Speaker 1: Bloomberg Audio Studios, podcasts, radio news.
Speaker 2: Our last podcast recording of the year. Yeah, it's been
Speaker 2: an interesting year.
Speaker 1: One thing I never do.
Speaker 2: Yeah, I know, you tell all.
Speaker 1: Years of media does any sort of year end wrap
Speaker 1: up or look forward? Which is so good among the
Speaker 1: best parts of my life as a media person. Is
Speaker 1: not ever doing that. But people want that. People are like, oh,
Speaker 1: would you like to contribute to twenty themes for the
Speaker 1: year ahead? And I say no, no, no, get worry.
Speaker 2: I'm sorry for introducing a hint of reflection.
Speaker 1: It's okay, it's okay. We can reflect about my lack
Speaker 1: of reflection.
Speaker 2: Yeah, that's good.
Speaker 1: How about your themes for next year? What are you
Speaker 1: looking forward to?
Speaker 2: Looking forward to the introduction of multi share classes?
Speaker 1: Boy? See, yeah, that'll be like that. Not to be
Speaker 1: looking forward to that, Hey.
Speaker 2: Could be big. What are you looking forward to next year? Oh?
Speaker 2: I wasn't supposed to ask you that.
Speaker 1: But I'm looking forward to coming in each day. Yeah,
Speaker 1: to find weird news and write about it delightedly. And
Speaker 1: if I knew what it would be, it wouldn't be
Speaker 1: that weird, it wouldn't be that exciting, it wouldn't be delightful.
Speaker 1: It wouldn't be.
Speaker 2: It wouldn't be as much mirth, wouldn't be.
Speaker 1: The spontaneity and joy that I bring to my job
Speaker 1: every day. There, it's didna sound like it? Hello, and
Speaker 1: welcome to the Money Stuff Podcast, your weekly podcast where
Speaker 1: we talk about stuff related to money. I'm Matt Levine
Speaker 1: and I write the Money Stuff column for Bloomberg Opinion.
Speaker 2: And I'm Katie Greifeld, a reporter for Bloomberg News and
Speaker 2: an anchor for Bloomberg Television.
Speaker 1: What are you talking about today, Katie, it says on
Speaker 1: my script, Shoot.
Speaker 2: What do you want to talk about? First? We actually
Speaker 2: have four topics today?
Speaker 1: Four topics? Do you wan the winner situation?
Speaker 2: Yeah, it's pret Louise. Yeah, remember you were reluctant to
Speaker 2: talk about that.
Speaker 1: Well, okay, So here's the thing. It went from being
Speaker 1: like a big media merger with like a lot of
Speaker 1: moving pieces and a lot of like stuff that people
Speaker 1: are cared about in terms of like anti trust and
Speaker 1: like creative direction of Hollywood and like the Trump involvement
Speaker 1: and who will own CNN and all these things, And
Speaker 1: it went from that to being a really drawn out
Speaker 1: fight about closing certainty and merger agreements, which is much
Speaker 1: more my area of interest, and it's kind of wild,
Speaker 1: like what is happening, which is that there's some debate
Speaker 1: about who has the higher bid, but Paramount are pretty
Speaker 1: sure they have the higher bid. They also think they
Speaker 1: have a better regulatory path. But Netflix has said no
Speaker 1: to them for the number of reasons, including bid valuations.
Speaker 1: But what they really leaned on in their most recent
Speaker 1: like they've made an official filing telling Warner shareholders to
Speaker 1: reject the Paramount tender offer, and the Warner board really
Speaker 1: leaned on the fact that Paramount's money. I mean, Paramu
Speaker 1: doesn't have money, right, Paramount is much smaller company than More,
Speaker 1: and it has documentments which are fairly standard UG commitments,
Speaker 1: and it has some equity commitments from like Middle Eastern
Speaker 1: sabon wealth people that Warner is kind of casting us
Speaker 1: persians on. But really the equity is backslots by a
Speaker 1: forty billion dollar commitment from Larry Ellison's personal trust Larry Allison,
Speaker 1: the dad of parame CEO David Allison, and you know,
Speaker 1: the fifth ish richest person in the world two hundred
Speaker 1: and fifty billion dollars of Oracle stock. But it's all
Speaker 1: on this trust, and the incredibly weird thing that's happening
Speaker 1: here is that the commitment papers are all apparently being
Speaker 1: signed by the trust. And Warner says, well, but you
Speaker 1: could take all this stuff out of the trust and
Speaker 1: then when it comes time to the close, we'll go
Speaker 1: to you and we'll go to the trust and be like,
Speaker 1: all right, we need the forty billion in the trust
Speaker 1: can be like I don't have any money. I'm just
Speaker 1: like an empty shell. And I think that's right. I
Speaker 1: think that as a technical analysis is right. And the
Speaker 1: paramount people are like, this is crazy. Yeah, you know,
Speaker 1: Larry Elison is good for the money. He has sign
Speaker 1: and other big merger commitments as the trust, right, Like
Speaker 1: he committed to Elms Twitter deal and to the Electronic
Speaker 1: Arts deal. Look, he was not the principal there, he's
Speaker 1: not the person on the hook for the whole deal.
Speaker 1: He's like, yeah, he's committing an Elon's deal. And so
Speaker 1: basically Paraman is like, no, look, this is fine. This
Speaker 1: is a crazy technicality and you're misleading people by saying
Speaker 1: that this matters. And Winner's like, no, no, no, we really
Speaker 1: need you to commit your money. And the solution to
Speaker 1: this seems so easy that I don't understand what is happening.
Speaker 1: It's so like the easy solution I think Warner has
Speaker 1: asked for this is in the piece of paper, where
Speaker 1: like instead of saying, like, the Larry Ellison trust signs
Speaker 1: this deal, you just say Larry Ellison signs this deal, right,
Speaker 1: and then like he owes the money and if he
Speaker 1: takes it out of his trust or any other you know,
Speaker 1: personal vehicle, he has to close the deal. And I
Speaker 1: don't understand what's happening because the winners are just sign
Speaker 1: it in your personal you know, personally, aren't did and
Speaker 1: paramounts so far, I don't know they've said no, but
Speaker 1: they haven't said yes. That's where we are.
Speaker 2: Yeah, it's very weird. Yeah, ag ansel thought I had
Speaker 2: is that you mentioned Larry Elson, the fifth wealthiest person
Speaker 2: in the world. Oracle stock has gotten pretty flattened over
Speaker 2: the past couple of weeks. It's just gotten rocked. I
Speaker 2: wonder how about that person.
Speaker 1: Right, So, like, I don't think that it is reasonable
Speaker 1: for Warner to think this guy with let's say two
Speaker 1: hundred and fifty billion dollars of Oracle stock less than
Speaker 1: it was a few weeks ago. But you know, two
Speaker 1: hundred fifty billion is I think it's reasonable for them
Speaker 1: to think he's not good for a forty billion dollars.
Speaker 1: I can agree, right, you know, it's a meaningful chunk
Speaker 1: of as well, but it's yeah, twenty percent. The thing
Speaker 1: that I'm struggling to understand here is if you're Warner,
Speaker 1: the situation that they're positing is kind of absurd, right.
Speaker 1: The situation they're positing is like Paramount or Ellison changed
Speaker 1: their minds and they don't close the deal, and Warner
Speaker 1: sues them, and Para is like, we have money, and
Speaker 1: then Larry Ellison's like, oh no, it's the trust and
Speaker 1: the trust doesn't have any money anywhere, right, Haha. It's
Speaker 1: a crazy thing for them to do. And I think
Speaker 1: like part of what Paramount is saying here is kind
Speaker 1: of like that would be a crazy thing for us
Speaker 1: to do, and just like as a reputational matter, like
Speaker 1: you shouldn't worry about it. Yeah, but I think they're
Speaker 1: like ever so slightly maintaining the legal flexibility to do
Speaker 1: it if they really have to. And you could imagine
Speaker 1: that being part of a story of Yeah, the oracle
Speaker 1: stock clout line, and you can imagine that being like
Speaker 1: if things get really bad when we join the shares
Speaker 1: out of the trust and Steff Warner, then maybe right, yeah,
Speaker 1: and like that's a you know, if your stock is
Speaker 1: riding high, that's a different story than if you like
Speaker 1: you're getting slammed in the market for having too much
Speaker 1: AI lease obligations.
Speaker 2: Well to add insult to injury, did you also see
Speaker 2: the Jared Kushner's Affinity Partners is withdrawing from the battle
Speaker 2: all together.
Speaker 1: And it's a little interesting, right.
Speaker 2: It is a little bit interesting.
Speaker 1: So like generally you're like, oh, this is such a
Speaker 1: great deal, we really want to win, and then you're like,
Speaker 1: you know, one random equity partners, Yeah, it's a bad
Speaker 1: sign somehow.
Speaker 2: The statement from the firm was that with two strong
Speaker 2: competitors to secure the future of this unique American asset,
Speaker 2: Affinity has decided to no longer pursue the opportunity. We
Speaker 2: continue to believe there is strong strategic rationale for Paramount's offer.
Speaker 1: Yeah, so it's just weird.
Speaker 2: It's like a very very like good luck, you know.
Speaker 1: Yeah. One thing that people really commented on and about
Speaker 1: the Affinity involvement early was you know, the deal environment
Speaker 1: is so politicized, and like the sort of subtext of the
Speaker 1: Paramoun's bid was Netflix will not get anti trust approval
Speaker 1: one because it raises anti trust concerns and two because
Speaker 1: we're friends with Trump and he'll tell them not to
Speaker 1: approve the deal. Right, And like with Jared Kushner on
Speaker 1: Paramount's side, there's some enhancement to that argument. And if
Speaker 1: him gone, it's like, oh, maybe that argument's off the table.
Speaker 2: So where does this leave Paramount.
Speaker 1: I feel, like I said this last week, they should
Speaker 1: probably raise their bid because they have said in public
Speaker 1: on television that their bid is not best in the
Speaker 1: final And then they should probably have Larry Ellison sign
Speaker 1: a personal guarantee for the deal.
Speaker 2: It seems signary.
Speaker 1: It seems very easy, and I'm very puzzled that it's
Speaker 1: not as easy for him as we thought, as I think.
Speaker 1: Can I talk about one other thing about the Warner deal?
Speaker 2: I really want you to.
Speaker 1: There is a great Financial Time story about the advisors
Speaker 1: who you know, any big merger, Right, It's like the
Speaker 1: south side advisors are going to get paid and then
Speaker 1: like one by side team of advisors is going to
Speaker 1: get paid an ocean of money and the other one
Speaker 1: is not. So you know, it's a bitter battle. But
Speaker 1: they also quite people talking about how it's a deal
Speaker 1: that like kind of got negotiated over Thanksgiving and is
Speaker 1: now heating up into Christmas. And they quote like one
Speaker 1: of the advisors saying, when the NBA players play on
Speaker 1: Christmas Day, nobody says our holidays are ruined. They say,
Speaker 1: isn't it great You're in the NBA. This is as
Speaker 1: good as it gets for investment bankers.
Speaker 2: It's like a perfect quote.
Speaker 1: It's a perfect It's also true there was nothing special
Speaker 1: if but like I worked in like high stakes of
Speaker 1: a day, and like one way you know it's high
Speaker 1: stakes is you're like working all night on holidays, right,
Speaker 1: and like it's like you feel cool about it. It's
Speaker 1: as good as it gets for investment backers. And that
Speaker 1: happens to me, and it happens for Christmas.
Speaker 3: Yeah, do you want to talk about Excel sheets?
Speaker 1: Yeah?
Speaker 2: So tricolor, I think it's try color. I don't know,
Speaker 2: can we just call it try?
Speaker 1: In America, it was a subprime auto retailer and lender.
Speaker 1: So you could like buy your car from Trickler and
Speaker 1: then they would lend you the money to pay for
Speaker 1: the car, and they went bankrupt this year because they
Speaker 1: want some trouble with their creditors. The creditors had some complaints,
Speaker 1: and when they went bankrupt, the story was kind of
Speaker 1: they were like double pledging loans, which makes sense, right.
Speaker 1: They make a bunch of car loans, they put them
Speaker 1: all on an excel file. They send the excel file
Speaker 1: to one of six lenders. And you know, if you
Speaker 1: send the the same excel file to two different lenders
Speaker 1: and you can borrow twice as much twenty That's kind
Speaker 1: of what people were talking about and what they assumed.
Speaker 1: But this week the CEO of Track Color, Daniel Cheu,
Speaker 1: was indicted by federal prosecutors, and the accusation is, yes,
Speaker 1: a lot of double pledging, but also sillier stuff. The
Speaker 1: one that I think everyone really enjoyed is that so
Speaker 1: they made a lot of like subprime model loans, and
Speaker 1: a lot of them are not current, right, people don't
Speaker 1: make payments, and so the way that their deals with
Speaker 1: their lenders work is that you can't borrow against the
Speaker 1: loan that's more than sixty days delinquent, right, Like if
Speaker 1: people haven't paid in two months. Then you can't use
Speaker 1: that as your borrowing base to borrow from your lenders.
Speaker 1: And they had a lot of those loans and they
Speaker 1: needed money, and so they're we're just going to pretend
Speaker 1: those loans are current. So they marked them all as
Speaker 1: current and they could then borrow more money against them.
Speaker 1: But they made a little mistake, which is that if
Speaker 1: the loan is current, then it's getting paid every month,
Speaker 1: which means that it goes down. The balance goes down
Speaker 1: every month, right, because each month you make a little
Speaker 1: payment on your car loan, and your carlan goes down
Speaker 1: at And they didn't decrease the amount of these loans
Speaker 1: because they weren't current. They weren't getting paid, and they
Speaker 1: just marked them current to trick their lenders. Yeah, and
Speaker 1: this worked for a while. And then the reporting from
Speaker 1: Bloomberg is that it's a junior analyst that Waterfall Capital
Speaker 1: is one of.
Speaker 2: Their lenders, very fitting name for the situation.
Speaker 1: Looked at this that these accel sheets and said why
Speaker 1: are these bounces not going down? And so the lender
Speaker 1: called them called tri color. I was like, hey, what's up?
Speaker 1: And so like two things happen there. When is that
Speaker 1: Tricolor and like Daniel Chu are like scrambling too, or
Speaker 1: allegedly scrambling to tell the lender some story.
Speaker 2: Right.
Speaker 1: But the other thing that's happening is that like the
Speaker 1: people who are marking the spreadsheet are like, oh, I
Speaker 1: need a lawyer. So there are calls. The indictment says
Speaker 1: their calls among the Tricolor executives that one or more
Speaker 1: like some of them were recorded by two different people
Speaker 1: on the call because everyone is like, I need to
Speaker 1: be able to bring something to prosecutors so that I
Speaker 1: get the cooperation agreement, so I'm not the one who
Speaker 1: goes to prison on this deal, which is really like yeah,
Speaker 1: quick thinking. So there are all these recorded calls where
Speaker 1: they say wild things, including Daniel Chio allegedly had a
Speaker 1: call with Waterfall where he was like, oh no, no,
Speaker 1: this is some sort of system's problem. I don't know
Speaker 1: what it is, but we'll fix it. And he said, quote, look,
Speaker 1: if we were trying to commit fraud, we wouldn't be
Speaker 1: so stupid as to keep the same balances on there.
Speaker 1: Nobody would be that.
Speaker 2: Stall, which is just like it's perfect, yeah, hiding in
Speaker 2: plain sight.
Speaker 1: Right. I said in my column, like nobody would be
Speaker 1: so stupid as to do fraud this way. I was, like,
Speaker 1: it sounds appealing, but it's not a good argument, because, like,
Speaker 1: there are a lot of stupid frauds out there.
Speaker 2: I mean, the defense did work for a little bit.
Speaker 1: He says on the call that I worked, but like
Speaker 1: the thing unraveled pretty quickly afterwards. I don't think it worked. Worked.
Speaker 2: Yeah, I also love this detail. This is from the
Speaker 2: Bloomberg News story that by late August, Cho was plotting
Speaker 2: with other Tricolor executives, including co defendant David good Game
Speaker 2: another great name, and Jerome Caller on how to settle
Speaker 2: with JP Morgan. Except during the call, she likened Tricolors
Speaker 2: melt down to Enron, the energy giant felled by counting fraud.
Speaker 2: He even discussed the idea of pinning the blame on
Speaker 2: banks for allegedly ignoring reg flags, a threat they hope
Speaker 2: to wield as leverage.
Speaker 1: Right, it's bold. Hey guys, what if we were en Rod?
Speaker 2: Yeah, well, he did say Enron has a nice ring
Speaker 2: to it, right, She said, Enron raises the blood pressure
Speaker 2: of lenders when they see that.
Speaker 1: He added, yeah, yeah, really a high wire act to
Speaker 1: be like we're Enron, but we're not going to prison.
Speaker 2: And also perhaps this is your fault. It's a difficult needle, but.
Speaker 1: This is your fault. Argument is like, we were so
Speaker 1: blatantly committing from that, I can't believe you didn't catch us.
Speaker 1: So when you think about it, it's your fault. You
Speaker 1: got to make that argument to then settle with the
Speaker 1: banks and have them not go to the police. And
Speaker 1: it's tough. Doesn't seem to work here.
Speaker 2: Really charming though, this was a nice December read.
Speaker 1: Yes, yes, you know what else was?
Speaker 2: Tell me no one else.
Speaker 1: Has a real I was going to say end of
Speaker 1: year vibe, but really more like end of civilization. But
Speaker 1: oh god, Trump Media, the three billion dollar public company
Speaker 1: that runs a social media site and also like a
Speaker 1: ETU of some kind. I can't say with the straight
Speaker 1: face they bought a nuclear fusion company.
Speaker 2: Yeah, they sure did.
Speaker 1: Why not? Really? Why not?
Speaker 2: Yeah? This was very sign of the times. I'm not
Speaker 2: going to pretend to really really know what nuclear fusion is.
Speaker 1: Nuclear fission is when you like smash your atoms together
Speaker 1: and they go flying out and they produce energy from
Speaker 1: like breaking apart. A nuclear fusion is when you smash
Speaker 1: your adams together and they stay together and they produce
Speaker 1: even more energy from staying together. Nuclear fusion is what
Speaker 1: power is such notable sources of power as the sun,
Speaker 1: oh sure, and not a ton of commercial nuclear fusion
Speaker 1: generation currently. Yeah, but a lot of people have thought
Speaker 1: about it because it would be pretty good source of power.
Speaker 1: And some of the people who thought about it worked
Speaker 1: for this company called tay which is a nuclear fusion company,
Speaker 1: found it in nineteen ninety eight, like you know, real people.
Speaker 1: So as I can tell from their investor presentation, they
Speaker 1: seem to have first all raised over a billion dollars
Speaker 1: in funding from like you know, people like Google and Chevron,
Speaker 1: and secondly too you know the pictures of reactors, right,
Speaker 1: so yeah, maybe they're on their way to commercial grade
Speaker 1: nuclear fusion. But in any case, yeah, they e merged
Speaker 1: with truth social hate.
Speaker 2: Me a picture of a world where this makes sense?
Speaker 2: What could be the logic here?
Speaker 1: I want to just make sure that we keep my
Speaker 1: laughing into me? But no, I mean, okay, there's a
Speaker 1: press release. You can read the press release.
Speaker 2: Yeah.
Speaker 1: One thing in the press release is like one thing
Speaker 1: they say about their mission is that's to like free
Speaker 1: the world of big tech censorship, which not applicable to
Speaker 1: nuclear fusion probably. But another thing is like, oh, it's
Speaker 1: America first strategic, like it all kind of like fits
Speaker 1: in a vague like strategic America nuclear power. Yeah. But
Speaker 1: the other reason for the deal, which is also in
Speaker 1: the press is they say in the press, pays the
Speaker 1: deal is to quote combine tmtg's access to significant capital
Speaker 1: and tay's leading fusion technology. So like one way to
Speaker 1: put that on way to rephrase that Trump Media has
Speaker 1: raised a lot of money, has a big stock price.
Speaker 1: Isn't like doing a ton with that stock price. Stock
Speaker 1: price was higher, now it's lower because people had high
Speaker 1: hopes they bought the stock and then like yeah, it's
Speaker 1: like social media like ets whatever, right, and like there's
Speaker 1: not been a ton of exciting news and the stock
Speaker 1: is drifted off. But they have a lot of access
Speaker 1: to capital. They announced big news, the stock will go up.
Speaker 1: The stock was up a lot on Thursday. And one
Speaker 1: thing you might do if you have a lot of
Speaker 1: access to capital and not much of a profitable or
Speaker 1: revenue generating business is use your access to capital by
Speaker 1: other businesses, because then at the end of the day,
Speaker 1: you have a nuclear fusion company, right, You've used your
Speaker 1: access to capital markets to acquire real assets, right, Yeah,
Speaker 1: you know, like the truth social is an asset, is not,
Speaker 1: you know, not three billion dollars of assets. And then
Speaker 1: from taste perspective, if you are building nuclear fusion reactors,
Speaker 1: you have a lot of need for capital. And if
Speaker 1: someone has a lot of access to capital, and like,
Speaker 1: that's a good trade for you, right, So like Trump
Speaker 1: media brings the stock raising ability and hey brings the
Speaker 1: possibility of nuclear fusion. But it's a very strange combination
Speaker 1: because it's like people whose business is somewhere between like
Speaker 1: running a social media company and like being friends with
Speaker 1: Donald Trump. Yeah, and like now they're in charge of
Speaker 1: nuclear fusion. It's just a strange pivot.
Speaker 2: You point to AMC buying a gold mine. There is
Speaker 2: they did do that thing some some tenuous precedent for this.
Speaker 1: Is there precedent for meme stocks getting into unrelated businesses
Speaker 1: because like, you know, the point of a meme stock
Speaker 1: is that your stock is really high without necessarily the
Speaker 1: underlying business justifying it. So you're like, well, Okay, I'm
Speaker 1: going to use this high stock price to go buy
Speaker 1: an underlying business that justifies it, right, Like we're totally
Speaker 1: precedent for that, Like games that was playing that game
Speaker 1: for years, you know, like, yeah, there's definitely a precedent
Speaker 1: for trying that, for trying it.
Speaker 2: Game Stop never went out and bought anything super cool though, right, No,
Speaker 2: I just revealed that. I think buying a gold mine
Speaker 2: is super cool. But that's fine.
Speaker 1: It's kind of unarguably cool, Like it's cool. Yeah, like
Speaker 1: whatever else it is, that was a cool yeah. Yeah,
Speaker 1: nuclear fusion. Also, you got to give it to them.
Speaker 1: I was not expecting that, and I was like.
Speaker 2: Good game, good game. Not of course the co defendant
Speaker 2: in the tricolor good game.
Speaker 1: Should talking about watching videos?
Speaker 2: Yes, tell me about this. So South Korean's right.
Speaker 1: South Koreans they love They didn't know this until recently.
Speaker 1: They love crazy trading in American financial products, probably also
Speaker 1: South Korean financial products. But like there's yeah, and so
Speaker 1: like Leverty ETFs great up the time, and so there's
Speaker 1: a big boom in South Korean retail speculation on stuff
Speaker 1: like Leverty dfs, which we've talked about. Are you know,
Speaker 1: they're a product that sometimes loses people money and that
Speaker 1: like how it works is not necessarily intuitive to everyone
Speaker 1: who looks at it, right. I mean, in particular, like
Speaker 1: the way Levertyts work is they provide two or three
Speaker 1: x the daily returns, and so they don't provide necessarily
Speaker 1: two to three xts the yearly returns.
Speaker 2: Discuss.
Speaker 1: Yeah, if you buy an hold of leverty TF, it
Speaker 1: might might rip your hand off, hurt, might not might
Speaker 1: be great, not investment advice. But the South Korean regulators
Speaker 1: are sick of this, and so they've said, like, as
Speaker 1: of this week, brokerage as will this is from a
Speaker 1: Financial Times story. As of this week, brokerages will automatically
Speaker 1: block investors wanting to put their funds into leveraged or
Speaker 1: in verse ETFs and who cannot provide the certification number
Speaker 1: given to those who have completed a one hour online
Speaker 1: training one hour.
Speaker 2: Okay, so I didn't read the story click through.
Speaker 1: An online they get an hour long online.
Speaker 2: I was thinking, like the little video ad you get
Speaker 2: before YouTube video where it's fifteen seconds and then you
Speaker 2: can click through.
Speaker 1: Yeah, right, us chance, Literally it's like with like options,
Speaker 1: you know, like you have to click some forms to
Speaker 1: be approved to trade options, right, and like an hour
Speaker 1: is aggressive? Yeah, there's someone emailed me to be like
Speaker 1: there's going to be an aftermarket in those codes, Like
Speaker 1: he has the video, you're right down the corde. You
Speaker 1: send it to some of your friends for money.
Speaker 2: Can make an ETF out of that. Yeah, levered a
Speaker 2: few times.
Speaker 1: But I will say I love those.
Speaker 2: Yeah, because you think that there should be gated access
Speaker 2: to the products?
Speaker 1: Absolutely, Wow, Yeah, I'm a gatekeeper. Wow, I think there
Speaker 1: should be gated access. I also think that, like, if
Speaker 1: you're a securities regulator, one real bind that you have
Speaker 1: is that when stuff is going up, if you are
Speaker 1: ever like we don't want people to be able to
Speaker 1: invest in this stuff, Like, people get really mad at
Speaker 1: you because you're standing in the way of the fun.
Speaker 1: And then when this stuff goes down, it's like, oh,
Speaker 1: this was a terrible product. They come to the regulators
Speaker 1: like where were you on stopping this terrible product? And
Speaker 1: as if you're the regulators, it's an unpleasant bind to
Speaker 1: be in. A Yeah, you can't really do anything other
Speaker 1: than try to put the decision on the retail investors
Speaker 1: and try to give them as much information as you
Speaker 1: can and also like make it not your problem, which
Speaker 1: means like you know people. Maybe like there's gonna be
Speaker 1: an aftermarket in those codes, right, Like, yeah, people are
Speaker 1: going to trade these ETFs without watching the hour long video. Yeah,
Speaker 1: but like that's not a problem because from the regulat's perspective,
Speaker 1: those people can't complain. Right if you like didn't watch
Speaker 1: the video and then you buy the ETF and you
Speaker 1: go to the regulatory Oh why did you let me
Speaker 1: buy the CTF? I didn't watch the video. The regulator
Speaker 1: is like, you're a problem man. You should have watched
Speaker 1: the video.
Speaker 2: Yeah.
Speaker 1: I don't know, Like I think it's a good move.
Speaker 2: I have some practical questions. Is this before every single
Speaker 2: purchase that you make or is.
Speaker 1: It just like it's like to get turned onto trade
Speaker 1: levery you tube. Oh interesting, So I do think that,
Speaker 1: like if it works, you can have a separate airline
Speaker 1: training video for all sorts of products. I really want
Speaker 1: to like record the library of like dark by these
Speaker 1: product videos.
Speaker 2: People would actually watch the video, then good, that would
Speaker 2: be fun.
Speaker 1: I should turn this podcast into that.
Speaker 2: Yeah, yeah, we can monetize that. This reminded me of
Speaker 2: episode in twenty twenty two, when Finra apparently opened a
Speaker 2: consultation on whether complex exchange traded products should be basically curbed,
Speaker 2: so complex in their world means leverage and in verse crypto,
Speaker 2: certain crypto funds, and some of the things that they
Speaker 2: were considering were enhanced disclosure and a knowledge check for
Speaker 2: retail customers. So basically like a little quiz was the
Speaker 2: understanding at the time, and I was saying to look
Speaker 2: at my reporting from the time. Apparently when I wrote
Speaker 2: this in mid May, FINRA had received twelve thousand comments
Speaker 2: on this proposal, and for context, usually FINRA notices get
Speaker 2: fewer than twenty comments, So it meant violent opposition in
Speaker 2: the US, right, But I think I assume.
Speaker 1: That's not like mostly from burkers being like I want
Speaker 1: to sell stuffs or roobs. You don't understand it. I
Speaker 1: think it's mostly from retail customers I don't want to
Speaker 1: watch a video before I buy stuff, yeah.
Speaker 2: Or like I don't want to take a little quiz.
Speaker 1: Yeah. I'm surprised that it met with violent onsicion. I
Speaker 1: just like it.
Speaker 2: I would love that. I would love to take the
Speaker 2: quiz though. I think that sounds fun. Someone I don't
Speaker 2: know had one. I'd be interested in taking it soon.
Speaker 2: Could check our knowledge good game have a great holiday season.
Speaker 1: We'll see you back here.
Speaker 2: Well, they'll see us on January second.
Speaker 1: Yeah, I was gonna say we're off next week. Yeah,
Speaker 1: but probably back the following week with a mel back
Speaker 1: episode US something goes wrong, uns it goods to leave
Speaker 1: it looks. And that was The Money Stuff Podcast.
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