WEBVTT - Pick Up the Phone: Shorts, PSUS, BLS

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<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news. Let's get go in here.

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<v Speaker 1>Enough chit chat, let's go.

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<v Speaker 2>We're on the cloth a right, I have so much

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<v Speaker 2>more chit chat. Hello, and welcome to The Money Stuff Podcast,

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<v Speaker 2>your weekly podcast where we talk about stuff related to money.

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<v Speaker 2>I'm Matt Levine and I write the Money Stuff column

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<v Speaker 2>for Bloomberg Opinion.

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<v Speaker 1>And I'm Katie Greifeld, a reporter for Bloomberg News and

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<v Speaker 1>an anchor for Bloomberg Television.

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<v Speaker 2>Katie, it's good to be back putting out this week.

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<v Speaker 1>I'm so excited to see you in person, not pixelated.

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<v Speaker 1>We're talking about short sellers, We're talking about Bill Lackman.

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<v Speaker 1>We're also talking about drama at the Bureau of Labor Statistics.

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<v Speaker 2>Dramas maybe a generous term for it. Drama, Yeah, drama,

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<v Speaker 2>drama scan, dramatic intrigues, short.

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<v Speaker 1>Sellers, short sellers. I have to say, so the way

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<v Speaker 1>that I prepare for this podcast, and we can cut

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<v Speaker 1>this if it's boring. I listened to it text to speech.

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<v Speaker 1>I put your columns in text to speech and then

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<v Speaker 1>this robot voice spits them out. And so I was

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<v Speaker 1>listening to activist shorts can still have fun and that

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<v Speaker 1>legal disclaimer from Carrysdale Capital, And I was so confused

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<v Speaker 1>because I was like, did Matt write this? It kind

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<v Speaker 1>of read like you wrote it, just the tone of

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<v Speaker 1>this legal disclaimer.

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<v Speaker 2>You know, I have not taken any steps to confirm this,

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<v Speaker 2>but I did feel a little bit like this disclaimer

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<v Speaker 2>was somewhat influenced by money stuff.

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<v Speaker 1>It was like a column, So let me take a

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<v Speaker 1>step back, okay, carrysale, right, let me take a further

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<v Speaker 1>step back. Okay, for sure.

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<v Speaker 2>Andrew left Active a short. Tried about him on the

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<v Speaker 2>podcast a while back. He was charged criminally with like

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<v Speaker 2>doing securities ride because he was a short. Look, he

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<v Speaker 2>would short a stock. You would publish a report saying

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<v Speaker 2>the stock is bad, it'll go down, and then the

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<v Speaker 2>stock would go down because people would read the report.

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<v Speaker 2>And then he would buy back the stock he had shorted.

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<v Speaker 2>He would cover his short, and he make a profit.

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<v Speaker 2>And the sec and the Department of Justice didn't like

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<v Speaker 2>this because they thought that he was sort of deceiving

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<v Speaker 2>investors because he would say, oh, I'm sure that stock

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<v Speaker 2>is going to zero, and then the stock would go

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<v Speaker 2>down ten percent. He'd buy back his short. It was like, oh,

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<v Speaker 2>he's not really conveying his true opinion because he's buying back.

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<v Speaker 2>He's just trying to manipulate the market. He's not trying

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<v Speaker 2>to make money by finding companies that are really going

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<v Speaker 2>to zero. He's trying to make money by convincing other

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<v Speaker 2>people to sell the stock and then he's going to

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<v Speaker 2>buy back for them. It's like a reverse pumpit dump.

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<v Speaker 2>A lot of people think this is kind of a

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<v Speaker 2>wild theory because it's not like he's obligated to keep

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<v Speaker 2>his short on until the company goes to zero, right,

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<v Speaker 2>and his reports, you don't have disclaimers that are like

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<v Speaker 2>we can trade on the security is at any time,

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<v Speaker 2>no promises, right. But you know, there's like some bad

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<v Speaker 2>facts and like there's some bad emails that sort of

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<v Speaker 2>suggest that maybe he did overly enjoy his influence over

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<v Speaker 2>retail traders. And there are a couple cases where like

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<v Speaker 2>you would go on TV and they'd say have you

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<v Speaker 2>covered your short and its say like no, not really,

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<v Speaker 2>and then like they argue he had. So that's the

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<v Speaker 2>Andrew Left story. I think that when he was arrested

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<v Speaker 2>that kind of like cast a Paul over the activist

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<v Speaker 2>short community because everyone who does this, who like shorts

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<v Speaker 2>a stock and then publishes a negative report about it.

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<v Speaker 2>They all have disclaimers of the back saying we reserve

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<v Speaker 2>the right to buy back at any time. And I

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<v Speaker 2>think my impression is that the business model has always

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<v Speaker 2>involved a certain amount of that of covering. Right. If

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<v Speaker 2>you do a really good job in the report and

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<v Speaker 2>the stock goes down twenty percent on the first day,

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<v Speaker 2>you will be tempted to say, well, I'm going to

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<v Speaker 2>take some risk off, right. I did my job. I

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<v Speaker 2>want to get paid for it now. Maybe this company

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<v Speaker 2>will go to zero in a year, but I don't

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<v Speaker 2>want to lock up all my capitol. I don't take

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<v Speaker 2>that risk. I'm going to take some money off now.

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<v Speaker 2>And so I think that when the SEC brought this

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<v Speaker 2>case against Left, that was sort of scary to a

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<v Speaker 2>lot of these short sellers. And so anyway, this week

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<v Speaker 2>Carrisdale and other activist short seller Carrystelle published a negative

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<v Speaker 2>report on the Lumen and they have this disclaimer at

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<v Speaker 2>the back that is one written like I'm going to

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<v Speaker 2>arrogantly say some what money stuff style too?

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<v Speaker 1>If you like money stuff, you'll lost di.

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<v Speaker 2>And I cudited extensively. Two is you know a response

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<v Speaker 2>directly to the left case, and three is just like

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<v Speaker 2>sort of like lays out more clearly what the business

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<v Speaker 2>model might be. And so it says things like, perhaps

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<v Speaker 2>I would help investors to just assume the following. Assume

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<v Speaker 2>we have shorted lots and lots of the stock of

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<v Speaker 2>the covered assurer, that is Lumen, immediately prior to publication,

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<v Speaker 2>and assume we will buy lots and lots of the

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<v Speaker 2>stock of women to cover our short position immediately subsequent

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<v Speaker 2>to pupl equations.

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<v Speaker 1>Right.

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<v Speaker 2>So they've always said we reserved the right to buy

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<v Speaker 2>back ers not but now they're saying, just assume we

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<v Speaker 2>bought back the stock. There's also some other like so

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<v Speaker 2>in the absence of second by second trading updates, just

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<v Speaker 2>assume that is exactly what we'll do. Then you won't

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<v Speaker 2>be er defrauded or something like that.

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<v Speaker 1>That was when I almost crashed my car. But I

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<v Speaker 1>was listening to this while driving and it was read

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<v Speaker 1>to me in this rope voice, and I was like,

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<v Speaker 1>did the robot mess up? Or did they really just

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<v Speaker 1>put that.

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<v Speaker 2>An error in the text.

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<v Speaker 1>So funny.

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<v Speaker 2>Yes, So there's like there's morely that it's like a

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<v Speaker 2>very sarcastic legal disclaimer. Yeah, and I think it's a

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<v Speaker 2>good response to the SEC case because once you have

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<v Speaker 2>that disclaimer, they can't really very a case against you, right. Yeah,

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<v Speaker 2>really elated it out there, and it is sort of

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<v Speaker 2>like a sarcastic defense of the activist short business model. Also,

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<v Speaker 2>the other thing that happened is that Luman was down

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<v Speaker 2>fourteen point five percent when they published this report, right,

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<v Speaker 2>So the report had an impact. And one thing that

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<v Speaker 2>the SEC is saying and the Andrew Left case is

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<v Speaker 2>that when he allegedly deceived people about what he was doing,

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<v Speaker 2>he was buying back the shorts while saying he was

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<v Speaker 2>short forever. I think that's like a little bit of

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<v Speaker 2>a weird claim, right, because I think that what happened

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<v Speaker 2>is that people would sell those stocks that Andrew Left

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<v Speaker 2>recommended against because they thought he was right, or because

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<v Speaker 2>they thought he had a good track record, or because

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<v Speaker 2>they thought other people would copy him, right, but not

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<v Speaker 2>because they really thought he was going to be short

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<v Speaker 2>the whole time. And here Carristelle is like, assume we

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<v Speaker 2>are not short anymore, and they still had a big

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<v Speaker 2>effect on the stock, right, which suggests that like the

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<v Speaker 2>effect that activist short sellers have is much more about

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<v Speaker 2>like the content of the reports than it is about

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<v Speaker 2>people trying to copy their trades, because these people are

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<v Speaker 2>you know, when we talked about Andrew Left, what I

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<v Speaker 2>said is like he's a guy on Twitter, Like, yeah,

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<v Speaker 2>he's not running a multi billion dollar hedge fund. People

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<v Speaker 2>are not copying their trades because I think they are

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<v Speaker 2>huge lucrative hedgehom manage.

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<v Speaker 1>His investor letters are addressed to him.

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<v Speaker 2>Yeah, they're copying the trades because I think they get

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<v Speaker 2>them right. And here again like Caroristelle, like you know,

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<v Speaker 2>is not a huge fund, but people seem to have

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<v Speaker 2>found the report convincing, even as Carrostel is emphatically saying

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<v Speaker 2>just assume we've covered it.

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<v Speaker 1>Short I want to talk about another short selling story

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<v Speaker 1>that dropped this week because it feels like, I don't know,

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<v Speaker 1>earlier this year, there was a lot of obituaries being

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<v Speaker 1>written about short selling. You know, Jim Chainos, Yeah, forever.

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<v Speaker 2>It's been since like GameStop people have been writing.

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<v Speaker 1>Yeah. But Carson Block launched his first law only fond,

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<v Speaker 1>which felt really like a sign of the times. So

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<v Speaker 1>you had Carastale, you also had Hindenburg coming out against

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<v Speaker 1>super Micro. Just in this past week, it feels like,

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<v Speaker 1>and maybe it's just because I've been paying attention to

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<v Speaker 1>it more since we talk about it a lot, but

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<v Speaker 1>it feels like we are seeing more short selling campaigns

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<v Speaker 1>come to life and make a splash in this market.

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<v Speaker 2>Yeah. Well, I think a little of it is like

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<v Speaker 2>a reaction to the left case and they're like yeah,

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<v Speaker 2>They're like we're still here, like like it can't intimidate

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<v Speaker 2>us too much. I think an interesting thing about the

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<v Speaker 2>left case is like I think that that business model

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<v Speaker 2>is okay. The business model, like we short the stock,

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<v Speaker 2>we publish negative things on it, and then we buy

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<v Speaker 2>back because we take that first day reaction to our

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<v Speaker 2>report and like we're not in it for the long term.

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<v Speaker 2>We're in it for what we hope is a good report,

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<v Speaker 2>and the stock goes down, we take our profits, and

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<v Speaker 2>then we do this again and again and hopefully like

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<v Speaker 2>we have enough of a track record that like, you know,

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<v Speaker 2>we have some long term interest, because it only works

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<v Speaker 2>if we have a track record, right, Like we're not

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<v Speaker 2>our report is not going to move down the stock

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<v Speaker 2>if we keep being wrong. So I think that's like

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<v Speaker 2>a legitimate business model and My impression from like years

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<v Speaker 2>of like kind of following these guys and talking to

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<v Speaker 2>these guys occasionally is that that's not like an uncommon

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<v Speaker 2>business model. It's sort of understood in the activist short community.

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<v Speaker 2>They're like, yeah, you take some profits on the first

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<v Speaker 2>day because like you're you know, you run a small fund,

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<v Speaker 2>and yeah, and like why would you take you know,

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<v Speaker 2>short selling is a really risky business. And if you

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<v Speaker 2>can take a profit on the first day and not

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<v Speaker 2>sort of hold it until the stock goes to zero

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<v Speaker 2>and get like in fights with the company and all

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<v Speaker 2>this stuff, why wouldn't you take some risk off the table.

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<v Speaker 2>But I think that it is probably the case that

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<v Speaker 2>the SEC case against Andrew left probably some people didn't

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<v Speaker 2>understand that aspect of the business model and were surprised. Yeah,

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<v Speaker 2>and sort of thought that if an activist short seller

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<v Speaker 2>said the stock is going to zero, like they were

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<v Speaker 2>going to hold their short position until the stock went

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<v Speaker 2>to zero. And like one thing in the in the

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<v Speaker 2>Caristel disclaimer is like we sometimes publish reports on companies

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<v Speaker 2>that we think are worth zero dollars. We have never

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<v Speaker 2>held a short position until the company went to zero.

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<v Speaker 2>But yeah, a thing that the SEC did was call

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<v Speaker 2>attention to this business model, and like maybe the equilibrium

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<v Speaker 2>going forward as everyone understands the business model, no one

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<v Speaker 2>is deceived, you know, or allegedly deceived by people covering

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<v Speaker 2>on the first day, but it continues to kind.

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<v Speaker 1>Of work, and maybe we get more fantastically written legal

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<v Speaker 1>disclaimers out of it. That would be pretty good too.

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<v Speaker 2>Yeah, I mean, like the way this business works is

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<v Speaker 2>you are good at writing, good at being inflammatory, good

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<v Speaker 2>at getting publicity, right, That's how this business works, and

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<v Speaker 2>so like you'll get good disclaimers, which.

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<v Speaker 1>Reminds me, well, two points. We haven't talked about hunter

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<v Speaker 1>Brook in a while.

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<v Speaker 2>We're still there.

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<v Speaker 1>How do you say it?

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<v Speaker 2>Hunter Brook? All right? Right, right right? Hunter Brook the

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<v Speaker 2>newspaper that is also a hedge fund that is also

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<v Speaker 2>a website whose name doesn't have value because.

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<v Speaker 1>The skill set that you just described, being good at

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<v Speaker 1>writing and being splashy sounds a lot like a journalist,

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<v Speaker 1>and Hunter Brook is an interesting hybrid between those two.

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<v Speaker 2>Oh yeah, and like there's always been overlap between investigative

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<v Speaker 2>journalism and like opinion journalism and shortzellers.

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<v Speaker 1>We asked the question the other week, who's hated more

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<v Speaker 1>journalists are short sellers, but also quickly on the super

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<v Speaker 1>Micro short report. So basically, hint, Hinterbrook, No, no, no, Hindenburg,

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<v Speaker 1>Hinden never mind Hindenburg was Basically the basis of their

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<v Speaker 1>short was that their investigationvealed glaring accounting red flags, evidence

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<v Speaker 1>of undisclosed related party transactions, sanctions and export control failures

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<v Speaker 1>and customer issues. So super Micro said that they don't

0:10:33.320 --> 0:10:36.839
<v Speaker 1>comment on rumors and speculations. But then I think the

0:10:36.840 --> 0:10:39.280
<v Speaker 1>next day or the day after the next day, super

0:10:39.320 --> 0:10:42.880
<v Speaker 1>Micro delayed their ten K filing, and I just thought

0:10:42.920 --> 0:10:45.040
<v Speaker 1>that was interesting in light of you writing about how

0:10:45.160 --> 0:10:48.720
<v Speaker 1>cool accounting is this week, it kind of ties in

0:10:48.800 --> 0:10:50.360
<v Speaker 1>and now we have an accounting booboo.

0:10:50.840 --> 0:10:54.120
<v Speaker 2>Yeah. I mean, you know, the activist short business model

0:10:54.280 --> 0:10:57.480
<v Speaker 2>is like they're filling a real need, right. It's like

0:10:57.679 --> 0:11:00.560
<v Speaker 2>if a company is messing up its account and like

0:11:01.040 --> 0:11:03.720
<v Speaker 2>someone notices that and says it publicly, like that can

0:11:03.800 --> 0:11:04.520
<v Speaker 2>have a big effect.

0:11:04.600 --> 0:11:07.720
<v Speaker 1>Well, unless the accounting industry rebearns itself, we might have

0:11:08.320 --> 0:11:11.160
<v Speaker 1>more short campaigns for years and years to comb Yeah.

0:11:10.960 --> 0:11:12.920
<v Speaker 2>I'll say something about that. So I wrote about accounting

0:11:12.960 --> 0:11:15.720
<v Speaker 2>this week. I wrote like I sort of like appreciation

0:11:15.800 --> 0:11:18.680
<v Speaker 2>of accountants, because there was riffing on a business inside

0:11:18.720 --> 0:11:21.120
<v Speaker 2>our article saying that like kids these days don't want

0:11:21.120 --> 0:11:23.600
<v Speaker 2>to be accountants. And I got a bunch of emails

0:11:23.640 --> 0:11:26.640
<v Speaker 2>from accountants saying thank you for appreciating my art. But

0:11:26.679 --> 0:11:28.480
<v Speaker 2>I got one from a guy saying, like, you know,

0:11:28.559 --> 0:11:32.200
<v Speaker 2>there's actually, like there's some studies of the sort of

0:11:32.200 --> 0:11:35.960
<v Speaker 2>long run demand for accountancy degrees. And one of the

0:11:35.960 --> 0:11:39.400
<v Speaker 2>big drivers of people into accounting was Enron. Like when

0:11:39.480 --> 0:11:44.120
<v Speaker 2>Enron failed in like a sea of accounting scandals, everyone

0:11:44.160 --> 0:11:45.559
<v Speaker 2>like looked at that, or like a lot of young

0:11:45.559 --> 0:11:46.760
<v Speaker 2>people looked at that, and they're like, I want to

0:11:46.760 --> 0:11:49.520
<v Speaker 2>be an accountant, which is fascinating. So anyway, he's like, yeah,

0:11:49.520 --> 0:11:51.400
<v Speaker 2>that we just need another big accounting scandal and the

0:11:51.440 --> 0:11:53.280
<v Speaker 2>accountancy will come right back there, you go.

0:11:53.640 --> 0:11:54.160
<v Speaker 1>I like that.

0:11:54.160 --> 0:11:54.960
<v Speaker 2>I'll tice together.

0:12:08.520 --> 0:12:10.200
<v Speaker 1>How about Bill Ackman?

0:12:10.720 --> 0:12:11.280
<v Speaker 2>How about him?

0:12:11.559 --> 0:12:15.120
<v Speaker 1>Oh my gosh. So the Financial Times reported that he's

0:12:15.160 --> 0:12:18.760
<v Speaker 1>seeking to resurrect the initial public offering of the Pershing

0:12:18.920 --> 0:12:23.080
<v Speaker 1>Square USA by offering sweeteners to early investors. Can you

0:12:23.320 --> 0:12:26.960
<v Speaker 1>imagine my delight at seeing the story cross from The

0:12:26.960 --> 0:12:30.360
<v Speaker 1>Financial Times At nine to twelve am Eastern this morning,

0:12:30.720 --> 0:12:31.400
<v Speaker 1>on Thursday.

0:12:31.840 --> 0:12:34.360
<v Speaker 2>I can imagine your delight. I think I shared it.

0:12:34.440 --> 0:12:34.640
<v Speaker 1>Yeah.

0:12:34.640 --> 0:12:36.520
<v Speaker 2>We both were sort of like, what will we talk

0:12:36.559 --> 0:12:40.080
<v Speaker 2>about on this podcast and then and then the answer

0:12:40.160 --> 0:12:41.680
<v Speaker 2>came to us. Yeah, sweeteners.

0:12:41.960 --> 0:12:44.000
<v Speaker 1>So let's talk about some of the sweeteners again. This

0:12:44.040 --> 0:12:46.680
<v Speaker 1>is according to reporting from the Financial Times. According to

0:12:47.280 --> 0:12:50.679
<v Speaker 1>several people familiar with the matter, some of them are

0:12:50.800 --> 0:12:54.120
<v Speaker 1>the right to buy extra shares in the vehicle in

0:12:54.160 --> 0:12:57.720
<v Speaker 1>the future at a fixed price through Warrens. But according

0:12:57.720 --> 0:13:00.960
<v Speaker 1>to the Financial Times, the real prize could be if

0:13:01.000 --> 0:13:03.800
<v Speaker 1>you invest in Pershing Square USA, the closed end fund,

0:13:04.080 --> 0:13:06.520
<v Speaker 1>you could get rights to buy into the eventual IPO

0:13:06.960 --> 0:13:08.120
<v Speaker 1>of the actual hedge fund.

0:13:08.440 --> 0:13:10.640
<v Speaker 2>Yeah, the hedge on management company, right, right, So we

0:13:10.679 --> 0:13:13.679
<v Speaker 2>talked about this when the Pershing Square USA IPO got

0:13:13.800 --> 0:13:18.160
<v Speaker 2>delayed postponed with true tron would be a rude.

0:13:17.920 --> 0:13:20.640
<v Speaker 1>Word, okay, forget, I said, temporarily.

0:13:20.160 --> 0:13:25.760
<v Speaker 2>With drown rather than the problem was that people didn't

0:13:25.760 --> 0:13:27.760
<v Speaker 2>want to pay full price for the shares, and you

0:13:27.840 --> 0:13:29.880
<v Speaker 2>can't really sell the shares at a discount, right Again,

0:13:29.920 --> 0:13:32.240
<v Speaker 2>a normal IPO, you just negotiate the price and if

0:13:32.240 --> 0:13:33.840
<v Speaker 2>people want to pay less than you think the company

0:13:33.960 --> 0:13:36.040
<v Speaker 2>is worth, then like you do that. But with this,

0:13:36.200 --> 0:13:38.839
<v Speaker 2>they're raising money to invest, and so you can't really

0:13:38.880 --> 0:13:40.720
<v Speaker 2>sell the shares at a discount because then you don't

0:13:40.720 --> 0:13:43.079
<v Speaker 2>get as much money as you wanted to invest. And

0:13:43.920 --> 0:13:45.839
<v Speaker 2>that was a real problem. And so they went back

0:13:45.880 --> 0:13:47.240
<v Speaker 2>to the drawing board and they're like, how do we

0:13:47.280 --> 0:13:50.480
<v Speaker 2>give people a sweetener so that they'll put in fifty

0:13:50.559 --> 0:13:53.480
<v Speaker 2>dollars for me to invest fifty dollars and they'll feel

0:13:53.520 --> 0:13:56.440
<v Speaker 2>like they're getting a discount. And there are a couple

0:13:56.480 --> 0:13:59.320
<v Speaker 2>of ways to do that. One way is to actually

0:13:59.320 --> 0:14:02.160
<v Speaker 2>give them a discount by putting in cash from Pershing Square.

0:14:02.640 --> 0:14:05.080
<v Speaker 2>Another way to do it is to give them ownership.

0:14:05.080 --> 0:14:06.520
<v Speaker 2>And I think we talked about this last time. The

0:14:06.600 --> 0:14:09.040
<v Speaker 2>obvious asset that you can put into this IPO is

0:14:09.360 --> 0:14:12.319
<v Speaker 2>some of the management company. The management company has a

0:14:12.400 --> 0:14:15.319
<v Speaker 2>recent valuation. They sold ten percent of it at a

0:14:15.360 --> 0:14:17.439
<v Speaker 2>ten billion dollar valuations. We have some idea of what

0:14:17.520 --> 0:14:21.040
<v Speaker 2>the management company is supposed to be worth, so sophisticated investors,

0:14:21.600 --> 0:14:24.000
<v Speaker 2>the management company has plans to go public perhaps by

0:14:24.080 --> 0:14:26.040
<v Speaker 2>next year. When you say we'll give you a bit

0:14:26.040 --> 0:14:28.320
<v Speaker 2>of the management company, there's like a path to that

0:14:28.480 --> 0:14:32.640
<v Speaker 2>being monetizable, and they have it coming around. There's like

0:14:32.640 --> 0:14:35.080
<v Speaker 2>an alignment of incentives where it's like someone emailed me

0:14:35.440 --> 0:14:37.360
<v Speaker 2>when they pulled the IPO, like they could do what

0:14:37.560 --> 0:14:41.120
<v Speaker 2>Vanguard does. Vanguard is a mutual, it's owned by the

0:14:41.240 --> 0:14:43.760
<v Speaker 2>investors in its funds. You pay fees to Vanguard, but

0:14:43.920 --> 0:14:46.480
<v Speaker 2>like you have an alignment of incentives because you kind

0:14:46.520 --> 0:14:48.360
<v Speaker 2>of get the fees back as an owner of the company.

0:14:48.760 --> 0:14:50.400
<v Speaker 2>Pershing Square would be like a little like that too,

0:14:50.440 --> 0:14:53.680
<v Speaker 2>where Pershing Square USA holders would also own the management company.

0:14:54.120 --> 0:14:56.880
<v Speaker 2>So that makes sense as a sweetener, like you give

0:14:56.920 --> 0:14:59.960
<v Speaker 2>them some of the management company. It's a little awkward

0:15:00.160 --> 0:15:03.640
<v Speaker 2>because part of the point of the Pershing Square USI IPO,

0:15:04.080 --> 0:15:07.720
<v Speaker 2>it's like, raise a lot of assets for Pershing Square

0:15:08.000 --> 0:15:09.680
<v Speaker 2>so that it's management company will be worth a lot

0:15:09.720 --> 0:15:11.880
<v Speaker 2>of money, so that they can do an IPO of

0:15:11.960 --> 0:15:13.800
<v Speaker 2>the management company that will raise a lot of money

0:15:14.160 --> 0:15:17.480
<v Speaker 2>for Pershing Square and its owners and its investors, and

0:15:17.880 --> 0:15:20.480
<v Speaker 2>giving away some of the management company to get the

0:15:20.600 --> 0:15:22.720
<v Speaker 2>Pershing Square US ideal done. It's like a little bit

0:15:22.760 --> 0:15:24.840
<v Speaker 2>of a setback, yeah, but you know you could do it.

0:15:25.200 --> 0:15:26.880
<v Speaker 2>And then the third option you can do is you

0:15:26.920 --> 0:15:29.240
<v Speaker 2>can give people optically a discount. You can give them

0:15:29.360 --> 0:15:33.840
<v Speaker 2>warrants to buy more shares of Pershing Square USA, which

0:15:33.840 --> 0:15:35.760
<v Speaker 2>I don't think is that appealing. Yeah, that's why the

0:15:35.880 --> 0:15:38.080
<v Speaker 2>ft says, like the real prize is the management company,

0:15:38.440 --> 0:15:40.480
<v Speaker 2>because like just giving them warrants, it's still the same

0:15:40.560 --> 0:15:42.520
<v Speaker 2>pot of money. You're just like slicing it a different

0:15:42.520 --> 0:15:44.920
<v Speaker 2>ways to try to, you know, see if people will

0:15:45.000 --> 0:15:45.440
<v Speaker 2>like that more.

0:15:45.880 --> 0:15:49.040
<v Speaker 1>So, I mean, where does this leave you on the

0:15:49.200 --> 0:15:53.040
<v Speaker 1>question of whether you just be better off waiting here?

0:15:53.080 --> 0:15:55.240
<v Speaker 1>I mean, is this enough to answer for what? So

0:15:55.600 --> 0:15:58.040
<v Speaker 1>for waiting for it to actually trade at a discount?

0:15:58.360 --> 0:16:01.000
<v Speaker 2>Oh, it's just like a matter of price, right, Like

0:16:01.680 --> 0:16:03.280
<v Speaker 2>you're getting a discount. Right, So if you put in

0:16:03.360 --> 0:16:05.480
<v Speaker 2>fifty dollars in a structure where like you get back

0:16:05.920 --> 0:16:08.440
<v Speaker 2>your person Square USA share plus a warrant to buy

0:16:08.520 --> 0:16:12.600
<v Speaker 2>the management company, then you're getting a fifty dollars claim

0:16:12.680 --> 0:16:14.480
<v Speaker 2>on a pot of money that Bi Lackman is investing,

0:16:14.680 --> 0:16:19.200
<v Speaker 2>and you're also getting some percentage of the management company

0:16:19.240 --> 0:16:21.160
<v Speaker 2>that is worth some amount of money, right, And then

0:16:21.200 --> 0:16:23.440
<v Speaker 2>you just negotiate the price, right, Like if the managing

0:16:23.480 --> 0:16:25.640
<v Speaker 2>company is worth ten billion dollars and like people want

0:16:25.680 --> 0:16:28.280
<v Speaker 2>a ten percent discount and persons Square a USA is

0:16:28.360 --> 0:16:30.360
<v Speaker 2>raising five billion dollars and you just do the math

0:16:30.400 --> 0:16:32.040
<v Speaker 2>and be like, well, you know, then they need five

0:16:32.120 --> 0:16:33.880
<v Speaker 2>hundred million dollars and like that's five percent of the

0:16:33.880 --> 0:16:35.720
<v Speaker 2>managing company, you know whatever, right, and then you can

0:16:35.800 --> 0:16:38.080
<v Speaker 2>negotiate what the valuation of the management company is. But

0:16:38.240 --> 0:16:40.520
<v Speaker 2>there's a path to getting a deal done. So, like

0:16:41.400 --> 0:16:46.880
<v Speaker 2>when the IPO starts trading, it will probably trade at

0:16:46.880 --> 0:16:49.200
<v Speaker 2>a discount to its net asset value, but the net

0:16:49.240 --> 0:16:51.760
<v Speaker 2>asset value will be more than fifty dollars per share, right,

0:16:51.760 --> 0:16:53.920
<v Speaker 2>because it'll be the fifty dollars you put in plus

0:16:54.400 --> 0:16:56.920
<v Speaker 2>whatever bit of the management company they put in. So

0:16:57.000 --> 0:16:58.720
<v Speaker 2>if the net asset value is like fifty five dollars

0:16:58.760 --> 0:17:00.400
<v Speaker 2>and a trades at fifty dollars, then you should buy

0:17:00.440 --> 0:17:01.640
<v Speaker 2>it for fifty dollars in the IPI.

0:17:01.840 --> 0:17:04.520
<v Speaker 1>So does it also get you back to twenty five

0:17:04.560 --> 0:17:05.199
<v Speaker 1>billion dollars?

0:17:06.520 --> 0:17:07.560
<v Speaker 2>I don't think so.

0:17:08.040 --> 0:17:10.920
<v Speaker 1>It's a big like a big pot of money.

0:17:11.240 --> 0:17:13.640
<v Speaker 2>Right. That's the other important point here is that at

0:17:13.680 --> 0:17:16.000
<v Speaker 2>some point there was discussion of raising twenty five billion

0:17:16.000 --> 0:17:16.879
<v Speaker 2>dollars in this IPO.

0:17:17.359 --> 0:17:20.280
<v Speaker 1>And it's a tall order.

0:17:20.720 --> 0:17:23.840
<v Speaker 2>It's a tall order, and you know, and like if

0:17:23.880 --> 0:17:25.879
<v Speaker 2>the discount needs to be ten percent. Then you need

0:17:25.960 --> 0:17:28.120
<v Speaker 2>to put in Like, if you're raising five billion dollars,

0:17:28.119 --> 0:17:29.720
<v Speaker 2>you need to put in five hundred million dollars worth

0:17:29.760 --> 0:17:31.880
<v Speaker 2>of stuff to give people the discount. If you're raising

0:17:31.920 --> 0:17:33.159
<v Speaker 2>twenty five billion dollars, you have to put in two

0:17:33.200 --> 0:17:35.359
<v Speaker 2>point five billion dollars worth of stuff. It costs you

0:17:35.480 --> 0:17:38.440
<v Speaker 2>more r The other interesting thing in the ft article

0:17:38.560 --> 0:17:42.200
<v Speaker 2>is that in the previous round, part of the incentive

0:17:42.320 --> 0:17:45.200
<v Speaker 2>to put in your money was that they would waive

0:17:45.320 --> 0:17:47.840
<v Speaker 2>the management fees for the first year of the fund,

0:17:48.560 --> 0:17:51.520
<v Speaker 2>and now in a revised version, they might not waive

0:17:51.600 --> 0:17:54.040
<v Speaker 2>the management fees. Yeah, in part because you're maybe getting

0:17:54.040 --> 0:17:56.040
<v Speaker 2>shares of the management company, which you share the management

0:17:56.080 --> 0:18:00.400
<v Speaker 2>fees anyway. But yeah, like, whatever they do to get

0:18:00.480 --> 0:18:02.520
<v Speaker 2>people into this fund is going to cost the pushing

0:18:02.560 --> 0:18:06.399
<v Speaker 2>square money and so they will make back some of

0:18:06.440 --> 0:18:07.480
<v Speaker 2>it by charging more fees.

0:18:07.640 --> 0:18:09.800
<v Speaker 1>You know, I think they should just launch an ETF.

0:18:09.960 --> 0:18:12.080
<v Speaker 1>I know that they're not going to. I know it.

0:18:12.240 --> 0:18:14.000
<v Speaker 2>I know it. You traded a discout.

0:18:14.040 --> 0:18:16.560
<v Speaker 1>You're right, it wouldn't It would easily solve that problem.

0:18:17.080 --> 0:18:19.240
<v Speaker 2>You know. It's an idea that I've poo pooed because

0:18:19.320 --> 0:18:21.520
<v Speaker 2>the whole plant here is permanent capital to make long

0:18:21.600 --> 0:18:24.960
<v Speaker 2>term investments, and ETF doesn't do that. But you're right that,

0:18:25.200 --> 0:18:27.639
<v Speaker 2>like it would solve the main problem they're trying to

0:18:27.720 --> 0:18:29.240
<v Speaker 2>solve now it's just trading at a discount.

0:18:29.440 --> 0:18:34.199
<v Speaker 1>Yeah, and I understand why investors such as Bill Ackman

0:18:34.440 --> 0:18:37.480
<v Speaker 1>and issuers in general would like the closed end fund

0:18:37.480 --> 0:18:42.040
<v Speaker 1>structure for that appeal of permanent capital, but investors clearly

0:18:42.359 --> 0:18:45.320
<v Speaker 1>prefer ETFs. I mean, if you take a look at

0:18:46.080 --> 0:18:49.480
<v Speaker 1>closed end fund assets, they've been camped out at the

0:18:49.520 --> 0:18:51.760
<v Speaker 1>same level. I think it's like three hundred billion dollars

0:18:51.840 --> 0:18:54.640
<v Speaker 1>in the US for a long time now. There's been

0:18:54.800 --> 0:18:57.640
<v Speaker 1>no growth there, even through all of these market cycles.

0:18:57.880 --> 0:18:59.720
<v Speaker 2>Yeah, the Bill Lackman pictures like, this is not a

0:18:59.800 --> 0:19:01.800
<v Speaker 2>c is then fund. This is sort of like Berkshire

0:19:01.800 --> 0:19:05.480
<v Speaker 2>Hathaway Analytic, Like this is a company that happens to

0:19:05.560 --> 0:19:08.560
<v Speaker 2>be structured as I closed then fund, and but it is.

0:19:10.040 --> 0:19:11.720
<v Speaker 2>It's like, I'm not sure that that's right.

0:19:11.960 --> 0:19:14.360
<v Speaker 1>Yeah, let me just fact check that number. It's either

0:19:14.400 --> 0:19:15.800
<v Speaker 1>three hundred or five hundred.

0:19:16.080 --> 0:19:17.159
<v Speaker 2>We're gonna leave all of this in.

0:19:18.920 --> 0:19:21.920
<v Speaker 1>Come on, Matt, do something fun. I don't talk about

0:19:21.920 --> 0:19:26.440
<v Speaker 1>the economy. Either she's right, it's three hundred billion.

0:19:26.560 --> 0:19:30.040
<v Speaker 2>Oh yeah, all of it, all of it. If you

0:19:30.119 --> 0:19:32.320
<v Speaker 2>had been wrong, you would have had to like just

0:19:32.560 --> 0:19:32.800
<v Speaker 2>edit it.

0:19:34.160 --> 0:19:38.639
<v Speaker 1>But I was gonna follow up a salad anyway. The

0:19:38.760 --> 0:19:53.879
<v Speaker 1>point being close end funds are really small b LS,

0:19:54.200 --> 0:19:57.440
<v Speaker 1>the BLS, the Bureau of Labor Statistics. What is going

0:19:57.480 --> 0:20:01.800
<v Speaker 1>on over there? I don't know, Absolutely a monkey business.

0:20:03.400 --> 0:20:06.240
<v Speaker 1>I'm trying to think what I can say on this podcast.

0:20:07.000 --> 0:20:12.760
<v Speaker 1>So the payroll revisions data covering April twenty twenty three

0:20:12.960 --> 0:20:16.960
<v Speaker 1>through March twenty twenty four, there was hyper focus on

0:20:17.160 --> 0:20:20.240
<v Speaker 1>these revisions, and ultimately they were huge. It shows that

0:20:20.320 --> 0:20:22.879
<v Speaker 1>payrolls are likely going to be revised down by over

0:20:22.960 --> 0:20:26.480
<v Speaker 1>eight hundred thousand jobs in those twelve months through March.

0:20:26.600 --> 0:20:30.760
<v Speaker 1>But just the singular focus on this specific report was

0:20:30.800 --> 0:20:33.560
<v Speaker 1>already ridiculous, and then it was made even more ridiculous

0:20:33.920 --> 0:20:35.960
<v Speaker 1>by the fact that it was supposed to come out

0:20:36.320 --> 0:20:39.000
<v Speaker 1>at ten am. One half of this podcast is on

0:20:39.200 --> 0:20:42.639
<v Speaker 1>live TV at that time, and it's me It didn't

0:20:42.680 --> 0:20:46.000
<v Speaker 1>come out until ten thirty three am. But people are

0:20:46.040 --> 0:20:46.880
<v Speaker 1>getting a piecemeal.

0:20:47.280 --> 0:20:51.400
<v Speaker 2>I have seen your filibustering skills in this podcast. Were

0:20:51.440 --> 0:20:54.280
<v Speaker 2>you like just talking about we called that for thirty

0:20:54.320 --> 0:20:54.760
<v Speaker 2>three minutes.

0:20:54.920 --> 0:20:57.680
<v Speaker 1>We call it tap dancing. I was on air with

0:20:57.760 --> 0:20:59.880
<v Speaker 1>Matt Miller and Shannali Basic, so we at least had.

0:20:59.760 --> 0:21:01.800
<v Speaker 2>Each and it was like sitting at me like, yeah,

0:21:01.800 --> 0:21:02.119
<v Speaker 2>where's that.

0:21:02.280 --> 0:21:04.639
<v Speaker 1>Yeah, we were kind of you know, by ten minutes

0:21:04.680 --> 0:21:07.920
<v Speaker 1>in you're like, okay, well something is strange here. We

0:21:08.000 --> 0:21:11.040
<v Speaker 1>still don't have this data. We're waiting on it. There

0:21:11.160 --> 0:21:13.679
<v Speaker 1>was some funky trading going on as well. I mean,

0:21:13.760 --> 0:21:16.040
<v Speaker 1>in the grand scheme of life, it didn't amount to anything,

0:21:16.119 --> 0:21:18.359
<v Speaker 1>but you know, you had the S and P five hundred,

0:21:18.480 --> 0:21:20.879
<v Speaker 1>you had bond yield zigging and zagging. Because people were

0:21:20.960 --> 0:21:23.959
<v Speaker 1>getting it piecemeal. That was the crazy thing. People, as

0:21:24.040 --> 0:21:27.760
<v Speaker 1>we know now were calling up the BLS and the

0:21:27.840 --> 0:21:31.640
<v Speaker 1>BLS was telling them the number right.

0:21:31.600 --> 0:21:34.520
<v Speaker 2>Because apparently what happened is they had the numbers. The

0:21:34.840 --> 0:21:38.119
<v Speaker 2>BLS employees were able to see the numbers. There was

0:21:38.200 --> 0:21:41.040
<v Speaker 2>a technical glitch on the website, so the website didn't

0:21:41.080 --> 0:21:43.320
<v Speaker 2>have the numbers, but the internal people had the numbers,

0:21:43.880 --> 0:21:47.720
<v Speaker 2>and the data was embargoed until ten am, and so

0:21:47.840 --> 0:21:50.520
<v Speaker 2>at like ten fifteen, if you called BLS, you might

0:21:50.640 --> 0:21:52.639
<v Speaker 2>reach a person who was like, oh, the embargoes off,

0:21:52.680 --> 0:21:54.160
<v Speaker 2>I can give you the numbers, even though it wasn't

0:21:54.200 --> 0:21:56.240
<v Speaker 2>on the website yet, So like some people called and

0:21:56.320 --> 0:21:58.800
<v Speaker 2>got the numbers, and other people didn't call, and we're

0:21:58.840 --> 0:22:01.240
<v Speaker 2>like refreshing the webpage and didn't get the numbers.

0:22:01.440 --> 0:22:04.399
<v Speaker 1>So reading the reporting after the fact, it seems like

0:22:04.480 --> 0:22:08.720
<v Speaker 1>there were several communication failures over at the BLS about

0:22:08.800 --> 0:22:13.359
<v Speaker 1>how they would handle external inquiries. I will say that

0:22:13.840 --> 0:22:16.760
<v Speaker 1>going through this experience, this is where lockups are your

0:22:16.840 --> 0:22:20.640
<v Speaker 1>friend when it comes to economic data releases. There used

0:22:20.720 --> 0:22:24.760
<v Speaker 1>to be lockups for things such as the jobs reports

0:22:24.760 --> 0:22:27.399
<v Speaker 1>such as CPI, where you know news agencies would get

0:22:27.440 --> 0:22:30.840
<v Speaker 1>them in advance. That went away during the pandemic. But

0:22:30.960 --> 0:22:33.160
<v Speaker 1>that wouldn't have even helped us in this situation because

0:22:33.160 --> 0:22:38.360
<v Speaker 1>this is such usually not that substantial data, or it's

0:22:38.480 --> 0:22:41.639
<v Speaker 1>like second or third tier data being generous. This was

0:22:41.760 --> 0:22:43.960
<v Speaker 1>never even subject to a lock up, so it's ridiculous

0:22:43.960 --> 0:22:46.159
<v Speaker 1>that we even cared this much. But there was a

0:22:46.200 --> 0:22:47.119
<v Speaker 1>better way to do this.

0:22:48.080 --> 0:22:51.520
<v Speaker 2>Sort of right, I mean, like this is like I

0:22:51.640 --> 0:22:53.520
<v Speaker 2>appreciate the effort to sort of publish it on the

0:22:53.600 --> 0:22:55.480
<v Speaker 2>website to everyone all at once.

0:22:55.640 --> 0:22:57.359
<v Speaker 1>Right, If you can't do that you know, you have

0:22:57.400 --> 0:22:58.600
<v Speaker 1>to be able to do it. Yeah.

0:22:58.840 --> 0:23:01.320
<v Speaker 2>I think there's an interesting thing in financial markets where like,

0:23:01.880 --> 0:23:04.440
<v Speaker 2>on the one hand, you want to reward people for

0:23:04.560 --> 0:23:07.360
<v Speaker 2>doing work, for doing research, like trying to find stuff out,

0:23:07.520 --> 0:23:09.520
<v Speaker 2>because that's the point of financial markets. It's to make

0:23:09.560 --> 0:23:12.320
<v Speaker 2>prices more efficient for people to find stuff out and

0:23:12.880 --> 0:23:15.040
<v Speaker 2>then have them reflected in prices. On the other hand,

0:23:15.080 --> 0:23:16.480
<v Speaker 2>you want things to be fair, right, So you don't

0:23:16.520 --> 0:23:19.240
<v Speaker 2>want like people to find stuff out by playing golf

0:23:19.240 --> 0:23:21.040
<v Speaker 2>with the company ceo and being like, sorry, you didn't

0:23:21.040 --> 0:23:24.320
<v Speaker 2>e merger and like finding out inside information, right, and

0:23:24.440 --> 0:23:26.280
<v Speaker 2>so like there's this effort to make it a level

0:23:26.280 --> 0:23:28.800
<v Speaker 2>playing field, but you also do want to incentivize people

0:23:28.960 --> 0:23:33.399
<v Speaker 2>to get information. So it didn't work here. They were

0:23:33.480 --> 0:23:35.560
<v Speaker 2>trying to make it a level playing field and they failed.

0:23:35.920 --> 0:23:38.000
<v Speaker 2>But I do really appreciate the people who and it

0:23:38.040 --> 0:23:40.159
<v Speaker 2>didn't come out At ten o'clock, we're like, well, I

0:23:40.200 --> 0:23:42.399
<v Speaker 2>guess I'll make a phone call. You should do that.

0:23:42.960 --> 0:23:43.520
<v Speaker 2>It should work.

0:23:43.680 --> 0:23:47.199
<v Speaker 1>You sound like an editor, Yeah, right, exactly, yeah, exactly,

0:23:47.440 --> 0:23:49.240
<v Speaker 1>telling your reporter to just pick up.

0:23:49.240 --> 0:23:51.960
<v Speaker 2>Like pick up the phone, you know, and like the

0:23:52.040 --> 0:23:54.520
<v Speaker 2>way financial markets work now is a lot of people

0:23:54.680 --> 0:23:57.600
<v Speaker 2>probably have automated trading algorithms that were scraping the you know,

0:23:57.720 --> 0:23:59.560
<v Speaker 2>BLS website at ten o'clock and you.

0:23:59.560 --> 0:24:02.720
<v Speaker 1>Know, thirty three minutes straight mines.

0:24:02.560 --> 0:24:06.240
<v Speaker 2>Just refreshing the website, and the people who picked up

0:24:06.280 --> 0:24:09.880
<v Speaker 2>the phone had an advantage over those computer traders for once,

0:24:09.960 --> 0:24:12.600
<v Speaker 2>you know, So I don't know, I appreciate the people

0:24:12.640 --> 0:24:14.360
<v Speaker 2>who picked up the phone. It's one of these where

0:24:14.400 --> 0:24:16.280
<v Speaker 2>like if you didn't get this information before I was

0:24:16.280 --> 0:24:18.040
<v Speaker 2>out on the website, Like, yeah, it's like a little

0:24:18.080 --> 0:24:20.680
<v Speaker 2>embarrassing in hindsight, Yeah, like you should have called.

0:24:20.840 --> 0:24:22.360
<v Speaker 1>I guess part of the reason I'm being so hard

0:24:22.400 --> 0:24:24.760
<v Speaker 1>on the BLS is because it has been not a

0:24:24.840 --> 0:24:26.040
<v Speaker 1>great year for them, well right.

0:24:26.000 --> 0:24:28.399
<v Speaker 2>Because they've previously like done the opposite, and they put

0:24:28.400 --> 0:24:29.920
<v Speaker 2>it up on the website before it was supposed to

0:24:29.920 --> 0:24:30.119
<v Speaker 2>be up.

0:24:30.320 --> 0:24:34.040
<v Speaker 1>Oh yeah, CPI data too, Like I'm dunking on this

0:24:34.160 --> 0:24:39.280
<v Speaker 1>payroll revisions release, but CPI data is absolutely I mean,

0:24:39.640 --> 0:24:41.960
<v Speaker 1>now we're all really focused on the labor market, of course,

0:24:42.080 --> 0:24:44.399
<v Speaker 1>but the CPI prints for the last four years have

0:24:44.520 --> 0:24:48.400
<v Speaker 1>been the most important piece of data that you can get,

0:24:48.720 --> 0:24:50.960
<v Speaker 1>and they put it on the website thirty minutes early

0:24:51.240 --> 0:24:51.560
<v Speaker 1>in May.

0:24:51.840 --> 0:24:53.680
<v Speaker 2>I was a little unclear on that they put some

0:24:53.760 --> 0:24:55.600
<v Speaker 2>stuff on the website a little early, but like there

0:24:55.720 --> 0:24:57.760
<v Speaker 2>was no weird trading in it ahead of it, right,

0:24:57.880 --> 0:25:00.720
<v Speaker 2>Like I think it was like they if identified a

0:25:00.840 --> 0:25:02.720
<v Speaker 2>glitch where they published it early, but it wasn't like

0:25:02.840 --> 0:25:03.840
<v Speaker 2>the market got it early.

0:25:04.000 --> 0:25:09.080
<v Speaker 1>Even still even still even still also super users, super users,

0:25:09.080 --> 0:25:13.919
<v Speaker 1>the fact that they didn't have clear communication on how

0:25:14.000 --> 0:25:19.040
<v Speaker 1>to handle external inquiries after the super users debacle, it

0:25:19.160 --> 0:25:20.000
<v Speaker 1>raises an eyebrow.

0:25:20.359 --> 0:25:23.080
<v Speaker 2>Yeah, the super users debacle is when like people would

0:25:23.320 --> 0:25:26.200
<v Speaker 2>get enhanced color on economic.

0:25:25.840 --> 0:25:28.720
<v Speaker 1>Being a host today, Oh yeah, I've just rippen through

0:25:28.800 --> 0:25:31.280
<v Speaker 1>these explain super users.

0:25:31.720 --> 0:25:34.199
<v Speaker 2>I forget they would release economic data and like they

0:25:34.240 --> 0:25:37.640
<v Speaker 2>would give like further color to a list of economists

0:25:37.680 --> 0:25:40.760
<v Speaker 2>and like you know, hedge funds or whatever who bothered

0:25:40.800 --> 0:25:43.560
<v Speaker 2>to sign up. Right, this is again it's like, you know,

0:25:43.640 --> 0:25:45.479
<v Speaker 2>it's like a little meaning scandal, but it's also it's

0:25:45.560 --> 0:25:49.120
<v Speaker 2>like these people are public servants. Like if you call

0:25:49.520 --> 0:25:51.600
<v Speaker 2>the Bureau labor Stahysics and say I'd like to know

0:25:51.720 --> 0:25:54.440
<v Speaker 2>more about CPI, they'll tell you more. Yeah, And the

0:25:54.520 --> 0:25:57.359
<v Speaker 2>people who have an economic interest in trading on macro

0:25:57.480 --> 0:25:59.600
<v Speaker 2>data would say Hey, I'd like to be on your

0:25:59.640 --> 0:26:02.120
<v Speaker 2>email where you explain things more, and the people who

0:26:02.119 --> 0:26:03.879
<v Speaker 2>didn't didn't, right, And so the people who signed up

0:26:03.880 --> 0:26:06.480
<v Speaker 2>for the email list got better information, and I don't know,

0:26:06.600 --> 0:26:09.560
<v Speaker 2>I sort of feel like they deserved better information.

0:26:09.720 --> 0:26:11.600
<v Speaker 1>This actually brings me neatly to a point that I

0:26:11.640 --> 0:26:13.960
<v Speaker 1>should make, because again I've been pretty harsh on the

0:26:14.000 --> 0:26:17.080
<v Speaker 1>BLS here, But if we think back to this super

0:26:17.240 --> 0:26:21.040
<v Speaker 1>user's debacle, one of the reasons why it even happened

0:26:21.160 --> 0:26:23.920
<v Speaker 1>was because, yes, you can ask the BLS questions and

0:26:24.000 --> 0:26:27.119
<v Speaker 1>the BLS can answer you, but the BLS doesn't have

0:26:27.320 --> 0:26:32.359
<v Speaker 1>enough resources to answer each individual one. So this specific economists.

0:26:32.400 --> 0:26:35.159
<v Speaker 1>I believe it was an economist thinking was I'll just

0:26:35.200 --> 0:26:38.160
<v Speaker 1>put everyone on a list. And I remember last week,

0:26:38.240 --> 0:26:41.960
<v Speaker 1>after the payrolls revision debacle, I was speaking to Claudia

0:26:42.080 --> 0:26:45.280
<v Speaker 1>sam who's a former freed economist, and I asked her

0:26:45.320 --> 0:26:48.840
<v Speaker 1>what this meant for BLS credibility, and she said, it's

0:26:48.920 --> 0:26:52.520
<v Speaker 1>absolutely inexcusable, of course, but at the same time, like

0:26:52.600 --> 0:26:58.280
<v Speaker 1>the BLS is underfunded, they're under resource constraints, and you know,

0:26:58.359 --> 0:26:59.920
<v Speaker 1>something like this is bound to happen if you don't

0:27:00.040 --> 0:27:02.320
<v Speaker 1>give them the proper support. So here we are.

0:27:02.960 --> 0:27:04.320
<v Speaker 2>Yeah, here we are.

0:27:04.800 --> 0:27:09.480
<v Speaker 1>Sorry BLS, they're going through it. Katie is our you

0:27:09.800 --> 0:27:12.080
<v Speaker 1>need to raise Yeah, yeah, here I am.

0:27:14.400 --> 0:27:15.840
<v Speaker 2>And that was the Money Stuff Podcast.

0:27:16.040 --> 0:27:18.000
<v Speaker 1>I'm Matt Levian and I'm Katie Greifeld.

0:27:18.400 --> 0:27:20.440
<v Speaker 2>You can find my work by subscribing to The Money

0:27:20.480 --> 0:27:22.280
<v Speaker 2>Stuff newsletter on Bloomberg.

0:27:21.920 --> 0:27:24.200
<v Speaker 1>Dot com, and you can find me on Bloomberg TV

0:27:24.440 --> 0:27:28.080
<v Speaker 1>every day on Open Interest between nine to eleven am Eastern.

0:27:28.480 --> 0:27:30.199
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0:27:41.240 --> 0:27:44.000
<v Speaker 2>The Money Stuff Podcast is produced by Anna Maserakus and

0:27:44.119 --> 0:27:45.239
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0:27:45.320 --> 0:27:47.199
<v Speaker 1>Theme music was composed by Blake Maples.

0:27:47.480 --> 0:27:50.040
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0:27:50.119 --> 0:27:52.040
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0:27:52.400 --> 0:27:54.720
<v Speaker 2>Thanks for listening to The Money Stuff Podcast. We'll be

0:27:54.800 --> 0:28:03.480
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