1 00:00:09,960 --> 00:00:13,960 Speaker 1: Hello, and welcome to another episode of the Odd Lots Podcast. 2 00:00:14,040 --> 00:00:18,480 Speaker 1: I'm Joe Wisenthal and I'm Tracy Alloway. Tracy, do you 3 00:00:18,560 --> 00:00:23,040 Speaker 1: remember what you were doing on February nine, two thousand 4 00:00:23,120 --> 00:00:28,600 Speaker 1: and nine. Uh, that is oddly specific. I'm trying to 5 00:00:28,640 --> 00:00:32,640 Speaker 1: think what might have happened on February two thousand nine. Um, 6 00:00:32,680 --> 00:00:35,520 Speaker 1: it would have been you can't remember very specific dates 7 00:00:35,600 --> 00:00:39,360 Speaker 1: like that in the past. Uh No. Um. About all 8 00:00:39,400 --> 00:00:41,320 Speaker 1: I can remember is it would have been, you know, 9 00:00:41,479 --> 00:00:45,000 Speaker 1: deep into the financial crisis, and uh, I would have 10 00:00:45,000 --> 00:00:47,720 Speaker 1: been writing a lot about the fallout from the Lehman 11 00:00:47,760 --> 00:00:51,199 Speaker 1: Brothers bankruptcy, and uh, you know all the stimulus plans 12 00:00:51,200 --> 00:00:53,600 Speaker 1: that the US government was unveiling at that time to 13 00:00:53,640 --> 00:00:56,000 Speaker 1: try to prop up the economy. That's That's all I 14 00:00:56,000 --> 00:00:58,320 Speaker 1: can think of. Those were the deep dark days of 15 00:00:58,560 --> 00:01:02,360 Speaker 1: two thousand nine. Yeah, it was very dark days, to 16 00:01:02,480 --> 00:01:05,200 Speaker 1: say the least. The bottom of the market. I think 17 00:01:05,240 --> 00:01:07,679 Speaker 1: the bottom of the stock market came about three or 18 00:01:07,720 --> 00:01:10,440 Speaker 1: so weeks later. It really kind of felt like the 19 00:01:10,640 --> 00:01:14,840 Speaker 1: entire world economy was just straight up becoming unglued in 20 00:01:14,880 --> 00:01:17,400 Speaker 1: those days. So I'm very excited. Are we going to 21 00:01:17,480 --> 00:01:20,400 Speaker 1: talk about the financial crisis, because you know, financial crisis 22 00:01:20,440 --> 00:01:24,240 Speaker 1: hindsight is my all time favorite topic. Kind of we're 23 00:01:24,240 --> 00:01:27,120 Speaker 1: going to talk about it. It turns out that February 24 00:01:27,280 --> 00:01:32,280 Speaker 1: nineteen was also a very pivotal day in American political 25 00:01:32,360 --> 00:01:36,440 Speaker 1: history because, of course, out of that extreme period in 26 00:01:36,480 --> 00:01:39,880 Speaker 1: the economy, we also sort of sent our political system 27 00:01:40,040 --> 00:01:46,200 Speaker 1: on brand new trajectories. Oh wait, okay, I think I 28 00:01:46,240 --> 00:01:48,280 Speaker 1: know what you're getting at, and I think it involves 29 00:01:48,400 --> 00:01:53,520 Speaker 1: a certain rant that went on to become very, very famous. Exactly, So, 30 00:01:53,600 --> 00:01:57,120 Speaker 1: in February nine, two thousand and nine, anyone who was 31 00:01:57,160 --> 00:02:01,440 Speaker 1: watching a certain financial news network that wasn't Bloomberg, and 32 00:02:01,840 --> 00:02:03,640 Speaker 1: you know, I'll just say it because we have to 33 00:02:03,640 --> 00:02:08,440 Speaker 1: say it. So CNBC was treated to one of the 34 00:02:08,480 --> 00:02:12,960 Speaker 1: most remarkable moments in probably TV history, when Rick Santelli, 35 00:02:13,000 --> 00:02:17,480 Speaker 1: who's still there, delivered a famous rant on the floor 36 00:02:17,680 --> 00:02:23,320 Speaker 1: of the Exchange in Chicago in his anger towards a 37 00:02:23,400 --> 00:02:28,080 Speaker 1: lot of the stimulus measures that President Obama was unveiling. Remember, 38 00:02:28,120 --> 00:02:32,120 Speaker 1: there was a hodgepodge of things. There was stimulus. There 39 00:02:32,120 --> 00:02:35,919 Speaker 1: are all these attempts to sort of stem the tide 40 00:02:36,000 --> 00:02:40,679 Speaker 1: of foreclosures, do other things, mortgage modifications, things like that 41 00:02:41,040 --> 00:02:44,840 Speaker 1: something to sort of just stop the bleeding in the economy, 42 00:02:44,960 --> 00:02:47,600 Speaker 1: and Rick Santelli was not a fan of it. Yeah, 43 00:02:47,720 --> 00:02:51,520 Speaker 1: I remember this clip. There was something deeply weird about 44 00:02:51,639 --> 00:02:54,840 Speaker 1: a guy who you know, made his name in finance 45 00:02:55,040 --> 00:02:58,760 Speaker 1: trading derivatives being on TV. I think he was in 46 00:02:58,800 --> 00:03:03,520 Speaker 1: front of the the Chicago training floor and just ranting 47 00:03:03,560 --> 00:03:07,400 Speaker 1: about government bailouts and things like that. It was definitely memorable. 48 00:03:07,560 --> 00:03:10,560 Speaker 1: Are we talking to Rick Santelly? We're not talking to 49 00:03:10,680 --> 00:03:14,880 Speaker 1: Rick Santelly. But I don't know if you remember it, 50 00:03:15,000 --> 00:03:18,280 Speaker 1: but there was someone standing right next to Rick Santelly 51 00:03:18,960 --> 00:03:21,720 Speaker 1: and he had I think a blue shirt with orange 52 00:03:21,919 --> 00:03:25,400 Speaker 1: or with yellow sleeves. And as Rick Santelly was getting 53 00:03:25,440 --> 00:03:28,800 Speaker 1: the crowd riled up about who here wants to pay 54 00:03:28,919 --> 00:03:32,040 Speaker 1: for their neighbors mortgages and they took out a mortgage 55 00:03:32,040 --> 00:03:35,520 Speaker 1: they couldn't afford and they have five extra bathrooms. Who 56 00:03:35,520 --> 00:03:39,320 Speaker 1: wants to bail them out? The traders on the floor 57 00:03:39,480 --> 00:03:43,080 Speaker 1: or getting very they're very into the rant, if at 58 00:03:43,120 --> 00:03:45,320 Speaker 1: least it appeared so on TV, and there was someone 59 00:03:45,400 --> 00:03:49,080 Speaker 1: standing right next to Rick Santelly who was sort of 60 00:03:49,120 --> 00:03:51,839 Speaker 1: played a pivotal role in all this. And we will 61 00:03:51,880 --> 00:03:54,960 Speaker 1: be talking to that trader today, So I believe that 62 00:03:55,480 --> 00:03:59,200 Speaker 1: to some extent, that speech is credited with having catalyzed 63 00:03:59,400 --> 00:04:02,520 Speaker 1: the Tea part A movement. And because the person we're 64 00:04:02,520 --> 00:04:05,600 Speaker 1: talking today was sort of an important character in that 65 00:04:05,960 --> 00:04:08,440 Speaker 1: in that rant, you could say he too, was an 66 00:04:08,440 --> 00:04:11,720 Speaker 1: inspirant to that political movement. Before we get to our guests, 67 00:04:12,080 --> 00:04:15,520 Speaker 1: let's listen to a very brief clip from that rant. 68 00:04:16,160 --> 00:04:19,479 Speaker 1: How about this president new administration. Aren't you put up 69 00:04:19,480 --> 00:04:22,440 Speaker 1: a website to have people vote on the internet as 70 00:04:22,440 --> 00:04:25,520 Speaker 1: a referendum to see if we really want to subsidize 71 00:04:25,560 --> 00:04:28,720 Speaker 1: the loser's mortgages or would we like to at least 72 00:04:28,920 --> 00:04:32,240 Speaker 1: buy cars and buy houses and foreclosure and give them 73 00:04:32,279 --> 00:04:35,120 Speaker 1: to people that might have a chance to actually prosper 74 00:04:35,200 --> 00:04:38,479 Speaker 1: down the road and reward people that could carry the 75 00:04:38,520 --> 00:04:42,160 Speaker 1: water instead of drink the water. This is America. How 76 00:04:42,160 --> 00:04:45,000 Speaker 1: many people want to pay for your neighbors mortgage that 77 00:04:45,160 --> 00:04:48,160 Speaker 1: has an extra bathroom and can't pay their bills? Raise 78 00:04:48,240 --> 00:04:53,520 Speaker 1: their hand? How about we all, President Obama? Are you listening? 79 00:04:54,000 --> 00:04:56,040 Speaker 1: That's how we all stopped paying our mortgage. It's a 80 00:04:56,120 --> 00:05:00,640 Speaker 1: moral hazard. That trader's name is Eric Wilke. Soon, Eric, 81 00:05:00,680 --> 00:05:02,479 Speaker 1: thank you, very much for joining us. Thank you, Joe, 82 00:05:02,520 --> 00:05:04,920 Speaker 1: thank you for having me. I appreciate it, obviously. I 83 00:05:04,960 --> 00:05:07,919 Speaker 1: want to talk about that day, that moment. It was 84 00:05:07,920 --> 00:05:12,880 Speaker 1: sort of about five unforgettable minutes of TV that I think, um, 85 00:05:13,000 --> 00:05:15,560 Speaker 1: you know, I had an effect on American political history. 86 00:05:15,960 --> 00:05:17,880 Speaker 1: But before we do that, what don't you tell us 87 00:05:17,920 --> 00:05:21,200 Speaker 1: about your background? How long? What did you do on 88 00:05:21,320 --> 00:05:23,719 Speaker 1: the floor? How did you get there? How did I 89 00:05:23,760 --> 00:05:26,840 Speaker 1: get there? I actually started with college and I was 90 00:05:27,400 --> 00:05:29,720 Speaker 1: trying to get my psychology degree, and about a year 91 00:05:29,760 --> 00:05:31,400 Speaker 1: and a half into that, I had some money I 92 00:05:31,440 --> 00:05:34,640 Speaker 1: had earned uh in high school and in middle school 93 00:05:34,760 --> 00:05:39,440 Speaker 1: working on farms around our community, and started investing that 94 00:05:39,680 --> 00:05:42,320 Speaker 1: switched over to finance, and after graduating, a buddy of 95 00:05:42,320 --> 00:05:44,320 Speaker 1: mine just said, you know, you would be perfect for 96 00:05:44,360 --> 00:05:45,760 Speaker 1: working on the floor of the board of Trade. So 97 00:05:45,800 --> 00:05:49,039 Speaker 1: I literally walked up, just walked onto the floor and 98 00:05:49,080 --> 00:05:51,200 Speaker 1: started handing out my phone number and got a job 99 00:05:51,240 --> 00:05:54,360 Speaker 1: down there, and UH a few months later, sold all 100 00:05:54,360 --> 00:05:58,040 Speaker 1: my stocks and bought myself one of the cheapest badges, 101 00:05:58,120 --> 00:05:59,839 Speaker 1: the one that I could forward on the floor where 102 00:05:59,880 --> 00:06:02,640 Speaker 1: to trade. And that's kind of where I started continuing 103 00:06:02,640 --> 00:06:06,760 Speaker 1: my trading. So I've been trading futures, options and derivatives 104 00:06:06,800 --> 00:06:10,320 Speaker 1: ever since. So, Eric, what was floor trading like at 105 00:06:10,320 --> 00:06:13,280 Speaker 1: that time? We've discussed this on a previous episode of 106 00:06:13,360 --> 00:06:17,039 Speaker 1: All Thoughts podcast, but it definitely had a distinct culture 107 00:06:17,080 --> 00:06:20,279 Speaker 1: of its own, right, Yes, I mean, of course, I'll 108 00:06:20,320 --> 00:06:22,559 Speaker 1: never forget the first day that I walked onto the floor. 109 00:06:22,560 --> 00:06:26,800 Speaker 1: It was it was probably so it was June of 110 00:06:27,839 --> 00:06:30,320 Speaker 1: I'm you know, what is that fifteen years ago or 111 00:06:32,000 --> 00:06:36,520 Speaker 1: years ago? Exactly? A yes, so, uh uh, it's been 112 00:06:36,520 --> 00:06:38,800 Speaker 1: a while, and you know, back in that day, it 113 00:06:38,920 --> 00:06:41,800 Speaker 1: was on the old trading floor and it was it 114 00:06:41,920 --> 00:06:47,680 Speaker 1: was crazy elbows, backs and you know, just jammed in 115 00:06:47,720 --> 00:06:51,159 Speaker 1: like sardines and the energy. You could literally feel the 116 00:06:51,279 --> 00:06:53,760 Speaker 1: energy like when you see the stock markets having the 117 00:06:53,839 --> 00:06:56,400 Speaker 1: kind of volatility we've seen in the last couple of months. 118 00:06:56,600 --> 00:06:59,479 Speaker 1: You could feel that like static energy, Like you could 119 00:06:59,480 --> 00:07:01,400 Speaker 1: almost feel the hair on the back of your neck 120 00:07:01,480 --> 00:07:04,040 Speaker 1: start to stand up when that energy would start picking up. 121 00:07:04,760 --> 00:07:09,120 Speaker 1: So you said two things in your uh when you 122 00:07:09,160 --> 00:07:11,920 Speaker 1: talk about your sort of entry onto the floor, that 123 00:07:11,960 --> 00:07:14,240 Speaker 1: really intrigued me. And one of my favorite questions to 124 00:07:14,280 --> 00:07:17,240 Speaker 1: ask people is she said, a friend of yours said 125 00:07:17,240 --> 00:07:20,000 Speaker 1: you would be perfect trading on the floor. What did 126 00:07:20,240 --> 00:07:23,200 Speaker 1: that friends seeing you that made them think, oh, this 127 00:07:23,240 --> 00:07:25,800 Speaker 1: person would thrive in this environment, you know. I mean 128 00:07:25,840 --> 00:07:28,760 Speaker 1: I played rugby, so that was one of those things. 129 00:07:28,880 --> 00:07:33,280 Speaker 1: And I think a pretty outgoing personality. So we were 130 00:07:33,320 --> 00:07:35,480 Speaker 1: just sitting there and he had just gotten back from 131 00:07:35,480 --> 00:07:38,240 Speaker 1: an internship with Iowa Grain, and I was like, go 132 00:07:38,360 --> 00:07:40,960 Speaker 1: up there. I'll get you in contact with my friend 133 00:07:41,000 --> 00:07:43,000 Speaker 1: and check it out. And I went there for a 134 00:07:43,040 --> 00:07:45,360 Speaker 1: summer job and literally, like we just talked about, it, 135 00:07:45,400 --> 00:07:48,440 Speaker 1: stayed for twenty five years, and then the twenties two years. 136 00:07:48,560 --> 00:07:51,560 Speaker 1: And then the other thing you said, so you liquidated 137 00:07:51,760 --> 00:07:55,840 Speaker 1: your investment holdings to buy a badge, explained, and you 138 00:07:55,880 --> 00:07:58,600 Speaker 1: said it was one of the cheapest badges. So explain 139 00:07:58,680 --> 00:08:01,360 Speaker 1: the pricing tears of that badge, Like how does that 140 00:08:01,360 --> 00:08:03,120 Speaker 1: that mechanics work, because I don't think we've ever talked 141 00:08:03,160 --> 00:08:05,560 Speaker 1: about that. So the different types of badges allow you 142 00:08:05,600 --> 00:08:08,480 Speaker 1: to trade different products, and the more expensive badges will 143 00:08:08,480 --> 00:08:11,680 Speaker 1: allow you to trade everything. So um, for instance, in 144 00:08:11,720 --> 00:08:13,720 Speaker 1: the grain room, a lot of those guys you'll see 145 00:08:13,760 --> 00:08:16,560 Speaker 1: walking around with gold badges, and that's literally what it 146 00:08:16,600 --> 00:08:19,400 Speaker 1: was called the gold badge, and it allowed you to 147 00:08:19,440 --> 00:08:22,360 Speaker 1: trade every product. And then there was um an a 148 00:08:22,640 --> 00:08:26,200 Speaker 1: m which would allow you to trade uh the bonds 149 00:08:26,240 --> 00:08:28,080 Speaker 1: and things of that nature. There was a calm that 150 00:08:28,080 --> 00:08:30,640 Speaker 1: would allow you trade options. And then I had the 151 00:08:30,800 --> 00:08:34,800 Speaker 1: item which allowed you to trade the indexes, and that 152 00:08:34,920 --> 00:08:36,840 Speaker 1: being the Fed funds. It was kind of like path 153 00:08:36,960 --> 00:08:39,839 Speaker 1: at least resistance for me is I can afford that one. 154 00:08:39,840 --> 00:08:41,840 Speaker 1: I can't afford the million dollar badge over there in 155 00:08:41,840 --> 00:08:43,720 Speaker 1: the grain room, but you know I can afford this 156 00:08:44,000 --> 00:08:46,680 Speaker 1: item badge, And how much should that cost if you don't? 157 00:08:46,720 --> 00:08:50,800 Speaker 1: At that time it cost me sixteen thou dollars. So 158 00:08:50,920 --> 00:08:53,720 Speaker 1: and right after the doll opened, those badges went up 159 00:08:53,760 --> 00:08:57,360 Speaker 1: to about a hundred and at one point in time. 160 00:08:57,400 --> 00:08:59,920 Speaker 1: But I basically rode the whole wave. I wasn't really 161 00:09:00,040 --> 00:09:03,800 Speaker 1: looking at it like as an asset necessarily, but it 162 00:09:03,840 --> 00:09:07,240 Speaker 1: lowered my commissions and uh allowed me to trade with 163 00:09:07,280 --> 00:09:11,640 Speaker 1: better margin. So that was the benefit of it. So Eric, sorry, 164 00:09:11,679 --> 00:09:14,120 Speaker 1: you said you were trading of FED futures. Is that right? 165 00:09:14,800 --> 00:09:18,360 Speaker 1: Federal fund future? So it's the overnight rate that they bank. Ye, 166 00:09:20,280 --> 00:09:23,200 Speaker 1: So what was the you know, if we fast forward 167 00:09:23,360 --> 00:09:26,880 Speaker 1: to two early two thousand nine, what was the mood 168 00:09:26,960 --> 00:09:29,840 Speaker 1: like on the trading for because of course, you just 169 00:09:29,840 --> 00:09:34,120 Speaker 1: witnessed possibly the worst financial crisis in American history. I 170 00:09:34,120 --> 00:09:38,040 Speaker 1: imagine a lot had been going on, absolutely, you know, 171 00:09:38,120 --> 00:09:40,000 Speaker 1: I mean there was a lot of anger because you know, 172 00:09:40,120 --> 00:09:43,360 Speaker 1: it is, you know, the epicenter of free markets, right 173 00:09:43,520 --> 00:09:47,920 Speaker 1: and with the bailouts, it just didn't seem right that 174 00:09:48,600 --> 00:09:51,320 Speaker 1: somebody that did something wrong was going to get off 175 00:09:51,360 --> 00:09:55,200 Speaker 1: the hook. And it was a little strange because it 176 00:09:55,240 --> 00:09:57,440 Speaker 1: was like a whirlwind. When Rick came running up and 177 00:09:57,440 --> 00:09:59,559 Speaker 1: he was like, you know, we got to do something 178 00:09:59,559 --> 00:10:01,200 Speaker 1: about all this, and I was like, I know, we 179 00:10:01,240 --> 00:10:03,240 Speaker 1: got to do something. And he was like, what about 180 00:10:03,240 --> 00:10:05,480 Speaker 1: a tea party? And I was like, let's do it. 181 00:10:05,600 --> 00:10:07,559 Speaker 1: I'm like, I'm buying a boat. I'm actually buying a 182 00:10:07,600 --> 00:10:09,440 Speaker 1: boat right now. I'm gonna name it tea party. And 183 00:10:09,679 --> 00:10:12,320 Speaker 1: that's what ended up happening. But uh, but you did 184 00:10:12,320 --> 00:10:15,800 Speaker 1: by I did buy a party and named it tea party. 185 00:10:16,080 --> 00:10:20,240 Speaker 1: It was a woody Chris Craft sea skiff, so named 186 00:10:20,240 --> 00:10:23,480 Speaker 1: a tea party. And you know, that was a little 187 00:10:23,480 --> 00:10:25,520 Speaker 1: bit later. But when he walked up, when I first said, 188 00:10:25,600 --> 00:10:27,800 Speaker 1: you know, it's a moral hazard. We should all stop 189 00:10:27,800 --> 00:10:30,600 Speaker 1: paying our mortgages. I like, after I said it, I'm like, 190 00:10:31,559 --> 00:10:36,080 Speaker 1: you just said something on National TV and you're not 191 00:10:36,120 --> 00:10:39,320 Speaker 1: even really sure that you can use moral hazard the 192 00:10:39,360 --> 00:10:42,040 Speaker 1: way you used it, you know, I mean business school. 193 00:10:42,080 --> 00:10:44,240 Speaker 1: I you know, we talked about the moral hazard. I 194 00:10:44,240 --> 00:10:47,400 Speaker 1: can't take insurance out on somebody I have no investable 195 00:10:47,480 --> 00:10:51,240 Speaker 1: interest in, and this was kind of like off the 196 00:10:51,280 --> 00:10:53,600 Speaker 1: cuff of that. And so after I said it, I 197 00:10:53,640 --> 00:10:55,160 Speaker 1: was like, Oh my god, did I just make the 198 00:10:55,160 --> 00:10:57,720 Speaker 1: biggest idiot out of myself? And then I started thinking 199 00:10:57,720 --> 00:10:59,040 Speaker 1: through it, and I was like, yeah, no, it's a 200 00:10:59,080 --> 00:11:03,040 Speaker 1: moral hazard if if Joe is doing everything right but 201 00:11:03,400 --> 00:11:06,320 Speaker 1: sees that somebody else is not paying their mortgage and 202 00:11:06,840 --> 00:11:09,920 Speaker 1: gets off, and then what's stopping me from doing that? 203 00:11:09,920 --> 00:11:14,240 Speaker 1: That creates that reciprocal moral hazard of if I see 204 00:11:14,240 --> 00:11:16,960 Speaker 1: somebody doing something wrong and they're not getting in trouble 205 00:11:17,000 --> 00:11:19,840 Speaker 1: for it, then why can't I do that? Can we 206 00:11:19,920 --> 00:11:22,280 Speaker 1: back up for a second, because before we go into 207 00:11:22,360 --> 00:11:25,160 Speaker 1: exactly what happened and what was said, I'm just curious 208 00:11:25,200 --> 00:11:28,959 Speaker 1: how did it normally work with the CNBC's presence on 209 00:11:29,000 --> 00:11:31,440 Speaker 1: the floor, And I imagine it wasn't every day that 210 00:11:31,480 --> 00:11:34,680 Speaker 1: you actually chimed into the coverage being filmed from there. 211 00:11:35,280 --> 00:11:38,120 Speaker 1: I had a really good relationship with Rix Antilly, so 212 00:11:38,440 --> 00:11:42,440 Speaker 1: I had a little bit more leeway than most other 213 00:11:42,480 --> 00:11:45,720 Speaker 1: traders were getting. You know, you could get fine for 214 00:11:45,880 --> 00:11:50,280 Speaker 1: just like chirping in. But they set up those cameras 215 00:11:50,320 --> 00:11:52,120 Speaker 1: to kind of be right there because Rick and I 216 00:11:52,240 --> 00:11:54,240 Speaker 1: had something that we can kind of bounce off of 217 00:11:54,240 --> 00:11:57,480 Speaker 1: each other out every now and again, So it was 218 00:11:57,559 --> 00:12:00,960 Speaker 1: set up for that type of back and forth, if 219 00:12:01,000 --> 00:12:04,200 Speaker 1: you will. So I felt like I could, you know, 220 00:12:04,240 --> 00:12:06,360 Speaker 1: as long as I didn't interrupt him and I could 221 00:12:06,440 --> 00:12:08,320 Speaker 1: interject then That's kind of where I went at it. 222 00:12:08,559 --> 00:12:13,080 Speaker 1: And prior to that day, can you tell a little 223 00:12:13,120 --> 00:12:16,280 Speaker 1: bit about was there a lot of politics talk on 224 00:12:16,320 --> 00:12:21,000 Speaker 1: the floor, Was there a range of viewpoint held by 225 00:12:21,080 --> 00:12:23,440 Speaker 1: the traders sort of like what was the chatter like 226 00:12:23,640 --> 00:12:26,400 Speaker 1: leading up to that day. I think a lot of 227 00:12:26,440 --> 00:12:29,880 Speaker 1: people were, you know, ready to revolt, especially on the 228 00:12:29,920 --> 00:12:34,520 Speaker 1: floor because it being free market that everybody really wanted 229 00:12:34,559 --> 00:12:39,800 Speaker 1: to see these businesses that did wrong to fail or 230 00:12:39,920 --> 00:12:42,960 Speaker 1: to go into bankruptcy because then it gives the retailer 231 00:12:43,040 --> 00:12:45,400 Speaker 1: the opportunity to come in and invest and lift those 232 00:12:45,640 --> 00:12:48,560 Speaker 1: companies up, rather than the government doing it and then 233 00:12:48,679 --> 00:12:51,679 Speaker 1: making the retailers pay for it in a different way 234 00:12:52,120 --> 00:12:54,600 Speaker 1: through our taxes and things of that nature. Why not 235 00:12:54,760 --> 00:12:58,920 Speaker 1: let those guys fail. The investors that originally got in 236 00:12:59,120 --> 00:13:01,040 Speaker 1: are the ones that get hurt, which is the way 237 00:13:01,080 --> 00:13:04,319 Speaker 1: it should be, and then everybody else gets to come 238 00:13:04,360 --> 00:13:07,959 Speaker 1: in later and kind of pick it up. I'm curious, though, 239 00:13:08,920 --> 00:13:11,440 Speaker 1: the way you describe it now talk about sort of 240 00:13:11,480 --> 00:13:15,280 Speaker 1: businesses that failed in an opportunities for investors, though the 241 00:13:15,400 --> 00:13:17,480 Speaker 1: Rick said Telly Rant, a lot of it was on 242 00:13:17,800 --> 00:13:22,160 Speaker 1: homeowners and their mortgages. And I'm curious whether at the 243 00:13:22,280 --> 00:13:25,520 Speaker 1: time or in retrospect you sort of make a distinction 244 00:13:25,559 --> 00:13:29,160 Speaker 1: between sort of the Wall Street businesses that made horrible 245 00:13:29,280 --> 00:13:33,120 Speaker 1: bets that caused them to capsize, versus this idea of 246 00:13:33,160 --> 00:13:36,520 Speaker 1: the homeowner and they paid for all these extra bathrooms 247 00:13:36,559 --> 00:13:39,600 Speaker 1: that they didn't need, and sort of whether and whether 248 00:13:39,640 --> 00:13:42,560 Speaker 1: you make a distinction between sort of two classes of 249 00:13:42,600 --> 00:13:46,760 Speaker 1: people who really got swallowed under by the crisis. True, 250 00:13:46,800 --> 00:13:50,360 Speaker 1: and in the homeowner was as bad as anybody, not 251 00:13:50,480 --> 00:13:52,520 Speaker 1: that you know, the bank should have been accepting those 252 00:13:52,800 --> 00:13:57,600 Speaker 1: But an interesting story. I was visiting my uncle and 253 00:13:57,800 --> 00:14:01,160 Speaker 1: he had worked with a company for twenty five years 254 00:14:01,600 --> 00:14:05,360 Speaker 1: and just bought a new house. I go to visit 255 00:14:06,160 --> 00:14:07,839 Speaker 1: and I'm talking to him, and I'm like, man, your 256 00:14:07,880 --> 00:14:11,880 Speaker 1: next door neighbor has every toy imaginable. He had like 257 00:14:11,920 --> 00:14:14,880 Speaker 1: a he had a fifth wheel with like you know, 258 00:14:14,960 --> 00:14:17,400 Speaker 1: you can put your a t VS in the back 259 00:14:17,440 --> 00:14:20,680 Speaker 1: of it, and a duly truck and all these other things. 260 00:14:21,040 --> 00:14:23,840 Speaker 1: And I was like, that guy has got the garage. 261 00:14:24,080 --> 00:14:26,240 Speaker 1: And he was, yeah, you know that guy right there, 262 00:14:26,640 --> 00:14:28,840 Speaker 1: he works for me. He was I know how much 263 00:14:28,840 --> 00:14:32,960 Speaker 1: he's making and he can't I can't afford that stuff, 264 00:14:33,640 --> 00:14:37,000 Speaker 1: which means he can't afford that stuff. And uh. I 265 00:14:37,040 --> 00:14:38,560 Speaker 1: was like wow, I go, how do you do it? 266 00:14:38,600 --> 00:14:41,440 Speaker 1: And he was like, basically he is on interest only 267 00:14:41,560 --> 00:14:44,280 Speaker 1: loan and all these other things. And and I was like, 268 00:14:44,360 --> 00:14:49,640 Speaker 1: this is getting crazy when my uncle is next door 269 00:14:49,680 --> 00:14:53,640 Speaker 1: to a guy who is outspending him and he's his boss. 270 00:14:56,160 --> 00:14:59,560 Speaker 1: So you mentioned the anger that you and others felt 271 00:15:00,080 --> 00:15:03,720 Speaker 1: around that time. I'm still not sure I get exactly 272 00:15:03,800 --> 00:15:06,360 Speaker 1: what was making you so angry, because you know, in 273 00:15:06,400 --> 00:15:08,520 Speaker 1: the aftermath of the crisis, we had a lot of 274 00:15:08,560 --> 00:15:12,720 Speaker 1: people who had lost their jobs, who were losing their 275 00:15:12,720 --> 00:15:16,960 Speaker 1: houses either. You know, rightly or wrongly, and you're a 276 00:15:17,000 --> 00:15:19,960 Speaker 1: guy with a pretty good job. I'm assuming on the 277 00:15:19,960 --> 00:15:22,800 Speaker 1: training floor you're still employed. You're standing with a bunch 278 00:15:22,800 --> 00:15:26,320 Speaker 1: of other people who are still employed. So where was 279 00:15:26,360 --> 00:15:29,280 Speaker 1: the outrage stemming from. Was it just that notion of 280 00:15:29,520 --> 00:15:32,200 Speaker 1: unfairness of some people getting away with something that they 281 00:15:32,240 --> 00:15:35,680 Speaker 1: shouldn't be getting away with. Yes, and it creates a 282 00:15:35,760 --> 00:15:40,200 Speaker 1: systemic problem. Also, one thing with traders is they don't care. 283 00:15:40,240 --> 00:15:43,000 Speaker 1: They'll trade to rain drops against each other. So the 284 00:15:43,080 --> 00:15:45,120 Speaker 1: ups and downs of the market's not going to really 285 00:15:46,080 --> 00:15:49,800 Speaker 1: drive that emotion in the same way. But what it 286 00:15:50,200 --> 00:15:53,360 Speaker 1: really came down to was the fact that if the 287 00:15:53,400 --> 00:15:56,440 Speaker 1: government comes in and starts propping these guys up or 288 00:15:56,480 --> 00:16:00,480 Speaker 1: bails them out for doing something wrong, for one, the 289 00:16:00,560 --> 00:16:05,720 Speaker 1: investor doesn't get to take advantage of low prices because 290 00:16:05,760 --> 00:16:08,840 Speaker 1: they're getting propped up. You know, Warren Buffett got the 291 00:16:08,880 --> 00:16:11,560 Speaker 1: warrants on a i G. Where is that wasn't really 292 00:16:11,560 --> 00:16:17,680 Speaker 1: offered to the retail investor because they were getting bailed out, right, 293 00:16:17,800 --> 00:16:20,840 Speaker 1: So it didn't get to the point where investors could 294 00:16:20,880 --> 00:16:23,560 Speaker 1: have bought into a I G at much lower levels, 295 00:16:23,560 --> 00:16:26,240 Speaker 1: which it would have gone much lower had Warren Buffett 296 00:16:26,280 --> 00:16:30,040 Speaker 1: not stepped in and across the board. So any time 297 00:16:30,080 --> 00:16:34,520 Speaker 1: we're in free markets, the market should dictate price, and 298 00:16:34,800 --> 00:16:40,000 Speaker 1: if somebody intervenes, then it doesn't allow that to happen, 299 00:16:40,160 --> 00:16:42,640 Speaker 1: you know. And another one of our arguments is is 300 00:16:42,680 --> 00:16:46,320 Speaker 1: why is the Fed dictating interest rates? Why doesn't the 301 00:16:46,360 --> 00:16:49,960 Speaker 1: overall market dictate those interests rates if we are free markets. 302 00:16:49,960 --> 00:16:52,800 Speaker 1: So it kind of all goes back to the free 303 00:16:52,840 --> 00:16:58,560 Speaker 1: market should discover price and the market should be allowed 304 00:16:58,600 --> 00:17:01,800 Speaker 1: to go to that price. All right, let's talk about 305 00:17:01,840 --> 00:17:07,040 Speaker 1: that specific day, February two thousand nine. I have to 306 00:17:07,080 --> 00:17:10,240 Speaker 1: imagine you remember it pretty well because it's now so historic. 307 00:17:10,760 --> 00:17:15,040 Speaker 1: What was that morning, Like, did you know prior to 308 00:17:15,320 --> 00:17:18,439 Speaker 1: Rick Santelly really going off that something was going to 309 00:17:18,480 --> 00:17:20,760 Speaker 1: happen or did it just sort of like the moment 310 00:17:20,880 --> 00:17:24,080 Speaker 1: was the moment? Uh he started stirring it up, because 311 00:17:24,480 --> 00:17:28,760 Speaker 1: you know, it basically happened right at the opening of 312 00:17:28,800 --> 00:17:33,000 Speaker 1: the day. So I just remember him all fired up, 313 00:17:33,200 --> 00:17:35,159 Speaker 1: running up to the pit and he ran up and 314 00:17:35,240 --> 00:17:38,439 Speaker 1: started like ranting about a couple of things, and we 315 00:17:38,520 --> 00:17:40,560 Speaker 1: brought up the tea party thing, and then he bolted 316 00:17:40,600 --> 00:17:42,399 Speaker 1: and I was like, okay, that was the end of it, 317 00:17:42,440 --> 00:17:44,399 Speaker 1: and the next thing we know, he's running up the 318 00:17:44,400 --> 00:17:46,720 Speaker 1: stairs and came up right next to me and goes 319 00:17:46,800 --> 00:17:51,760 Speaker 1: on and started that rant. So after that it really 320 00:17:51,800 --> 00:17:54,680 Speaker 1: started spinning. So it just to be clear, you and Rick, 321 00:17:54,840 --> 00:17:57,439 Speaker 1: prior to him having gone on air that morning, had 322 00:17:57,480 --> 00:18:00,320 Speaker 1: a little tea party chat where you talked about your boat, 323 00:18:00,640 --> 00:18:03,280 Speaker 1: like yeah, it was like, uh, you know, a minute 324 00:18:03,640 --> 00:18:05,760 Speaker 1: minute to two minutes before he went on air, it 325 00:18:05,840 --> 00:18:07,920 Speaker 1: came up, started talking and I think he probably ran 326 00:18:07,960 --> 00:18:11,200 Speaker 1: down and checked out your Bloomberg terminal, which he always 327 00:18:11,280 --> 00:18:13,920 Speaker 1: did before he went on air, and then came right 328 00:18:13,920 --> 00:18:19,280 Speaker 1: back up and we all started that little ramp. And 329 00:18:19,320 --> 00:18:22,320 Speaker 1: then that phrase the tea party, which we now know 330 00:18:22,400 --> 00:18:24,880 Speaker 1: to be the political force, that was not something that 331 00:18:25,040 --> 00:18:27,760 Speaker 1: anyone was really like, I've never heard that term prior 332 00:18:27,800 --> 00:18:31,000 Speaker 1: to that morning, you know, no, and prior to that 333 00:18:31,520 --> 00:18:33,760 Speaker 1: couple of minutes. Because the ofference of course to the 334 00:18:33,760 --> 00:18:37,360 Speaker 1: original team, right absolutely, and that's and that's what that's 335 00:18:37,400 --> 00:18:39,879 Speaker 1: what the reference was was like, you know, we need 336 00:18:39,920 --> 00:18:43,439 Speaker 1: to because you know, it's taxation without representation in a 337 00:18:43,520 --> 00:18:47,040 Speaker 1: sense again to the bailouts, if you're going to tax 338 00:18:47,119 --> 00:18:50,679 Speaker 1: the people to bail out somebody that did something wrong. 339 00:18:50,880 --> 00:18:55,320 Speaker 1: Is that in my best interest? You know? And that 340 00:18:55,520 --> 00:18:57,520 Speaker 1: is all part of that as well. So that's kind 341 00:18:57,520 --> 00:18:59,760 Speaker 1: of where that kind of came up with and and 342 00:18:59,840 --> 00:19:03,000 Speaker 1: we ran with it. So you're listening to san Kelly, 343 00:19:03,520 --> 00:19:06,399 Speaker 1: you're not just listening, you're also chiming in. Did you 344 00:19:06,440 --> 00:19:09,280 Speaker 1: have any sense at the time that this was a 345 00:19:09,320 --> 00:19:11,720 Speaker 1: big moment that was going to be remembered or at 346 00:19:11,800 --> 00:19:16,280 Speaker 1: least enter the public consciousness for years to come. No. 347 00:19:16,480 --> 00:19:18,479 Speaker 1: I did not realize it was going to be as 348 00:19:18,480 --> 00:19:20,000 Speaker 1: big as it was. You know. I thought there was 349 00:19:20,280 --> 00:19:23,560 Speaker 1: other moments where I had different interviews at different times 350 00:19:23,560 --> 00:19:25,520 Speaker 1: that I thought were going to maybe be bigger than that. 351 00:19:25,560 --> 00:19:29,320 Speaker 1: But I didn't even realize that day necessarily how big 352 00:19:29,359 --> 00:19:32,280 Speaker 1: it had gotten. I did a couple of interviews afterwards, 353 00:19:32,359 --> 00:19:35,000 Speaker 1: and it's kind of like, okay, you know. But then 354 00:19:35,040 --> 00:19:37,200 Speaker 1: I was walking through the airport and this guy came 355 00:19:37,280 --> 00:19:40,240 Speaker 1: up to me. It was just like yeah, you know, 356 00:19:40,359 --> 00:19:43,720 Speaker 1: And I was because I flew out to Tahoe literally 357 00:19:43,760 --> 00:19:46,600 Speaker 1: that weekend to go on a ski trip and this 358 00:19:46,640 --> 00:19:48,520 Speaker 1: guy walked up to me in the airport and I 359 00:19:48,560 --> 00:19:51,399 Speaker 1: was like, Okay, now I know it's big. You know, 360 00:19:51,920 --> 00:19:55,000 Speaker 1: something I'm curious about I feel like a lot of 361 00:19:55,040 --> 00:19:58,399 Speaker 1: people went in the moment and going back and watching 362 00:19:58,480 --> 00:20:02,840 Speaker 1: that video there like this is crazy, all these people 363 00:20:03,000 --> 00:20:06,760 Speaker 1: complaining about bailouts and stuff. But the people who are 364 00:20:06,840 --> 00:20:09,640 Speaker 1: cheering it on are all people in finance, and they're 365 00:20:09,640 --> 00:20:12,159 Speaker 1: all people trading, and they're all people who are in 366 00:20:12,240 --> 00:20:15,960 Speaker 1: some way part of the sort of speculative financial system. 367 00:20:16,040 --> 00:20:19,199 Speaker 1: Do you think that people fail to like a have 368 00:20:19,359 --> 00:20:22,679 Speaker 1: you what have you heard people make that complaint? They're like, 369 00:20:22,720 --> 00:20:25,600 Speaker 1: why are these the people complaining they're out CNBC part 370 00:20:25,600 --> 00:20:28,720 Speaker 1: of the trader world and be do you think people 371 00:20:28,840 --> 00:20:32,840 Speaker 1: fail to make a distinction between, say, the role that 372 00:20:33,080 --> 00:20:38,160 Speaker 1: Chicago floor traders had in the financial system versus finance 373 00:20:38,280 --> 00:20:41,760 Speaker 1: versus the banking system, and that people don't distinguish it because, 374 00:20:42,040 --> 00:20:45,160 Speaker 1: as Tracy sort of alluded to earlier, a bunch of 375 00:20:45,760 --> 00:20:50,560 Speaker 1: guys in Chicago speculative trading instruments. You don't automatically feel 376 00:20:50,600 --> 00:20:53,440 Speaker 1: the most sympathy with them. Absolutely, And I get that, 377 00:20:53,480 --> 00:20:56,040 Speaker 1: you know your people. There's a bunch of rich guys 378 00:20:56,080 --> 00:20:59,000 Speaker 1: down on the floor that are worried about these poor people, 379 00:21:00,080 --> 00:21:02,560 Speaker 1: you know, losing their house and making a big deal 380 00:21:02,600 --> 00:21:07,320 Speaker 1: about that. I don't believe it was about that specifically. 381 00:21:07,400 --> 00:21:10,960 Speaker 1: You know, it is about even that rich trader, and 382 00:21:11,000 --> 00:21:12,920 Speaker 1: those guys took advantage of it too. Some of those 383 00:21:12,920 --> 00:21:16,440 Speaker 1: guys walked away from their mortgages just because they could 384 00:21:16,480 --> 00:21:18,680 Speaker 1: to get a lower interest rate. Lock that stuff in. 385 00:21:19,200 --> 00:21:23,800 Speaker 1: And the real issue is that's the moral hazard is 386 00:21:24,160 --> 00:21:26,720 Speaker 1: you know, smart people will take advantage of those kind 387 00:21:26,760 --> 00:21:31,359 Speaker 1: of loopholes. And that's where the unfairness comes in. Is 388 00:21:31,400 --> 00:21:35,560 Speaker 1: when you start seeing that role, you know that snowball 389 00:21:35,600 --> 00:21:38,600 Speaker 1: effects start happening. And that was the real worry is 390 00:21:39,240 --> 00:21:41,600 Speaker 1: if you start letting people off the hook, well what 391 00:21:41,720 --> 00:21:45,679 Speaker 1: about me? You know, um, you can't prop up a 392 00:21:45,720 --> 00:21:49,840 Speaker 1: certain area of society, just like I felt with the 393 00:21:49,880 --> 00:21:54,080 Speaker 1: cash for clunkers. For one, those companies were already giving 394 00:21:54,080 --> 00:21:57,280 Speaker 1: incentives that were probably better than the incentive of a 395 00:21:57,320 --> 00:21:59,480 Speaker 1: cash for clunker. And I can go into all the 396 00:21:59,520 --> 00:22:02,119 Speaker 1: cash for lunk or stuff. But at the end of 397 00:22:02,160 --> 00:22:06,359 Speaker 1: the day, now we're propping up the auto industry. But 398 00:22:06,480 --> 00:22:10,919 Speaker 1: what about the dishwashers, what about the microwave companies? You know, 399 00:22:11,080 --> 00:22:13,960 Speaker 1: all these other little companies that make these little widgets 400 00:22:14,040 --> 00:22:17,560 Speaker 1: or the microphones we're speaking into now because people are 401 00:22:17,600 --> 00:22:21,920 Speaker 1: buying a car. That segment of the society is doing well, 402 00:22:21,960 --> 00:22:24,119 Speaker 1: But what about all these other little mom and pop 403 00:22:24,200 --> 00:22:27,840 Speaker 1: stores that aren't getting that money cash for clunkers. For one, 404 00:22:27,920 --> 00:22:32,359 Speaker 1: you know, it was a cars so if you had 405 00:22:31,520 --> 00:22:34,200 Speaker 1: a car for one, you probably didn't have a very 406 00:22:34,200 --> 00:22:37,960 Speaker 1: big payment, you had very little insurance premium. And then 407 00:22:38,000 --> 00:22:40,120 Speaker 1: you go and turn that car in and now you're 408 00:22:40,560 --> 00:22:43,000 Speaker 1: getting a car and you've gotta pay five dollars a month, 409 00:22:43,040 --> 00:22:45,919 Speaker 1: your hundred fifty dollars for insurance a month or whatever. 410 00:22:46,760 --> 00:22:49,919 Speaker 1: So all of that money coming out of the economy 411 00:22:51,240 --> 00:22:55,160 Speaker 1: really stifles the velocity of money because if you spend 412 00:22:55,160 --> 00:22:57,720 Speaker 1: your six hundred dollars a month differently than I spend mine, 413 00:22:58,520 --> 00:23:01,320 Speaker 1: then the economy thrives. You know, I might be going 414 00:23:01,359 --> 00:23:04,520 Speaker 1: out and buying a new bed, but if I just 415 00:23:04,600 --> 00:23:07,400 Speaker 1: bought a car, I can't afford that bed now, right, 416 00:23:07,840 --> 00:23:10,159 Speaker 1: So that slows the velocity of money down when you 417 00:23:10,200 --> 00:23:11,920 Speaker 1: put it all into one segment. And that was part 418 00:23:11,920 --> 00:23:15,919 Speaker 1: of those problems as well. So related to Joe's question. 419 00:23:16,119 --> 00:23:19,080 Speaker 1: There's a moment during that rant when Rick Santelli talks 420 00:23:19,080 --> 00:23:22,600 Speaker 1: about the silent majority, and they're not that silent anymore, 421 00:23:22,600 --> 00:23:25,880 Speaker 1: they're right behind him. They're chiming in partially because you're 422 00:23:26,000 --> 00:23:30,600 Speaker 1: chiming in. Do you feel like your role in that rant, 423 00:23:30,760 --> 00:23:33,760 Speaker 1: the sort of like Greek chorus or or the backup 424 00:23:33,840 --> 00:23:36,080 Speaker 1: band or whatever you want to call it. Do you 425 00:23:36,160 --> 00:23:40,840 Speaker 1: think that that helped bring out opinions publicly that previously 426 00:23:41,480 --> 00:23:43,879 Speaker 1: had been hidden, Because part of what you're saying is, 427 00:23:43,960 --> 00:23:46,800 Speaker 1: you know, people basically complaining that they're not getting a 428 00:23:46,880 --> 00:23:49,760 Speaker 1: chance to snap up some assets on the cheap. That's 429 00:23:49,800 --> 00:23:55,880 Speaker 1: not necessarily a politically correct view um for that time period, right, Well, 430 00:23:55,920 --> 00:23:58,760 Speaker 1: I wouldn't say, I don't know if it's politically correct 431 00:23:58,840 --> 00:24:01,160 Speaker 1: or not, but I mean, you know, we are one 432 00:24:01,160 --> 00:24:07,280 Speaker 1: of the only countries that allows free market and and 433 00:24:07,359 --> 00:24:10,760 Speaker 1: when you stop allowing that to happen, we lose something 434 00:24:10,760 --> 00:24:15,159 Speaker 1: of what we are right. And that's the the nitty 435 00:24:15,160 --> 00:24:17,760 Speaker 1: gritty of it as far as I'm concerned. It's when 436 00:24:17,760 --> 00:24:20,159 Speaker 1: an investors snap up on the cheap and stuff like that. 437 00:24:20,160 --> 00:24:21,960 Speaker 1: But that could have been anybody. I mean, I was 438 00:24:22,000 --> 00:24:24,679 Speaker 1: telling my friends at that time. I was like, literally, 439 00:24:24,800 --> 00:24:27,119 Speaker 1: if you have a second car, go out and sell 440 00:24:27,160 --> 00:24:30,399 Speaker 1: it and buy something, Go buy forward at a dollar 441 00:24:30,560 --> 00:24:34,399 Speaker 1: fourteen or something like that, because you aren't going to 442 00:24:34,440 --> 00:24:38,200 Speaker 1: get these prices ever again when you can buy GM 443 00:24:38,280 --> 00:24:40,439 Speaker 1: for what did it go down to? I mean, it 444 00:24:40,520 --> 00:24:43,080 Speaker 1: was like I think I bought it. I bought a 445 00:24:43,080 --> 00:24:44,840 Speaker 1: way too high and it was like six dollars or 446 00:24:44,880 --> 00:24:47,119 Speaker 1: something like that in the tank below that. But and 447 00:24:47,160 --> 00:24:49,440 Speaker 1: I also got forward at it like a dollar fifteen. 448 00:24:49,480 --> 00:24:51,919 Speaker 1: It was literally right off the lows. But you know, 449 00:24:52,560 --> 00:24:57,200 Speaker 1: those are investment times where it could change people's lives. 450 00:24:57,640 --> 00:25:01,160 Speaker 1: So tell us about the aftermath. You mentioned the immediate 451 00:25:01,200 --> 00:25:05,119 Speaker 1: aftermath of um, you're flying to Tahoe and so what 452 00:25:05,359 --> 00:25:08,199 Speaker 1: you realized? That was your sort of first realization that 453 00:25:08,480 --> 00:25:10,720 Speaker 1: whoa you're that was sort of big and people remembered 454 00:25:10,800 --> 00:25:13,080 Speaker 1: you in this moment, and then of course the whole 455 00:25:13,080 --> 00:25:16,320 Speaker 1: two party movement became a thing in a force of 456 00:25:16,359 --> 00:25:19,720 Speaker 1: American politics. So what was that like? Watching that? Did 457 00:25:19,880 --> 00:25:22,439 Speaker 1: did you ever get invited to events? Like? What was 458 00:25:22,480 --> 00:25:24,639 Speaker 1: sort of how did it change your life? I did 459 00:25:24,720 --> 00:25:27,199 Speaker 1: get invited to a couple of events, but I didn't 460 00:25:27,240 --> 00:25:31,520 Speaker 1: really I didn't go to any of them. UM and 461 00:25:31,840 --> 00:25:33,680 Speaker 1: I wanted to kind of stay away from the believe 462 00:25:33,720 --> 00:25:36,399 Speaker 1: it or not politics of it all, you know, I 463 00:25:36,440 --> 00:25:38,919 Speaker 1: didn't want to get into politics, so I kind of 464 00:25:38,920 --> 00:25:40,880 Speaker 1: tried to shy away from it a little bit, but 465 00:25:41,280 --> 00:25:43,639 Speaker 1: it blew up quickly, and I was pretty proud of 466 00:25:43,640 --> 00:25:45,680 Speaker 1: it at first, and then you know, I kind of 467 00:25:45,720 --> 00:25:48,760 Speaker 1: got moved over to being more Republican, and it was 468 00:25:48,800 --> 00:25:50,439 Speaker 1: supposed to be a more of a middle of the 469 00:25:50,520 --> 00:25:53,160 Speaker 1: ais all kind of thing where you know, I don't 470 00:25:53,160 --> 00:25:56,320 Speaker 1: always necessarily agree with everything the Republics and say, or 471 00:25:56,400 --> 00:25:59,200 Speaker 1: the Democrats, so it was like the middle of the 472 00:25:59,320 --> 00:26:03,879 Speaker 1: road kind of idea that I think has lost its 473 00:26:03,920 --> 00:26:09,119 Speaker 1: way a little bit. Do you draw a direct connection between, um, 474 00:26:09,160 --> 00:26:12,240 Speaker 1: you know, what happened on that day, February birth of 475 00:26:12,280 --> 00:26:16,680 Speaker 1: the Tea Party to what happened with the most recent 476 00:26:16,760 --> 00:26:20,879 Speaker 1: presidential election and the rise of Donald Trump, also an 477 00:26:20,920 --> 00:26:27,240 Speaker 1: anti government, anti regulation, to some extent, free market candidate. Well, 478 00:26:27,280 --> 00:26:29,920 Speaker 1: you know, we thought he was a free market candidate 479 00:26:30,040 --> 00:26:34,280 Speaker 1: until he started throwing in terriffs. I guess, right, But um, 480 00:26:35,000 --> 00:26:37,639 Speaker 1: I don't know if it gave a rise to Trump. 481 00:26:37,720 --> 00:26:40,119 Speaker 1: But I suppose that there's something in that where I 482 00:26:40,200 --> 00:26:44,920 Speaker 1: think that, you know, Donald Trump really was the anti 483 00:26:45,000 --> 00:26:48,560 Speaker 1: political figure, and I think that that is something that 484 00:26:48,640 --> 00:26:54,040 Speaker 1: people really wanted and got right. They voters got what 485 00:26:54,080 --> 00:26:58,560 Speaker 1: they asked for. But yeah, I guess it could be 486 00:26:58,640 --> 00:27:01,000 Speaker 1: somewhat of a correlation there because I think that people 487 00:27:01,480 --> 00:27:04,439 Speaker 1: back then we're also kind of fed up with the 488 00:27:04,480 --> 00:27:07,560 Speaker 1: political system and tried to create a new entity that 489 00:27:07,600 --> 00:27:12,399 Speaker 1: would compete. So I hadn't really put that correlation together, 490 00:27:12,440 --> 00:27:15,080 Speaker 1: but that may very well be true what happened there. 491 00:27:15,200 --> 00:27:17,879 Speaker 1: So let's talk about the sort of, uh, the final 492 00:27:18,040 --> 00:27:23,280 Speaker 1: chapter of the story, because in addition to everything you saw, 493 00:27:23,320 --> 00:27:27,240 Speaker 1: the sort of the final years of that uh Chicago 494 00:27:27,359 --> 00:27:30,760 Speaker 1: floor trading culture. They what you described walking onto the 495 00:27:30,800 --> 00:27:36,560 Speaker 1: floor is long gone now, and so sort of talk 496 00:27:36,640 --> 00:27:40,399 Speaker 1: about how your final what the end of your time 497 00:27:40,440 --> 00:27:42,320 Speaker 1: on the floor looked like, and then what you're up 498 00:27:42,359 --> 00:27:46,080 Speaker 1: to now. Okay, So, yeah, that first day and those 499 00:27:46,160 --> 00:27:48,560 Speaker 1: days in the old room, in the old grain room 500 00:27:48,640 --> 00:27:51,239 Speaker 1: is the original floor for the grain room is the 501 00:27:51,480 --> 00:27:54,120 Speaker 1: trading floor that I originally walked on. And then we 502 00:27:54,240 --> 00:27:58,040 Speaker 1: had the new trading floor the CBOT built, and in 503 00:27:58,160 --> 00:28:03,080 Speaker 1: that time, yeah, it just uh slowly started dwindling down 504 00:28:03,320 --> 00:28:07,600 Speaker 1: and I at one point was just going down onto 505 00:28:07,600 --> 00:28:09,720 Speaker 1: the floor for an office. It was like, you know, 506 00:28:09,880 --> 00:28:12,679 Speaker 1: I felt more productive if I went down to the 507 00:28:12,720 --> 00:28:15,840 Speaker 1: border trade and went onto the floor and focused on 508 00:28:15,880 --> 00:28:19,120 Speaker 1: trading all day long. And then when it was kind 509 00:28:19,119 --> 00:28:22,000 Speaker 1: of like me looking around and not a whole lot 510 00:28:22,000 --> 00:28:24,439 Speaker 1: of other people in there, I did start going. I 511 00:28:24,480 --> 00:28:26,600 Speaker 1: did go and trade in the grain room for a 512 00:28:26,640 --> 00:28:30,640 Speaker 1: little while, and then it was trading from home more 513 00:28:30,680 --> 00:28:33,720 Speaker 1: and more. Finally I just looked at the wife and said, 514 00:28:33,920 --> 00:28:37,360 Speaker 1: you know, why are we in Chicago, Like we could 515 00:28:37,400 --> 00:28:39,760 Speaker 1: be anywhere, you know, we could be in the mountains. 516 00:28:40,360 --> 00:28:43,680 Speaker 1: So started looking at different places. It ended up moving 517 00:28:43,760 --> 00:28:48,560 Speaker 1: to Arizona. I'm still trading, and I also teach options 518 00:28:48,600 --> 00:28:52,040 Speaker 1: how to trade options at pro Trader Strategies, and I 519 00:28:52,080 --> 00:28:54,200 Speaker 1: teach a little bit different than a lot of people. 520 00:28:54,240 --> 00:28:56,320 Speaker 1: I talked about volatility and some of the things that 521 00:28:56,440 --> 00:28:58,160 Speaker 1: I learned on the floor. You know, I mean one 522 00:28:58,280 --> 00:29:01,480 Speaker 1: great thing about trading on the floor, good or bad, 523 00:29:01,520 --> 00:29:04,240 Speaker 1: I guess is you know, we got jammed with trades. 524 00:29:04,280 --> 00:29:06,320 Speaker 1: You didn't always like the trade that you were given, 525 00:29:06,360 --> 00:29:09,080 Speaker 1: but you had to make a market and somebody, a 526 00:29:09,120 --> 00:29:11,840 Speaker 1: broker would come in and you'd have to take that trade. 527 00:29:11,880 --> 00:29:14,320 Speaker 1: So I know, the good locations to get into good 528 00:29:14,360 --> 00:29:16,800 Speaker 1: trades and the bad locations or the bad types of 529 00:29:16,920 --> 00:29:19,760 Speaker 1: environments that you don't want to get involved in certain 530 00:29:19,760 --> 00:29:22,120 Speaker 1: types of trades, So I try to teach that. I'm 531 00:29:22,120 --> 00:29:24,880 Speaker 1: curious because you mentioned that one of the and this 532 00:29:25,000 --> 00:29:28,320 Speaker 1: came up in other conversations that we've had, so I 533 00:29:28,360 --> 00:29:31,400 Speaker 1: think it's great that you mentioned it. Your rugby player background, 534 00:29:31,480 --> 00:29:34,600 Speaker 1: your outgoing this background, none of that really matters if 535 00:29:34,640 --> 00:29:37,200 Speaker 1: you're trading from home on a computer, right, No, it doesn't. 536 00:29:37,280 --> 00:29:39,600 Speaker 1: My computer doesn't care how loud I yell at it. 537 00:29:39,640 --> 00:29:41,920 Speaker 1: You know, the traders on the floor, if you yelled 538 00:29:41,960 --> 00:29:44,160 Speaker 1: a little bit louder, you could get a couple of trades. 539 00:29:44,240 --> 00:29:46,240 Speaker 1: But the the computer doesn't help me out when I 540 00:29:46,280 --> 00:29:50,920 Speaker 1: start yelling at it, and it's it's a lot different. 541 00:29:50,960 --> 00:29:52,640 Speaker 1: Like you know, I talked about that buzz and that 542 00:29:52,760 --> 00:29:55,840 Speaker 1: energy and that you would feel on the floor, and 543 00:29:55,880 --> 00:30:01,040 Speaker 1: you just really lose that when you're trading, uh from 544 00:30:01,040 --> 00:30:04,520 Speaker 1: a screen and uh just listening TV and stuff like 545 00:30:04,560 --> 00:30:08,560 Speaker 1: that for that kind of information or directionality. Erica, Well, 546 00:30:08,640 --> 00:30:11,360 Speaker 1: good luck too, And I think you've had a very 547 00:30:11,400 --> 00:30:15,000 Speaker 1: sort of small but interesting and pivotal role in American 548 00:30:15,080 --> 00:30:18,240 Speaker 1: political history and really appreciate you coming on to tell 549 00:30:18,280 --> 00:30:20,080 Speaker 1: your story. Thank you. Joe thank you for having me. 550 00:30:20,080 --> 00:30:22,200 Speaker 1: It's finally nice to meet you in person. And Tracy, 551 00:30:22,880 --> 00:30:24,840 Speaker 1: hopefully one day we can meet in person as well. 552 00:30:24,840 --> 00:30:44,280 Speaker 1: Thank you. Thanks Eric, Tracy. I really enjoyed getting Eric's story, 553 00:30:44,440 --> 00:30:49,480 Speaker 1: and I remember vividly that day, February thousand and nine, 554 00:30:49,600 --> 00:30:52,280 Speaker 1: so I love getting some of the back story of 555 00:30:52,360 --> 00:30:56,640 Speaker 1: how that, how that actually emerged. Yeah, absolutely fascinating conversation. 556 00:30:56,960 --> 00:30:59,840 Speaker 1: Really interesting to think as well that at the time, 557 00:31:00,040 --> 00:31:02,200 Speaker 1: I don't think anyone had an inkling that it was 558 00:31:02,240 --> 00:31:04,720 Speaker 1: going to develop into the thing that it did, which 559 00:31:04,800 --> 00:31:09,640 Speaker 1: was an entire political movement in America. But in retrospect, 560 00:31:10,200 --> 00:31:13,120 Speaker 1: if you listen to what Santley said, you can hear 561 00:31:13,200 --> 00:31:16,640 Speaker 1: all the language that became popularized by the Tea Party, 562 00:31:16,680 --> 00:31:18,880 Speaker 1: and not just the Tea Party but Trump as well. 563 00:31:18,960 --> 00:31:22,120 Speaker 1: You know the moment where he talks about losers paying 564 00:31:22,160 --> 00:31:26,200 Speaker 1: for losers mortgages, that that's almost directly out of the 565 00:31:26,240 --> 00:31:29,640 Speaker 1: mouth of Trump. Really, there was something else that Eric 566 00:31:29,680 --> 00:31:33,720 Speaker 1: said that I had forgotten, but that actually really sort 567 00:31:33,760 --> 00:31:35,920 Speaker 1: of rang true with me, and I hadn't thought about 568 00:31:35,960 --> 00:31:39,560 Speaker 1: it all, which was that in the beginning, even once 569 00:31:39,680 --> 00:31:44,400 Speaker 1: the Tea Party as a political entity got going, or 570 00:31:44,440 --> 00:31:47,000 Speaker 1: when we said when he said there was made the 571 00:31:47,040 --> 00:31:50,680 Speaker 1: distinction between the Tea Party and the Republican Party. I 572 00:31:50,760 --> 00:31:53,720 Speaker 1: kind of that sounds weird in retrospect, because now we 573 00:31:53,760 --> 00:31:55,920 Speaker 1: know that the Tea Party, at least for a while 574 00:31:55,960 --> 00:31:59,120 Speaker 1: and arguably still is this big pillar of the Republican Party. 575 00:31:59,160 --> 00:32:02,120 Speaker 1: But this idea that at the very beginning it wasn't 576 00:32:02,160 --> 00:32:03,920 Speaker 1: exactly the same thing, and it was that it was 577 00:32:04,000 --> 00:32:07,120 Speaker 1: it seemed like maybe there was the potential for it 578 00:32:07,160 --> 00:32:10,480 Speaker 1: to be a sort of very like anti Wall Street, 579 00:32:10,560 --> 00:32:15,040 Speaker 1: anti bailouts, anti fat cats movement that wasn't necessarily going 580 00:32:15,080 --> 00:32:18,400 Speaker 1: to be aligned with a particular party. It did feel 581 00:32:18,440 --> 00:32:20,960 Speaker 1: like in the very early days that that was sort 582 00:32:20,960 --> 00:32:23,360 Speaker 1: of possible. And then, of course now we think of 583 00:32:23,440 --> 00:32:27,280 Speaker 1: the Tea Party is just being extremely right wing, which 584 00:32:27,480 --> 00:32:30,000 Speaker 1: and you know, and a lot there being a big 585 00:32:30,040 --> 00:32:33,880 Speaker 1: cultural element and immigration, all this other aspects. But the 586 00:32:33,920 --> 00:32:35,719 Speaker 1: fact that in the very beginning it was sort of 587 00:32:35,760 --> 00:32:38,480 Speaker 1: all of you know, anger towards the banks, it's sort 588 00:32:38,480 --> 00:32:41,320 Speaker 1: of a forgotten history of it. I think. No, it 589 00:32:41,360 --> 00:32:44,600 Speaker 1: was a complete fringe movement when it first started. And 590 00:32:44,880 --> 00:32:47,840 Speaker 1: you know, you rightly point out that there are these 591 00:32:47,880 --> 00:32:52,000 Speaker 1: different strains of populism, and at that time, in early 592 00:32:52,040 --> 00:32:54,520 Speaker 1: two thousand nine, you had almost two of them competing. 593 00:32:54,640 --> 00:32:57,920 Speaker 1: One of them was probably what Eric was talking about, 594 00:32:57,920 --> 00:33:00,880 Speaker 1: what Santelia was talking about, this sort of free market, 595 00:33:01,440 --> 00:33:06,240 Speaker 1: anti bailout sentiment. But the other strand had to be 596 00:33:06,320 --> 00:33:09,800 Speaker 1: the anti Wall Street sentiment, the whole idea of you know, 597 00:33:09,880 --> 00:33:13,400 Speaker 1: Goldman Sachs is the giant vampire squid. And you had 598 00:33:13,400 --> 00:33:17,200 Speaker 1: those competing strands, and it looks like, well, actually, I 599 00:33:17,240 --> 00:33:21,600 Speaker 1: don't think American politics has ever actually sorted out which 600 00:33:21,600 --> 00:33:24,560 Speaker 1: one of those it is. Um So certainly in the 601 00:33:24,600 --> 00:33:28,240 Speaker 1: Republican Party you still have Donald Trump, who will say 602 00:33:28,400 --> 00:33:32,120 Speaker 1: anti Wall Street, anti financial industry stuff, but then of 603 00:33:32,160 --> 00:33:34,880 Speaker 1: course we'll hire a bunch of Wall Street executives for 604 00:33:35,000 --> 00:33:38,800 Speaker 1: his administration, so it seems like there's still attention there. Yeah, 605 00:33:38,840 --> 00:33:41,800 Speaker 1: it's interesting to imagine an alternate history of the world 606 00:33:42,400 --> 00:33:45,720 Speaker 1: in which you sort of had the Tea Party, sort 607 00:33:45,720 --> 00:33:49,040 Speaker 1: of merged more with the Occupy Wall Street crowd, and 608 00:33:49,520 --> 00:33:54,040 Speaker 1: became the sort of united United Front against bailouts and bankers. 609 00:33:54,080 --> 00:33:57,920 Speaker 1: But I guess that that was never meant to be. Yeah, 610 00:33:58,240 --> 00:34:01,600 Speaker 1: all right, well, this has been another episode of the 611 00:34:01,640 --> 00:34:04,720 Speaker 1: odd thoughts podcast. I'm Tracy Alloway. You can follow me 612 00:34:04,880 --> 00:34:08,239 Speaker 1: on Twitter at Tracy Alloway and I'm Joe Why Isn't All? 613 00:34:08,360 --> 00:34:10,680 Speaker 1: You can follow me on Twitter at the Star Wart 614 00:34:10,880 --> 00:34:14,080 Speaker 1: and you should follow our guest Eric Wilkinson on Twitter 615 00:34:14,200 --> 00:34:18,520 Speaker 1: at Wolfman's Blog, as well as don't forget to follow 616 00:34:18,560 --> 00:34:22,440 Speaker 1: our producer tofur Foreheads at Foreheads t, as well as 617 00:34:22,480 --> 00:34:26,480 Speaker 1: the Bloomberg head of podcast, Francesca Levy at Francesca Today. 618 00:34:26,520 --> 00:34:27,280 Speaker 1: Thanks for listening