Speaker 1: Loker trillions. I'm Joe Webber and.
Speaker 2: I'm Eric Balchernas.
Speaker 3: Eric, you sent a note that caught my attention because
Speaker 3: you were like, it's the wave of the future. Manufactured
Speaker 3: high yield gonna be a big category. I was like,
Speaker 3: that's like Eric Balchina's at his finest. Let's unpack those three.
Speaker 3: The category a new one Auto callables. Yeah.
Speaker 2: I honestly I'd heard the word a couple of times,
Speaker 2: didn't know what it meant. This is part of a
Speaker 2: bigger theme that we call yield three point zero where
Speaker 2: manufactured yield. We used to use the meme of the
Speaker 2: breaking bad where using the lab making the meth. They
Speaker 2: are making yield that isn't from like bonds or stoughts.
Speaker 2: They're just making it and it's very popular, especially if
Speaker 2: it's a big yield.
Speaker 4: So auto callibles are.
Speaker 2: One of the latest areas that has a big yield,
Speaker 2: usually thirteen fourteen percent at least in the colum most
Speaker 2: etf that I looked at, And there is a huge
Speaker 2: demand for this. People love income. I've been to the
Speaker 2: Money Show several times, especially older people. They just go
Speaker 2: crazy for income. So these products are quite complicated. In
Speaker 2: my opinion. I used to say VIX and China were
Speaker 2: the two most complicated areas of ETFs. This is more complicated.
Speaker 2: So I want to make sure that we understand this
Speaker 2: and that we could explain it to you know, our
Speaker 2: aunt or uncle, like just somebody in our lives.
Speaker 1: We're gonna try, but we can't.
Speaker 2: End this podcast until we both understand it. I think
Speaker 2: I get it, but I get it on a very
Speaker 2: superficial level that I just learned it quickly for the note,
Speaker 2: but I really want to get it, and also want
Speaker 2: to make sure that people are aware of like the
Speaker 2: pros and cons of these, because Joel, they're going to grow.
Speaker 2: This thing came out. This calumost One already has four
Speaker 2: hundred million, and for something complex to come out, it's
Speaker 2: pretty good money for that, so I would suspect. And
Speaker 2: I'm hearing a lot of other issuers are going to
Speaker 2: launch these, And it's a word I hear when I
Speaker 2: travel around, including from our index team. They bring up
Speaker 2: auto callables all the time. So it's a word you're
Speaker 2: gonna hear more and more. Might as well get get
Speaker 2: our heads around it.
Speaker 3: Now I'm surrounded by papers trying to make sense of this,
Speaker 3: it's kind of hilarious.
Speaker 1: Uh I don't think I understand it.
Speaker 3: So I'll be the litmus test and to help us
Speaker 3: make sense of this, we're gonna be joined by Matt
Speaker 3: Kaufman Global ahead of ETFs at Klamos Investments First market
Speaker 3: or this year with a UTF in this space, this
Speaker 3: time my trillions auto callibles.
Speaker 1: Matt, welcome jillions.
Speaker 4: Joel, thanks for having me. Great to be here.
Speaker 1: How does this stuff work?
Speaker 4: We are going to hopefully get off of the meth analogy. Yeah,
Speaker 4: that was We'll move toward first step something.
Speaker 2: Listen, Matt, Matt goes to work every day in like
Speaker 2: this white suit. Then he's in there testing different things. Yes,
Speaker 2: that was the hollow costing this year, so you might
Speaker 2: as well.
Speaker 4: You already have ramid lab.
Speaker 3: But Colam Moos came out with a ticker ce ai E.
Speaker 3: That's the ticker if you want to look into this more.
Speaker 4: That is the ticker Auto Callable Income ETF. So let's
Speaker 4: take our minds from the equity markets and move it
Speaker 4: toward the fixed income market. So think like a bond
Speaker 4: that will pay you a monthly income and return your principle.
Speaker 4: As long as the equity markets don't fall too far.
Speaker 4: If you can understand that, you can understand an auto callable.
Speaker 4: So it's a lot like a bond that pays a
Speaker 4: monthly income and delivers your principle back to you either
Speaker 4: at maturity or if you're called away early. That is
Speaker 4: the auto call feature. And it's tied to the equity markets.
Speaker 4: So bonds are usually tied to duration and credit. This
Speaker 4: is tied to the equity markets. That's essentially it.
Speaker 3: That was a really great way of breaking it down.
Speaker 3: It's also a quote that you had in the story
Speaker 3: Waltree Cream's more auto callables into ETFs and race for
Speaker 3: yield by our colleagues at Bloomberg News.
Speaker 1: Yes, Matt, though I got that part. Where does the
Speaker 1: yield come from? The income? Where am I getting? Where
Speaker 1: are you getting that income to give it to me from?
Speaker 4: Yeah, great question. I think one of the easiest ways
Speaker 4: to think about this is to you know, normally you
Speaker 4: would frame it around a covered call so that covered
Speaker 4: call space, as Eric was talking about, is a massive market.
Speaker 4: It's one hundred and fifty billion dollar market. I was
Speaker 4: fortunate enough to be at Power Shares in early two thousands.
Speaker 4: We built the first buy right ETF in two thousand
Speaker 4: and seven. I think it was a little before it's time.
Speaker 4: You know, nobody really bought it back then. Now that
Speaker 4: space is one hundred and fifty one hundred and sixty
Speaker 4: billion in assets. It's a massive market. And you know,
Speaker 4: what are you doing with a covered call? You're selling
Speaker 4: off your upside. It's a by right strategy. Twenty years ago,
Speaker 4: very few people understood that term. Today it's commonplace. There's
Speaker 4: equity premium income strategies. You're selling off upside collecting an
Speaker 4: income payment, and auto callable is a long dated put
Speaker 4: right stra strategy. So take the other side of the trade.
Speaker 4: It's a long dated, say five year put right with
Speaker 4: a call feature, and that's it. That's all. You're collecting.
Speaker 2: What he just said, and he goes, that's it. You
Speaker 2: come on, dude, it's okay.
Speaker 4: You want it simple. So we're starting simple.
Speaker 2: I'm gonna break this down. Okay, I have ten thousand dollars.
Speaker 2: I give you ten thousand dollars to this. So first
Speaker 2: of all, who makes the auto callable? Like is it
Speaker 2: a bank? And this is like what like a swap
Speaker 2: contract or? Like whom I am I doing? It's just
Speaker 2: like Michael Burry where I'm walking into Goldman and I
Speaker 2: say I have this idea and the bank just says, okay,
Speaker 2: I'll make a thing for you. Is that what we're
Speaker 2: doing here?
Speaker 1: Yeah.
Speaker 4: So you can't go to the market and you can't
Speaker 4: go to the listed options market and find an auto
Speaker 4: callable yield, you know, option that does not exist. You
Speaker 4: can go to the listed options markets and do put
Speaker 4: writing strategies, you can call writing strategies. But what we've
Speaker 4: done is we've partnered with JP Morgan. There you go,
Speaker 4: biggest bank in the world. So yes, it is a
Speaker 4: bank strategy. You cannot do this with listed options. So
Speaker 4: we've partnered with JP Morgan. We took their auto callable
Speaker 4: pricing methodology and we built a laddered version of this hold.
Speaker 2: On, hold on. What is JP Morgan's auto callable pricing methodology?
Speaker 2: So the first of all, what is the index that
Speaker 2: were based? What's the equity index?
Speaker 4: Sure, so let me let me explain this to you
Speaker 4: in a way that we can we can understand. So,
Speaker 4: you know, you talked about you know what happens if
Speaker 4: you have ten thousand dollars. So I brought monopoly money,
Speaker 4: you did I did. Yeah, I actually brought monopoly money
Speaker 4: here before, so we can we can play with this.
Speaker 4: So here, Eric, I'll give you one hundred dollars monopolyous.
Speaker 1: He just gave you a hundred back.
Speaker 4: It's easy. He would be a bad banker, and it's
Speaker 4: easier to think about that because it's a Let's let's
Speaker 4: pretend like that hundred dollars is the par amount.
Speaker 2: Okay, Okay, So.
Speaker 1: By the way, I get nothing. I don't like this game.
Speaker 4: You're going to be the Joel. You're going to be
Speaker 4: the market. You're going to go to the market here,
Speaker 4: all right, So Eric's gonna buy an auto callable. Note,
Speaker 4: I'll be the bank. So you're going to invest in
Speaker 4: an auto call but note, so give me your hundred
Speaker 4: oct here's sliding it across the table. Okay, now that's.
Speaker 1: Stuck in the middle. I'm moving it across.
Speaker 4: Let's put it.
Speaker 2: We don't want it in free parking.
Speaker 4: Sure, So let's put some terms to this note. Let's
Speaker 4: say it has a five year life, it has a
Speaker 4: sixty percent principal coupon barrier. So we're gonna pay you
Speaker 4: monthly income as long as an equity index does not
Speaker 4: fall by forty.
Speaker 2: Percent during what time period?
Speaker 4: Every month?
Speaker 2: It's a monthly look, so if the S and P.
Speaker 2: Let's say it's the SMP index. If it doesn't fall
Speaker 2: forty percent a month.
Speaker 4: In a month while a starting date, so then I
Speaker 4: get a little a little something. Yeah, that's right, and
Speaker 4: then there's so and then there's the same thing at maturity.
Speaker 4: So let's just play this out.
Speaker 2: But hold on, does the forty percent restart in the
Speaker 2: second month. Uh, it's from the starting point we're starting
Speaker 2: for interception. And let's say the first month the SMP
Speaker 2: is down two percent. I get I get paid.
Speaker 4: So Joel, Joel gets to decided he's going to be
Speaker 4: the market here. Okay, okay, So let's say this pays
Speaker 4: twelve percent annualized income every month. So I've got you
Speaker 4: one hundred dollars safe here. So Joel, let's go thirty
Speaker 4: days in the future. What is the market going to do?
Speaker 4: Pick a number up or down?
Speaker 1: Right?
Speaker 3: This year, I'm gonna say, if we're if we're playing
Speaker 3: this from the beginning of the year, market gove up.
Speaker 4: Okay, let's say you're up five percent. So market's of
Speaker 4: five percent in a month, Eric, you get a dollar
Speaker 4: you're good.
Speaker 1: You're good.
Speaker 4: Okay. Next month, let's say the market.
Speaker 1: Well it happened, okay, kind kind of was a little chaotic.
Speaker 4: Okay, let's say it happens.
Speaker 1: Let's say market went down.
Speaker 4: Market goes down how much? Ten percent? All right, Eric,
Speaker 4: you still get a dollar. Market's down ten. It's not
Speaker 4: down forty, it's down ten.
Speaker 2: It resets every month.
Speaker 4: Uh, it's not, it's it's from the inception of the
Speaker 4: note to that month.
Speaker 1: I see.
Speaker 2: So because it went up and down. Now year to date,
Speaker 2: what do we down six percent or something?
Speaker 1: We were up five, Now we're down ten, So down
Speaker 1: five so far? Yeah.
Speaker 4: Right, So let's let's just keep playing out. Let's say
Speaker 4: the market is down forty percent the next month from
Speaker 4: inception no dollar for you.
Speaker 2: Hold on, stop real quick. So we're down five percent,
Speaker 2: so the market would have to go down like another
Speaker 2: thirty five percent. Then, so it hits forty percent year
Speaker 2: to date. Correct that month, I don't get a dollar.
Speaker 4: That's correct.
Speaker 2: And then because this got called in other.
Speaker 4: Words, the whole getting called yet.
Speaker 2: Oh okay, so don't get a dollar.
Speaker 4: Correct.
Speaker 2: Now the next month it goes up five percent.
Speaker 4: Your dollar kicks back in.
Speaker 2: I get another dollar, You get a dollar. Okay, what
Speaker 2: if it goes down another twenty percent from.
Speaker 4: The forty then you do not get your dollar, gotcha?
Speaker 1: Yes?
Speaker 2: So in other words, as long as it doesn't come
Speaker 2: above the forty percent watermark, I get no dollars. If
Speaker 2: it comes up above the forty percent of water mark,
Speaker 2: I start.
Speaker 4: Getting my dollars again, exactly.
Speaker 1: And the one hundred you just hold on to.
Speaker 2: Who How is this a good deal for JP Morgan?
Speaker 4: Uh?
Speaker 2: It seems a little too good, Like I feel like
Speaker 2: the number should be ten percent. That'd be fair for
Speaker 2: JP Morgan.
Speaker 4: Sure, No, that's a good question. So let's keep playing
Speaker 4: this out. So now you've got your hundred dollars still here.
Speaker 1: Yep.
Speaker 4: So five years from now, let's say the market is
Speaker 4: down twenty percent, you are maturing at par. You get
Speaker 4: your hundred dollars back. If the market is down forty
Speaker 4: percent or more, that's when you have principle at risk.
Speaker 4: So let's say the market is down forty percent five
Speaker 4: years from now. If I can make the sound in
Speaker 4: the in the mic, we're gonna tear your one hundred
Speaker 4: dollars bill by forty percent. You're gonna get sixty percent
Speaker 4: of your principle back. Oh, that is the risk that
Speaker 4: you're taking on.
Speaker 1: But he's collected income along the way. Correct if if it.
Speaker 2: So after five years, if I collected a dollar every
Speaker 2: month minus say like five months, that would be fifty
Speaker 2: five dollars against my sixty forty percent that I lost.
Speaker 2: So it would cush it in a little bit. That's
Speaker 2: like a cover call. Okay, yes, exactly.
Speaker 4: Okay, So that's how a single auto call of works.
Speaker 4: The call feature then would be if the market is positive,
Speaker 4: usually after a non call period like one year, then
Speaker 4: you are called away. JP gets the money back, your prince,
Speaker 4: you get your principal, you get your hundred dollars back,
Speaker 4: you get your final coupon payment. Good job shows over,
Speaker 4: everyone goes home, you have to go buy a new note.
Speaker 1: That's how it works.
Speaker 2: Wait, wait, that's that's when it gets called. I thought
Speaker 2: it got called if it goes down too much, No
Speaker 2: one goes up. Correct, So so when does it get
Speaker 2: called again?
Speaker 4: Yeah, so you're getting called when the market is positive
Speaker 4: after a one year nine all period.
Speaker 2: So if the market's up seven percent after like the
Speaker 2: market is up this year, it's up fourteen percent, so
Speaker 2: let's just say correct the year under. Now we're up
Speaker 2: fourteen percent in twenty twenty five, and therefore I would
Speaker 2: get the one hundred dollars back correct, and then I
Speaker 2: would have my twelve dollars because it every went down
Speaker 2: below forty exactly, so I would have So at that
Speaker 2: point the fund would automatically reinvest in.
Speaker 4: A new auto callable. That's correct.
Speaker 2: So now in that getting on the hundred dollars back,
Speaker 2: big reset, Well right now, a loss of money in
Speaker 2: that one hundred dollars getting called.
Speaker 4: Back or not?
Speaker 2: Those resets correct and you you reset it automatically.
Speaker 4: Well, so I'm teaching you about an auto callable, so
Speaker 4: we know how the auto callable works.
Speaker 1: Now.
Speaker 4: So what we have done with CIE is we've laddered
Speaker 4: exposure to fifty two or more of these. It's a
Speaker 4: weekly ladder, a laddered portfolio of auto callables. So now
Speaker 4: at week fifty three, if the market's down, you might
Speaker 4: lose coupon on one, I say, but you have fifty
Speaker 4: one others in the portfolio. So it's highly diversified.
Speaker 2: Wow, And the answer is in reality, in this fun CIAE,
Speaker 2: it is forty percent. That's the number. You don't want
Speaker 2: the market to go down below.
Speaker 4: For a severe and sustained time period.
Speaker 1: That's correct, Like, what's that mean?
Speaker 4: So we built all of this with JP Morgan and Mercube,
Speaker 4: a custom indexing provider, and this is all built inside
Speaker 4: of an index that we trade on swap with JP Morgan.
Speaker 4: So the risk would be a severe sustained market decline
Speaker 4: that never recovers, and that in five years your autocollables
Speaker 4: start to mature below the barrier.
Speaker 1: Let's back test it.
Speaker 3: What happened, What happens at the if March twenty twenty happens,
Speaker 3: we're back in the pandemic.
Speaker 2: Yeah, use one hundred dollars, put one hundred dollars in.
Speaker 2: Let's say I get Let's say for a year it's fine,
Speaker 2: so I got twelve dollars back, but then this next
Speaker 2: year it's like a twenty Let's say it's a two
Speaker 2: thousand and eight where the market, well, the market wasn't
Speaker 2: even down forty percent. It was down thirty three percent,
Speaker 2: thirty five percent in two thousand and eight, right, So
Speaker 2: way it's down forty five percent that year, Yeah, and
Speaker 2: it stays down. What happens?
Speaker 4: So, because this is an index. We can look at
Speaker 4: that history. We go back to two thousand and five,
Speaker 4: and you would have lost on two point eight percent
Speaker 4: of those autocollables. Historically, it would have equated to a
Speaker 4: seventeen percent principle impairment. That was the only time you
Speaker 4: would have lost money. Again, you did not lose that
Speaker 4: forty percent.
Speaker 2: So you don't lose everything. You lost seventy percent, So
Speaker 2: you basically you bet a seventeen percent loss on something
Speaker 2: that's almost not never gonna happen because the Fed's going
Speaker 2: to step in and start buying assets if a go
Speaker 2: that low again.
Speaker 4: Probably I think you're right.
Speaker 1: That's why I don't get I look, it's in this
Speaker 1: for JP Morgan.
Speaker 2: Yeah, this sounds like genius from your point of view,
Speaker 2: But it feels like JP Morgan is pretty smart, Like
Speaker 2: we had them on, they're pretty smart people. I feel
Speaker 2: like they could almost get you to do this deal
Speaker 2: at like fifteen percent. What do you mean, like if
Speaker 2: if the market goes down below fifteen percent, that's the threshold,
Speaker 2: Like going down forty seems like almost like beyond a
Speaker 2: tail risk event. I feel like they could do the
Speaker 2: same deal with you at fifteen percent like that would
Speaker 2: be almost pretty good deal because I don't even mark
Speaker 2: go down. We'll go down fifteen percent before the government
Speaker 2: starts buying up assets.
Speaker 4: Sure, I think when you're trying to build something with
Speaker 4: risk management, you know, Calamos is a risk manager who's
Speaker 4: been doing this for nearly fifty years. We want to
Speaker 4: give people the risk managed exposure. We want to give
Speaker 4: them a high stable tax efficient income. If there is
Speaker 4: a payoff that we are after, it's that it's high
Speaker 4: stable tax efficient income. So when you take this and
Speaker 4: ladder it out fifty two or more times, you put
Speaker 4: forty percent principal barriers on it, you get this really
Speaker 4: high stable taxificient income.
Speaker 2: Just jpen working consider this like issuing a bond on
Speaker 2: their port, where it's a high yield bond, but with
Speaker 2: this tail risk possibility. Therefore, that's why they're giving you
Speaker 2: a higher yield.
Speaker 4: Well, they're issuing the auto callables, so they're the issuer
Speaker 4: of the auto callables, so they're going to take a
Speaker 4: spread on that note. They're going to make money on
Speaker 4: the on the swap that we're trading, so we trade
Speaker 4: so for plus ten basis points. It's much more efficient
Speaker 4: for JP Morgan to trade swap with us than it
Speaker 4: is for somebody to go buy a note from JP Morgan,
Speaker 4: where you tie up all of their balance sheet, tie
Speaker 4: up all their capital. You've got a subordinated debt structure
Speaker 4: to that note, whereas here, if you build it synthetically
Speaker 4: and just trade on swap, well, ninety five percent of
Speaker 4: the assets in the ETF are in treasuries, so that
Speaker 4: money is sitting at State Street at the custodian. There's
Speaker 4: no real credit risk from that perspective. And then post
Speaker 4: Dodd Frank, JP Morgan has got to pay variation margin
Speaker 4: on the swap, so the whole structure is nearly one
Speaker 4: hundred percent collateralized. So go back to eight. You know,
Speaker 4: when a couple banks went under, you're on the hook
Speaker 4: for a lot of that. Hopefully you get some of
Speaker 4: your money back if you're a note issue or if
Speaker 4: you're a note buyer, who's here.
Speaker 2: You don't have that whose money is in collateral? Does
Speaker 2: JPM Moore can get a cut of the interest from
Speaker 2: the collateral.
Speaker 4: No, it's the investor. So we pay JP Morgan SOFA
Speaker 4: plus ten bases points.
Speaker 1: I see.
Speaker 4: Okay, They in turn give us the performance of that
Speaker 4: auto callable index that we've created with Sofa overnight rate, so.
Speaker 2: You pay I see. So they get a little interest
Speaker 2: from you plus ten BIPs correct, and they feel like
Speaker 2: that's what they get out of it. That's right, and
Speaker 2: that balances out the income they have to give you.
Speaker 2: But they also have this like sort of you know,
Speaker 2: fine print that if it goes down for forty percent,
Speaker 2: they really wine that's right.
Speaker 4: They're taking the other side of the trade.
Speaker 3: I feel a little bit like the guy at the
Speaker 3: craps table that's like, now, I'm gonna just watch that
Speaker 3: game play out.
Speaker 2: What well I mean, I mean here, I'll if you
Speaker 2: yield is twelve is well, if you get a dollar
Speaker 2: a month, that's twelve percent, but this is like fourteen
Speaker 2: percent a little more of a dollar.
Speaker 4: The average weighted coop on which is based on that
Speaker 4: par amount of your note, is fourteen point four percent.
Speaker 4: Right now. Okay, So the thing that we did not
Speaker 4: get into yet, which we have to build a base
Speaker 4: understanding of auto callables. It's a one hundred billion dollar
Speaker 4: market in the United States. You know, as you alluded
Speaker 4: to the structured note world, Well, let me back up
Speaker 4: the cover call space. You know, he said is one
Speaker 4: hundred and fifty billion dollar market. Derivative income is dominating
Speaker 4: the ETF landscape. If you go to the other side
Speaker 4: of the house, the structured note house, derivative income dominates
Speaker 4: there as well, but it's through the auto call. The
Speaker 4: auto callable is one hundred billion dollar market in the
Speaker 4: United States alone, multiples of that globally. People love this
Speaker 4: type of exposure.
Speaker 1: And it's never been in an ETF until this show.
Speaker 4: We built the first ETF correct.
Speaker 2: This is really interesting. You know that when he talks
Speaker 2: about people wanting income that is derivatives based. If you
Speaker 2: look at all the flows into income ETFs that would
Speaker 2: be equity, including which we've talked about before, that could
Speaker 2: be divid in ETFs which a plane vanilla or these
Speaker 2: derivative yield three point zero, over eighty percent goes into
Speaker 2: the derivative ones, which again would include the covered call.
Speaker 2: So this is again that the ones the stock ETFs
Speaker 2: that pay dividends like those old school, they're less than
Speaker 2: twenty percent of the flow. So this yield three point
Speaker 2: zero is taking the lion's share of all the income
Speaker 2: seeking money in the equity space. And I'm not counting
Speaker 2: bonds but.
Speaker 1: You were talking about since the CTF has come out.
Speaker 2: I'm talking about this year, so this is TF came
Speaker 2: out after this year. So like the thing is to me,
Speaker 2: I'm going to put this into a category with JEPY.
Speaker 2: This is a little more complex than JEPY, but the
Speaker 2: covered call space is huge now.
Speaker 4: But I might push back on you a little bit
Speaker 4: if you look at equity premium income strategies. You know,
Speaker 4: again another JP Morgan, you know tide product, but JEPI
Speaker 4: and JEFQ will hold actual equity linked notes and then
Speaker 4: deliver you know, that income which is somewhat tax inefficient,
Speaker 4: but you don't really know what's going on side those notes.
Speaker 4: Like you, you have to look at what they're publishing,
Speaker 4: which a lot of times they do it late and
Speaker 4: so there's there's not a lot of transparency all those.
Speaker 2: To be fair to them, though, in the yield that
Speaker 2: you get like that we display on the des is
Speaker 2: pretty good. I mean, I think what's like nine ten percent?
Speaker 2: And I think to some degree, like some of these
Speaker 2: products I've seen over the years, you just either trust
Speaker 2: the issue or you don't because correct a lot of advisors,
Speaker 2: they're not going to get what you're selling, they're gonna say, Matt,
Speaker 2: I trust you, You're a good guy. Calamos has a reputation.
Speaker 2: I also think the target altcome ETFs. The buffers are
Speaker 2: also like I just trust Innovator and Bruce Bond or
Speaker 2: I trust black Rock, because these are very complicated. The
Speaker 2: good news is the ETF industry does have this like
Speaker 2: really good track record, and from what you're describing it
Speaker 2: does seem like a pretty good bet to me. I'm
Speaker 2: not really seeing anything too outrageous, except the fact that
Speaker 2: obviously if there's somebody very bearish, this might not be
Speaker 2: the product for them.
Speaker 3: So who who was doing it before the ETF going
Speaker 3: to a bank and saying I want.
Speaker 1: That autocullable, autocullable thing that you guys have told me about.
Speaker 3: And then how is that changing now that it's you know,
Speaker 3: potentially retail friendly.
Speaker 4: You mentioned the buffer at ETF, so I had a
Speaker 4: hand in building though, so if you trust the bus
Speaker 4: buffer ETF SO, those have been working phenomenally for nearly
Speaker 4: a decade. It's a very big space. Now that model
Speaker 4: is very commoditized. Everybody who builds buffers tends to do
Speaker 4: it closely the same way, So yeah, if you understand
Speaker 4: that space or that was something that was mildly confusing.
Speaker 4: Back then, people had to get their heads around it.
Speaker 4: It was new. Now it's not. Most people understand it.
Speaker 4: The same is going to happen with auto calls. It's
Speaker 4: a new space for ETFs. People are going to wrap
Speaker 4: their heads around it. They're going to understand it, you know.
Speaker 4: But what we did with the buffers was largely disruptive
Speaker 4: to the banks. They did not really appreciate that there
Speaker 4: were flex options being built around this. It wasn't a
Speaker 4: bank driven product, whereas here this is collaborative with the banks.
Speaker 4: You know, we're seeing a tremendous amount of demand to
Speaker 4: actually bring in those structured note strategies and do that
Speaker 4: inside the ETF world. That's going to be a massive space.
Speaker 4: We've opened this huge gate where we can now partner
Speaker 4: with banks and bring their structured strategies into a liquid,
Speaker 4: transparent and ETF ETF wrapper. I'd say it's also tax efficient.
Speaker 4: So most large banks around the world have an equity
Speaker 4: derivatives desk, they have an autocallable business JP Morgan, Morgan Stanley, RBC,
Speaker 4: like you name it, SoC Chan, Barclays, They all have
Speaker 4: these types of products that they issue, and it's on
Speaker 4: a massive scale, hundreds of billions of dollars. And so
Speaker 4: we've taken one of the most popular versions, laddered it together,
Speaker 4: did it in swap form, and did it in a
Speaker 4: way where we can deliver really high stable income in
Speaker 4: a very tax efficient way. Most derivative income products are
Speaker 4: a little less tax efficient. They'll give you either ordinary
Speaker 4: income or they'll give you maybe sixty four already treatment
Speaker 4: if it's index options. Here the coupon that we're delivering,
Speaker 4: about eighty to ninety percent of it will be treated.
Speaker 4: Our expectation is that it'll be return of capital, so
Speaker 4: that will be tax deferred until you sell, and then
Speaker 4: if you held for a year, it'll be long term
Speaker 4: capital gains.
Speaker 3: So his ten thousand spits out this income for the
Speaker 3: duration and then you give up whatever the market gains.
Speaker 1: But you're going to get your principle back.
Speaker 4: That's correct.
Speaker 3: And at what percentage of the time do you get
Speaker 3: your principle back when you did this.
Speaker 4: If you look historically, it would have been ninety seven
Speaker 4: point two percent of the time for our our US
Speaker 4: large cat version. We're launching a NASDAK version that historically
Speaker 4: had never breached principle. Yeah, so I know, I know
Speaker 4: what you're saying. It sounds too good to be true.
Speaker 4: So the piece that we have not unlocked yet now
Speaker 4: that we know understand auto calls is the reference index.
Speaker 4: So if you just tied this to the S and
Speaker 4: P five hundred, you would get a low coupon. You'd
Speaker 4: get maybe seven eight percent something like that, a little
Speaker 4: bit over risk free. If you're familiar with covered call strategies,
Speaker 4: the income that you collect changes with market parameters, it
Speaker 4: changes with volatility, interest rates, dividends. So what we have
Speaker 4: done is we've built an equity index that has been
Speaker 4: customized for auto callables. So it's an S and P
Speaker 4: five hundred base and it has a high volatility target.
Speaker 4: It's a stable vault target of thirty five percent, so
Speaker 4: that every week when we write a new auto callable
Speaker 4: inside that index, the volatility is the same. So that's
Speaker 4: how I can come here confidently and say you're going
Speaker 4: to get a high stable income because we've stabilized the
Speaker 4: parameter inside that options pricing model. I know we're getting
Speaker 4: really deep. But then when you compile all that together,
Speaker 4: the VALL of the strategy historically has been around eighteen percent.
Speaker 1: But what happens in those moments where the volatility spikes.
Speaker 4: Then your VALL will come down in the VALL target.
Speaker 4: So you mentioned twenty twenty, so I put that on
Speaker 4: pause for a reason. So in twenty twenty, what was
Speaker 4: equity market volatility sixty seventy percent, So you're at thirty five.
Speaker 4: So in that environment you're defending the barrier. Not only
Speaker 4: do you now have a forty percent barrier, but it's
Speaker 4: even more powerful because your VALL is at thirty five
Speaker 4: while the SMP is at seventy.
Speaker 2: But in twenty twenty.
Speaker 3: Only that was like when Eric's quite it that long,
Speaker 3: He's like, it's like next level, We've done it.
Speaker 4: We have never made Eric Roy too like.
Speaker 2: A physics conversation you can have in like our podcast.
Speaker 1: This is.
Speaker 2: I mean, we're about to get into black holes and
Speaker 2: like dark matters.
Speaker 4: No, no, no, black shoals, not black holes.
Speaker 2: But in twenty twenty, you still got your thing. You
Speaker 2: still got the there was no call. It didn't get called.
Speaker 4: Over the last ten years, you would have gotten every
Speaker 4: single coupon and you never would have breached barrier.
Speaker 2: So I think this is something When you go talk
Speaker 2: to advisors and people about this, it sounds like you're
Speaker 2: gonna get interest. But I'm assuming they put like two
Speaker 2: percent to.
Speaker 4: Three percent of the portfolio.
Speaker 2: Wouldn't go too crazy and where do you put it?
Speaker 2: What do you ad this?
Speaker 4: This has equity market like volatility. So think of fifty
Speaker 4: two auto callables like rubber bands that will trade at par.
Speaker 4: And as the market goes down, the rubber bands will
Speaker 4: start to stretch. You'll trade at a discount to par.
Speaker 4: And as long as they don't break, then you're going
Speaker 4: to snap back to par. Those rubber bands will go
Speaker 4: back to par. So we want to make sure that
Speaker 4: people are comfortable with equity market like volatility. If you're
Speaker 4: comfortable with that, you can exchange it for a high, stable,
Speaker 4: tax efficient coupon.
Speaker 2: So if the markets go down, say twenty percent, and
Speaker 2: you're seeing a discount in these, there's a certain kind
Speaker 2: of trader who may think that's the braid yeah, Versus
Speaker 2: in the flip side, if the market keeps going up,
Speaker 2: a trader may be like, you know what, let me
Speaker 2: not buy that right now because it's looking a little pricey.
Speaker 2: I get it.
Speaker 4: I mean we have so let me.
Speaker 2: Ask you this. Are these used mostly by buy and
Speaker 2: hold with a little traders if it gets into a discount,
Speaker 2: like what's the buy and hold trader ratio here for
Speaker 2: something like this?
Speaker 4: It's both early adopters. There's more than ten thousand shareholders
Speaker 4: in KAI right now. Let's what we're calling ci E KAI.
Speaker 4: A lot of them are financial advisors who use auto
Speaker 4: callable notes. They said, we've been using these for decades.
Speaker 4: We get called away after you know, six months to
Speaker 4: a year, we have to go buy a new note
Speaker 4: of all changes on us. The parameters are different, might
Speaker 4: not be able to get the same terms. I've got
Speaker 4: a hundred of these things on the books, one for
Speaker 4: every different client. I can't keep it all straight. One
Speaker 4: advisor that we were talking to said, I go to
Speaker 4: New York every quarter, meet with the banks, find good
Speaker 4: you know, good products. He said, I'm canceling my flights
Speaker 4: to New York. I've got this. This ETF gives me
Speaker 4: what I'm looking for. It's an evergreen solution. I'm going
Speaker 4: to play golf and this makes things easy for me.
Speaker 2: Where does he live?
Speaker 4: He's out West.
Speaker 2: Yeah, that's it. That's a long flight. Yeah, well this
Speaker 2: is the this is what ETFs do, drool. They take complicated, messy,
Speaker 2: institutional type stuff and they just make it simple, fast,
Speaker 2: good cheap.
Speaker 3: Okay, so fast, good cheap. How do you what color
Speaker 3: of uh light do you give this?
Speaker 4: We have what we do.
Speaker 1: I don't believe if we.
Speaker 2: Could dress this one yet, I think, hold on, hold on,
Speaker 2: what do you give?
Speaker 4: What do you give? Covered? Call ETFs? What light do
Speaker 4: they get?
Speaker 2: I gotta look. I believe they're green. They might get
Speaker 2: dinged once for using derivatives. Okay, so maybe you'd be
Speaker 2: the same green, but one little note for like the
Speaker 2: fact that it uses derivatives. But I guess that's it.
Speaker 2: I mean there's no leverage thet there's no rolling of commodities,
Speaker 2: and there's no hidden fees. Correct, those would be the
Speaker 2: things we ding them. But I'd have to look deeper.
Speaker 2: But I would to me, these feel you know, between
Speaker 2: PG and PG thirteen somewhere.
Speaker 3: So the risk really is I'm not going to get
Speaker 3: my principal back if there's some you know, real big downturn,
Speaker 3: or I'm going to give up some upside.
Speaker 4: Yeah, your risk is largely to the other side.
Speaker 1: Here's what I.
Speaker 2: Don't get like, if I'm in the VU, right, I'm
Speaker 2: a SAP five hundred, and I get Oh, I know
Speaker 2: why you don't get the return of the index.
Speaker 1: You just get the Yeah. Yeah, the principle just comes back. Yeah.
Speaker 2: So in the end, VU could be up twenty percent
Speaker 2: that would outperform this. This is more like just getting
Speaker 2: a little income based on VU not going down a
Speaker 2: super amount, which I feel like is a sort of
Speaker 2: the words. This would be kind of a little less
Speaker 2: risky than VU in a way.
Speaker 4: At times it could be forget volatility. Yeah, if you're
Speaker 4: looking for income, yeah, or if you don't think the
Speaker 4: market's going up fourteen and a half percent next year,
Speaker 4: then this would be a way to essentially lock that
Speaker 4: in as long as you're not going to fall by
Speaker 4: that barrier.
Speaker 1: So maybe instead of buying a.
Speaker 3: Rental property real estate property like this, this is in
Speaker 3: that category if you're thinking about it from like what
Speaker 3: a financial advisor would tell a client.
Speaker 4: Yeah, that's an interesting here.
Speaker 2: It is. It's a rental property in Florida. But you've
Speaker 2: got to pray there's nothing once everything in your hurricane.
Speaker 2: That's what it is.
Speaker 4: It is your God kind of like that. Yeah, so
Speaker 4: let's pretend like you are the insurer and you are
Speaker 4: collecting premiums from people all over the country.
Speaker 1: It was way more fun when we were doing it
Speaker 1: a way.
Speaker 2: I'm an insured I think we nailed it, and that's
Speaker 2: I don't think you're can improve on it though.
Speaker 4: No, I say, if you're an insurer, you're collecting premiums,
Speaker 4: maybe there's a storm in Florida, but everyone else is
Speaker 4: still paying you.
Speaker 2: Yeah, but aren't you doing these fifty or so all
Speaker 2: are on equity indexes, right, I mean one of them.
Speaker 5: Insures got out of not but there's fifty starting in
Speaker 5: the starting You're right, I say, Oh, I say, okay,
Speaker 5: so it's like all over the country, but there's one
Speaker 5: hurricane in Miami.
Speaker 1: Okay.
Speaker 4: Correct. You're diversified by time instead of geography.
Speaker 2: That's a lot of work. Yeah, Like do you have
Speaker 2: like associates that like do all this like keep up
Speaker 2: Kai take like an army of people like putting these
Speaker 2: new notes on like just seems like a lot of effort.
Speaker 4: The beauty of KAI is that it's all swap based.
Speaker 4: So we built everything.
Speaker 2: JP Morgan is the rest. It's all in them.
Speaker 4: Well, we built everything inside that Mercube index. And so Mercube, Yeah.
Speaker 2: That sounds like like matrix or something that sounds like
Speaker 2: what's that sounds too much? Merkcube? Who is that somebody's
Speaker 2: last name?
Speaker 4: Mercube is an indexing provider that was ok yeah, founded
Speaker 4: by the former head of custom indexing at S.
Speaker 2: And P the Mercube theory.
Speaker 1: Okay, so you're not alone anymore?
Speaker 2: Right?
Speaker 3: You got Kai was out there first. Yeah, you got
Speaker 3: some competition. What does the competition look like?
Speaker 4: Can I backup for thirty seconds? And we're going to
Speaker 4: spend a while on this. So on the ETF side,
Speaker 4: the last point here, because we did this index based
Speaker 4: it trades extremely tight. We don't have to post Greeks
Speaker 4: to the website. There's not a lot of active management here.
Speaker 4: So we take this index by Greeks.
Speaker 2: By the way, Ajoul, he doesn't mean Athnosios. He means
Speaker 2: like formulas like Vega, Gamma, Kalamos. He's picturing Athnosios and
Speaker 2: John Stamos on your website and.
Speaker 4: That's not true, that's right. Not yet. We do have
Speaker 4: Yanis though. Yeah, yeah, so where was I We take
Speaker 4: that index, We give that price almost like an intra
Speaker 4: day nave to the market makers, so they are very
Speaker 4: tight to that index level. JP Morgan is trading swap
Speaker 4: on the index. It is trading at one to three
Speaker 4: cents wide every day, and that's largely because of that index.
Speaker 4: So it's extremely operationally light.
Speaker 3: Okay, now my question, yes, oh yes, you were first.
Speaker 3: Now there's some competition. Yes, how do you feel about
Speaker 3: the competition?
Speaker 4: I think it's great. Competition is good for the market.
Speaker 4: It's going to grow. We're not going to raise you know,
Speaker 4: one hundred billion dollars all by ourselves. I hope we do,
Speaker 4: but I know it's going to be because a rising
Speaker 4: tide is lifting all boats. If there's an encouragement, I
Speaker 4: hope that it's done correctly. The covered call space took
Speaker 4: fifteen twenty years to grow and then become more risky.
Speaker 4: You've got weekly daily single stock. My fear is the
Speaker 4: auto call space does that too fast, and you go
Speaker 4: into this risky stuff and then people get hurt and
Speaker 4: they get burned, and like I thought, I had a barrier,
Speaker 4: I was tied to a single stock. It went down fast.
Speaker 4: That's what we don't want.
Speaker 2: Oh yeah, because somebody filed for single stock auto call
Speaker 2: Yeah you too. I see so that well, let's go
Speaker 2: I know you don't do those, but like let's say
Speaker 2: you're doing Navidia. Let's say you did Navidia single stock
Speaker 2: auto call Well, what would.
Speaker 1: The barrier be?
Speaker 4: You think, Well, the volatility would be you know, fairly
Speaker 4: high higher, but it comes at it.
Speaker 2: Could the barrier be sixty?
Speaker 4: It depends. You know, you can pull those levers and
Speaker 4: change your coupon.
Speaker 2: So what you're worried about is somebody going for the
Speaker 2: jacked up yield with a lower barrier and people being
Speaker 2: like not understanding the auto callable. Correct, yeah, and then
Speaker 2: it changed the whole camera and you know the industry
Speaker 2: is going to do this and you and they like
Speaker 2: to push the envelope.
Speaker 4: Oh for sure, for sure and you and we've seen
Speaker 4: this in Korea. We've seen this in other markets where
Speaker 4: folks these are big. In South Korea, I extremely they
Speaker 4: love risk, they love risk.
Speaker 2: Going theo is it's a gen per capita in South
Speaker 2: Korea is like off the charts.
Speaker 3: The the Calamost strategy is we're just going to go
Speaker 3: to indexes S and P five hundred.
Speaker 4: Yeah, let's build an index that is customized for auto
Speaker 4: callables to give you the best chance of getting a high, stable,
Speaker 4: tax efficient coupon.
Speaker 2: By the way, has have you talked to Bruce Bond regularly?
Speaker 4: I have you talked to him in about this strategy?
Speaker 1: Yeah?
Speaker 2: I feel like he's an eye in this. I don't know,
Speaker 2: I just feel like this is Bruce bondish.
Speaker 4: Oh that's funny. You know Innovator brought out were First Trust.
Speaker 2: I feel like they might just.
Speaker 4: Like, so we all filed around the same time. Okay,
Speaker 4: Innovator brought out some single stock products. I don't know
Speaker 4: how well those that have done, like you do the
Speaker 4: research on that, and then the other competitors have not
Speaker 4: come to market yet. There's about four or five in
Speaker 4: the market. So you know why you probably feel that way.
Speaker 2: Is because you guys all live in the same town
Speaker 2: and what and Illinois?
Speaker 4: Wow, this is true?
Speaker 2: Like by the way, in Wheaton, like where he lives,
Speaker 2: he has like a cul de sac. His next door
Speaker 2: neighbor is Innovator and this other nextraor neighbor is First
Speaker 2: Trust and all their kids are friends. But they hate
Speaker 2: each other at work?
Speaker 1: Is that true?
Speaker 4: Something like that hate each other?
Speaker 3: Okay, all right, but just confront of me, are you
Speaker 3: on the same kids baseball teams.
Speaker 4: It is a small town, and well, we have seven kids,
Speaker 4: so there's a good chance that we're on everybody's baseball team.
Speaker 1: All right, you have seven kids. We do? Wow? Yeah,
Speaker 1: we do.
Speaker 2: Oh my god, that's going. Wow, that must be you're wow.
Speaker 2: You look pretty good for seven kids.
Speaker 4: I don't sit down. You just got to keep keep
Speaker 4: on going.
Speaker 1: Yeah.
Speaker 2: Yeah, that's your exercise, I guess. But I think the
Speaker 2: reason amazing.
Speaker 4: I think the reason you are thinking that way is,
Speaker 4: you know, the buffers at the time replicated the largest
Speaker 4: structured note market, and in a zero rate environment, buffers
Speaker 4: were the king. When rates rose to five percent, what
Speaker 4: are people doing. They're buying fixed indexinuities. They're buying capital
Speaker 4: protected notes. So that was what we brought at Calamos,
Speaker 4: one hundred percent protected products. I helped Bruce build innovator
Speaker 4: when I was at Milliman. I was there for twelve years.
Speaker 4: So what are people doing now? They won income? You know,
Speaker 4: rates are coming back down, they're chasing that, you know,
Speaker 4: high stable income. The forty year run in bonds is over.
Speaker 4: You cannot get ballast and income from bonds anymore, and
Speaker 4: so they're parsing it out and so the auto call
Speaker 4: space was always the golden goose. We happened to win
Speaker 4: the race this time.
Speaker 2: Yeah, No, he Matt comes from that world. This is
Speaker 2: organic to because I've known him for quite a while
Speaker 2: and his work on the early days of the target outcome,
Speaker 2: having worked in an options industry. But what you will
Speaker 2: find is a lot of the issuers who don't normally
Speaker 2: do this are going to get involved. That's just the
Speaker 2: way it goes, but it is I also think ETFs
Speaker 2: everybody who's seen the Big Short and then Mayor Michael
Speaker 2: Burry going over to Goldman and JP Morgan and being like,
Speaker 2: I want to make this specific bet against the housing market,
Speaker 2: and at first JP More they're like laughing at them.
Speaker 2: They're like, no problem. That idea of a swap contract
Speaker 2: with a bank. People don't realize, like the levere ETFs,
Speaker 2: like so many ETFs are basically just democratizing what you
Speaker 2: saw in the Big Short, and that's kind of cool
Speaker 2: as long as it's done responsibly. Obviously, some of the
Speaker 2: leverage that are they're trying to file his five X
Speaker 2: where you're gonna get like irresponsible. But for the most part,
Speaker 2: you know those two guys who are waiting the lobby
Speaker 2: of JP Morgan in the beginning that this is what Matt.
Speaker 2: Matt has access to those desks that those guys were
Speaker 2: trying to get access to. These are just customized contracts
Speaker 2: with a big bank. It's almost like a high roller
Speaker 2: to casino. Who can get a special table.
Speaker 1: Yeah, and I'm at that special table just watching it happen.
Speaker 2: I know now you now you can just get the
Speaker 2: for twenty five dollars that can be Let me ask
Speaker 2: you this, you have seven kids, you have other film members.
Speaker 2: Would you feel safe putting your own family in here?
Speaker 2: Is this more for a sophisticated investor?
Speaker 4: No, I would what we've done here, you know, going
Speaker 4: all the way back to the beginning, if you tie
Speaker 4: all of your money or tie your money to a
Speaker 4: single auto callable, you have single point coupon risk, single
Speaker 4: point maturity risk where you can lose forty percent or
Speaker 4: more of your money when you ladder that out fifty
Speaker 4: two or more times and do it weekly. Now you've
Speaker 4: got an opportunity to diversify out that risk. You've got a
Speaker 4: product that looks a lot like the equity markets, but
Speaker 4: delivers that high stable coupon, So you know, I own
Speaker 4: this in my account, you know, not to create suitability.
Speaker 4: My parents, you know, are doing similar. They own a
Speaker 4: lot of buffers. They own this for income. When you
Speaker 4: can tie your money to the equity markets, now you
Speaker 4: can keep pace with inflation. You can do remarkably better
Speaker 4: than your fixed income, which would be inversely correlated to inflation.
Speaker 4: So there's a lot of ways to think about it.
Speaker 3: Best time we talked about this space, boomer candy was
Speaker 3: the phrase that came out of your mouth.
Speaker 1: Is this boomer candy?
Speaker 2: Yeah, I mean I think so, because it's a way
Speaker 2: to participate boomer's love income. But then again, sort of
Speaker 2: the gen z ers too, So I would say the
Speaker 2: only thing that doesn't make this boomer candy is that
Speaker 2: there isn't a protection element. I mean, you're betting the
Speaker 2: market won't get on forty percent, and that actual income
Speaker 2: can be a buffer if it does go down. But
Speaker 2: I think, I don't know. It might be like half
Speaker 2: boomer candy. I consider boomer candy something that helps you
Speaker 2: sleep at night and cures anxiety.
Speaker 1: This is angiin boom boomer candy.
Speaker 2: Maybe, or I don't know, it's just it's ancillary, but
Speaker 2: I could see this appealing, especially we like guy from
Speaker 2: Texas who's a YouTube star. I could see the other
Speaker 2: younger investors actually getting into this because it does have
Speaker 2: you know, that's a pretty big yield. I mean, that's
Speaker 2: going to excite some people. Although some of the yield
Speaker 2: max field like eighty to one hundred percent. But with those,
Speaker 2: you're giving up so much much total return.
Speaker 4: What makes me nervous with those? Well, so you, if
Speaker 4: I remember correctly, you came up with the boomer candy
Speaker 4: term after we launched the one hundred percent protected ETFs.
Speaker 2: Yeah, well it was that I camera when I camp
Speaker 2: with it, but it was that it was the buffers
Speaker 2: combined with the cover calls. Yes, those are both. I
Speaker 2: don't know.
Speaker 4: They just feel it as a specific protection amount. Yes,
Speaker 4: here you're taking diet market correct. Here you're taking on
Speaker 4: tail risks. So there's a chance some of those coupons.
Speaker 2: That's why it's a little.
Speaker 4: Bit I would agree with you. You got to be
Speaker 4: comfortable with equity market like volatility, the single stock covered
Speaker 4: call ETFs as a risk manager, you know, coming from
Speaker 4: an actuarial consulting firm, not something we would build Calamos. As
Speaker 4: a forty five year old risk manager, we would not
Speaker 4: build those. But the yield that those are stating is
Speaker 4: not a yield that you will likely get.
Speaker 1: You know.
Speaker 4: It's if it's a daily by ride or a weekly
Speaker 4: by right, they'll take that number that they've collected and
Speaker 4: they'll annualize it. So if it's a daily buy right
Speaker 4: and the market's volatile, I'm going to get a good
Speaker 4: coupon today and now times that by two hundred and
Speaker 4: fifty two trading days, and it looks like this massive number.
Speaker 4: The odds of you actually achieving that are next to zero.
Speaker 3: All right, Matt, I have one final question for you,
Speaker 3: which is what is your favorite ETF ticker other than
Speaker 3: any of your own.
Speaker 4: Oh that's a good question. A Power Shares product. I
Speaker 4: don't work there anymore. We launched food and Beverage ETF. Eric,
Speaker 4: do you remember the ticker PBJ.
Speaker 2: Here you go, Yes, that is a good one. Yeah,
Speaker 2: no one's ever picked it.
Speaker 3: And it really PBJ protein beverage, I know, healthy fads.
Speaker 2: Yeah, nice kicker, that's a good one PBJ.
Speaker 1: Matt Koffman, thanks so much for joining us on trillions.
Speaker 4: Thanks for having me.
Speaker 3: Thanks for listening to Trillions until next time. You can
Speaker 3: find us on the Bloomberg terminal, Bloomberg dot com, Apple Podcasts, Spotify,
Speaker 3: or wherever you'd like to listen. We'd love to hear
Speaker 3: from you. Hit us up on social I'm at Joel
Speaker 3: Weber Show, He's at Eric Balcino's. Trillions is produced by
Speaker 3: Magnus Hendrickson. Sage Bauman is the head of Bloomberg Podcast