1
00:00:02,560 --> 00:00:07,040
Speaker 1: Bloomberg Audio Studios, Podcasts, radio News.

2
00:00:12,600 --> 00:00:15,840
Speaker 2: Welcome to Everybody's Business from Bloomberg BusinessWeek. I'm Max Chafkin and.

3
00:00:15,760 --> 00:00:16,840
Speaker 3: I'm Stacy Mannock Smith.

4
00:00:17,239 --> 00:00:20,440
Speaker 2: Stacy, you can almost hear the excitement in the background.

5
00:00:20,440 --> 00:00:23,240
Speaker 2: We're at the Wyatt Hotel at the on Air Festival

6
00:00:23,320 --> 00:00:25,600
Speaker 2: in Williamsburg, Brooklyn for a big live taping.

7
00:00:25,880 --> 00:00:26,480
Speaker 3: It is true.

8
00:00:26,480 --> 00:00:30,240
Speaker 4: This is a big gathering of the podcasters of America.

9
00:00:30,600 --> 00:00:33,199
Speaker 3: Lots of people as people in America, lots.

10
00:00:33,040 --> 00:00:35,519
Speaker 4: Of bo's noise canceling headphones.

11
00:00:35,800 --> 00:00:36,720
Speaker 3: It is a great scene.

12
00:00:36,720 --> 00:00:38,840
Speaker 4: And we are about to do a live show, which

13
00:00:38,880 --> 00:00:42,320
Speaker 4: is really cool. We're teaming up with a Pushkin podcast,

14
00:00:42,360 --> 00:00:44,479
Speaker 4: Business History with Robert Smith and Jaob Goldstein.

15
00:00:44,680 --> 00:00:45,480
Speaker 3: Yeah, this is huge.

16
00:00:45,479 --> 00:00:48,360
Speaker 2: This is like a podcast equivalent of a mega merger

17
00:00:48,520 --> 00:00:51,040
Speaker 2: Business History X times.

18
00:00:51,080 --> 00:00:52,000
Speaker 3: I don't know what the word is.

19
00:00:52,040 --> 00:00:55,680
Speaker 2: Everybody's Business, Stacy. I think the FTC might have to

20
00:00:55,680 --> 00:00:57,480
Speaker 2: get involved. They might have to approve this one. It's

21
00:00:57,520 --> 00:00:58,160
Speaker 2: such a big deal.

22
00:00:58,320 --> 00:01:01,200
Speaker 4: Everybody's Business History is what we're calling it. And we

23
00:01:01,280 --> 00:01:03,960
Speaker 4: are talking today about prediction markets.

24
00:01:04,319 --> 00:01:07,120
Speaker 2: Okay, but Stacy, before we jump on stage, yea, we

25
00:01:07,160 --> 00:01:10,440
Speaker 2: got to follow up on last week's emergency podcast episode

26
00:01:10,720 --> 00:01:13,880
Speaker 2: on the Supreme Court tariff's ruling and President Trump State

27
00:01:13,880 --> 00:01:14,760
Speaker 2: of the Union address.

28
00:01:14,840 --> 00:01:17,520
Speaker 3: We got to get to that. Yes, indeed, it was

29
00:01:18,080 --> 00:01:18,560
Speaker 3: quite a.

30
00:01:18,520 --> 00:01:23,600
Speaker 5: Week before we get there.

31
00:01:23,640 --> 00:01:26,639
Speaker 2: Stacy, I thought we could just have a quick follow

32
00:01:26,680 --> 00:01:29,560
Speaker 2: up chat on the tariff issue. I listened to last

33
00:01:29,560 --> 00:01:31,800
Speaker 2: week's episode with Jonathan.

34
00:01:31,440 --> 00:01:32,560
Speaker 5: Lieberman and the trade Barger.

35
00:01:32,600 --> 00:01:36,000
Speaker 2: Good job on that emergency episode working over time for

36
00:01:36,040 --> 00:01:38,960
Speaker 2: our listeners, and I figured we just unpack what we've

37
00:01:39,040 --> 00:01:41,240
Speaker 2: learned over the last few days, especially with the State

38
00:01:41,240 --> 00:01:42,120
Speaker 2: of the Union address.

39
00:01:42,600 --> 00:01:42,919
Speaker 3: Yeah.

40
00:01:42,959 --> 00:01:47,480
Speaker 4: So Jonathan said, basically, what he does is helps companies

41
00:01:47,480 --> 00:01:49,960
Speaker 4: with the paperwork when they're trying to import goods. He

42
00:01:50,040 --> 00:01:52,320
Speaker 4: figures out all the forms and it's like a tax form,

43
00:01:52,360 --> 00:01:54,560
Speaker 4: a terraff form, because a tariff is a tax and

44
00:01:54,600 --> 00:01:57,040
Speaker 4: so he mostly deals with seafood. So if a company

45
00:01:57,160 --> 00:01:58,919
Speaker 4: is trying to bring in like a two hundred thousand

46
00:01:58,920 --> 00:02:02,640
Speaker 4: dollars shipp container full of lobster tales and they have

47
00:02:02,720 --> 00:02:05,400
Speaker 4: to figure out a tariff, that is what happens. Then

48
00:02:05,400 --> 00:02:07,040
Speaker 4: he helps them figure out how much they owe and

49
00:02:07,080 --> 00:02:07,960
Speaker 4: fills out all the forms.

50
00:02:08,200 --> 00:02:11,359
Speaker 2: Yeah, that was fascinating, just because I hadn't thought about

51
00:02:11,400 --> 00:02:14,720
Speaker 2: the level of complication involved, or I hadn't thought much

52
00:02:14,760 --> 00:02:17,600
Speaker 2: about how complicated this is. And it kind of helps

53
00:02:17,639 --> 00:02:21,320
Speaker 2: explain why these tariffs have been unpopular, because it's just

54
00:02:21,400 --> 00:02:25,080
Speaker 2: this huge amount of not only attax which most people hate,

55
00:02:25,240 --> 00:02:27,399
Speaker 2: but just a huge amount of uncertainty. And I think

56
00:02:27,400 --> 00:02:29,720
Speaker 2: the takeaway from the State of the Union address, Stacy

57
00:02:30,280 --> 00:02:33,000
Speaker 2: is that uncertainty is going to continue.

58
00:02:33,280 --> 00:02:34,200
Speaker 3: Oh yeah, yeah.

59
00:02:34,240 --> 00:02:36,560
Speaker 4: In fact, Jonathan, poor Jonathan, when we talked to him,

60
00:02:36,600 --> 00:02:39,240
Speaker 4: was getting calls the whole time. We were talking from

61
00:02:39,360 --> 00:02:43,000
Speaker 4: his customers from these seafood importers who were wondering what

62
00:02:43,080 --> 00:02:44,680
Speaker 4: was going on, and they were like, does this mean

63
00:02:44,720 --> 00:02:47,000
Speaker 4: we don't have to pay tariffs anymore? What does the

64
00:02:47,200 --> 00:02:49,760
Speaker 4: new ten percent tariff mean? Can we get our money back?

65
00:02:49,800 --> 00:02:53,280
Speaker 4: Because if these tariffs were indeed illegal, these seafood importers

66
00:02:53,320 --> 00:02:55,320
Speaker 4: should be able to get the money that they paid

67
00:02:55,520 --> 00:02:56,440
Speaker 4: back from the government.

68
00:02:56,840 --> 00:02:59,760
Speaker 2: And yet the Trump administration has in all sorts of

69
00:02:59,800 --> 00:03:02,880
Speaker 2: ways suggested that they are going to try to not

70
00:03:03,000 --> 00:03:07,160
Speaker 2: pay the money back. Also, Donald Trump immediately after and

71
00:03:07,160 --> 00:03:09,200
Speaker 2: I think this came up in your conversation with Jonathan,

72
00:03:09,560 --> 00:03:12,880
Speaker 2: immediately after the Supreme Court ruling essentially said we're just

73
00:03:12,919 --> 00:03:16,000
Speaker 2: going to do the tariffs through some other means, and

74
00:03:16,080 --> 00:03:19,040
Speaker 2: he reiterated that point during the State of the Union address.

75
00:03:19,120 --> 00:03:22,720
Speaker 2: Let's just quickly listen to that little segment now.

76
00:03:25,240 --> 00:03:28,280
Speaker 6: But the good news is that almost all countries and

77
00:03:28,360 --> 00:03:33,840
Speaker 6: corporations want to keep the deal that they already made Scott,

78
00:03:34,560 --> 00:03:38,760
Speaker 6: knowing that the legal power that I as president have

79
00:03:38,880 --> 00:03:42,160
Speaker 6: to make a new deal could be far worse for them,

80
00:03:42,360 --> 00:03:45,200
Speaker 6: and therefore they will continue to work along the same

81
00:03:45,280 --> 00:03:50,120
Speaker 6: successful path that we had negotiated before the Supreme Court's

82
00:03:50,520 --> 00:03:57,720
Speaker 6: unfortunate involvement. So despite the disappointing ruling, these powerful country

83
00:03:57,840 --> 00:04:01,320
Speaker 6: saving it's saving our country. The kind of money we're

84
00:04:01,360 --> 00:04:06,280
Speaker 6: taking in peace protecting many of the wars I settled

85
00:04:06,360 --> 00:04:08,480
Speaker 6: was because of the threat of tariffs. I wouldn't have

86
00:04:08,520 --> 00:04:11,240
Speaker 6: been able to settle him with a will remain in

87
00:04:11,280 --> 00:04:16,240
Speaker 6: place under fully approved and tested alternative legal statutes, and

88
00:04:16,320 --> 00:04:19,080
Speaker 6: they have been tested for a long time. They're a

89
00:04:19,080 --> 00:04:23,440
Speaker 6: little more complex, but they're actually probably better, leading to

90
00:04:23,480 --> 00:04:28,920
Speaker 6: a solution that will be even stronger than before. Congressional

91
00:04:29,000 --> 00:04:31,960
Speaker 6: action will not be necessary. It's already time tests that

92
00:04:32,040 --> 00:04:32,640
Speaker 6: are approved.

93
00:04:33,160 --> 00:04:35,719
Speaker 4: Yeah, this tracks with what Jonathan said. He said a

94
00:04:35,720 --> 00:04:36,200
Speaker 4: couple things.

95
00:04:36,200 --> 00:04:38,080
Speaker 3: He said. Number one, the President is right.

96
00:04:38,080 --> 00:04:41,080
Speaker 4: There are all these avenues that he has and can

97
00:04:41,200 --> 00:04:43,880
Speaker 4: use to put new temporary tariffs in place.

98
00:04:43,960 --> 00:04:45,440
Speaker 3: One of them he did use.

99
00:04:45,480 --> 00:04:47,719
Speaker 4: He invoked a ten percent tariff immediately, then raced it

100
00:04:47,720 --> 00:04:51,279
Speaker 4: to a fifteen percent tariff, and then lowered it again

101
00:04:51,400 --> 00:04:52,480
Speaker 4: to a ten percent tariff.

102
00:04:52,520 --> 00:04:55,000
Speaker 2: They haven't actually done the fifteen percent, so there was

103
00:04:55,040 --> 00:04:57,800
Speaker 2: a little bit of confusion. The confusion continues, and it's

104
00:04:57,960 --> 00:05:00,760
Speaker 2: confusing even for those of us who make it our

105
00:05:00,800 --> 00:05:03,520
Speaker 2: business to try to help people figure this out. And

106
00:05:03,680 --> 00:05:08,080
Speaker 2: just like Jonathan, I was surprised by the tone I

107
00:05:08,120 --> 00:05:10,920
Speaker 2: guess of the State of the Union address. Trump has

108
00:05:11,400 --> 00:05:14,799
Speaker 2: been super unpopular on these issues. It's been this huge

109
00:05:15,440 --> 00:05:17,680
Speaker 2: turn for the Trump administration where it's.

110
00:05:17,560 --> 00:05:19,280
Speaker 3: Hard on businesses, hard on consumers.

111
00:05:19,360 --> 00:05:22,880
Speaker 2: He'd always been pretty popular on the economy, but these

112
00:05:22,960 --> 00:05:26,039
Speaker 2: tariffs and all the affordability stuff that we've talked about

113
00:05:26,120 --> 00:05:29,120
Speaker 2: has really bit into that. There was speculation that there

114
00:05:29,160 --> 00:05:31,760
Speaker 2: might be some sort of confrontation with the Supreme Court justices.

115
00:05:32,760 --> 00:05:33,680
Speaker 3: I was watching on TV.

116
00:05:33,800 --> 00:05:36,200
Speaker 2: I'd say it was a little awkward, not as awkward

117
00:05:36,240 --> 00:05:37,000
Speaker 2: as it could have been.

118
00:05:37,120 --> 00:05:39,520
Speaker 3: He shook John Robert's hand.

119
00:05:39,400 --> 00:05:42,600
Speaker 2: Although he did not shake Amy Coney Barrett's hand, And

120
00:05:42,640 --> 00:05:47,040
Speaker 2: even in this little bit you just heard, he's quibbling

121
00:05:47,080 --> 00:05:49,080
Speaker 2: with the decision, but he's not doing what he did

122
00:05:49,160 --> 00:05:51,599
Speaker 2: in the immediate aftermath of the tariff ruling, where I

123
00:05:51,640 --> 00:05:55,719
Speaker 2: believe Stacy called them lapdogs and was really slinging insults

124
00:05:55,720 --> 00:05:57,839
Speaker 2: at the justices of our High Court.

125
00:05:58,120 --> 00:06:00,960
Speaker 4: And it's really interesting because that at the top level,

126
00:06:00,960 --> 00:06:03,880
Speaker 4: but practically what this means for businesses and for customers

127
00:06:03,960 --> 00:06:06,200
Speaker 4: is really interesting. Jonathan got into a little bit of this,

128
00:06:06,520 --> 00:06:07,960
Speaker 4: but one of the things he said was that for

129
00:06:08,160 --> 00:06:12,600
Speaker 4: every tariff that he levied, like every terraform he filled out,

130
00:06:12,600 --> 00:06:14,720
Speaker 4: for every single shipment of whatever lobster tails or shrimp

131
00:06:14,839 --> 00:06:17,200
Speaker 4: or whatever, it was a separate form. And if these

132
00:06:17,240 --> 00:06:19,720
Speaker 4: companies want their money back from the government, they have

133
00:06:19,800 --> 00:06:23,120
Speaker 4: to file a claim for every single one, which is

134
00:06:23,200 --> 00:06:27,280
Speaker 4: like tens about Yeah, it's tens of thousands of separate,

135
00:06:27,360 --> 00:06:30,960
Speaker 4: tiny lawsuits. And so Jonathan was kind of losing his

136
00:06:31,040 --> 00:06:32,920
Speaker 4: mind about how much paperwork this was going to mean.

137
00:06:33,040 --> 00:06:35,880
Speaker 4: It's going to be a big, possibly expensive mess for

138
00:06:35,960 --> 00:06:36,800
Speaker 4: companies going forward.

139
00:06:36,800 --> 00:06:39,120
Speaker 2: Okay, I think there are two questions Stacy. One is,

140
00:06:39,720 --> 00:06:42,680
Speaker 2: when do we get our money back, Like we, yeah,

141
00:06:42,839 --> 00:06:45,720
Speaker 2: ultimately paid some of these tarrants. I know, are we

142
00:06:46,000 --> 00:06:47,320
Speaker 2: going to get a check?

143
00:06:48,200 --> 00:06:50,040
Speaker 4: Well, this is where things get really messy because Let's

144
00:06:50,040 --> 00:06:53,240
Speaker 4: say you're a seafood importer and you sell your seafood

145
00:06:53,240 --> 00:06:56,520
Speaker 4: to Long John Silver's, so you've been paying tariffs. Let's

146
00:06:56,520 --> 00:06:58,440
Speaker 4: say you do get your money back on the tariffs,

147
00:06:58,480 --> 00:06:59,800
Speaker 4: but then Long John Silver is going to go to

148
00:06:59,800 --> 00:07:02,039
Speaker 4: you and like, hey, you passed those costs along to me.

149
00:07:02,160 --> 00:07:04,640
Speaker 4: I should get a refund too. Suddenly you're in this

150
00:07:04,720 --> 00:07:07,960
Speaker 4: really strange situation as well. So it is a mess

151
00:07:08,000 --> 00:07:10,200
Speaker 4: that I think is going to be going years into

152
00:07:10,240 --> 00:07:10,680
Speaker 4: the future.

153
00:07:11,000 --> 00:07:12,960
Speaker 2: Yeah, and I think it's going to be a huge

154
00:07:13,200 --> 00:07:16,040
Speaker 2: political issue going forward, which I guess brings me to

155
00:07:16,040 --> 00:07:20,600
Speaker 2: the other question. Do we think that this ruling helps

156
00:07:20,600 --> 00:07:24,040
Speaker 2: Donald Trump in a weird way? Because maybe the Supreme

157
00:07:24,040 --> 00:07:26,600
Speaker 2: Court did him a favor saying these tariffs are illegal

158
00:07:26,880 --> 00:07:30,120
Speaker 2: allows him maybe to back away from these policies.

159
00:07:30,840 --> 00:07:33,520
Speaker 4: I think it would have been amazing groundcover for two reasons.

160
00:07:33,560 --> 00:07:35,800
Speaker 4: One because he could have been like, if the economy

161
00:07:35,840 --> 00:07:37,960
Speaker 4: didn't go well or prices continue to rise, he could

162
00:07:37,960 --> 00:07:40,400
Speaker 4: have been like, listen, I tried with the tariffs. The

163
00:07:40,440 --> 00:07:43,040
Speaker 4: Supreme Court struck me down. What can I do? It's

164
00:07:43,120 --> 00:07:46,160
Speaker 4: their fault, right, it gives him good groundcover, but he.

165
00:07:46,120 --> 00:07:46,840
Speaker 3: Didn't take the win.

166
00:07:46,920 --> 00:07:49,200
Speaker 4: And then he put new tariffs in place, So I

167
00:07:49,200 --> 00:07:51,520
Speaker 4: don't know. I felt like there was a win right there,

168
00:07:51,800 --> 00:07:54,320
Speaker 4: but he's not taken. But he didn't take it.

169
00:07:55,520 --> 00:07:57,160
Speaker 5: Stacy, I'm looking at the clock.

170
00:07:57,480 --> 00:08:01,280
Speaker 2: Yes, And Robert Smith and Jacob Goldstein, the host of

171
00:08:01,280 --> 00:08:03,000
Speaker 2: Business History, they're going to be here any minute.

172
00:08:03,000 --> 00:08:03,920
Speaker 3: We got to go downstairs.

173
00:08:04,000 --> 00:08:13,480
Speaker 4: Enough about hair offfs, time to pivot to prediction markets.

174
00:08:18,280 --> 00:08:21,040
Speaker 4: This is Everybody's business from Bloomberg Business Week.

175
00:08:21,080 --> 00:08:22,160
Speaker 3: I'm Stacey Mannock.

176
00:08:21,960 --> 00:08:24,960
Speaker 7: Smith, I'm Max Chafkin, and this is Business History, a

177
00:08:25,040 --> 00:08:26,080
Speaker 7: show about the.

178
00:08:26,080 --> 00:08:28,960
Speaker 3: History of business. I'm Jacob Goldstein and I'm Robert Smith.

179
00:08:29,360 --> 00:08:31,160
Speaker 4: And today we are going to be talking about the

180
00:08:31,160 --> 00:08:35,319
Speaker 4: world of prediction markets. This is polymarket and call sheet.

181
00:08:35,400 --> 00:08:38,200
Speaker 4: These are places where you can bet on how many

182
00:08:38,240 --> 00:08:41,080
Speaker 4: inches it is going to snow in Brooklyn today or

183
00:08:41,520 --> 00:08:42,680
Speaker 4: whether we are going.

184
00:08:42,559 --> 00:08:44,120
Speaker 3: To attack Iran.

185
00:08:44,679 --> 00:08:47,480
Speaker 4: These markets are now worth more than one hundred billion

186
00:08:47,559 --> 00:08:48,120
Speaker 4: dollars a year.

187
00:08:48,200 --> 00:08:49,280
Speaker 3: They're growing all the time.

188
00:08:49,520 --> 00:08:52,640
Speaker 2: Yeah, I figured just for those people who have been

189
00:08:52,640 --> 00:08:54,880
Speaker 2: following this in the pages of the Wall Street Journal

190
00:08:54,920 --> 00:08:57,800
Speaker 2: or Bloomberg. Just want to lay it out quickly. Prediction markets.

191
00:08:57,800 --> 00:09:02,080
Speaker 2: You've probably seen them most with politics. They're two big companies.

192
00:09:02,080 --> 00:09:05,360
Speaker 2: Stacey just mentioned them, Calshi Polymarket. You go on a

193
00:09:05,400 --> 00:09:09,280
Speaker 2: prediction market and you'll see essentially a price like a

194
00:09:09,679 --> 00:09:12,920
Speaker 2: say ten cents for AOC to be the DEM nominee.

195
00:09:13,160 --> 00:09:15,600
Speaker 2: And what that means is that if you put ten

196
00:09:15,679 --> 00:09:19,000
Speaker 2: cents down and AOC becomes a DEM nominee, then you

197
00:09:19,040 --> 00:09:21,440
Speaker 2: get a dollar and if she doesn't, you get zero dollars.

198
00:09:21,520 --> 00:09:24,320
Speaker 2: And you can bet on everything pretty much anything under

199
00:09:24,320 --> 00:09:27,560
Speaker 2: the sun. And we wanted to kind of give people

200
00:09:28,040 --> 00:09:31,600
Speaker 2: a visceral sense of this via market our own sort

201
00:09:31,600 --> 00:09:34,439
Speaker 2: of prediction market. So this is our own prediction market.

202
00:09:34,480 --> 00:09:37,239
Speaker 2: You should scan the QR code. This is a financial

203
00:09:37,240 --> 00:09:41,439
Speaker 2: opportunity for everyone in the room. You can enter and

204
00:09:42,000 --> 00:09:43,800
Speaker 2: once people have had a chance to do that, I

205
00:09:43,840 --> 00:09:46,840
Speaker 2: will read the market and the terms of the market.

206
00:09:47,000 --> 00:09:50,280
Speaker 2: It's gonna require you to look around the room and

207
00:09:50,400 --> 00:09:54,640
Speaker 2: ask yourself, how's this talk going to go? The terms

208
00:09:54,640 --> 00:09:57,560
Speaker 2: of this market are will at least ten percent of

209
00:09:57,559 --> 00:09:59,880
Speaker 2: the audience leave the room before the end of the show.

210
00:10:00,160 --> 00:10:03,920
Speaker 2: So just to be clear, betting yes is betting. I

211
00:10:03,960 --> 00:10:07,400
Speaker 2: think you guys on a dud. Right, If they bet yes,

212
00:10:07,400 --> 00:10:09,440
Speaker 2: they're betting that more than ten percent are going to.

213
00:10:09,480 --> 00:10:12,720
Speaker 4: Link is necessarily a dud because they're also like overlapping segments.

214
00:10:12,760 --> 00:10:16,000
Speaker 4: So there could be another panel that people feel like.

215
00:10:15,960 --> 00:10:17,960
Speaker 3: They even stronger panels.

216
00:10:19,360 --> 00:10:22,760
Speaker 2: It's difficult to believe that also, bathroom right, right, All

217
00:10:22,880 --> 00:10:26,160
Speaker 2: factors are possible. There's also the prospect of insider training,

218
00:10:26,200 --> 00:10:27,040
Speaker 2: which we will get to.

219
00:10:27,120 --> 00:10:29,920
Speaker 3: I mean, you could bet yes and then walk out.

220
00:10:30,040 --> 00:10:32,760
Speaker 7: We could we could all leave, make sure you come

221
00:10:32,840 --> 00:10:34,040
Speaker 7: back in case you want.

222
00:10:34,080 --> 00:10:35,800
Speaker 3: We are, by the way, counting, and I just.

223
00:10:35,800 --> 00:10:38,360
Speaker 2: Want to give people a sense of how crazy this gets.

224
00:10:38,640 --> 00:10:42,319
Speaker 2: So Stacy mentioned a couple of markets. Whether there's politics,

225
00:10:42,440 --> 00:10:45,280
Speaker 2: there are also these things called mentioned markets. And Stacy,

226
00:10:45,480 --> 00:10:47,800
Speaker 2: you are a big fan of the Federal Reserve. I

227
00:10:47,840 --> 00:10:49,640
Speaker 2: do love the Federal People listen to the show know this,

228
00:10:49,720 --> 00:10:56,520
Speaker 2: it's kind of it's endearing, strange, it's very Minetary policy

229
00:10:56,760 --> 00:10:59,560
Speaker 2: is exciting. And there is a prediction market. There are

230
00:10:59,600 --> 00:11:03,319
Speaker 2: prediction markets, as you know, Stacy, every time Jerome Powell

231
00:11:03,360 --> 00:11:06,560
Speaker 2: gives a speech, and we wrote about one of these

232
00:11:06,640 --> 00:11:08,400
Speaker 2: in the latest issue a business Week.

233
00:11:08,600 --> 00:11:10,000
Speaker 3: This is the lead of the story.

234
00:11:10,040 --> 00:11:14,000
Speaker 2: But so basically, this is Jerome Powell's last press conference.

235
00:11:14,000 --> 00:11:16,520
Speaker 2: You could bet on forty four words. So is he

236
00:11:16,600 --> 00:11:18,880
Speaker 2: going to say the phrase good afternoon?

237
00:11:18,880 --> 00:11:19,800
Speaker 5: That's a gimme by.

238
00:11:19,840 --> 00:11:23,400
Speaker 2: It always says good always, easiest one cent you'll ever make.

239
00:11:23,720 --> 00:11:25,760
Speaker 2: But the thing that was kind of crazy about this

240
00:11:25,880 --> 00:11:29,480
Speaker 2: market is as the press conference goes on, the odds change.

241
00:11:29,480 --> 00:11:31,559
Speaker 2: You just saw that with our on market right as

242
00:11:31,559 --> 00:11:35,160
Speaker 2: people are entering the odds shift. And so during the

243
00:11:35,240 --> 00:11:39,040
Speaker 2: last press conference, there was a question of the word renovation.

244
00:11:39,360 --> 00:11:41,720
Speaker 3: Would Jerome Powell mention renovation?

245
00:11:41,800 --> 00:11:44,440
Speaker 2: Remember people who've been following this probably remember that there's

246
00:11:44,440 --> 00:11:47,480
Speaker 2: a big controversy over the renovation of the FED building.

247
00:11:47,559 --> 00:11:50,160
Speaker 3: Donald Trump's remad about it. And let me just play

248
00:11:50,160 --> 00:11:50,680
Speaker 3: what happened.

249
00:11:51,400 --> 00:11:56,680
Speaker 8: Technological developments that raise potential output, some kind of technological

250
00:11:56,760 --> 00:11:59,600
Speaker 8: renovation revolution like like kappening and.

251
00:11:59,640 --> 00:12:00,800
Speaker 1: Not here like.

252
00:12:02,920 --> 00:12:05,280
Speaker 5: That insane? Am I right?

253
00:12:05,280 --> 00:12:08,080
Speaker 2: It's like the equivalent of a Hail Mary at the

254
00:12:08,360 --> 00:12:10,960
Speaker 2: when you're you know, the game is almost over, we

255
00:12:11,000 --> 00:12:15,680
Speaker 2: need a replay. Traders on Discord and on Twitter went

256
00:12:15,960 --> 00:12:19,360
Speaker 2: absolutely berserk over this. You know, the quotes and you

257
00:12:19,360 --> 00:12:21,000
Speaker 2: can read these in the in the Business Week story

258
00:12:21,120 --> 00:12:24,120
Speaker 2: the most Insane Market I've Ever traded. Somebody else wrote

259
00:12:24,280 --> 00:12:28,120
Speaker 2: investigate Palell in all caps, suggesting that perhaps Jerome pal

260
00:12:28,200 --> 00:12:28,760
Speaker 2: had done.

261
00:12:28,559 --> 00:12:31,320
Speaker 4: This pollymarket bet.

262
00:12:31,520 --> 00:12:34,040
Speaker 2: But I do think Stacy, this kind of raises a question,

263
00:12:34,040 --> 00:12:37,280
Speaker 2: which is like is this valuable?

264
00:12:37,320 --> 00:12:39,199
Speaker 5: Like like what is the point of this?

265
00:12:39,400 --> 00:12:41,720
Speaker 3: Yes, like what is the economic value of these?

266
00:12:41,800 --> 00:12:45,440
Speaker 4: Obviously, if you are betting on Jerome Pala saying renovation,

267
00:12:45,960 --> 00:12:48,400
Speaker 4: you have personal value, But what about for the economy?

268
00:12:48,520 --> 00:12:51,000
Speaker 2: Okay, So let me give you the perspective of the

269
00:12:51,040 --> 00:12:53,840
Speaker 2: founder of Calshi, who's uh, this is one of the

270
00:12:53,840 --> 00:12:56,920
Speaker 2: two big companies. Let's let's just listen to Tarik Man's

271
00:12:57,040 --> 00:13:00,480
Speaker 2: or try to explain why this matters, like why this

272
00:13:00,600 --> 00:13:03,520
Speaker 2: is important beyond just an exciting opportunity for gamblers.

273
00:13:04,880 --> 00:13:08,000
Speaker 9: The long term vision is to financialize everything and create

274
00:13:08,000 --> 00:13:10,200
Speaker 9: a tradable asset out of any difference in opinion. And

275
00:13:10,240 --> 00:13:11,760
Speaker 9: I think if you do build a general, on purpose

276
00:13:11,800 --> 00:13:14,840
Speaker 9: exchange that can resolve differences of opinions on anything like

277
00:13:15,080 --> 00:13:16,400
Speaker 9: the time is quite massive.

278
00:13:16,880 --> 00:13:20,120
Speaker 2: I think that might be the least relatable sentiment I've

279
00:13:20,160 --> 00:13:24,720
Speaker 2: ever heard. We're going to financialize everything. Do you like finance?

280
00:13:24,760 --> 00:13:27,800
Speaker 2: What if everything was finance? That's essentially what they're saying,

281
00:13:28,280 --> 00:13:31,000
Speaker 2: and it sounds kind of crazy, but the argument is

282
00:13:31,160 --> 00:13:34,480
Speaker 2: basically that this would be a way to sort of

283
00:13:34,600 --> 00:13:37,200
Speaker 2: hedge your risk in areas or it might be hard

284
00:13:37,200 --> 00:13:41,080
Speaker 2: to So one example the Calshi founders give is flood insurance,

285
00:13:41,080 --> 00:13:43,199
Speaker 2: Like maybe instead of buying flood insurance, or if the

286
00:13:43,200 --> 00:13:46,480
Speaker 2: flood insurance were too expensive, you could buy a contract

287
00:13:46,800 --> 00:13:50,120
Speaker 2: on the weather, you could buy a contract on rainstorms.

288
00:13:50,400 --> 00:13:51,559
Speaker 3: And it sort of is.

289
00:13:51,880 --> 00:13:54,760
Speaker 2: It's the way that like Wall Street hedge funds, you know,

290
00:13:54,960 --> 00:13:56,240
Speaker 2: use futures and stuff like that.

291
00:13:56,280 --> 00:13:57,600
Speaker 3: But it would be for all of us.

292
00:13:57,800 --> 00:13:59,960
Speaker 2: And I want to say, as crazy as this town,

293
00:14:00,320 --> 00:14:03,280
Speaker 2: anyone who bets on sports knows this phenomenon because there's

294
00:14:03,280 --> 00:14:07,040
Speaker 2: this concept of emotional hedging where you bet against the

295
00:14:07,080 --> 00:14:09,400
Speaker 2: team you're rooting for serve as a way to soften

296
00:14:09,400 --> 00:14:12,560
Speaker 2: the blow, Like my team loses, but you know, but

297
00:14:12,600 --> 00:14:13,600
Speaker 2: I make a little money.

298
00:14:13,320 --> 00:14:14,120
Speaker 3: I lose, I win.

299
00:14:14,920 --> 00:14:17,800
Speaker 2: It feels kind of wrong though, Like here, let me

300
00:14:17,840 --> 00:14:21,120
Speaker 2: just give you one last prediction market that's on polymarket

301
00:14:21,200 --> 00:14:25,880
Speaker 2: right now. Will Jesus Christ return before twenty twenty seven.

302
00:14:25,920 --> 00:14:29,200
Speaker 4: It's gone up sharply since February, it's also gone down.

303
00:14:29,280 --> 00:14:31,920
Speaker 2: What has happened in the last month or so? And

304
00:14:31,960 --> 00:14:34,920
Speaker 2: who is betting on this? Anyway, there's a lot But

305
00:14:35,160 --> 00:14:37,720
Speaker 2: is this would be good information to have if this

306
00:14:37,800 --> 00:14:38,600
Speaker 2: were reliable.

307
00:14:39,240 --> 00:14:42,760
Speaker 4: I'm not sure how you could possibly cash in, but

308
00:14:42,760 --> 00:14:45,400
Speaker 4: but yes, I mean, this is very informative.

309
00:14:44,880 --> 00:14:48,880
Speaker 2: If he with a capital age returns, do we think

310
00:14:48,920 --> 00:14:50,400
Speaker 2: that polymarket's gonna pay?

311
00:14:51,240 --> 00:14:53,240
Speaker 7: Oh, that's a good It might be bigger problems at

312
00:14:53,280 --> 00:14:56,240
Speaker 7: that point, or opportunities, depending on how you've lived your life.

313
00:14:56,360 --> 00:14:58,600
Speaker 1: And we should say for people listening, it's a three

314
00:14:58,680 --> 00:15:01,480
Speaker 1: percent chance, which seems pretty high.

315
00:15:01,600 --> 00:15:06,640
Speaker 2: Right, it's been two thousand years. We'll talk about this

316
00:15:06,720 --> 00:15:09,440
Speaker 2: more stacy. But to me, like this just kind of

317
00:15:09,440 --> 00:15:12,680
Speaker 2: feels wrong. I'm not specifically talking about the Jesus market,

318
00:15:12,880 --> 00:15:16,239
Speaker 2: although this does feel wrong to me, but the whole.

319
00:15:16,000 --> 00:15:18,440
Speaker 3: Thing, the whole idea of financializing everything.

320
00:15:19,480 --> 00:15:24,160
Speaker 4: I mean, yes, these markets are incredibly problematic, but I

321
00:15:24,920 --> 00:15:25,720
Speaker 4: kind of like them.

322
00:15:26,040 --> 00:15:28,920
Speaker 3: Okay, here's why I like them.

323
00:15:28,960 --> 00:15:32,840
Speaker 4: So I really hate gambling. I don't like taking risks,

324
00:15:33,040 --> 00:15:35,160
Speaker 4: and I don't like trying my luck.

325
00:15:35,600 --> 00:15:38,400
Speaker 3: I like homework. You know you do the work and

326
00:15:38,440 --> 00:15:39,200
Speaker 3: you get the payoff.

327
00:15:39,240 --> 00:15:41,280
Speaker 4: That makes sense to me, That feels fair to me.

328
00:15:41,840 --> 00:15:44,640
Speaker 4: These are the markets I mean, And homework does not

329
00:15:44,720 --> 00:15:48,600
Speaker 4: help you in gambling. This all tracks like if you

330
00:15:48,640 --> 00:15:51,240
Speaker 4: go to a roulette table and you know more about

331
00:15:51,480 --> 00:15:53,720
Speaker 4: roulette and the history of roulette and the roulette wheel

332
00:15:53,960 --> 00:15:56,080
Speaker 4: than anybody in history, it's not going to help you

333
00:15:56,120 --> 00:15:56,920
Speaker 4: win at roulette.

334
00:15:57,000 --> 00:15:59,960
Speaker 3: Right in those cases, like the casino, it's got an edge.

335
00:16:00,120 --> 00:16:02,080
Speaker 7: Yeah, if you understand gambling, you don't go into the

336
00:16:02,080 --> 00:16:03,960
Speaker 7: casino exactly.

337
00:16:04,480 --> 00:16:07,440
Speaker 4: And I would argue in investing, there's kind of similar

338
00:16:07,480 --> 00:16:09,960
Speaker 4: things going on because you know these big investment houses

339
00:16:10,000 --> 00:16:12,720
Speaker 4: and hedge funds, they have all this money and they

340
00:16:12,720 --> 00:16:15,200
Speaker 4: have access to all this information that you and I

341
00:16:15,320 --> 00:16:18,800
Speaker 4: have no access to. Like they will look at satellite

342
00:16:18,840 --> 00:16:21,240
Speaker 4: photos of Walmart's parking lot and they will see how

343
00:16:21,280 --> 00:16:23,680
Speaker 4: many trucks are going in and out, and they will

344
00:16:23,800 --> 00:16:26,760
Speaker 4: estimate Walmart's sales, and they will figure out Walmart's profits,

345
00:16:27,080 --> 00:16:29,280
Speaker 4: and then they will place a bet on Walmart's share price.

346
00:16:29,360 --> 00:16:31,560
Speaker 4: You and I don't have access to that information. It

347
00:16:31,560 --> 00:16:35,760
Speaker 4: feels very unfair to me, and I don't like it.

348
00:16:35,760 --> 00:16:36,600
Speaker 3: It just feels like in.

349
00:16:36,560 --> 00:16:39,920
Speaker 4: These cases the house has the edge and homework is

350
00:16:39,960 --> 00:16:42,400
Speaker 4: for suckers, and I don't like it, but this is

351
00:16:42,440 --> 00:16:45,200
Speaker 4: not true on Polymarket and Calshi.

352
00:16:45,800 --> 00:16:48,720
Speaker 2: We a couple of months ago on the show interviewed

353
00:16:48,720 --> 00:16:51,360
Speaker 2: this big poly market trader. I think we called him

354
00:16:51,360 --> 00:16:55,680
Speaker 2: the polymarket whale. His name is his pseudonym is Domer.

355
00:16:56,040 --> 00:16:59,200
Speaker 2: We know his name, but he likes to be anonymous because,

356
00:16:59,240 --> 00:17:01,360
Speaker 2: I think partly because these markets are in sort of.

357
00:17:01,280 --> 00:17:02,800
Speaker 3: A legal gray area.

358
00:17:02,880 --> 00:17:07,120
Speaker 2: But anyway, Domer had bet Stacey's something like four hundred

359
00:17:07,400 --> 00:17:08,880
Speaker 2: million dollars.

360
00:17:08,520 --> 00:17:09,399
Speaker 3: On Polly Market.

361
00:17:09,440 --> 00:17:11,320
Speaker 2: When we talked to him, he had a big money

362
00:17:11,359 --> 00:17:14,840
Speaker 2: bet on Taylor Swift album sales. He had one million

363
00:17:15,040 --> 00:17:18,320
Speaker 2: riding on the question of how many albums Taylor Swift

364
00:17:18,320 --> 00:17:18,800
Speaker 2: would sell.

365
00:17:19,080 --> 00:17:22,000
Speaker 4: Yes, And we asked Domer, like, was there a bet

366
00:17:22,040 --> 00:17:23,439
Speaker 4: that did it? How did you get on on these

367
00:17:23,440 --> 00:17:24,920
Speaker 4: markets because this is his job.

368
00:17:25,000 --> 00:17:25,240
Speaker 6: Now.

369
00:17:25,520 --> 00:17:27,399
Speaker 4: He had been a professional poker player, but he had

370
00:17:27,480 --> 00:17:30,119
Speaker 4: left the world of professional poker for this market. And

371
00:17:30,160 --> 00:17:31,879
Speaker 4: he said, yeah, there was this bet that did it.

372
00:17:31,880 --> 00:17:34,119
Speaker 4: It was back in two thousand and eight, so it

373
00:17:34,160 --> 00:17:37,320
Speaker 4: was John McCain versus Barack Obama. We knew that, but

374
00:17:37,359 --> 00:17:40,440
Speaker 4: they hadn't picked their running mates yet, and everyone was wondering,

375
00:17:40,560 --> 00:17:43,000
Speaker 4: especially who's John McCain going to pick. People thought maybe

376
00:17:43,000 --> 00:17:45,480
Speaker 4: Mitt Romney, but they weren't sure. And there was this

377
00:17:45,640 --> 00:17:48,320
Speaker 4: old betting market, this old version of a betting market

378
00:17:48,359 --> 00:17:50,600
Speaker 4: was not poly market or Calci that went up and

379
00:17:50,720 --> 00:17:53,000
Speaker 4: Domer thought, I'm going to bet on this, and I

380
00:17:53,119 --> 00:17:55,040
Speaker 4: wonder if I can get an edge.

381
00:17:55,080 --> 00:17:56,439
Speaker 3: And here's what he told us.

382
00:17:56,760 --> 00:18:01,439
Speaker 8: The date for John McCain picking had been announced, and

383
00:18:01,480 --> 00:18:03,800
Speaker 8: also the location was a small town in Ohio, which

384
00:18:03,840 --> 00:18:06,479
Speaker 8: is obviously a swing state. And then it's okay, like

385
00:18:06,520 --> 00:18:08,680
Speaker 8: what are the logistics of it? And so we looked

386
00:18:08,720 --> 00:18:11,480
Speaker 8: at the map and we're like, okay, where's the nearest airport?

387
00:18:11,760 --> 00:18:14,640
Speaker 8: And so we found the nearest airport, and we were

388
00:18:14,680 --> 00:18:18,000
Speaker 8: looking at the flights that were coming in, and most

389
00:18:18,000 --> 00:18:20,080
Speaker 8: flights are a little po dunk things, but there was

390
00:18:20,119 --> 00:18:23,600
Speaker 8: this one random flight from Alaska that was coming in,

391
00:18:23,840 --> 00:18:26,840
Speaker 8: and it's like what is going on here? Like why

392
00:18:26,880 --> 00:18:29,359
Speaker 8: is a flight from Alaska coming into this random town

393
00:18:29,680 --> 00:18:32,640
Speaker 8: in Ohio? And we're like, okay, I think it might

394
00:18:32,680 --> 00:18:35,280
Speaker 8: be Sarah Palin And she was twenty five to one

395
00:18:35,280 --> 00:18:37,600
Speaker 8: odds and I put a thousand dollars on it, which

396
00:18:37,640 --> 00:18:40,320
Speaker 8: is a huge bet and ended up being Sarah Palin

397
00:18:40,400 --> 00:18:42,760
Speaker 8: and I made twenty five thousand.

398
00:18:42,480 --> 00:18:43,600
Speaker 3: Game change baby.

399
00:18:43,720 --> 00:18:44,000
Speaker 5: Yeah.

400
00:18:44,160 --> 00:18:45,639
Speaker 3: Heartwarming story, right.

401
00:18:46,280 --> 00:18:48,800
Speaker 4: I think so homework for the win to meet is

402
00:18:48,800 --> 00:18:49,680
Speaker 4: a heartwarming story.

403
00:18:49,760 --> 00:18:50,040
Speaker 9: Do over.

404
00:18:50,119 --> 00:18:53,000
Speaker 2: By the way, he made sixty k on that sixty

405
00:18:53,040 --> 00:18:55,760
Speaker 2: thousand dollars on that Taylor Swift bet, which that was

406
00:18:55,800 --> 00:18:57,480
Speaker 2: like a couple of days work for him.

407
00:18:57,520 --> 00:18:59,480
Speaker 5: So this guy is pretty.

408
00:18:59,200 --> 00:19:01,879
Speaker 3: Successful, yes, and at this point Domer is kind of

409
00:19:01,920 --> 00:19:02,200
Speaker 3: a pro.

410
00:19:02,320 --> 00:19:05,680
Speaker 4: But anybody can do this. So our wonderful producer, Jasmine JT.

411
00:19:05,840 --> 00:19:09,280
Speaker 4: Green say, Hi, Jasmine uh told me about this story

412
00:19:09,320 --> 00:19:11,160
Speaker 4: that I loved and have not been able to stop

413
00:19:11,200 --> 00:19:13,920
Speaker 4: thinking about. This guy, Cayden Booth, he was twenty one

414
00:19:14,280 --> 00:19:17,000
Speaker 4: and he decided he wanted to bet on the Super Bowl,

415
00:19:17,359 --> 00:19:18,960
Speaker 4: and he didn't want to bet on the game or.

416
00:19:18,880 --> 00:19:19,560
Speaker 3: The halftime show.

417
00:19:19,600 --> 00:19:23,080
Speaker 4: He wanted to bet on the national anthem, which seems

418
00:19:23,080 --> 00:19:24,200
Speaker 4: like a weird thing to bet on.

419
00:19:24,480 --> 00:19:25,200
Speaker 3: He was betting on.

420
00:19:25,119 --> 00:19:28,720
Speaker 4: The length of the national anthem specifically, which doesn't seem

421
00:19:28,760 --> 00:19:30,160
Speaker 4: like there should be that big of a range because

422
00:19:30,240 --> 00:19:32,320
Speaker 4: the song is the song is the song, but there's

423
00:19:32,400 --> 00:19:36,560
Speaker 4: actually a huge range. So back in nineteen ninety eight,

424
00:19:36,600 --> 00:19:39,359
Speaker 4: This is Jewel singing the national anthem. It's one of

425
00:19:39,400 --> 00:19:42,720
Speaker 4: the shortest national anthems in Super Bowl history, clopped in

426
00:19:42,720 --> 00:19:46,720
Speaker 4: at one minute in twenty seven seconds. Now, in twenty thirteen,

427
00:19:46,800 --> 00:19:49,560
Speaker 4: it was one of the longest national anthems in Super

428
00:19:49,600 --> 00:19:52,520
Speaker 4: Bowl history. It clocked in at two minutes and thirty

429
00:19:52,560 --> 00:19:57,080
Speaker 4: six seconds from the Lovely Miss Alicia Keys. So now

430
00:19:57,600 --> 00:20:02,119
Speaker 4: Cayden had to call this this year's Super Bowl national anthem.

431
00:20:02,240 --> 00:20:04,800
Speaker 4: Charlie Pooth was singing, and he had to figure out

432
00:20:05,440 --> 00:20:07,960
Speaker 4: where Charlie Pooth's national anthem was going to fall on

433
00:20:08,080 --> 00:20:10,679
Speaker 4: the like Star Spangled spectrum.

434
00:20:10,280 --> 00:20:13,480
Speaker 5: Yes, is he gonna hold the hind note from a

435
00:20:13,520 --> 00:20:14,200
Speaker 5: minute and a half?

436
00:20:14,480 --> 00:20:15,280
Speaker 3: Yes? Exactly?

437
00:20:15,320 --> 00:20:17,960
Speaker 4: Is he gonna be on the Jewel side or is

438
00:20:17,960 --> 00:20:20,280
Speaker 4: he gonna be on the Alicia Keys side? So he

439
00:20:20,359 --> 00:20:22,960
Speaker 4: was kind of poking around and he came across there

440
00:20:23,000 --> 00:20:24,520
Speaker 4: was this moment and he saw it and he was like,

441
00:20:24,600 --> 00:20:25,399
Speaker 4: this is my moment.

442
00:20:25,680 --> 00:20:26,480
Speaker 3: And what happened was.

443
00:20:26,440 --> 00:20:28,480
Speaker 4: He just saw a social media post from Charlie pooths

444
00:20:28,480 --> 00:20:30,480
Speaker 4: being like, hey headed to San Francisco. It's like a

445
00:20:30,480 --> 00:20:33,919
Speaker 4: week before the Super Bowl, and he thought, this.

446
00:20:33,840 --> 00:20:37,280
Speaker 3: Is my moment. He bought three things. He bought a stopwatch.

447
00:20:37,800 --> 00:20:41,800
Speaker 4: He bought this weird listening equipment that really serious bird

448
00:20:41,840 --> 00:20:46,280
Speaker 4: watchers use, yeah, exactly to listen to like distant bird calls.

449
00:20:46,320 --> 00:20:48,840
Speaker 4: And he bought a plane ticket to San Francisco. He

450
00:20:48,880 --> 00:20:51,760
Speaker 4: went to San Francisco. He stood outside of the stadium.

451
00:20:51,800 --> 00:20:55,000
Speaker 4: There he is, there's the weird bird watching. He stood

452
00:20:55,040 --> 00:20:57,240
Speaker 4: outside of the stadium and he was like, at some point,

453
00:20:57,400 --> 00:20:59,600
Speaker 4: Charlie Pooth is gonna come and he is going to

454
00:20:59,640 --> 00:21:02,760
Speaker 4: rehearse on site, and I'm gonna catch the sound with

455
00:21:02,800 --> 00:21:05,320
Speaker 4: my bird watching listening equipment.

456
00:21:05,400 --> 00:21:07,320
Speaker 3: I'm gonna time it. I'm gonna place my bet.

457
00:21:07,560 --> 00:21:10,720
Speaker 4: And he waited and he waited and he waited, and

458
00:21:10,760 --> 00:21:14,560
Speaker 4: then he heard the swell of the music. He hit

459
00:21:14,680 --> 00:21:17,159
Speaker 4: the timer and clopped it in. I think you can

460
00:21:17,240 --> 00:21:20,080
Speaker 4: see it there. At a minute fifty one, he placed

461
00:21:20,119 --> 00:21:23,719
Speaker 4: his bet. He won thousands of dollars homework for the win.

462
00:21:23,960 --> 00:21:25,040
Speaker 5: Okay, two things, Stacy.

463
00:21:25,160 --> 00:21:28,360
Speaker 2: One is, this is not heartwarming to me because if

464
00:21:28,400 --> 00:21:30,359
Speaker 2: I'm gonna bet on this, I have the bet against

465
00:21:30,359 --> 00:21:32,440
Speaker 2: this guy with the parabolic mic and the plane ticket

466
00:21:32,440 --> 00:21:33,080
Speaker 2: and the stop watching.

467
00:21:33,160 --> 00:21:35,720
Speaker 3: He did his homework. Okay, this feels fair to me.

468
00:21:36,560 --> 00:21:41,040
Speaker 2: Problem number two is what happened, Stacy if Charlie Pooth deliberately,

469
00:21:41,880 --> 00:21:44,680
Speaker 2: you know, swayed the you know, he held the high

470
00:21:44,720 --> 00:21:47,800
Speaker 2: notes for longer than he intended to during the Super Bowl,

471
00:21:47,920 --> 00:21:50,080
Speaker 2: placed a bet and took five million dollars from this guy.

472
00:21:50,359 --> 00:21:52,840
Speaker 4: Yes, so these markets, it is true, have always had

473
00:21:52,840 --> 00:21:56,280
Speaker 4: an insider trading problem, but now that they're getting bigger

474
00:21:56,400 --> 00:21:58,840
Speaker 4: and more money is going into them, the insider trading

475
00:21:58,920 --> 00:22:03,960
Speaker 4: problem is getting much larger. This is especially true in sports.

476
00:22:04,240 --> 00:22:07,520
Speaker 4: Of course, everyone loves sports betting. Sports betting, you can

477
00:22:07,560 --> 00:22:09,960
Speaker 4: bet on everything from like the color of socks that

478
00:22:10,080 --> 00:22:13,760
Speaker 4: some athlete is going to wear, to how many fouls

479
00:22:13,760 --> 00:22:15,240
Speaker 4: there's going to be to how many free throws. So

480
00:22:15,320 --> 00:22:17,359
Speaker 4: you can bet on every aspect of every sports game.

481
00:22:17,480 --> 00:22:24,240
Speaker 4: And some people have really taken this kind of insider

482
00:22:24,280 --> 00:22:27,680
Speaker 4: trading to almost an art form. So there is an athlete,

483
00:22:27,760 --> 00:22:32,959
Speaker 4: Johntay Porter. He was with the Toronto Raptors and he

484
00:22:33,040 --> 00:22:36,960
Speaker 4: was accused of basically making bets on the sideline saying

485
00:22:36,960 --> 00:22:40,160
Speaker 4: I'm about to go in and fake an injury and

486
00:22:40,440 --> 00:22:42,600
Speaker 4: place a bet, and he would go in and fake

487
00:22:42,640 --> 00:22:44,240
Speaker 4: an injury and win all the time.

488
00:22:44,400 --> 00:22:46,680
Speaker 2: These aren't necessarily prediction markets, right that you're talking about.

489
00:22:46,720 --> 00:22:49,560
Speaker 2: This is traditional sports betting with Johntay Porter. And the

490
00:22:49,560 --> 00:22:52,600
Speaker 2: other thing is this could happen in all sorts of

491
00:22:52,680 --> 00:22:56,000
Speaker 2: other domains, and that, to me is what's kind of

492
00:22:56,119 --> 00:22:58,679
Speaker 2: so distressing about this.

493
00:22:59,160 --> 00:23:02,520
Speaker 4: So Johntey was banned for life from the NBA, but

494
00:23:02,600 --> 00:23:05,560
Speaker 4: these issues have happened on professional sports leagues and college

495
00:23:05,600 --> 00:23:09,199
Speaker 4: sports leagues. And here's the thing that shocks me and

496
00:23:09,320 --> 00:23:11,639
Speaker 4: makes me think that maybe this is all going in

497
00:23:11,680 --> 00:23:13,840
Speaker 4: the direction of casinos and hedge funds.

498
00:23:14,320 --> 00:23:16,960
Speaker 3: You think that sports leagues would be horrified by this, right,

499
00:23:17,000 --> 00:23:18,440
Speaker 3: it's terrible for sportsmanship.

500
00:23:18,560 --> 00:23:20,600
Speaker 4: Who wants to watch a game where people are throwing

501
00:23:20,640 --> 00:23:24,000
Speaker 4: the game or wearing socks or missing free throws because

502
00:23:24,000 --> 00:23:27,160
Speaker 4: they can get some side money. But no, the biggest

503
00:23:27,200 --> 00:23:30,199
Speaker 4: thing the sports leagues are worried about is getting a

504
00:23:30,240 --> 00:23:33,960
Speaker 4: cut of the action. National Hockey League, Major League Soccer

505
00:23:34,320 --> 00:23:38,200
Speaker 4: have signed deals with poly Market, basically exclusivity deals so

506
00:23:38,280 --> 00:23:39,760
Speaker 4: Polymarket can offer bets on.

507
00:23:39,720 --> 00:23:42,160
Speaker 3: Them and they are cashing in.

508
00:23:42,240 --> 00:23:45,600
Speaker 4: And the New York Stock Exchange bought a huge chunk

509
00:23:45,640 --> 00:23:49,359
Speaker 4: of poly Market. They too are cashing in, which makes

510
00:23:49,440 --> 00:23:52,040
Speaker 4: me think that poly market and call she and all

511
00:23:52,080 --> 00:23:54,840
Speaker 4: the glories of homework are now going in the direction

512
00:23:55,000 --> 00:23:58,120
Speaker 4: of casinos and hedge funds, and that these big rich

513
00:23:58,160 --> 00:24:02,240
Speaker 4: players can buy an edge or make an edge in

514
00:24:02,320 --> 00:24:11,639
Speaker 4: this case, and that homework once again is for suckers.

515
00:24:14,240 --> 00:24:18,960
Speaker 2: I also just worry Stacey that we're trivializing important stuff.

516
00:24:19,080 --> 00:24:23,080
Speaker 2: Like let's look at this ad that Calshi has been running.

517
00:24:23,119 --> 00:24:24,719
Speaker 2: I think I saw this during the Olympics, but it's

518
00:24:24,800 --> 00:24:26,760
Speaker 2: it's been out there for a couple of months.

519
00:24:26,840 --> 00:24:30,120
Speaker 3: This is how Calshi is promoting itself. History has taught

520
00:24:30,200 --> 00:24:33,000
Speaker 3: us anything. It's not to root against the underdog.

521
00:24:32,680 --> 00:24:32,959
Speaker 1: All right.

522
00:24:33,000 --> 00:24:38,040
Speaker 2: So you see David with a sling shot Paul Revere ride.

523
00:24:38,160 --> 00:24:42,240
Speaker 2: People are betting on whether the Right Brothers plane will crash.

524
00:24:42,320 --> 00:24:46,119
Speaker 2: I guess, will prisoners escape out?

525
00:24:46,200 --> 00:24:48,000
Speaker 5: The tras just Sparta win the war.

526
00:24:48,480 --> 00:24:51,200
Speaker 2: It's like a three hundred scene here, And I guess

527
00:24:51,240 --> 00:24:55,240
Speaker 2: the point is, like, hey, all these historical events, you

528
00:24:55,280 --> 00:24:57,280
Speaker 2: may think of them as historical events, but they're just

529
00:24:57,320 --> 00:24:58,320
Speaker 2: betting opportunities.

530
00:24:59,000 --> 00:25:01,399
Speaker 3: I will say they were betting up.

531
00:25:01,440 --> 00:25:04,760
Speaker 1: It's like we know in fact that there were prediction

532
00:25:04,880 --> 00:25:07,000
Speaker 1: markets on the Revolutionary.

533
00:25:06,320 --> 00:25:09,200
Speaker 7: War and we think that we've invented something new, as

534
00:25:09,200 --> 00:25:12,000
Speaker 7: we always do on the internet, but as we found

535
00:25:12,000 --> 00:25:16,200
Speaker 7: a business history. People want to gamble and they want

536
00:25:16,200 --> 00:25:18,280
Speaker 7: to know the future, and that has always been the case.

537
00:25:18,960 --> 00:25:20,399
Speaker 3: So can we check you in on the market?

538
00:25:20,480 --> 00:25:26,320
Speaker 5: Can Yeah, let's just see how it's going. It's one,

539
00:25:26,840 --> 00:25:29,760
Speaker 5: it's at fifty six cents. What oh, it just dropped.

540
00:25:29,800 --> 00:25:31,720
Speaker 5: It is at whale.

541
00:25:32,440 --> 00:25:35,439
Speaker 3: Now remember remember on AirFest whale.

542
00:25:35,640 --> 00:25:36,600
Speaker 5: Just get against them.

543
00:25:38,200 --> 00:25:41,840
Speaker 7: Because we're part way through this session, people have looked around.

544
00:25:42,200 --> 00:25:44,320
Speaker 7: They have determined that not a lot of people have

545
00:25:44,480 --> 00:25:48,200
Speaker 7: left so far, and so they are reevaluating what they

546
00:25:48,280 --> 00:25:50,959
Speaker 7: think of this question. Whether ten percent of the audience

547
00:25:51,000 --> 00:25:52,440
Speaker 7: is going to leave the room or note.

548
00:25:52,280 --> 00:25:54,720
Speaker 3: If there's also pressure to not leave, because.

549
00:25:56,560 --> 00:25:59,880
Speaker 7: We will close our eyes for ten seconds. If any

550
00:26:00,040 --> 00:26:04,800
Speaker 7: one wants to make a batary anybody, anybody.

551
00:26:04,280 --> 00:26:05,560
Speaker 5: We will call you out. Okay.

552
00:26:05,840 --> 00:26:08,800
Speaker 1: We know that prediction markets, not just gambling, but real

553
00:26:08,840 --> 00:26:10,520
Speaker 1: prediction markets go back.

554
00:26:10,680 --> 00:26:12,920
Speaker 3: At least five hundred years.

555
00:26:13,560 --> 00:26:16,679
Speaker 1: They go back to Italy in the fifteen hundreds and

556
00:26:16,760 --> 00:26:19,560
Speaker 1: the big market there, the big prediction market in Italy

557
00:26:20,119 --> 00:26:24,120
Speaker 1: scomeza farel papa betting on who's going to be the

558
00:26:24,160 --> 00:26:28,600
Speaker 1: Pope Papa. And it makes sense both that it's in

559
00:26:28,640 --> 00:26:32,000
Speaker 1: Italy and that's what they were betting on, because this

560
00:26:32,160 --> 00:26:35,120
Speaker 1: was the time Italy in the fifteen hundreds when modern

561
00:26:35,320 --> 00:26:39,440
Speaker 1: finances emerging in Europe, the first banks are being established,

562
00:26:39,600 --> 00:26:43,320
Speaker 1: the medici are running Florence, and so you see these

563
00:26:43,400 --> 00:26:46,800
Speaker 1: laws being passed to give brokers in Rome and Florence

564
00:26:47,280 --> 00:26:49,640
Speaker 1: a monopoly on these prediction markets.

565
00:26:50,400 --> 00:26:53,360
Speaker 3: And then the Il Papa part also makes sense.

566
00:26:53,160 --> 00:26:57,280
Speaker 1: Because predicting the next pope in the fifteen hundreds was

567
00:26:57,400 --> 00:27:00,520
Speaker 1: like the super Bowl and the presidential election rolled into

568
00:27:00,520 --> 00:27:03,840
Speaker 1: one lottery and a lottery. Sure, you know, the pope

569
00:27:04,200 --> 00:27:07,640
Speaker 1: had a tremendous amount of political power. It mattered if

570
00:27:07,640 --> 00:27:09,439
Speaker 1: you were a wool merchant in England or if you

571
00:27:09,480 --> 00:27:10,879
Speaker 1: were the king of France or whatever.

572
00:27:10,960 --> 00:27:12,720
Speaker 3: It mattered who was going to be the next pope.

573
00:27:12,760 --> 00:27:17,120
Speaker 1: And so you see ambassadors writing back home every time

574
00:27:17,160 --> 00:27:20,480
Speaker 1: there's a conclave like who is papabul who's popable? They

575
00:27:20,520 --> 00:27:25,360
Speaker 1: would ask, And these brokers who have the monopoly they

576
00:27:25,440 --> 00:27:28,119
Speaker 1: print up chid they like they would. That's like a

577
00:27:28,200 --> 00:27:32,040
Speaker 1: voucher today, like tickets with each cardinals or all the

578
00:27:32,119 --> 00:27:35,360
Speaker 1: like possible guys' names on them, and they pay off

579
00:27:35,359 --> 00:27:38,200
Speaker 1: for one hundred scootye, and you buy it for whatever

580
00:27:38,680 --> 00:27:42,359
Speaker 1: fractional probability the guy is selling it exactly like prediction.

581
00:27:42,040 --> 00:27:42,960
Speaker 3: Markets work today.

582
00:27:43,840 --> 00:27:48,399
Speaker 1: And for example, in fifteen forty nine, there was a

583
00:27:48,440 --> 00:27:52,760
Speaker 1: Conclave and at one moment Cardinal Poll of England was

584
00:27:52,800 --> 00:27:57,440
Speaker 1: at eighty percent in the voting heavy favorite. And interestingly

585
00:27:57,520 --> 00:28:00,439
Speaker 1: we know now from the historical record, but at that

586
00:28:00,640 --> 00:28:04,480
Speaker 1: moment he did in fact have twenty six of the.

587
00:28:04,480 --> 00:28:08,680
Speaker 3: Twenty eight votes he needed. That market was reflecting reality.

588
00:28:08,960 --> 00:28:10,960
Speaker 5: How could they possibly know that the people who are

589
00:28:11,000 --> 00:28:11,560
Speaker 5: betting on it.

590
00:28:12,280 --> 00:28:15,280
Speaker 3: Could the Cardinals have been insider trade?

591
00:28:15,600 --> 00:28:16,320
Speaker 5: Oh muldeu.

592
00:28:16,600 --> 00:28:16,840
Speaker 2: No.

593
00:28:17,160 --> 00:28:20,240
Speaker 1: Look, if you saw the movie Conclave, right that the

594
00:28:20,280 --> 00:28:22,879
Speaker 1: Conclave is supposed to be sealed, like literally the word

595
00:28:23,000 --> 00:28:26,960
Speaker 1: conclave is like kon kiavik kum klavis right with the key.

596
00:28:27,000 --> 00:28:28,640
Speaker 3: It's a room that's closed with a key.

597
00:28:29,359 --> 00:28:32,520
Speaker 1: But yes, obviously the Cardinals were insider trading, right, of

598
00:28:32,560 --> 00:28:33,200
Speaker 1: course they were.

599
00:28:33,320 --> 00:28:35,840
Speaker 3: This is how it got out. And now there is

600
00:28:35,880 --> 00:28:37,360
Speaker 3: this question, right stay.

601
00:28:37,200 --> 00:28:40,840
Speaker 1: Saying next, you guys just talked about why prediction markets

602
00:28:40,880 --> 00:28:44,920
Speaker 1: are so bad and fair enough, but put yourself in

603
00:28:44,960 --> 00:28:47,120
Speaker 1: the shoes of the British wool merchant or of the

604
00:28:47,400 --> 00:28:50,400
Speaker 1: ambassador or whatever. These people who really need to know

605
00:28:50,440 --> 00:28:52,760
Speaker 1: who's going to be the pope. Lives depend on it,

606
00:28:52,840 --> 00:28:57,280
Speaker 1: livelihoods depend on it. And so this insider trading by

607
00:28:57,320 --> 00:29:00,800
Speaker 1: the cardinals. Yes, it's unfair, Sure it's gross, but it

608
00:29:00,880 --> 00:29:04,720
Speaker 1: is useful information. And it's helpful if you're the ambassador

609
00:29:04,760 --> 00:29:06,880
Speaker 1: who needs to know, if you're the wool merchant who

610
00:29:06,920 --> 00:29:10,200
Speaker 1: needs to know, it's good to know what's going on inside.

611
00:29:09,800 --> 00:29:11,880
Speaker 3: The locked room. Although I should say.

612
00:29:12,080 --> 00:29:14,719
Speaker 1: That Cardinal Pole, that guy who was trading at eighty percent,

613
00:29:15,360 --> 00:29:16,040
Speaker 1: he did not win.

614
00:29:16,480 --> 00:29:19,480
Speaker 3: A French cardinal showed up at the last minute.

615
00:29:19,200 --> 00:29:22,520
Speaker 1: An accused Pole of being a crypto Lutheran, not a

616
00:29:22,520 --> 00:29:26,760
Speaker 1: bitcoin trader, but a secret Protestant, and the papacy went

617
00:29:26,800 --> 00:29:28,520
Speaker 1: to an Italian cardinal instead.

618
00:29:28,760 --> 00:29:30,720
Speaker 3: Your bet on Pole was now worth zero weaping in

619
00:29:30,720 --> 00:29:31,080
Speaker 3: the street.

620
00:29:31,120 --> 00:29:34,400
Speaker 2: It's basically the Jerome Powell renovation of yes sixteenth.

621
00:29:35,000 --> 00:29:36,440
Speaker 5: Exactly right, exactly right.

622
00:29:36,640 --> 00:29:39,400
Speaker 7: I've done this sort of history of the opportunities of betting,

623
00:29:39,440 --> 00:29:42,640
Speaker 7: but there's also a history of the backlash to betting

624
00:29:42,720 --> 00:29:45,400
Speaker 7: on real events. We're gonna forget Europe for a second

625
00:29:45,440 --> 00:29:48,040
Speaker 7: and move to America in the eighteen hundreds and the

626
00:29:48,040 --> 00:29:51,040
Speaker 7: early nineteen hundreds. The big question, of course, was similar

627
00:29:51,040 --> 00:29:52,560
Speaker 7: to the pope one, which is who is going to

628
00:29:52,560 --> 00:29:54,880
Speaker 7: be the next president? In the United States. There was

629
00:29:54,920 --> 00:29:57,560
Speaker 7: not polling at the time, and so they tried unique

630
00:29:57,760 --> 00:30:00,240
Speaker 7: things to figure out who the next president was be

631
00:30:00,680 --> 00:30:04,400
Speaker 7: Reporters would go to bars and count the number of.

632
00:30:04,440 --> 00:30:06,240
Speaker 5: Toasts to the various candidates.

633
00:30:06,280 --> 00:30:09,440
Speaker 7: They would be like huzzal William Harrison, and they can't

634
00:30:09,680 --> 00:30:11,800
Speaker 7: mark that down. This was a terrible way to predict

635
00:30:11,920 --> 00:30:12,600
Speaker 7: the presidency.

636
00:30:13,240 --> 00:30:16,440
Speaker 3: Only drinking, but the most fun but the most fun bah.

637
00:30:17,480 --> 00:30:21,080
Speaker 7: And there were actual prediction markets in presidential elections. They

638
00:30:21,120 --> 00:30:24,360
Speaker 7: tried that, but then States thought this is a terrible idea,

639
00:30:24,400 --> 00:30:27,440
Speaker 7: and in the nineteen twenties they decide that they are

640
00:30:27,440 --> 00:30:29,760
Speaker 7: going to basically outlaw this kind of betting in the

641
00:30:29,800 --> 00:30:32,959
Speaker 7: United States of America. Now it does come back, and

642
00:30:33,040 --> 00:30:36,760
Speaker 7: it comes back prediction markets from an unlikely source. At

643
00:30:36,760 --> 00:30:40,920
Speaker 7: the beginning of the twenty first century. The source of

644
00:30:41,000 --> 00:30:45,800
Speaker 7: prediction markets is the US government. The US government decides

645
00:30:45,840 --> 00:30:50,400
Speaker 7: they're going to see if people can bet on terrorism.

646
00:30:51,080 --> 00:30:56,239
Speaker 7: Let me explain, all right, May of two thousand and one, DARPA. Now,

647
00:30:56,280 --> 00:30:58,720
Speaker 7: I know it sounds like a H. James Bond bad guy,

648
00:30:58,760 --> 00:31:01,080
Speaker 7: but DARPA is the research which arm of the Pentagon.

649
00:31:01,320 --> 00:31:03,560
Speaker 7: They're the people who helped bring us the Internet, and

650
00:31:03,600 --> 00:31:07,440
Speaker 7: they put out this call for proposals for quote electronic

651
00:31:07,640 --> 00:31:13,400
Speaker 7: market based decision support. The proposal is basically asking, can

652
00:31:13,520 --> 00:31:16,120
Speaker 7: prediction markets help the US government predict what's going to

653
00:31:16,200 --> 00:31:19,640
Speaker 7: happen around the world, Like maybe in the coming year,

654
00:31:19,720 --> 00:31:24,000
Speaker 7: what's the probability of a revolution in Tunisia? What will

655
00:31:24,040 --> 00:31:26,160
Speaker 7: the economic growth in Mexico be? These are things the

656
00:31:26,200 --> 00:31:28,640
Speaker 7: US government wants to know. And you know, the smart

657
00:31:28,640 --> 00:31:31,240
Speaker 7: guys they are playing around with prediction markets because the

658
00:31:31,280 --> 00:31:33,560
Speaker 7: Internet has just come in. People are obviously using the

659
00:31:33,560 --> 00:31:37,000
Speaker 7: Internet for betting already, and so DARPA thinks we should

660
00:31:37,120 --> 00:31:38,480
Speaker 7: give this a try and see.

661
00:31:38,280 --> 00:31:39,000
Speaker 5: What's going to happen.

662
00:31:39,040 --> 00:31:39,280
Speaker 3: Now.

663
00:31:39,600 --> 00:31:42,000
Speaker 7: They put out the call for this in May of

664
00:31:42,040 --> 00:31:44,200
Speaker 7: two thousand and one. I don't need to tell you

665
00:31:44,280 --> 00:31:47,800
Speaker 7: that on September eleventh, two thousand and one, the World

666
00:31:47,840 --> 00:31:51,240
Speaker 7: Trade Sitter is attacked and it's the worst attack on America.

667
00:31:51,320 --> 00:31:56,440
Speaker 7: Sin's pearl harbor, and this should affect the market.

668
00:31:57,200 --> 00:31:59,080
Speaker 5: But DARPA thinks.

669
00:31:58,920 --> 00:32:03,280
Speaker 7: Actually, this is a case for having prediction markets for terrorism.

670
00:32:03,960 --> 00:32:06,440
Speaker 7: There is all of this stuff happening in the world.

671
00:32:06,480 --> 00:32:09,760
Speaker 7: We need better ways to predict the future. And for

672
00:32:09,800 --> 00:32:11,600
Speaker 7: those of you who read the nine eleven report, there

673
00:32:11,600 --> 00:32:15,080
Speaker 7: were people who knew parts of the story. It just

674
00:32:15,160 --> 00:32:17,280
Speaker 7: was in different agencies, different people. It was hard to

675
00:32:17,320 --> 00:32:19,320
Speaker 7: tell the signal from the noise. If there's one thing

676
00:32:19,320 --> 00:32:22,640
Speaker 7: a betting market does is it aggregates all this information

677
00:32:23,000 --> 00:32:24,240
Speaker 7: in one place.

678
00:32:24,640 --> 00:32:26,560
Speaker 5: So Darbitt decides they're going to go forward with this.

679
00:32:26,600 --> 00:32:29,120
Speaker 7: They pay a million dollars and they start a market

680
00:32:29,160 --> 00:32:33,240
Speaker 7: called PAM, a Policy analysis market.

681
00:32:33,480 --> 00:32:35,400
Speaker 3: I don't know if that's their actual logo, but I hope.

682
00:32:35,400 --> 00:32:37,520
Speaker 5: So it's got a rainbows.

683
00:32:37,840 --> 00:32:41,240
Speaker 7: That's how the web used to look. Oh, I love it.

684
00:32:41,280 --> 00:32:44,000
Speaker 7: What the rain It's got a rainbow? The world supply

685
00:32:44,040 --> 00:32:45,920
Speaker 7: and demand curve, I believe over there on the market

686
00:32:45,960 --> 00:32:48,120
Speaker 7: part of it. So one of the main proponents of

687
00:32:48,160 --> 00:32:50,760
Speaker 7: this is an economist named Robin Hanson. He's still a

688
00:32:50,760 --> 00:32:54,240
Speaker 7: proponent of prediction markets, former Silicon Valley guy. And the

689
00:32:54,280 --> 00:32:56,720
Speaker 7: market is all set to open in the summer of

690
00:32:56,720 --> 00:32:59,240
Speaker 7: two thousand and three. Now it's just going to be

691
00:32:59,280 --> 00:33:00,680
Speaker 7: a sample market. In terrorism.

692
00:33:00,720 --> 00:33:02,560
Speaker 5: It's just gonna be about the Middle East.

693
00:33:03,000 --> 00:33:06,040
Speaker 7: And they are only gonna give testers one hundred dollars

694
00:33:06,080 --> 00:33:08,040
Speaker 7: to trade, so you can't make a million dollars un

695
00:33:08,040 --> 00:33:09,520
Speaker 7: predicting what's gonna happen in Middle East.

696
00:33:09,640 --> 00:33:11,160
Speaker 5: But they're just gonna play around with this.

697
00:33:12,160 --> 00:33:14,960
Speaker 7: And then in July of two thousand and three, a

698
00:33:15,000 --> 00:33:19,560
Speaker 7: few Democratic senators learn about the plan, and I believe

699
00:33:19,600 --> 00:33:22,480
Speaker 7: get wind of is the official Washington term. They get

700
00:33:22,480 --> 00:33:26,200
Speaker 7: wind of this plan, and the Democratic senators are not

701
00:33:26,880 --> 00:33:30,520
Speaker 7: happy about this. They are Byron Dorgan of South Dakota

702
00:33:31,280 --> 00:33:33,480
Speaker 7: and Ron Wyden of Oregon.

703
00:33:33,840 --> 00:33:35,800
Speaker 5: Look at those guys, and on.

704
00:33:35,800 --> 00:33:39,480
Speaker 7: July twenty eighth, they call a press conference. They call

705
00:33:39,480 --> 00:33:41,200
Speaker 7: a press conference. You're gonna have to We have a

706
00:33:41,200 --> 00:33:43,120
Speaker 7: picture up of them smiling, but you're gonna have to

707
00:33:43,400 --> 00:33:45,360
Speaker 7: picture them being incredibly mad.

708
00:33:45,800 --> 00:33:47,520
Speaker 5: This is what Dorgan says.

709
00:33:48,160 --> 00:33:51,800
Speaker 7: The idea of a federal betting parlor on atrocities and

710
00:33:51,920 --> 00:33:54,400
Speaker 7: terrorism is ridiculous and it's grotesque.

711
00:33:54,520 --> 00:33:55,280
Speaker 3: Grotesque.

712
00:33:55,440 --> 00:33:57,040
Speaker 7: Yeah, sounds bad when you put it that way, right,

713
00:33:57,040 --> 00:34:00,400
Speaker 7: Wyden says, why wouldn't terrorists just hop online and start

714
00:34:00,440 --> 00:34:03,880
Speaker 7: betting if they couldn't either mislead American authorities about their

715
00:34:03,920 --> 00:34:07,120
Speaker 7: plans or make money to fund more al Qaeda operations.

716
00:34:08,160 --> 00:34:11,200
Speaker 7: They say that it is morally wrong. And this, of

717
00:34:11,200 --> 00:34:16,080
Speaker 7: course was a huge story boiled down, not the subtle

718
00:34:16,120 --> 00:34:20,560
Speaker 7: economics of it, but really, just like Pentagon kills terror,

719
00:34:20,640 --> 00:34:26,040
Speaker 7: futures market sounds terrible, but there is something really deep here,

720
00:34:26,080 --> 00:34:28,640
Speaker 7: and something that gets to the heart of our relationship

721
00:34:28,680 --> 00:34:29,680
Speaker 7: with prediction markets.

722
00:34:30,160 --> 00:34:31,760
Speaker 5: People love to gamble.

723
00:34:31,920 --> 00:34:36,080
Speaker 7: There are real reasons to gamble, but people hate the

724
00:34:36,280 --> 00:34:41,319
Speaker 7: idea of gambling. It's unseemly, and they find gambling on

725
00:34:41,480 --> 00:34:44,840
Speaker 7: important things morally repugnant, things like will there be a

726
00:34:44,960 --> 00:34:48,160
Speaker 7: terrorist attack. So literally the day the Senators hold the

727
00:34:48,160 --> 00:34:51,640
Speaker 7: press conference, the Deputy Secretary of Defense says, I have

728
00:34:51,760 --> 00:34:54,319
Speaker 7: never heard of that program until I read about it

729
00:34:54,360 --> 00:34:56,120
Speaker 7: in the paper today, And yes.

730
00:34:56,280 --> 00:34:58,040
Speaker 5: Obviously we're going to kill the program.

731
00:34:58,360 --> 00:35:00,960
Speaker 7: The government will do without the election tronic market based

732
00:35:00,960 --> 00:35:04,799
Speaker 7: decision support, there will be no betting on terrorism, and

733
00:35:04,880 --> 00:35:07,640
Speaker 7: the prediction markets basically fade away until the rise of

734
00:35:07,640 --> 00:35:12,000
Speaker 7: Calshi and polymarket. Who took this lesson to heart because

735
00:35:12,000 --> 00:35:14,760
Speaker 7: the one thing they do not call it is gambling.

736
00:35:15,239 --> 00:35:17,160
Speaker 5: It's prediction sounds much better.

737
00:35:21,680 --> 00:35:23,160
Speaker 3: We're going to wrap up the history section.

738
00:35:24,520 --> 00:35:28,200
Speaker 1: But before we do that, I want to go back

739
00:35:28,440 --> 00:35:30,440
Speaker 1: to Italy in the fifteen hundreds.

740
00:35:30,400 --> 00:35:32,120
Speaker 5: For just have money on that you win.

741
00:35:32,719 --> 00:35:34,319
Speaker 1: And the thing I want to point out is this

742
00:35:34,440 --> 00:35:36,880
Speaker 1: tension between like we want to gamble, we want information

743
00:35:36,880 --> 00:35:37,279
Speaker 1: about the.

744
00:35:37,239 --> 00:35:40,120
Speaker 3: Future, but also we hate it when people do that.

745
00:35:40,120 --> 00:35:42,640
Speaker 1: That has always been there, that was there from the

746
00:35:42,680 --> 00:35:47,080
Speaker 1: beginning in the fifteen hundreds, and in fact, in fifteen ninety,

747
00:35:47,800 --> 00:35:53,200
Speaker 1: Pope Gregory the fourth issued a papal bull banning Scomez

748
00:35:53,440 --> 00:35:56,040
Speaker 1: fai papa, banning betting on who is going to be.

749
00:35:56,040 --> 00:35:57,960
Speaker 3: The next Pope. That is him. I don't know if

750
00:35:57,960 --> 00:35:59,080
Speaker 3: that's his papal bull in his.

751
00:35:58,960 --> 00:36:04,080
Speaker 1: Hand, but he is waving, waving, goodbye, Papa. The penalty

752
00:36:04,560 --> 00:36:08,600
Speaker 1: was excommunication, and amazingly it worked.

753
00:36:09,080 --> 00:36:10,560
Speaker 3: Prediction markets on.

754
00:36:10,600 --> 00:36:12,239
Speaker 1: Who was going to be the next Pope seem to

755
00:36:12,320 --> 00:36:16,200
Speaker 1: have gone away after this point. You don't see ambassadors

756
00:36:16,200 --> 00:36:19,319
Speaker 1: writing home about it anymore, and so you know what

757
00:36:19,400 --> 00:36:23,600
Speaker 1: has happened. The church seems less gross and maybe less corrupt.

758
00:36:23,719 --> 00:36:24,600
Speaker 3: The Pope talked.

759
00:36:24,360 --> 00:36:27,279
Speaker 1: About how we shouldn't combine the most holy thing in

760
00:36:27,280 --> 00:36:28,880
Speaker 1: the world with the corruption of the market.

761
00:36:29,000 --> 00:36:31,560
Speaker 3: Right and emotionally, that is resonant.

762
00:36:32,080 --> 00:36:34,640
Speaker 1: It's the counter reformation, right, So it's also good for

763
00:36:34,680 --> 00:36:37,760
Speaker 1: business at this moment if the Catholic Church seems less corrupt.

764
00:36:38,280 --> 00:36:41,720
Speaker 1: But on the other hand, the people who really needed

765
00:36:41,719 --> 00:36:44,880
Speaker 1: that information about who was gonna be the next pope

766
00:36:45,360 --> 00:36:48,239
Speaker 1: don't have it anymore. They have less idea about this

767
00:36:48,360 --> 00:36:50,400
Speaker 1: important thing that's gonna happen, and so there is this

768
00:36:50,480 --> 00:36:51,000
Speaker 1: trade off.

769
00:36:52,000 --> 00:36:55,879
Speaker 3: Last thought before we talk it out is it's easy to.

770
00:36:55,920 --> 00:36:59,400
Speaker 1: Think, oh, prediction markets, like the modern world is so gross,

771
00:36:59,440 --> 00:37:00,879
Speaker 1: everything is just getting worse.

772
00:37:01,360 --> 00:37:02,960
Speaker 3: That is clearly not true, right.

773
00:37:03,000 --> 00:37:05,160
Speaker 1: This is not a line where things are getting more

774
00:37:05,200 --> 00:37:08,480
Speaker 1: and more gambly, more and more degenerate. This is a

775
00:37:08,480 --> 00:37:11,360
Speaker 1: pendulum that has been swinging back and forth for literally

776
00:37:11,440 --> 00:37:12,200
Speaker 1: hundreds of years.

777
00:37:12,360 --> 00:37:12,839
Speaker 3: And so the.

778
00:37:12,880 --> 00:37:17,640
Speaker 1: Question I would pose as we as we finish is

779
00:37:17,640 --> 00:37:19,239
Speaker 1: is there going to be a backlash? When is the

780
00:37:19,239 --> 00:37:20,399
Speaker 1: pendulum going to swing back?

781
00:37:20,440 --> 00:37:22,080
Speaker 7: And just to be clear, this Papa Bowl is still

782
00:37:22,080 --> 00:37:25,200
Speaker 7: in effect, so the current pope cannot bet on Jesus

783
00:37:25,360 --> 00:37:26,600
Speaker 7: Nust returning.

784
00:37:27,520 --> 00:37:29,880
Speaker 1: He would have to do it through maybe a cardinal

785
00:37:30,480 --> 00:37:33,319
Speaker 1: cardinal but yeah, so what do you think is this?

786
00:37:33,560 --> 00:37:35,760
Speaker 7: Are we going to enter the era where everyone's betting

787
00:37:35,760 --> 00:37:38,600
Speaker 7: on everything or will it swing back where it becomes

788
00:37:38,680 --> 00:37:40,040
Speaker 7: morally repugnant in a way.

789
00:37:40,760 --> 00:37:46,680
Speaker 4: I think this is different than the Papa voting because

790
00:37:47,400 --> 00:37:50,759
Speaker 4: you can bet on everything and we are all so connected.

791
00:37:51,040 --> 00:37:53,280
Speaker 4: I just think this betting is on another level.

792
00:37:53,440 --> 00:37:56,479
Speaker 2: I feel like there are so many ways in which

793
00:37:56,520 --> 00:37:59,160
Speaker 2: you take these kind of things that have happened through

794
00:37:59,239 --> 00:38:02,719
Speaker 2: history and then you turbocharge them with the Internet and

795
00:38:02,760 --> 00:38:06,120
Speaker 2: you get something like say's saying different and and I

796
00:38:06,160 --> 00:38:09,160
Speaker 2: don't know, I mean putting these papal markets for instance,

797
00:38:09,920 --> 00:38:10,279
Speaker 2: did how.

798
00:38:10,239 --> 00:38:11,760
Speaker 5: Did you have to bet Jacob?

799
00:38:11,800 --> 00:38:13,160
Speaker 2: You had to like fill out a piece of paper

800
00:38:13,160 --> 00:38:17,719
Speaker 2: and like physically handed to too much friction I mean

801
00:38:17,800 --> 00:38:21,759
Speaker 2: more certainly more friction, and you didn't have all this

802
00:38:21,920 --> 00:38:24,640
Speaker 2: marketing behind it. It does feel like there is just

803
00:38:24,760 --> 00:38:26,520
Speaker 2: it's hard to say that this isn't going to go away,

804
00:38:26,560 --> 00:38:29,879
Speaker 2: because this stuff just feels like it's everywhere right now.

805
00:38:29,920 --> 00:38:34,799
Speaker 2: Just every part of life is being financialized, being turned

806
00:38:34,800 --> 00:38:36,440
Speaker 2: into gambling, essentially.

807
00:38:36,080 --> 00:38:37,120
Speaker 5: Including journalism.

808
00:38:37,360 --> 00:38:41,680
Speaker 7: Journalistic organizations have partnered with betting platforms because what they

809
00:38:41,719 --> 00:38:44,839
Speaker 7: see is that people are using this as a way

810
00:38:44,880 --> 00:38:47,600
Speaker 7: to get information. Why wait on what the news is

811
00:38:47,640 --> 00:38:50,080
Speaker 7: going to tell you about that was on Twitter or

812
00:38:50,120 --> 00:38:53,359
Speaker 7: on the polymarket. When you can sign up yourself and

813
00:38:53,440 --> 00:38:57,080
Speaker 7: see the moment the bet changes, the moment something pops.

814
00:38:57,360 --> 00:38:59,600
Speaker 7: That's a news item that may be considered in the

815
00:38:59,600 --> 00:39:02,600
Speaker 7: future like a news alert on your phone, except you're

816
00:39:02,640 --> 00:39:03,200
Speaker 7: watching it.

817
00:39:03,680 --> 00:39:06,160
Speaker 4: Well, and then I think they're counting on insider traders

818
00:39:06,680 --> 00:39:10,160
Speaker 4: to have a correct market. They're counting on people who

819
00:39:10,160 --> 00:39:12,520
Speaker 4: have more knowledge than the rest of us weighing in

820
00:39:12,560 --> 00:39:15,839
Speaker 4: on the market. Well in this, I mean, in my heart, yes,

821
00:39:15,920 --> 00:39:19,160
Speaker 4: it is bad because it did values homework, but I

822
00:39:19,200 --> 00:39:22,440
Speaker 4: do think that it does make those markets more valuable.

823
00:39:22,480 --> 00:39:25,480
Speaker 4: I mean Domer actually told us this really interesting case

824
00:39:25,800 --> 00:39:28,400
Speaker 4: that took place here in New York around the mayoral election,

825
00:39:29,040 --> 00:39:29,880
Speaker 4: and it was when.

826
00:39:30,000 --> 00:39:33,200
Speaker 3: There was corruption New York. I know, I know, hold

827
00:39:33,239 --> 00:39:34,040
Speaker 3: onto your seats.

828
00:39:34,480 --> 00:39:36,319
Speaker 4: But Eric Adams was still in the race at this point,

829
00:39:36,360 --> 00:39:38,480
Speaker 4: but it was clear he was dropping out, and so

830
00:39:38,880 --> 00:39:42,160
Speaker 4: this question came up about when, and according to Domer,

831
00:39:42,360 --> 00:39:45,399
Speaker 4: he told us there was this huge bet placed from

832
00:39:45,480 --> 00:39:49,120
Speaker 4: a new user on poly market, like right before Eric

833
00:39:49,200 --> 00:39:52,000
Speaker 4: Adams dropped out of the race, like seconds.

834
00:39:52,200 --> 00:39:55,040
Speaker 2: The suggestion being that maybe it was Eric Adams the

835
00:39:55,080 --> 00:39:56,520
Speaker 2: man himself, but I will say.

836
00:39:56,920 --> 00:39:58,320
Speaker 3: He couldn't be rich for comment because he was on

837
00:39:58,360 --> 00:39:59,399
Speaker 3: a front sun bull.

838
00:39:59,520 --> 00:40:02,280
Speaker 2: He I've only had a poly market account before.

839
00:40:04,719 --> 00:40:05,320
Speaker 3: That's true.

840
00:40:05,400 --> 00:40:07,759
Speaker 1: Actually, look, I mean I could imagine, like what you

841
00:40:07,760 --> 00:40:10,160
Speaker 1: guys are saying is true, but there could be some

842
00:40:11,400 --> 00:40:14,799
Speaker 1: huge horrific event and two senators could stand up and say,

843
00:40:14,840 --> 00:40:17,520
Speaker 1: people are profiting from this huge horrific event.

844
00:40:18,000 --> 00:40:20,680
Speaker 3: And like, I do feel like there's a way to.

845
00:40:21,040 --> 00:40:22,759
Speaker 1: Put a little skin in this game, right, Like, I

846
00:40:22,760 --> 00:40:27,320
Speaker 1: think what we need is a market that says, will

847
00:40:28,040 --> 00:40:31,800
Speaker 1: Calshi or Polymarket be banned by twenty thirty?

848
00:40:31,960 --> 00:40:34,640
Speaker 3: You want to make a betting market about betting market?

849
00:40:34,840 --> 00:40:36,879
Speaker 1: I guess the problem is if you say yes, they'll

850
00:40:36,920 --> 00:40:39,000
Speaker 1: be banned, how do you collect?

851
00:40:39,120 --> 00:40:41,399
Speaker 3: It's like the Jesus bat all of it. It's Jesus bad.

852
00:40:42,760 --> 00:40:44,680
Speaker 3: Should we check in one last time? One?

853
00:40:44,719 --> 00:40:44,919
Speaker 2: Yeah?

854
00:40:45,000 --> 00:40:46,439
Speaker 5: See, let's see who might have won here?

855
00:40:47,320 --> 00:40:53,040
Speaker 7: Oh wow, okay, so we're going to resolve this market.

856
00:40:53,120 --> 00:40:55,799
Speaker 3: I don't understand this chart though, which we So this

857
00:40:55,840 --> 00:41:00,000
Speaker 3: is me bad for us? For us?

858
00:41:00,120 --> 00:41:04,520
Speaker 2: This implies that the audience believes that it's a lower

859
00:41:04,560 --> 00:41:07,279
Speaker 2: than fifty percent chance that half that the people will leave.

860
00:41:10,560 --> 00:41:13,080
Speaker 2: And I would say that's great, We're going to get

861
00:41:13,120 --> 00:41:15,920
Speaker 2: the official results shortly, but I would say I'm feeling

862
00:41:15,920 --> 00:41:16,560
Speaker 2: pretty confident.

863
00:41:16,600 --> 00:41:18,320
Speaker 7: I don't know about you all. I'm going to declare

864
00:41:18,320 --> 00:41:21,319
Speaker 7: this market closed. So if you have been waiting to leave,

865
00:41:21,440 --> 00:41:22,920
Speaker 7: you can last minute bed.

866
00:41:25,000 --> 00:41:26,279
Speaker 5: But in a real.

867
00:41:26,040 --> 00:41:28,439
Speaker 7: Market, of course, if you made this bet, you would

868
00:41:28,440 --> 00:41:29,600
Speaker 7: have bet a certain amount of money.

869
00:41:29,680 --> 00:41:34,160
Speaker 3: I have the resolution home, my goodness. Okay, okay, so the.

870
00:41:34,040 --> 00:41:38,760
Speaker 5: Market has resolved to know that's good for us.

871
00:41:42,280 --> 00:41:44,120
Speaker 3: Than you around. Yes.

872
00:41:44,760 --> 00:41:48,680
Speaker 2: Now, the the app we created that we vibe coded,

873
00:41:48,920 --> 00:41:51,920
Speaker 2: created user names for people and and we have selected

874
00:41:52,040 --> 00:41:55,120
Speaker 2: among the people who bet correctly, We've selected three winners.

875
00:41:55,320 --> 00:41:57,480
Speaker 4: So you should have a username if you've placed it.

876
00:41:57,719 --> 00:41:59,719
Speaker 2: And if you are on this list, come come find

877
00:41:59,800 --> 00:42:01,480
Speaker 2: us and will give you your prize.

878
00:42:03,080 --> 00:42:05,880
Speaker 4: Come up, claim your toad bag. There is a toe bag.

879
00:42:07,239 --> 00:42:11,480
Speaker 4: This has been the very first Mashup live show of

880
00:42:11,600 --> 00:42:12,880
Speaker 4: Everybody's business history.

881
00:42:12,920 --> 00:42:13,920
Speaker 3: I'm Stacey Mannix.

882
00:42:13,719 --> 00:42:16,840
Speaker 2: Smith, I'm Max Shaffin, Robert Smith, and I'm Jacob Goldstein.

883
00:42:16,920 --> 00:42:30,719
Speaker 3: Thanks for listening, Thanks everybody, Thank you. This show is

884
00:42:30,719 --> 00:42:32,680
Speaker 3: produced by Stacy Wong and Jasmine J. T.

885
00:42:32,800 --> 00:42:33,040
Speaker 5: Green.

886
00:42:33,440 --> 00:42:37,400
Speaker 2: Magnus Hendrickson is our supervising producer. Sam Rogich handles engineering

887
00:42:37,440 --> 00:42:40,719
Speaker 2: and Dave Purcell fact checks. Special thanks to Jeff Muscus,

888
00:42:40,840 --> 00:42:45,719
Speaker 2: Julia Rubin, Maria Ling, Alex Chucas, Melissa Rogers, and Lowly Chan.

889
00:42:46,239 --> 00:42:48,120
Speaker 2: If you have a minute, please rate and review the show.

890
00:42:48,160 --> 00:42:49,520
Speaker 2: It'll mean a lot to us. And if you have

891
00:42:49,560 --> 00:42:51,920
Speaker 2: a story that should be our business, email us at

892
00:42:51,960 --> 00:42:55,080
Speaker 2: Everybody's at Bloomberg dot net. That's everybody with ans at

893
00:42:55,080 --> 00:42:57,719
Speaker 2: Bloomberg dot net. Thank you for listening, and we'll see

894
00:42:57,719 --> 00:43:03,160
Speaker 2: you next week.