most in terms

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Speaker 1: of um percentage return is this, as far as anyone

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Speaker 1: can tell, as this guy, um who goes by Roaring

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Speaker 1: Kitty on Twitter, who's who had a position that was

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Speaker 1: worth upwards a fifty million at various points over the

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Speaker 1: past week. Thanks, you know million by the time people

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Speaker 1: are right, who knows where it's at? But he put

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Speaker 1: up fifty k and it's it's you know, so Um.

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Speaker 1: You know this is a guy who's a financial advisor

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Speaker 1: for financial advisor for a Massachusetts insurance company. UM. You know,

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Speaker 1: and I'm not trying to come out and bash this guy,

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Speaker 1: but UM, I'm sorry that that's that's not you know,

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Speaker 1: the masses in the United States. Fifty dollars that he

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Speaker 1: you know, you'll owd into the stock is half of

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Speaker 1: US media net worth, um, and most of that net

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Speaker 1: worth isn't liquid assets. It's tied up in real estate.

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Speaker 1: So you know, really, anyone that can come up with

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Speaker 1: fift k to put into the stock market on this

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Speaker 1: kind of bet is doing substantially better than the typical person. UM.

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Speaker 1: I think it's it's fair to say, so, you know,

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Speaker 1: I just my basic take is just this is not

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Speaker 1: some working class revolution against capital as represented by hedge funds.

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Speaker 1: So I I understand the point about deep effing value

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Speaker 1: as he's known around here, and the fact that a

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Speaker 1: lot of the people on Reddit are quite sophisticated in

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Speaker 1: the way they talk about options, and the fact that

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Speaker 1: they're targeting Agama squeezes is a very you know, non

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Speaker 1: retail activity. But your point about one of the biggest

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Speaker 1: holders in gm E being the subprime auto finance guy

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Speaker 1: like you can have a bad populist movement or a

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Speaker 1: bad coordinated or effective populist movement. I mean, we arguably

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Speaker 1: just saw one of those in the US at the

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Speaker 1: beginning of the year with the storming of the capital.

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Speaker 1: Could it not just be that these people are trying

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Speaker 1: to make a political statement, but they're just not doing

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Speaker 1: a very good job. I mean, I think if you

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Speaker 1: ask the people on Wall Street bets like, why are

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Speaker 1: you in this? I mean, you know, if the tendees

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Speaker 1: didn't exist, they wouldn't be in it, right, This is

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Speaker 1: not a political project as a you know, as a

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Speaker 1: first order um, you know, goal there's definitely some political

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Speaker 1: um spin on it, but that's always true. I Mean.

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Speaker 1: One of my favorite memories from my career in markets

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Speaker 1: is watching Bill Ackman and um, uh what's his name? Icon?

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Speaker 1: Do get out with Scott Wapner on SNBC. Um, Scott

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Speaker 1: Watner moderating on SNBC. And I think it was over

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Speaker 1: herbal Life, which was this similar situation where there was

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Speaker 1: a large short interest and Icon was long and um,

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Speaker 1: you know, it turned into a political question, right, like

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Speaker 1: herbal Life is extracting rents from these these poor folks,

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Speaker 1: and you know it's a pyramid scheme and that's evil

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Speaker 1: and we need to stop that. And you know, whereas

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Speaker 1: something oside saying, actually, people get a lot of value

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Speaker 1: out of this, and you know, I don't particularly find

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Speaker 1: a compelling but hey, they like it and it seems

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Speaker 1: to work for them. So with the issue here, you know,

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Speaker 1: everything gets politicized. Um and um. You know, I think

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Speaker 1: with Game Stop, we've seen that to a degree that's

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Speaker 1: just so over the top. So you know that the

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Speaker 1: takes that have emerged out of it are so beyond

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Speaker 1: the pale that you've got avowed communists saying that this

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Speaker 1: is like the best thing that's ever happened to workers,

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Speaker 1: and you know, at the start of the giant Revolution,

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Speaker 1: and it's like, what are you people talking about? Right? Like, um,

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Speaker 1: so yeah, I just think it's it's hyperbolate. That's the

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Speaker 1: I want to Yeah, I want to hop in there

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Speaker 1: because George, I actually remember watching that acmen Icon debate

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Speaker 1: as well, and I'm pretty sure that you and I

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Speaker 1: were probably texting each other at the time or bantering

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Speaker 1: about it, because that was around the time we got

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Speaker 1: to know each other. But what I think is so

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Speaker 1: beautif full about the last couple of weeks and about

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Speaker 1: what this sort of Reddit revolution has shown is that

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Speaker 1: now anyone can be Akmin or icon, anyone can get

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Speaker 1: up on their soapbox and make a case for how

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Speaker 1: the market should be playing out, for what should be

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Speaker 1: happening in a given single name stock. And yes, of

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Speaker 1: course that's going to be politicized, and I think to

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Speaker 1: a degree it should be because to your point about

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Speaker 1: the fact that some of these redditors are quite sophisticated,

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Speaker 1: that's actually part of the point that just goes to

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Speaker 1: show how high the bar to entry is and how

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Speaker 1: big you can still be in the sense of education

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Speaker 1: or even net worth and still be a little guy

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Speaker 1: compared to one of these big institutions. You know, formerly

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Speaker 1: you had to be akmin to be Akman, you had

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Speaker 1: to have raised hundreds of millions, if not billions, from LPs,

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Speaker 1: you had to have your own fund, and you had

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Speaker 1: to be candidly, probably a white guy in a suit

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Speaker 1: getting on CNBC to have that kind of a soap box.

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Speaker 1: And that's not the case anymore. And I think that

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Speaker 1: that's a really important part of the paradigm shift here

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Speaker 1: that says to me that this is not actually just

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Speaker 1: about the tendees. You know, these are not just purely

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Speaker 1: kind of rational economic actors here, because if you look

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Speaker 1: at the discourse at least around who's taking money off

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Speaker 1: the table, who's taking profit on these trades, there are

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Speaker 1: a lot of people with irrational money still in the

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Speaker 1: game who are holding the line, as they like to say,

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Speaker 1: just to stick it to the suits. And that sounds

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Speaker 1: pretty political to me, George, can ever, can anyone be

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Speaker 1: an acment now? I wasn't around during the Internet stock

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Speaker 1: bubble of the late and early two thousand's. I was

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Speaker 1: still in grad school back then. But I know, Joe,

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Speaker 1: you've told anecdotes about reading message boards back then, about

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Speaker 1: people hyping stocks and about stocks doing the kind of

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Speaker 1: thing that stocks you today, and maybe not through a

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Speaker 1: short squeeze in a gamma squeeze, by through you know,

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Speaker 1: mass participation in markets. UM, you know, the democratization as

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Speaker 1: it were. I think that's the wrong word for it,

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Speaker 1: But I think what people will identify of of going

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Speaker 1: to decimalization of um having expanded access to brokerage accounts

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Speaker 1: that happened in the es like that all happened before,

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Speaker 1: right um people signed up for e trade accounts to

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Speaker 1: ride the Internet stock bubble higher in the late nineteen nineties. Um,

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Speaker 1: and you know, we're able to participate, We're able to

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Speaker 1: coordinate in just the same way that we're seeing now.

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Speaker 1: I think you could make the case that the specific

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Speaker 1: strategy is a little bit more complex now. Um. But

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Speaker 1: I don't think it's actually something new. Um. And I

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Speaker 1: don't think it's actually something that's changed significantly. I will

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Speaker 1: admit that there it's easier to get into the market

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Speaker 1: and speculate today with an app like robin Hood than

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Speaker 1: it would have been twenty years ago. And it probably

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Speaker 1: is a little bit easier to coordinate via some of

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Speaker 1: these large scale network effect online communities like Reddit, Wall

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Speaker 1: Street bets or like Twitter or whatever. Um, But I

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Speaker 1: don't think that's an phenomenon at his core. It's maybe

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Speaker 1: a more intense version of something we've seen previously. But um,

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Speaker 1: I think there has been ample precedent in relatively recent

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Speaker 1: history for this exact same pattern of behavior, and so

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Speaker 1: we're not seeing some new emergent um factor, but just

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Speaker 1: standard rehash of what's happened before. Maybe Joe knows the

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Speaker 1: answer to this, But I wasn't trading in the late

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Speaker 1: early two thousand's. But I don't remember anyone talking about

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Speaker 1: specific options contracts that they could gang up on to

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Speaker 1: create a gamma squeeze. Like that feels relatively new to me. Yeah,

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Speaker 1: I mean, you know, I just um, you know, my

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Speaker 1: twenty second take is like, yeah, there were message boards. Yeah,

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Speaker 1: the message boards moving market there a. I do think

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Speaker 1: George is right, the coordination is sort of more intense

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Speaker 1: these days, and I think the sophistication is just um

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Speaker 1: way more intense these days. I mean, the level of

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Speaker 1: intelligent at would agree at least on some say like

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Speaker 1: Wall Street beds posters, is extremely high. They're under some

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Speaker 1: of them at least have very good understanding of how

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Speaker 1: the derivatives markets work and where the pressure points are emerging,

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Speaker 1: and they know how to communicate as such. And also

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Speaker 1: in the case of DFV the Roaring Kitty like also

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Speaker 1: very high level understanding of business. I mean, Joel, I

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Speaker 1: guess I would ask you though, like, yes, the markets

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Speaker 1: are changing and that is new and anyone can sort

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Speaker 1: of like tell a story in a way that maybe

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Speaker 1: previously would be reserved for a hedge fund manager. But

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Speaker 1: is that like, is that political or is that just

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Speaker 1: changing market? Well, part of what I love about all

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Speaker 1: of the commentary that has occurred around this is that

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Speaker 1: for the first time, people are paying attention to market

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Speaker 1: structure and paying attention to all of the implications that

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Speaker 1: come along with market structure in a way that frankly,

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Speaker 1: even Wall Street didn't um. You know, Church and I

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Speaker 1: will both remember when we're working on banks, right at

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Speaker 1: working at banks, excuse me, right out of college, you know,

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Speaker 1: the least loved task was interfacing with middle and back office,

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Speaker 1: was waiting through all of the new regulations that were

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Speaker 1: coming out post two thousand eight. It turns out, you know,

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Speaker 1: now looking back ten years later, for me, that was

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Speaker 1: some of the most important work that I did, because

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Speaker 1: it gave me this understanding of how the market is structured,

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Speaker 1: why it's structured this way, and all of the knock

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Speaker 1: on effects and implications that that has on who can

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Speaker 1: access the market, who can access the market in what ways,

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Speaker 1: who can access information and data flow, who can access leverage,

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Speaker 1: who can access various financial products? And again, I think

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Speaker 1: that that should be political. And I think that we've

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Speaker 1: seen over the last year people waking up to the

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Speaker 1: system around them, the fish waking up to the water.

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Speaker 1: And I think that this is yet another example of that.

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Speaker 1: Whether you know, we look at the storming of the

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Speaker 1: Capitol Building or even the election of Donald Rump. You know,

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Speaker 1: that was a subset of the American people waking up

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Speaker 1: and say, you know what, the current system it's not

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Speaker 1: working for me. It doesn't serve me. Even the BLM

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Speaker 1: protests last spring. Of course, that was a very different

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Speaker 1: sort of belief system and ideology that was driving that,

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Speaker 1: but still it was people waking up and saying this

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Speaker 1: system doesn't serve me. And I think that this fits

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Speaker 1: somehow with all of those other examples of this sort

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Speaker 1: of zeitgeist in context of the time that we're in,

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Speaker 1: of people waking up this time to market structure and

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Speaker 1: saying the market structure is broken. I like that idea

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Speaker 1: that market structure market access should be political. I think

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Speaker 1: that's a good way of framing it. Um So I

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Speaker 1: just want to go back to, you know, the notion

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Speaker 1: of what is actually motivating Wall Street bets on aggregate.

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Speaker 1: So if you spend time on the message board, it's

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Speaker 1: pretty clear to me that there is a wrong sense

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Speaker 1: of community. Although I guess you could argue over the

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Speaker 1: past week that might be changing, since they've gone up

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Speaker 1: to seven million followers or something crazy like that, and

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Speaker 1: it's starting to change the makeup of the form. But

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Speaker 1: if you go back to like a few months, like

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Speaker 1: Wall Street Bets had a very defined identity, It had

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Speaker 1: its own language, its own culture, And it feels to

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Speaker 1: me like when you have that commonality, when you have

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Speaker 1: that much in common, you have that unity. And part

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Speaker 1: of that unity is developed by having a common identifiable enemy.

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Speaker 1: And it feels like Wall Street Bets settled on Wall

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Speaker 1: Street or parts of Wall Street and the financial industry

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Speaker 1: as their common enemy. So I don't really get how

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Speaker 1: how we can ignore that side of things. Well, I mean,

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Speaker 1: if you're someone who is well off, who's done well

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Speaker 1: in society, who has five figures to risk on relatively high,

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Speaker 1: relatively low expected return trades which is what deep out

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Speaker 1: of the money call options and highly concentrated positions and

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Speaker 1: margin all you know imply, Um, if you're if you're

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Speaker 1: resentful towards someone who's you know, got a nice suit on,

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Speaker 1: that works at a business that ends in the word capital, Um,

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Speaker 1: I mean that that that's all well and good. I

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Speaker 1: mean I don't deny that there's a certain group of

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Speaker 1: people on you know, the Wall Street bets or however

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Speaker 1: you want to frame this community is is resentful of

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Speaker 1: the classic hedge fund crowd. But I would also say

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Speaker 1: that that's very different from something like the Occupy Wall

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Speaker 1: Street movement in the post crisis period, right where you

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Speaker 1: know that that was not upper middle class people getting

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Speaker 1: super mad about UM. You know, the fact that they

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Speaker 1: didn't get enough respect in markets, or that they you know,

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Speaker 1: that that hedge funds got all the attention and their

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Speaker 1: ideas were overlooked like that was. That was a rejection

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Speaker 1: of the larger distribution of wealth, the distribution of resources

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Speaker 1: this country, so on and so forth. It did end

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Speaker 1: up being, you know, something that UM metastasized into the

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Speaker 1: broader politics of of the United States, but at least

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Speaker 1: not long term. But I do think you can make

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Speaker 1: that that case. Whereas the you know, I'm glad Jill

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Speaker 1: brought up the US capital sacking. I mean that group

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Speaker 1: of people was by any measure a diverse group of

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Speaker 1: people in terms of the amount of UM social resources

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Speaker 1: they controlled, around the types of work they do, around

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Speaker 1: you know, their status as labor capital. Right. You have

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Speaker 1: people flying to that event on private planes, and you

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Speaker 1: also have people who were solid by any definition, working

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Speaker 1: class and not doing as well as other folks in society.

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Speaker 1: You know. So to me, both the US capital and

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Speaker 1: the Wall Street pets phenomenon and game stop whatever um

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Speaker 1: are really good examples of trying to paint over, you know,

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Speaker 1: a people group of people with diverse and you know,

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Speaker 1: unified interests, but unified interests that don't really break down

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Speaker 1: along the lines of UM broader political economy. Right, it's it's,

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Speaker 1: it's and and that's really what I object to most

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Speaker 1: about some of the takes is that you're trying to

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Speaker 1: fit um, interesting shaped pegs into holes that are just

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Speaker 1: a different shape. And so, yeah, haven't you just painted

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Speaker 1: over this group as a bunch of people who have

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Speaker 1: the five figures to throw away, as a bunch of

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Speaker 1: people who are jealous of the students? Want to absolutely people, Yeah,

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Speaker 1: there are absolutely people in this in this diverse range

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Speaker 1: of folks that use walls bats, who are not super

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Speaker 1: high income, who may be spending their last couple hundred

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Speaker 1: dollars on gm E calls or whatever the trade is, right,

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Speaker 1: I totally acknowledge there are people like that in there.

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Speaker 1: My point is, my point is not is that if

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Speaker 1: you're just going to ignore those people, you shouldn't ignore

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Speaker 1: those people anymore than you should ignore the people that

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Speaker 1: are also benefiting at benefiting who don't fit into that category. Right.

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Speaker 1: You can't. You can't decide that this, you know, this

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Speaker 1: is not a universal group of little guys. There's certainly

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Speaker 1: some little guys in there, and there's some big fish

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Speaker 1: in there too. That's that's my point. I think it's

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Speaker 1: I think that it's super worth acknowledging that so many

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Speaker 1: of the people on the Wall Street Beds forum and

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Speaker 1: participating in discourse and in the ways that they are here,

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Speaker 1: whether that's on the discord or wherever wherever you want

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Speaker 1: to point to, they're doing an under anonymous accounts or pseudonyms, right,

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Speaker 1: And I think that that, to me just drives home

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Speaker 1: this point that in a way, it doesn't matter who

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Speaker 1: they are, it doesn't matter what their associated economic background is,

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Speaker 1: what their motivations are, but they're all participating in this

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Speaker 1: kind of stick it to the man, stick it to

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Speaker 1: the suits narrative. And sure, I'm sure that you can

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Speaker 1: break down from each individual the nuanced differences of how

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Speaker 1: they see the world and why they're doing this, you

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Speaker 1: know why they've put money into game Stop. I'm sure

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Speaker 1: that there are some who are more rational economic actors

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Speaker 1: than others. But at the end of the day, you

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Speaker 1: have this population of folks who are again populating this

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Speaker 1: this message board that is driving home this narrative that

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Speaker 1: is fundamentally political, and I think that that's that's a

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Speaker 1: huge paradigm shift from what Wall Street has been to date,

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Speaker 1: where again you had to be a known name and

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Speaker 1: have a track record in order to have power. Now

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Speaker 1: you have people who are you know, going under inappropriate

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Speaker 1: names uh and and going by cat avatars having the

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Speaker 1: same level of influence and voice. So, George, I mean,

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Speaker 1: you're a finance professional and you've written on Business Insider

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Speaker 1: about game Stop. I'm curious how much vitriol have you

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Speaker 1: encountered on social media, because I'm sure between Joe and

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Speaker 1: myself we've gotten quite a lot of abuse over the

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Speaker 1: past week just by working at Bloomberg and therefore being

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Speaker 1: considered part of the financial establishment. People must be responding

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Speaker 1: to you, right, not really, I mean like I anytime

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Speaker 1: I say something that's like at all just us. Anytime

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Speaker 1: I say something that's at all like outside of consensus

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Speaker 1: opinion on Twitter, I'm going to have people in my

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Speaker 1: mentions being annoyed, but like it hasn't been anything unreasonable

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Speaker 1: in my opinion, I haven't had people Maybe I don't know,

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Speaker 1: maybe Twitter's quality filter is doing a good job or something.

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Speaker 1: But I haven't been harassed or anything like that. I'm

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Speaker 1: sorry y'all have and um, you know, I don't say

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Speaker 1: that to say that you'll have it. You know, it's awful.

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Speaker 1: The other night I made a chicken tenders and I

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Speaker 1: tweeted about it and someone said, I work at Bloomberg,

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Speaker 1: so I could never really appreciate tenders someone uh, they

429
00:23:32,119 --> 00:23:34,879
Speaker 1: said someone, Yeah, I can't eat tends the way the

430
00:23:34,960 --> 00:23:38,679
Speaker 1: common men, so that, yeah, I do. It is just

431
00:23:38,720 --> 00:23:41,320
Speaker 1: so interesting that back to what Jill said, like I

432
00:23:41,720 --> 00:23:45,199
Speaker 1: just should we I mean, maybe we should care if

433
00:23:45,240 --> 00:23:49,040
Speaker 1: the petite bougeois is really mad at you know, capitalists, Um,

434
00:23:49,080 --> 00:23:53,160
Speaker 1: but to me, like they're bigger, more pressing political narratives here,

435
00:23:53,200 --> 00:23:57,200
Speaker 1: that that ascribing these groups is like they're the underdog,

436
00:23:57,240 --> 00:24:02,480
Speaker 1: when like socio economically, they're definitely not the clear underdog, right, um,

437
00:24:02,520 --> 00:24:04,760
Speaker 1: compared to like the worst of people in this country

438
00:24:04,880 --> 00:24:06,840
Speaker 1: or in any other country around the world right now, Like,

439
00:24:07,000 --> 00:24:08,959
Speaker 1: is that the people we should be holding up as

440
00:24:09,040 --> 00:24:12,399
Speaker 1: like the the underdogs who are fighting against injustice and

441
00:24:12,480 --> 00:24:14,320
Speaker 1: being shut out of the system. Like I'm a lot

442
00:24:14,359 --> 00:24:17,880
Speaker 1: more worried about my friends who you know, have been

443
00:24:17,920 --> 00:24:21,560
Speaker 1: formally incarcerated and therefore can't rent rent an apartment Like

444
00:24:21,640 --> 00:24:22,920
Speaker 1: that to me is like the people we should be

445
00:24:22,920 --> 00:24:25,359
Speaker 1: worried about underdogs, not people who are mad that they

446
00:24:25,359 --> 00:24:27,480
Speaker 1: can't get as many tendees as they want. On robin Hood,

447
00:24:29,720 --> 00:24:31,879
Speaker 1: everyone will have their own fight to fight, and I

448
00:24:31,920 --> 00:24:34,199
Speaker 1: don't I don't think it's for me to uh to

449
00:24:34,400 --> 00:24:38,720
Speaker 1: dismiss this fight over another fight, although even if personally

450
00:24:38,920 --> 00:24:42,080
Speaker 1: I I don't disagree. And again, you know, we covered

451
00:24:42,119 --> 00:24:45,120
Speaker 1: this earlier, but in the macro sense of what defines

452
00:24:45,160 --> 00:24:48,240
Speaker 1: the haves versus the haves have not in the United States,

453
00:24:48,440 --> 00:24:51,600
Speaker 1: You're absolutely right, Torch, anyone with fifty k to throw

454
00:24:51,640 --> 00:24:54,560
Speaker 1: into a high risk trade goes into the category of

455
00:24:54,600 --> 00:24:59,000
Speaker 1: the haves. Under that, under that more macro framing, but

456
00:24:59,080 --> 00:25:02,879
Speaker 1: again it just goes to highlight how unequal access is

457
00:25:03,119 --> 00:25:15,760
Speaker 1: markets today. Let me ask a question, and I'm I'm

458
00:25:15,800 --> 00:25:18,080
Speaker 1: glad you ended on that note because there's been part

459
00:25:18,080 --> 00:25:20,320
Speaker 1: of the narrative that's been bugging me a little bit,

460
00:25:20,320 --> 00:25:22,960
Speaker 1: but maybe others have different views. And the story that

461
00:25:23,040 --> 00:25:25,880
Speaker 1: I hear a lot of people saying is why are

462
00:25:25,920 --> 00:25:29,840
Speaker 1: people um complaining about people on Reddit manipulating the price

463
00:25:29,840 --> 00:25:33,600
Speaker 1: of stocks? The market has been manipulated forever. People on

464
00:25:33,680 --> 00:25:36,480
Speaker 1: Wall Street are manipulating the stock market all the time,

465
00:25:36,560 --> 00:25:39,040
Speaker 1: and my I do not I know this is going

466
00:25:39,080 --> 00:25:41,639
Speaker 1: to be very Actually, the thing that I said that

467
00:25:41,720 --> 00:25:43,680
Speaker 1: got the most abuse so far in the last week

468
00:25:44,119 --> 00:25:46,520
Speaker 1: was when I tweeted that prior to this, I do

469
00:25:46,600 --> 00:25:50,680
Speaker 1: not think that US capital markets are actually particularly manipulated.

470
00:25:50,720 --> 00:25:53,600
Speaker 1: I think they're pretty transparent by and large. I think

471
00:25:53,640 --> 00:25:56,200
Speaker 1: that access has been pretty level for a while thanks

472
00:25:56,280 --> 00:25:59,560
Speaker 1: to Index CTF, people of low cost ways of investing

473
00:25:59,560 --> 00:26:02,040
Speaker 1: that are are probably better than they've ever been, and

474
00:26:02,080 --> 00:26:04,240
Speaker 1: then the old days it was much worse. But other

475
00:26:04,240 --> 00:26:07,080
Speaker 1: people think like, oh, it's like Riven with manipulation. I'd

476
00:26:07,080 --> 00:26:09,919
Speaker 1: love to hear both of your takes. Like was prior

477
00:26:10,040 --> 00:26:12,960
Speaker 1: to the Wall Street bets emerging, were big players on

478
00:26:13,000 --> 00:26:15,840
Speaker 1: Wall Street constantly manipulating US capital I'm gonna let the

479
00:26:15,840 --> 00:26:20,320
Speaker 1: former m bond trader go first. I was gonna say, Joe,

480
00:26:20,359 --> 00:26:23,560
Speaker 1: I mean, I think it's all relative, right, Certainly US

481
00:26:23,640 --> 00:26:27,359
Speaker 1: markets relative to some of the emerging markets, uh that

482
00:26:28,040 --> 00:26:31,639
Speaker 1: I dealt with in my former life once upon a time. Sure,

483
00:26:31,880 --> 00:26:36,560
Speaker 1: very transparent, very fair and equal market access. Um. But

484
00:26:36,760 --> 00:26:39,320
Speaker 1: you know, I think that that doesn't mean that it's

485
00:26:39,440 --> 00:26:42,280
Speaker 1: good enough. And I think that that's the distinction that

486
00:26:42,320 --> 00:26:44,760
Speaker 1: I would draw. But you know it is it is

487
00:26:44,880 --> 00:26:47,760
Speaker 1: very easy to uh, to make that argument and to

488
00:26:47,760 --> 00:26:50,040
Speaker 1: to have that come back of well, look at how

489
00:26:50,119 --> 00:26:54,720
Speaker 1: lucky we are here relative to most of the world. Yeah,

490
00:26:54,760 --> 00:26:56,800
Speaker 1: I agree with that. I mean it's so if you

491
00:26:56,840 --> 00:26:59,840
Speaker 1: look at a market like Hong Kong, um, like the

492
00:27:00,080 --> 00:27:02,719
Speaker 1: sort of capital structure manipulation that goes on with property

493
00:27:02,760 --> 00:27:05,159
Speaker 1: developers over there. UM. I mean, Tracy, I'm sure you

494
00:27:05,160 --> 00:27:08,440
Speaker 1: can speak to ever Grand and some of these companies, right,

495
00:27:08,520 --> 00:27:11,840
Speaker 1: I mean, we would not fly in the US, UM.

496
00:27:12,359 --> 00:27:17,040
Speaker 1: You know, um yeah, just not gonna happen. Um. So

497
00:27:17,600 --> 00:27:23,600
Speaker 1: comparing a relatively developed emerging market, UM, infrastructure, financial markets,

498
00:27:23,600 --> 00:27:26,240
Speaker 1: infrastructure like Hong Kong's UM. And I'm sure you could

499
00:27:26,240 --> 00:27:29,320
Speaker 1: pick out other examples. Um. You know, look at Japan

500
00:27:29,400 --> 00:27:33,639
Speaker 1: and how companies over there are able to avoid acting

501
00:27:33,680 --> 00:27:36,120
Speaker 1: and shareholder interests, you know, in favor of UM long

502
00:27:36,200 --> 00:27:38,520
Speaker 1: term holders or UM even some of the stuff that

503
00:27:38,520 --> 00:27:41,480
Speaker 1: goes on in Europe sometimes. I mean, the US markets

504
00:27:41,520 --> 00:27:46,800
Speaker 1: are are accessible and you know, cheap and generally fair

505
00:27:47,760 --> 00:27:52,760
Speaker 1: also compared to history of the US markets, UM. Right, Uh,

506
00:27:53,000 --> 00:27:55,880
Speaker 1: we've come a long way, and honestly, a lot of

507
00:27:55,920 --> 00:27:57,800
Speaker 1: the part of the reason for that is this sort

508
00:27:57,800 --> 00:28:01,480
Speaker 1: of market mechanics that drove Robin to stop people from trading. Right.

509
00:28:01,520 --> 00:28:06,080
Speaker 1: We that ultimately they were following a course prescribed by regulation. Right,

510
00:28:06,119 --> 00:28:08,080
Speaker 1: and that regulation in the long run does a really

511
00:28:08,560 --> 00:28:12,160
Speaker 1: a much better job than it could protecting UM individual

512
00:28:12,160 --> 00:28:16,520
Speaker 1: investors and making sure things are equitable. UM. But you know,

513
00:28:16,680 --> 00:28:19,080
Speaker 1: that doesn't mean we can't go further. And I definitely

514
00:28:19,080 --> 00:28:22,040
Speaker 1: agree with the idea that things could be more equitable,

515
00:28:22,119 --> 00:28:25,080
Speaker 1: things could be more fair, and that there are instances

516
00:28:25,080 --> 00:28:29,200
Speaker 1: of manipulation where um, you know, they need to be enforced.

517
00:28:29,240 --> 00:28:31,560
Speaker 1: And maybe I'm not a lawyer, but maybe the Wall

518
00:28:31,600 --> 00:28:34,320
Speaker 1: Street bet stuff falls into that category. It's possible we're

519
00:28:34,320 --> 00:28:36,760
Speaker 1: going to find out that the SEC has evidence that

520
00:28:36,800 --> 00:28:40,640
Speaker 1: people were posting from multiple accounts and people were misleading

521
00:28:41,000 --> 00:28:43,960
Speaker 1: people in a public forum. And you know, YadA YadA, YadA,

522
00:28:44,080 --> 00:28:45,920
Speaker 1: UM not to say that everything that was going on

523
00:28:46,320 --> 00:28:49,880
Speaker 1: was manipulation or anything like that, UM, but you know,

524
00:28:50,440 --> 00:28:53,280
Speaker 1: I do think we could see a lot more enforcement

525
00:28:53,520 --> 00:28:57,520
Speaker 1: of um, you know, general anti manipulate of law and

526
00:28:57,560 --> 00:28:59,800
Speaker 1: securities law in this country, and it would only do

527
00:28:59,840 --> 00:29:03,440
Speaker 1: good things for individual investors. I have been down this

528
00:29:03,480 --> 00:29:06,840
Speaker 1: whole kind of rabbit hole about what market manipulation actually

529
00:29:06,920 --> 00:29:10,120
Speaker 1: means over the last week, and it's it's actually a

530
00:29:10,240 --> 00:29:12,720
Speaker 1: very weird kind of question if you remove it from

531
00:29:12,800 --> 00:29:17,440
Speaker 1: obviously the legal parameters and definitions of just can you

532
00:29:17,520 --> 00:29:21,800
Speaker 1: be a market participant without in some way manipulating the market,

533
00:29:21,840 --> 00:29:25,200
Speaker 1: because people now take market manipulation just to mean influence

534
00:29:25,360 --> 00:29:28,440
Speaker 1: or outside influence on the market. And I think that

535
00:29:28,480 --> 00:29:31,440
Speaker 1: the problem that people are appointing to when they talk

536
00:29:31,480 --> 00:29:34,680
Speaker 1: about market manipulation in this context is just that a

537
00:29:34,720 --> 00:29:38,920
Speaker 1: few big market players have become or can be in

538
00:29:38,920 --> 00:29:43,960
Speaker 1: the market as it stands, kingmakers or world destroyers. And

539
00:29:44,280 --> 00:29:46,720
Speaker 1: the question is, should a few hedge funds get to

540
00:29:46,800 --> 00:29:49,720
Speaker 1: decide that game Stop is a bad company and should

541
00:29:49,760 --> 00:29:54,120
Speaker 1: go under? Equally, should retail investors get to decide that

542
00:29:54,280 --> 00:29:58,200
Speaker 1: AMC lives and should get this big cash infusion, and

543
00:29:58,360 --> 00:30:00,240
Speaker 1: I don't really know what to make of that, but

544
00:30:00,280 --> 00:30:02,920
Speaker 1: I think that that is more what we're getting at

545
00:30:02,920 --> 00:30:06,920
Speaker 1: when we talk about market manipulation. Now, I definitely agree

546
00:30:06,920 --> 00:30:09,280
Speaker 1: that there's a technical issue where there's what the actual

547
00:30:09,280 --> 00:30:13,040
Speaker 1: definition is and versus the popular perception are way on

548
00:30:13,160 --> 00:30:19,960
Speaker 1: different planets. Yeah, I think Jill's point about this idea

549
00:30:20,040 --> 00:30:23,400
Speaker 1: that eventually what's going on in markets might have an

550
00:30:23,440 --> 00:30:28,400
Speaker 1: impact on an actual company. So AMC averted bankruptcy recently

551
00:30:28,560 --> 00:30:31,240
Speaker 1: because it's stock had been squeezed up so high, and

552
00:30:31,280 --> 00:30:33,640
Speaker 1: we even saw its bond prices start to go up,

553
00:30:33,680 --> 00:30:36,880
Speaker 1: so you know, the influence of Wall Street Bets was

554
00:30:36,880 --> 00:30:40,800
Speaker 1: really felt across the capital structure of am C. GameStop

555
00:30:40,880 --> 00:30:44,239
Speaker 1: hasn't really done much with its searching stock price, but

556
00:30:44,280 --> 00:30:46,720
Speaker 1: who knows, maybe that will change. I think that idea

557
00:30:46,840 --> 00:30:51,040
Speaker 1: is really really interesting. I also think on the manipulation point,

558
00:30:51,560 --> 00:30:54,440
Speaker 1: it's going to be We've seen talk about maybe prosecuting

559
00:30:54,640 --> 00:30:58,760
Speaker 1: Wall Street Bets people for some sort of coordinated manipulation,

560
00:30:58,840 --> 00:31:01,520
Speaker 1: but I think it's going to be really hard to

561
00:31:01,520 --> 00:31:05,120
Speaker 1: to accuse someone of you know, buying game Stop shares

562
00:31:05,200 --> 00:31:07,680
Speaker 1: because they like them and then planning to hold them

563
00:31:07,800 --> 00:31:10,480
Speaker 1: for a long time Like that doesn't really seem like

564
00:31:10,520 --> 00:31:13,080
Speaker 1: a coordinated pump and dump effort. But anyway, sorry, I'm

565
00:31:13,080 --> 00:31:17,960
Speaker 1: getting slightly off, I respond to the really quick Yeah,

566
00:31:18,120 --> 00:31:20,840
Speaker 1: of course. It just begs the question to me of

567
00:31:21,080 --> 00:31:23,760
Speaker 1: why is it okay when hedge fund managers get together

568
00:31:23,800 --> 00:31:27,560
Speaker 1: at Lebernadine, you know, the smokey back room of the

569
00:31:27,560 --> 00:31:30,560
Speaker 1: restaurant in New York, and they share their trade positions

570
00:31:30,600 --> 00:31:33,480
Speaker 1: with each other. Why is it okay that even sell

571
00:31:33,560 --> 00:31:37,640
Speaker 1: side research is still totally restricted to the clients of

572
00:31:37,680 --> 00:31:40,440
Speaker 1: that of that given firm. You know, why why are

573
00:31:40,480 --> 00:31:43,240
Speaker 1: we okay with these elements of the way that the

574
00:31:43,280 --> 00:31:46,680
Speaker 1: markets are structured? And we're talking about prosecuting people who

575
00:31:46,720 --> 00:31:49,600
Speaker 1: are posting openly on a Reddit forum. That to me

576
00:31:50,200 --> 00:31:52,080
Speaker 1: is just a big part of what is so insane

577
00:31:52,120 --> 00:31:55,640
Speaker 1: here and what the rebellion is against. The last thing,

578
00:31:55,680 --> 00:32:00,360
Speaker 1: I'll say, the one thing you definitely can't fault Street

579
00:32:00,400 --> 00:32:04,400
Speaker 1: Bets for his transparency, right, Like everything is in the open,

580
00:32:04,800 --> 00:32:06,600
Speaker 1: and it is, in one way, like one of the

581
00:32:06,640 --> 00:32:09,840
Speaker 1: most level playing fields out there. Um. I wanted to

582
00:32:09,840 --> 00:32:11,800
Speaker 1: go back to robin Hood though, because when we're talking

583
00:32:11,840 --> 00:32:15,760
Speaker 1: about populist outrage. I feel like a lot of that

584
00:32:15,920 --> 00:32:18,480
Speaker 1: has been directed at robin Hood in recent days, ever

585
00:32:18,560 --> 00:32:22,040
Speaker 1: since they decided to shut down availability of trading on

586
00:32:22,200 --> 00:32:26,200
Speaker 1: game Stop and some other companies. People are really really

587
00:32:26,360 --> 00:32:30,000
Speaker 1: upset about that decision. And then there are people on

588
00:32:30,040 --> 00:32:33,520
Speaker 1: the other side, uh, maybe like George, who are describing

589
00:32:33,520 --> 00:32:36,560
Speaker 1: this as a pretty rational stance by robin Hood. It

590
00:32:36,640 --> 00:32:40,320
Speaker 1: wants to preserve its business. But how should we be

591
00:32:40,400 --> 00:32:43,680
Speaker 1: thinking about that? So it's really important to understand why

592
00:32:43,800 --> 00:32:46,240
Speaker 1: robin Hood restricts of trading. Right. They didn't do it

593
00:32:46,280 --> 00:32:48,280
Speaker 1: because Ken Griffin called them up and said you're not

594
00:32:48,320 --> 00:32:51,720
Speaker 1: allowed to trade in these stocks anymore. That's not what happened. Right.

595
00:32:52,000 --> 00:32:55,080
Speaker 1: They had a mechanical margin call from the Depository Trust

596
00:32:55,120 --> 00:33:00,280
Speaker 1: and Clearing Corporation that was due to huge new exposure

597
00:33:00,320 --> 00:33:03,760
Speaker 1: in robin Hood accounts that operate under reg T their

598
00:33:03,800 --> 00:33:06,320
Speaker 1: margin accounts Type two accounts, call them a bunch of

599
00:33:06,320 --> 00:33:09,160
Speaker 1: different things that created a need for robin Hood to

600
00:33:09,200 --> 00:33:12,520
Speaker 1: post large amounts of cash to ensure that they performed

601
00:33:12,560 --> 00:33:14,960
Speaker 1: on their end of trades during the T plus two

602
00:33:14,960 --> 00:33:17,920
Speaker 1: settlement cycle UM and the amount of cash they had

603
00:33:17,920 --> 00:33:20,479
Speaker 1: to post went up in part because these stocks are

604
00:33:20,520 --> 00:33:23,200
Speaker 1: so volatile, and in part because they just had so

605
00:33:23,240 --> 00:33:26,600
Speaker 1: many people in their platform opening exposure to them. All

606
00:33:26,640 --> 00:33:30,719
Speaker 1: of that, the increase in margin related to volatility, the

607
00:33:30,720 --> 00:33:32,400
Speaker 1: fact that robin Hood had to come up with the

608
00:33:32,440 --> 00:33:36,200
Speaker 1: cash itself, all of that is designed to protect the

609
00:33:36,240 --> 00:33:39,080
Speaker 1: people that own stocks via robin Hood. It's designed to

610
00:33:39,160 --> 00:33:41,760
Speaker 1: make sure that robin Hood is able to perform on

611
00:33:41,800 --> 00:33:44,920
Speaker 1: their behalf from a financial perspective, and they did. Robin

612
00:33:44,960 --> 00:33:46,920
Speaker 1: Hood did have to go out and raise cash through

613
00:33:46,960 --> 00:33:49,960
Speaker 1: bank loans and through credit lines and through a new

614
00:33:50,000 --> 00:33:53,000
Speaker 1: capital raise. And that is how the system is supposed

615
00:33:53,000 --> 00:33:54,720
Speaker 1: to work. And the reason it's supposed to work that

616
00:33:54,720 --> 00:33:57,960
Speaker 1: way is so that robin Hood doesn't end up blowing

617
00:33:58,080 --> 00:34:01,800
Speaker 1: up because they can't perform on their obligations to this

618
00:34:02,000 --> 00:34:05,600
Speaker 1: the clearing house and end up having all of their

619
00:34:05,760 --> 00:34:09,280
Speaker 1: customer accounts liquidated through what amounts to a bankruptcy process.

620
00:34:09,320 --> 00:34:11,960
Speaker 1: And so, you know, Jill and I early in our careers,

621
00:34:12,160 --> 00:34:15,760
Speaker 1: we we hit the street right after something related happened

622
00:34:15,920 --> 00:34:20,000
Speaker 1: at MF Global. Right, John Corzine was being too aggressive

623
00:34:20,160 --> 00:34:23,360
Speaker 1: with UM customer collateral and it ended up going the

624
00:34:23,360 --> 00:34:25,760
Speaker 1: wrong way on him. His trades actually ended up being correct.

625
00:34:25,840 --> 00:34:27,600
Speaker 1: It's just he got margin squeeze in the in the

626
00:34:27,640 --> 00:34:31,160
Speaker 1: interim and it it created a big blow up related

627
00:34:31,160 --> 00:34:34,920
Speaker 1: to collateral, and so you know, I just I really

628
00:34:34,960 --> 00:34:38,920
Speaker 1: it's really frustrating to see regulation that is definitely in

629
00:34:39,000 --> 00:34:42,040
Speaker 1: customers interests, that is definitely you know, especially over the

630
00:34:42,040 --> 00:34:46,200
Speaker 1: long term UM, and that is being rationally managed by

631
00:34:46,480 --> 00:34:50,160
Speaker 1: um the broker Robin Hood um be sort of ascribed

632
00:34:50,200 --> 00:34:53,960
Speaker 1: to some shadowy back room plot involving Citadel and some

633
00:34:54,040 --> 00:34:56,960
Speaker 1: other people. And I don't really understand, you know, because

634
00:34:56,960 --> 00:34:59,799
Speaker 1: people just don't understand how the plumbing works. And it's okay,

635
00:35:00,000 --> 00:35:02,279
Speaker 1: pole don't understand bunny works. But that's another thing that's

636
00:35:02,280 --> 00:35:05,960
Speaker 1: frustrating about these takes is that they were also unaware

637
00:35:06,120 --> 00:35:11,000
Speaker 1: of the mechanics of the market. UM. So that yeah,

638
00:35:11,239 --> 00:35:13,160
Speaker 1: this is why I like, so Tracy got mad at

639
00:35:13,200 --> 00:35:15,040
Speaker 1: maybe this morning over Ivy and she's like, why are

640
00:35:15,080 --> 00:35:18,400
Speaker 1: you anti takes? And it was actually mostly this because

641
00:35:18,960 --> 00:35:21,600
Speaker 1: it's not that I really, you know, everyone is an

642
00:35:21,640 --> 00:35:23,759
Speaker 1: opinion that's fine. Is that I actually think like some

643
00:35:23,840 --> 00:35:27,279
Speaker 1: of the misunderstandings about this stuff was like worsening the

644
00:35:27,320 --> 00:35:31,280
Speaker 1: public's understanding of this to very negative to a negative degree.

645
00:35:31,480 --> 00:35:33,080
Speaker 1: I mean some of it. I don't like the whole,

646
00:35:33,120 --> 00:35:36,200
Speaker 1: like you know, Occupy Wall Street stuff, but also like

647
00:35:36,520 --> 00:35:41,840
Speaker 1: people miss explaining why you know, the margin call aspect

648
00:35:41,880 --> 00:35:45,280
Speaker 1: of everything and plotting what is a sort of system

649
00:35:46,120 --> 00:35:48,799
Speaker 1: rules designed to keep the system from blowing up, as

650
00:35:48,960 --> 00:35:52,160
Speaker 1: rules designed to punish the little guy or prevent the

651
00:35:52,200 --> 00:35:55,239
Speaker 1: little guy from doing the same trades as hedge funds do.

652
00:35:55,960 --> 00:35:57,520
Speaker 1: That was like the part where I think, like, Okay,

653
00:35:57,560 --> 00:36:01,480
Speaker 1: some of these takes are like actually corrosive. Um, so

654
00:36:01,760 --> 00:36:04,719
Speaker 1: that's that's why, Tracy, But Jill, where you gonna I

655
00:36:04,760 --> 00:36:07,880
Speaker 1: mean here? So wait I have to respond to that.

656
00:36:07,960 --> 00:36:12,719
Speaker 1: Wait wait, wait, wait wait, I think look, I think

657
00:36:12,719 --> 00:36:15,000
Speaker 1: you need to be more specific when you do your

658
00:36:15,000 --> 00:36:17,760
Speaker 1: own takes on how there are too many takes because

659
00:36:17,800 --> 00:36:20,160
Speaker 1: you just go out and say, oh, all these takes suck,

660
00:36:20,360 --> 00:36:22,920
Speaker 1: But you need to be much much more specific about

661
00:36:22,920 --> 00:36:25,480
Speaker 1: which ones you're talking about, because otherwise it just sounds

662
00:36:25,520 --> 00:36:27,480
Speaker 1: like you don't want anyone to have an opinion on

663
00:36:27,600 --> 00:36:35,200
Speaker 1: same goes to you. No, I mean, I think, look,

664
00:36:35,320 --> 00:36:37,560
Speaker 1: I as someone who has worked for a long time

665
00:36:37,680 --> 00:36:41,520
Speaker 1: in the cryptocurrency and blockchain space, I can absolutely sympathize

666
00:36:41,600 --> 00:36:43,880
Speaker 1: with the feeling that there are too many takes and

667
00:36:43,920 --> 00:36:47,920
Speaker 1: that those takes are actually educating people in the wrong

668
00:36:47,960 --> 00:36:52,600
Speaker 1: direction um and and leaving them with misconceptions. I think

669
00:36:52,640 --> 00:36:54,640
Speaker 1: there's no doubt that we're going to come out the

670
00:36:54,640 --> 00:36:56,520
Speaker 1: other side of this whole game stop thing and the

671
00:36:56,520 --> 00:37:00,560
Speaker 1: whole Robin Hood halting trading fiasco with a whole bunch

672
00:37:00,600 --> 00:37:04,360
Speaker 1: of conspiracy theories, as George points to around Ken Griffin.

673
00:37:04,880 --> 00:37:08,200
Speaker 1: But my perspective is that if even one percent of

674
00:37:08,239 --> 00:37:12,160
Speaker 1: the people who were affected by this learned something about

675
00:37:12,440 --> 00:37:15,560
Speaker 1: the dt c C and settlement cycles in the United

676
00:37:15,600 --> 00:37:18,680
Speaker 1: States and have an opinion on that, I'll call that

677
00:37:18,760 --> 00:37:23,160
Speaker 1: a win. That's my own hot take there. I agree

678
00:37:23,200 --> 00:37:26,640
Speaker 1: that's a win, and it's awesome that I mean, first off,

679
00:37:26,680 --> 00:37:30,319
Speaker 1: it's really harmful that Robin Hood signed up everybody by

680
00:37:30,400 --> 00:37:33,040
Speaker 1: default for a margin account for a reg TEA marginalis,

681
00:37:33,040 --> 00:37:35,280
Speaker 1: in my opinion, not something that no one is talking about,

682
00:37:36,239 --> 00:37:38,680
Speaker 1: and we should absolutely hold their feet to the fire

683
00:37:38,719 --> 00:37:41,000
Speaker 1: for that, because I think that's that that harmed a

684
00:37:41,000 --> 00:37:43,920
Speaker 1: lot of people, because, by the way, if they hadn't

685
00:37:43,920 --> 00:37:45,480
Speaker 1: been signed up for margin accounts, if they had been

686
00:37:45,520 --> 00:37:48,000
Speaker 1: signed up in regular cash accounts, the margining works different.

687
00:37:48,040 --> 00:37:50,040
Speaker 1: They wouldn't have had to shut down trading if everyone

688
00:37:50,080 --> 00:37:52,400
Speaker 1: had been trading in cash accounts as opposed to margin accounts.

689
00:37:53,160 --> 00:37:55,640
Speaker 1: They did the margin account stuff for other reasons. They

690
00:37:55,680 --> 00:37:57,440
Speaker 1: want to get people trading quickly. They want to get

691
00:37:57,440 --> 00:38:00,719
Speaker 1: people doing stuff that's volatile, so you know, you get

692
00:38:00,760 --> 00:38:05,359
Speaker 1: the gambling aspect that growth exactly exactly. And so yeah,

693
00:38:05,400 --> 00:38:08,680
Speaker 1: I think I think that I'm totally I'm thrilled that

694
00:38:08,719 --> 00:38:12,000
Speaker 1: people are talking about collateral settlement and you know how

695
00:38:12,120 --> 00:38:14,680
Speaker 1: T plus two works, and you know how we just

696
00:38:14,719 --> 00:38:16,520
Speaker 1: went from T plus three a few years ago to

697
00:38:16,560 --> 00:38:20,680
Speaker 1: T plus two and what the DTCC is. That's great, awesome, Um,

698
00:38:20,719 --> 00:38:24,319
Speaker 1: but you've got people with huge platforms, with millions of

699
00:38:24,360 --> 00:38:27,640
Speaker 1: people able to see what they're saying, who are trying

700
00:38:27,680 --> 00:38:30,680
Speaker 1: to hold themselves forward as experts, and are saying stuff

701
00:38:30,680 --> 00:38:32,640
Speaker 1: that has nothing to do with all that. And so

702
00:38:32,800 --> 00:38:35,520
Speaker 1: I agree that there's a benefit to this that more

703
00:38:35,600 --> 00:38:38,719
Speaker 1: knowledge and market infrastructure for everyone involved is good. We

704
00:38:38,719 --> 00:38:40,960
Speaker 1: should that's great, we should celebrate that. But if the

705
00:38:41,040 --> 00:38:43,760
Speaker 1: cost to that is ten times as many people having

706
00:38:43,960 --> 00:38:47,120
Speaker 1: the complete opposite level of information, I'm not I don't

707
00:38:47,160 --> 00:38:50,359
Speaker 1: think that's worth the cost at all. I'm sorry, but

708
00:38:50,760 --> 00:38:53,120
Speaker 1: I think it's really harmful for venture capitalists to go

709
00:38:53,160 --> 00:38:55,520
Speaker 1: out and say, well, you know, my company that is

710
00:38:55,560 --> 00:38:58,000
Speaker 1: a competitor of robin Hood offer, you know you should

711
00:38:58,000 --> 00:38:59,759
Speaker 1: be using them instead because they won't do with these

712
00:38:59,760 --> 00:39:01,640
Speaker 1: people Robin Hood guys are doing, which is listening to

713
00:39:01,880 --> 00:39:05,719
Speaker 1: Riffin when their company that they're referring to does the

714
00:39:05,760 --> 00:39:08,480
Speaker 1: same did the exact same thing for the exact same reasons.

715
00:39:08,840 --> 00:39:12,840
Speaker 1: That's really harmful, right, and we need to say that. So, um,

716
00:39:12,880 --> 00:39:15,560
Speaker 1: you know, I'm with you. Joe say his name, George

717
00:39:15,560 --> 00:39:19,440
Speaker 1: say his name. I've actually never a massive sub tweet.

718
00:39:19,560 --> 00:39:22,120
Speaker 1: I've never heard Jonath's last name pronounced, so I'm not

719
00:39:22,160 --> 00:39:23,680
Speaker 1: going to be able to pronouce the last time. I'm

720
00:39:23,719 --> 00:39:27,279
Speaker 1: really sorry about that. I don't want to guest. M

721
00:39:27,560 --> 00:39:31,160
Speaker 1: Poliopatia is who you're referring to called out Robin Hood

722
00:39:31,280 --> 00:39:33,600
Speaker 1: and who is as part of a spack taking so

723
00:39:33,760 --> 00:39:38,560
Speaker 1: far public and SOFI is stock trading operations. People come

724
00:39:38,600 --> 00:39:40,480
Speaker 1: on the episode again at some point have a similar

725
00:39:40,520 --> 00:39:43,799
Speaker 1: business model to Robin and did put put restrictions on

726
00:39:43,880 --> 00:39:46,719
Speaker 1: trading and had the same kind of margin calls at

727
00:39:46,719 --> 00:39:51,240
Speaker 1: the d triple D D t CC Like, I'm sorry,

728
00:39:51,280 --> 00:39:55,840
Speaker 1: what what well, Joe, I want to go to you because, um,

729
00:39:55,960 --> 00:39:58,480
Speaker 1: we're going to get to the blockchain discussion in a second.

730
00:39:58,480 --> 00:39:59,839
Speaker 1: We're going to leave that to the very end. But

731
00:40:00,000 --> 00:40:01,560
Speaker 1: where we get there was sort of the transition she

732
00:40:01,640 --> 00:40:04,279
Speaker 1: used to be a trader and now you're on the

733
00:40:04,280 --> 00:40:09,200
Speaker 1: West Coast. You're surrounded by fintech people, in VC people

734
00:40:09,320 --> 00:40:12,640
Speaker 1: and so like on this whole like growth hack conversation

735
00:40:12,880 --> 00:40:16,600
Speaker 1: and the game of gamification of trading and stuff like that. Like,

736
00:40:17,000 --> 00:40:18,799
Speaker 1: is this sort of, in your view, like a sort

737
00:40:18,840 --> 00:40:23,560
Speaker 1: of pivotal moment where perhaps there's like a limit to

738
00:40:23,640 --> 00:40:27,080
Speaker 1: the degree to which sort of like the West Coast

739
00:40:27,440 --> 00:40:31,560
Speaker 1: mindset when brought to bear on something like finance and

740
00:40:31,560 --> 00:40:35,399
Speaker 1: trading like kind of reaches its limit. And maybe it's

741
00:40:35,400 --> 00:40:38,120
Speaker 1: sort of like a wake up moment for a lot

742
00:40:38,160 --> 00:40:40,480
Speaker 1: of the people on your half, on your side of

743
00:40:40,520 --> 00:40:42,200
Speaker 1: the your side of the country, when you think about

744
00:40:42,200 --> 00:40:44,560
Speaker 1: disrupting Wall Street and stuff like that, and the sort

745
00:40:44,600 --> 00:40:47,759
Speaker 1: of the limits there. Oh, Joe, I wish that I

746
00:40:47,800 --> 00:40:49,920
Speaker 1: could say that that that was at all part of

747
00:40:49,960 --> 00:40:52,520
Speaker 1: the narrative here. I mean, I I have long been

748
00:40:52,560 --> 00:40:55,920
Speaker 1: a proponent of the narrative that you can't move fast

749
00:40:55,920 --> 00:40:58,239
Speaker 1: and break things when you're building something in finance, when

750
00:40:58,280 --> 00:41:01,840
Speaker 1: you're building something that actually touches people money, people's money.

751
00:41:01,880 --> 00:41:05,960
Speaker 1: But that is not really the narrative that is playing

752
00:41:05,960 --> 00:41:08,799
Speaker 1: out on the back of this. If anything, I think

753
00:41:08,880 --> 00:41:14,520
Speaker 1: that the narrative is, how do we speed up the

754
00:41:14,560 --> 00:41:18,719
Speaker 1: ability of people to get involved and play the markets.

755
00:41:18,840 --> 00:41:25,160
Speaker 1: How do we build infrastructure, forums, social apps, you name

756
00:41:25,160 --> 00:41:29,919
Speaker 1: it that will continue to reduce the frictions at play

757
00:41:29,960 --> 00:41:33,279
Speaker 1: without any regard really to the fact that those frictions,

758
00:41:33,600 --> 00:41:37,200
Speaker 1: as George very well pointed out earlier, we're built in

759
00:41:37,480 --> 00:41:40,160
Speaker 1: for the integrity of the system and also to some

760
00:41:40,200 --> 00:41:43,520
Speaker 1: degree at least to protect the little guy. Um. But no,

761
00:41:43,760 --> 00:41:48,560
Speaker 1: it's all been emphasis on apps like common Stock and

762
00:41:48,719 --> 00:41:51,520
Speaker 1: public and Adam, there's a new one that I've heard

763
00:41:51,520 --> 00:41:56,640
Speaker 1: of coming out called Tendees Tendees dot af Yes, I

764
00:41:56,640 --> 00:41:59,840
Speaker 1: am serious. Um, that's where all of the hype and

765
00:41:59,880 --> 00:42:02,680
Speaker 1: it excitement around innovation is. There has not been a

766
00:42:02,680 --> 00:42:05,799
Speaker 1: whole lot of self reflection or self awareness. It's too

767
00:42:05,800 --> 00:42:08,080
Speaker 1: bad we're not saving the video for this because we

768
00:42:08,160 --> 00:42:09,680
Speaker 1: you know, we're looking at each other on video and

769
00:42:09,719 --> 00:42:12,080
Speaker 1: George's face right now with his hands and his face

770
00:42:12,200 --> 00:42:16,320
Speaker 1: is just like capturing at all is ten days that

771
00:42:17,920 --> 00:42:22,280
Speaker 1: you know, I just the year is. I think it's awesome.

772
00:42:22,960 --> 00:42:25,799
Speaker 1: I think it's awesome that people are getting exposed to

773
00:42:25,800 --> 00:42:29,400
Speaker 1: the stock market, you know, like financial markets are fascinating,

774
00:42:29,520 --> 00:42:33,560
Speaker 1: fascinating things to you know, be involved with from almost

775
00:42:33,600 --> 00:42:38,040
Speaker 1: any perspective. You know, I just really hope that this

776
00:42:38,920 --> 00:42:40,799
Speaker 1: whether there are people that have come to the stock

777
00:42:40,800 --> 00:42:42,400
Speaker 1: market in the past week because of all the headlines,

778
00:42:42,400 --> 00:42:43,920
Speaker 1: are come to the past, to the stock market in

779
00:42:43,920 --> 00:42:46,840
Speaker 1: the past couple of years, because of the advances apps

780
00:42:46,840 --> 00:42:49,400
Speaker 1: like robin Hood, etcetera. I just really hope that they

781
00:42:49,480 --> 00:42:53,279
Speaker 1: understand that they're taking big risk by just piling in

782
00:42:53,480 --> 00:42:55,560
Speaker 1: and you know whatever. I had a conversation with someone

783
00:42:55,640 --> 00:42:58,640
Speaker 1: last night who said, yeah, I own um G m E,

784
00:42:58,800 --> 00:43:00,920
Speaker 1: and I own AMC, and I own a couple other

785
00:43:01,000 --> 00:43:03,480
Speaker 1: you know, I think Nokia and maybe BlackBerry, like all

786
00:43:03,480 --> 00:43:06,680
Speaker 1: the meme socks like I put but if they all

787
00:43:06,719 --> 00:43:11,360
Speaker 1: go to zero, it's fine, Like I'm comfortable with that outcome.

788
00:43:11,520 --> 00:43:14,160
Speaker 1: It's not so much money that it'll it'll ruin me.

789
00:43:14,560 --> 00:43:17,719
Speaker 1: And I said, great, that's awesome. Good for you like,

790
00:43:17,760 --> 00:43:19,600
Speaker 1: you're getting involved with the market, but you're doing it

791
00:43:19,640 --> 00:43:23,440
Speaker 1: in a way that isn't betting your entire existence on it.

792
00:43:23,480 --> 00:43:25,280
Speaker 1: And I think that's awesome. And I just really hope

793
00:43:25,560 --> 00:43:27,960
Speaker 1: that as these you know, as the successibility, whether it's

794
00:43:27,960 --> 00:43:31,799
Speaker 1: to the stock market, crypto, whatever thing right as it

795
00:43:31,840 --> 00:43:34,279
Speaker 1: continues to expand, that we also try and do the

796
00:43:34,280 --> 00:43:36,720
Speaker 1: best we can educating people around the rest are taking

797
00:43:38,239 --> 00:43:39,920
Speaker 1: I think that tone does have a lot to do

798
00:43:39,960 --> 00:43:42,040
Speaker 1: with it, George, and I think that the tone in

799
00:43:42,080 --> 00:43:45,919
Speaker 1: which the education is happening really matters. And I think that,

800
00:43:46,400 --> 00:43:48,279
Speaker 1: you know, if I look back at sort of the

801
00:43:48,400 --> 00:43:52,919
Speaker 1: history of fintech innovation, none of this is really that new.

802
00:43:53,080 --> 00:43:55,359
Speaker 1: I think certainly the degree to which it's taking off

803
00:43:55,480 --> 00:43:57,640
Speaker 1: right now is that new. But something that a lot

804
00:43:57,680 --> 00:44:00,440
Speaker 1: of people don't realize about Wealth Front is that it

805
00:44:00,560 --> 00:44:05,000
Speaker 1: actually started as basically a social app geared towards getting

806
00:44:05,000 --> 00:44:06,879
Speaker 1: people involved in the markets. I think it was called

807
00:44:06,960 --> 00:44:10,759
Speaker 1: catching UM, which you can even take the name of

808
00:44:10,760 --> 00:44:13,920
Speaker 1: the company and ask questions about sort of the motivations,

809
00:44:14,040 --> 00:44:19,120
Speaker 1: probably that that it was imbuing in its customer base UM.

810
00:44:19,160 --> 00:44:21,520
Speaker 1: But I think that it's notable that that then ended

811
00:44:21,600 --> 00:44:24,399
Speaker 1: up as Wealth Front, which I think arguably has done

812
00:44:24,440 --> 00:44:27,439
Speaker 1: a lot to democratize finance in a very responsible way.

813
00:44:27,560 --> 00:44:31,640
Speaker 1: So we'll see where all of the the tech innovation

814
00:44:31,719 --> 00:44:34,719
Speaker 1: that's happening around the markets right now ends up this

815
00:44:34,760 --> 00:44:37,600
Speaker 1: time around. But I do agree George, it's about sort

816
00:44:37,600 --> 00:44:41,920
Speaker 1: of responsibility. Can we go back to the settlement issue,

817
00:44:42,080 --> 00:44:46,000
Speaker 1: because I unfortunately am old enough to remember not just

818
00:44:46,160 --> 00:44:49,640
Speaker 1: when T plus three changed into T plus two, but

819
00:44:49,800 --> 00:44:53,839
Speaker 1: when the dtc C actually started talking about it and

820
00:44:53,880 --> 00:44:56,279
Speaker 1: looking into this, and that was I think back in

821
00:44:56,320 --> 00:44:59,839
Speaker 1: two thousand twelve, and so it was a multi year

822
00:45:00,120 --> 00:45:03,719
Speaker 1: process to get down from T plus three to T

823
00:45:03,920 --> 00:45:07,360
Speaker 1: plus two. So to eliminate one day in the clearing time,

824
00:45:08,400 --> 00:45:12,680
Speaker 1: what are the chances that this actually sparks some sort

825
00:45:12,680 --> 00:45:15,200
Speaker 1: of improvement in the clearing system, because I gotta say,

826
00:45:15,200 --> 00:45:18,560
Speaker 1: like it would be quite unexpected and ironic if you know,

827
00:45:18,640 --> 00:45:23,760
Speaker 1: a sub bredit basically lead to a more efficient US

828
00:45:23,800 --> 00:45:31,320
Speaker 1: back office clearing system. But I'm curious what you think, Well,

829
00:45:31,360 --> 00:45:33,560
Speaker 1: I mean, everything's going to settle it a a leg no

830
00:45:33,600 --> 00:45:37,680
Speaker 1: matter what. There is no way to um have instant

831
00:45:37,960 --> 00:45:42,360
Speaker 1: you know, settlement UM in a in an exchange environment,

832
00:45:42,360 --> 00:45:45,880
Speaker 1: It's not possible. If you look at other markets as

833
00:45:45,880 --> 00:45:50,200
Speaker 1: an example, whether it's for an exchange, treasuries, futures, whatever,

834
00:45:50,239 --> 00:45:52,520
Speaker 1: there's always a settlement leg and it has to be

835
00:45:52,600 --> 00:45:55,000
Speaker 1: that way. Um, and there are ways to you know,

836
00:45:55,680 --> 00:45:59,480
Speaker 1: shorten it. Um. So I don't know, does T plus

837
00:45:59,480 --> 00:46:02,880
Speaker 1: two versus T plus one actually M mean that this

838
00:46:02,960 --> 00:46:05,719
Speaker 1: situation wouldn't have played out the way it does. It's

839
00:46:05,719 --> 00:46:07,680
Speaker 1: a technical question that I don't think we can know,

840
00:46:08,080 --> 00:46:11,279
Speaker 1: um from where we all sit. But um, you know,

841
00:46:11,320 --> 00:46:14,800
Speaker 1: I do think lower settlement cycles or shorter settlement cycles

842
00:46:14,800 --> 00:46:16,600
Speaker 1: reduced risk, but you're always going to have some kind

843
00:46:16,640 --> 00:46:19,560
Speaker 1: of settlement cycles, so you know, trying to avoid it entirely.

844
00:46:19,560 --> 00:46:21,680
Speaker 1: I've seen takes where people are like, we need to

845
00:46:21,719 --> 00:46:25,960
Speaker 1: have stock settling in microseconds, and it's like, no, that's

846
00:46:25,960 --> 00:46:28,360
Speaker 1: not gonna work. Um, like we're just not going to

847
00:46:28,480 --> 00:46:31,640
Speaker 1: get there. Um, you know. I I don't think it's realistic.

848
00:46:31,719 --> 00:46:34,400
Speaker 1: If Jill might have a different perspective on that with

849
00:46:34,440 --> 00:46:37,200
Speaker 1: her rooting and blockchain, but yeah, I mean, if if

850
00:46:37,239 --> 00:46:39,920
Speaker 1: you wade deep enough into the sea of bad takes

851
00:46:40,000 --> 00:46:42,920
Speaker 1: on all of this, many of those takes that have

852
00:46:42,960 --> 00:46:45,239
Speaker 1: been coming out of the corner of the Internet that

853
00:46:45,280 --> 00:46:48,960
Speaker 1: I frequent anyway have been around the fact that blockchain

854
00:46:49,000 --> 00:46:51,719
Speaker 1: would have prevented this, or blockchains would save us from

855
00:46:51,760 --> 00:46:55,839
Speaker 1: let's let's hear it. And look, I I don't want

856
00:46:55,840 --> 00:46:58,720
Speaker 1: to say that that is hard and fast, not true,

857
00:46:58,920 --> 00:47:01,319
Speaker 1: but I think at a minute, mom, you don't need

858
00:47:01,560 --> 00:47:05,879
Speaker 1: a blockchain to reduce settlement times right like you can

859
00:47:05,960 --> 00:47:08,440
Speaker 1: do that with a centralized database. If you look at

860
00:47:08,480 --> 00:47:12,640
Speaker 1: certificates of deposits and other short term paper, they already

861
00:47:12,719 --> 00:47:16,480
Speaker 1: settle on a T plus zero basis um. And I

862
00:47:16,520 --> 00:47:21,040
Speaker 1: think that there's this kind of techno utopian angle that

863
00:47:21,160 --> 00:47:25,680
Speaker 1: people want to impose upon this situation and say, oh,

864
00:47:25,800 --> 00:47:28,239
Speaker 1: you know, we can fix this with technology and wave

865
00:47:28,360 --> 00:47:32,560
Speaker 1: this magic wand blockchain is going to be a panacea. No, no, no,

866
00:47:33,200 --> 00:47:38,000
Speaker 1: It is much more about getting alignment within the current

867
00:47:38,040 --> 00:47:42,720
Speaker 1: actors of the financial system to want to change things,

868
00:47:42,840 --> 00:47:47,359
Speaker 1: to want to change processes in particular. And look, do

869
00:47:47,440 --> 00:47:50,480
Speaker 1: I think that it is insane the amount of power

870
00:47:50,719 --> 00:47:54,360
Speaker 1: that the dt c C wields over market structure. Yes,

871
00:47:54,480 --> 00:47:57,880
Speaker 1: I do think that they are effectively a monopoly and

872
00:47:57,920 --> 00:48:00,880
Speaker 1: as long as they don't want something to change, probably won't.

873
00:48:01,239 --> 00:48:04,439
Speaker 1: So I'm hopeful that Joe, to your point this whole

874
00:48:04,480 --> 00:48:08,920
Speaker 1: conversation that this this subreddit may in fact start to

875
00:48:09,000 --> 00:48:12,239
Speaker 1: change the tide of where that power lies. That would

876
00:48:12,280 --> 00:48:15,040
Speaker 1: be great, but it is going to be much more

877
00:48:15,080 --> 00:48:18,400
Speaker 1: about getting them on board and getting other market participants

878
00:48:18,440 --> 00:48:20,640
Speaker 1: on board. And I think it will be much easier

879
00:48:20,680 --> 00:48:24,400
Speaker 1: to do that using existing technology than it will be

880
00:48:24,480 --> 00:48:27,480
Speaker 1: to get the whole system to rip and replace and

881
00:48:27,760 --> 00:48:32,040
Speaker 1: uh and put in a blockchain. Well, on that note, Um,

882
00:48:32,160 --> 00:48:35,319
Speaker 1: that was a fantastic discussion. Love talking to both of you.

883
00:48:35,480 --> 00:48:38,920
Speaker 1: I think we struck the right tone of politeness without

884
00:48:38,960 --> 00:48:43,479
Speaker 1: being too friendly. So Joe Carlson and George Parks, thanks

885
00:48:43,480 --> 00:48:46,799
Speaker 1: for coming on, Navot, thanks for having me. Yeah, thanks

886
00:48:46,840 --> 00:49:12,359
Speaker 1: so much. This is fun. Uh, Tragy, George and Jill

887
00:49:12,400 --> 00:49:15,800
Speaker 1: are great to talk to you. I actually I definitely

888
00:49:15,840 --> 00:49:18,839
Speaker 1: have probably moved off. I actually, I mean I haven't

889
00:49:18,840 --> 00:49:22,759
Speaker 1: like changing my overall views too much. But I think um,

890
00:49:22,880 --> 00:49:27,520
Speaker 1: Jill's argument, which is that although we have seen versions

891
00:49:27,560 --> 00:49:30,560
Speaker 1: of this kind of class conflict and political conflict in

892
00:49:30,600 --> 00:49:33,040
Speaker 1: the past, then it's kind of like a new thing

893
00:49:33,560 --> 00:49:37,239
Speaker 1: when applied to the stock market. The idea of like

894
00:49:37,600 --> 00:49:40,920
Speaker 1: sticking it to the man, going after the suits but

895
00:49:41,120 --> 00:49:45,960
Speaker 1: within the context of trading is kind of new and interesting.

896
00:49:46,040 --> 00:49:48,799
Speaker 1: It's like, maybe it's like I give the political story

897
00:49:48,840 --> 00:49:51,120
Speaker 1: a little bit more credit than I previously did, Like

898
00:49:51,120 --> 00:49:54,439
Speaker 1: maybe I'm like somewhere in the middle. Now, I'm gonna

899
00:49:54,520 --> 00:49:56,880
Speaker 1: chalk that up as a win. I will note that

900
00:49:56,960 --> 00:49:59,880
Speaker 1: in an episode in which, uh, you know, two of

901
00:50:00,000 --> 00:50:02,560
Speaker 1: the four people on it were complaining about how many

902
00:50:02,600 --> 00:50:04,759
Speaker 1: takes there were, I am the only one who did

903
00:50:04,800 --> 00:50:08,040
Speaker 1: not deliver a take in that, So I'm going to

904
00:50:08,120 --> 00:50:12,200
Speaker 1: do it right now too. But okay, so to me,

905
00:50:13,000 --> 00:50:16,400
Speaker 1: So to me, my take is that it's impossible to

906
00:50:16,520 --> 00:50:21,240
Speaker 1: separate the takes, both good and bad, from the success

907
00:50:21,280 --> 00:50:25,880
Speaker 1: of Game Stop. So the whole thing depends on creating

908
00:50:26,000 --> 00:50:28,680
Speaker 1: a short squeeze or a Gama squeeze, forcing the share

909
00:50:28,760 --> 00:50:30,360
Speaker 1: price up. And in order to do that, you have

910
00:50:30,400 --> 00:50:33,680
Speaker 1: to get as many people as possible actually coming into

911
00:50:33,680 --> 00:50:35,719
Speaker 1: the trade. And in order to get as many people

912
00:50:35,760 --> 00:50:39,279
Speaker 1: as possible, you have to serve up these different narratives,

913
00:50:39,360 --> 00:50:42,200
Speaker 1: these different motivations, and you have to have things that

914
00:50:42,239 --> 00:50:45,640
Speaker 1: appealed to as wide range of people as possible. And

915
00:50:45,680 --> 00:50:49,120
Speaker 1: to me, that's why the takes, even if they're terrible,

916
00:50:49,480 --> 00:50:51,839
Speaker 1: are very, very important because there are things that get

917
00:50:51,880 --> 00:50:57,160
Speaker 1: people involved in it, you know that, And you know,

918
00:50:57,239 --> 00:51:00,319
Speaker 1: like I don't think it's occupy Wall Street or like

919
00:51:00,360 --> 00:51:05,000
Speaker 1: the Proletary Revolution or whatever. But I do think that

920
00:51:05,120 --> 00:51:08,400
Speaker 1: the idea that I can download an app and be

921
00:51:08,480 --> 00:51:10,480
Speaker 1: on the other side of a trade from like Steve

922
00:51:10,560 --> 00:51:16,680
Speaker 1: Cohen or Melvin Capital or whatever is really irresistible. And

923
00:51:16,840 --> 00:51:21,120
Speaker 1: I can see why that narrative is a big part

924
00:51:21,120 --> 00:51:23,520
Speaker 1: of what drove the trade. Now, what I object to

925
00:51:24,400 --> 00:51:27,120
Speaker 1: are the people who are like saying it's too real,

926
00:51:27,400 --> 00:51:30,399
Speaker 1: Like I don't really think, Like I guess that's where

927
00:51:30,400 --> 00:51:32,319
Speaker 1: I like like a lot where I sort of like

928
00:51:32,400 --> 00:51:35,240
Speaker 1: draw or like where I start to make the distinction,

929
00:51:35,320 --> 00:51:39,200
Speaker 1: Like that narrative is so good, it's fantastic, it's it's

930
00:51:39,239 --> 00:51:42,560
Speaker 1: it's absolutely irresistible. I can see why people are doing it.

931
00:51:42,840 --> 00:51:44,920
Speaker 1: On the other hand, sort of like people who know better,

932
00:51:45,200 --> 00:51:47,360
Speaker 1: who are like feeding into this idea that you're like

933
00:51:47,440 --> 00:51:52,520
Speaker 1: helping overthrow capitalism or overthrowing the one percent by trading

934
00:51:52,719 --> 00:51:58,440
Speaker 1: on this VC funded app on your iPhone with your

935
00:51:58,440 --> 00:52:00,799
Speaker 1: spare cash, Like I don't buy that, and I think

936
00:52:00,840 --> 00:52:03,480
Speaker 1: that's been way over sold and way over agged. But

937
00:52:03,600 --> 00:52:06,200
Speaker 1: you're a percent right like that, without that, if it's

938
00:52:06,320 --> 00:52:08,960
Speaker 1: just a mechanical trade, if it's just a short squeeze,

939
00:52:08,960 --> 00:52:11,200
Speaker 1: like if we're like like, people wouldn't have gotten excited

940
00:52:11,200 --> 00:52:13,400
Speaker 1: about this. It was like that, like the Porsche v

941
00:52:13,640 --> 00:52:16,279
Speaker 1: W short squeeze's from a few years ago. Like that

942
00:52:16,400 --> 00:52:19,600
Speaker 1: class angle is a big part of like what I

943
00:52:19,640 --> 00:52:24,040
Speaker 1: think made the trade work. So agree with you there, Okay,

944
00:52:24,080 --> 00:52:26,359
Speaker 1: another win. Um, I think that's right. But it also

945
00:52:26,520 --> 00:52:30,080
Speaker 1: begs the question. I mean, the thing that we're getting

946
00:52:30,080 --> 00:52:32,800
Speaker 1: at with the bad takes is that at some point

947
00:52:32,880 --> 00:52:36,799
Speaker 1: it becomes really difficult to counter them because they just

948
00:52:36,880 --> 00:52:38,560
Speaker 1: kind of get out there and take a life on

949
00:52:38,600 --> 00:52:41,840
Speaker 1: their own. So so for instance, if you tweet anything

950
00:52:41,960 --> 00:52:44,359
Speaker 1: in defense of Robin Hood at the moment, you're going

951
00:52:44,400 --> 00:52:47,320
Speaker 1: to get a bunch of people um talking about Citadel

952
00:52:47,360 --> 00:52:50,320
Speaker 1: and and all of that, and it just it becomes

953
00:52:50,320 --> 00:52:52,640
Speaker 1: really hard to change the narrative. And I mean, I

954
00:52:52,640 --> 00:52:55,920
Speaker 1: can tell you from personal experience that of course, I've

955
00:52:55,960 --> 00:52:58,520
Speaker 1: spoken to my dad about this, who is a noted

956
00:52:58,560 --> 00:53:02,160
Speaker 1: conspiracy theorist and fairly right wing, and you know, he

957
00:53:02,239 --> 00:53:05,720
Speaker 1: thinks it's all market manipulation, it's the hedge funds, getting

958
00:53:05,840 --> 00:53:08,560
Speaker 1: up with Robin Hood all of that, and even though

959
00:53:08,600 --> 00:53:13,239
Speaker 1: I'm a financial journalist, his daughter, who presumably he has

960
00:53:13,320 --> 00:53:17,160
Speaker 1: a reasonable amount of confidence in, I cannot change his

961
00:53:17,239 --> 00:53:21,000
Speaker 1: mind about how all of this is working. It's just impossible. Well,

962
00:53:21,040 --> 00:53:23,239
Speaker 1: this is like the thing which is that there's no

963
00:53:23,280 --> 00:53:26,480
Speaker 1: way to actually like disprove it, and that like if

964
00:53:26,480 --> 00:53:28,880
Speaker 1: you if you try to like say, well, this actually

965
00:53:29,000 --> 00:53:32,520
Speaker 1: is not that exciting that you know, this is the DCCC.

966
00:53:33,000 --> 00:53:36,080
Speaker 1: These are capital requirements that actually protect the unbroken and

967
00:53:36,160 --> 00:53:39,640
Speaker 1: users of Robin Hood. You're just like a hedge fund shill.

968
00:53:40,080 --> 00:53:42,280
Speaker 1: And if you sort of like make up a story

969
00:53:42,840 --> 00:53:46,080
Speaker 1: this is it's it's very difficult. This is I actually

970
00:53:46,160 --> 00:53:47,879
Speaker 1: feel like you're coming around to my view a little

971
00:53:47,880 --> 00:53:50,520
Speaker 1: bit that like a lot of these takes need to

972
00:53:50,560 --> 00:53:54,440
Speaker 1: be brained in. No, I told I, I agree, there

973
00:53:54,480 --> 00:53:58,640
Speaker 1: are terrible takes, but they're sort of part they're part

974
00:53:58,640 --> 00:54:00,920
Speaker 1: of the success because you can have you can have

975
00:54:01,000 --> 00:54:06,200
Speaker 1: an alluring yet factually incorrect story around something that brings

976
00:54:06,239 --> 00:54:08,400
Speaker 1: a lot of people in and it's probably going to

977
00:54:08,480 --> 00:54:13,160
Speaker 1: be more interesting and probably more simple um than the

978
00:54:13,239 --> 00:54:16,200
Speaker 1: explanation of what's actually happening. We talked about this with

979
00:54:16,239 --> 00:54:19,640
Speaker 1: bitcoin and inflation. Remember, like, it's much easier to talk,

980
00:54:21,640 --> 00:54:23,360
Speaker 1: you know what. Yeah, we could just go on and

981
00:54:23,360 --> 00:54:26,040
Speaker 1: on about this, so I'm gonna say, uh yeah, let's

982
00:54:26,160 --> 00:54:31,080
Speaker 1: um all right, let's leave it there. Let's leave it there. Okay.

983
00:54:31,400 --> 00:54:34,080
Speaker 1: This has been another episode of the All Thoughts Podcast.

984
00:54:34,160 --> 00:54:36,839
Speaker 1: I'm Tracy Alloway. You can follow me on Twitter at

985
00:54:36,840 --> 00:54:39,840
Speaker 1: Tracy Alloway and I'm Joe Wisn't You can follow me

986
00:54:39,960 --> 00:54:43,560
Speaker 1: on Twitter at the Stalwark. Definitely follow our great guests

987
00:54:43,560 --> 00:54:48,000
Speaker 1: on Twitter. George Parks. His handle is at Parks. Jill Carlson.

988
00:54:48,320 --> 00:54:53,200
Speaker 1: She's at Jill Ruth Carlson. Follow our producers. Thank you

989
00:54:53,239 --> 00:54:56,680
Speaker 1: to our substitute producer Today Till for for his He's

990
00:54:56,719 --> 00:54:59,719
Speaker 1: for his tea. Thank you to our follow our producer

991
00:55:00,040 --> 00:55:03,320
Speaker 1: Rack Carlson. She's at Laura M. Carlson. Follow the Bloomberg

992
00:55:03,360 --> 00:55:07,279
Speaker 1: head of podcast, Francisco Levi at Francisco Today, and check

993
00:55:07,320 --> 00:55:10,320
Speaker 1: out all of our podcasts in Bloomberg onto the handle

994
00:55:10,640 --> 00:55:12,440
Speaker 1: at podcasts. Thanks for listening.