WEBVTT - The ETF Story 1: The Crash

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<v Speaker 1>Welkno Trillions. I'm Joel Weber and I'm Eric belchionis Eric.

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<v Speaker 1>Five years ago you and I made an audio documentary

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<v Speaker 1>called the e t F Story. It's actually never been

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<v Speaker 1>in the Trillions feed. And here we are today January

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<v Speaker 1>and we're gonna bring that audio documentary into the main

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<v Speaker 1>Trillions feed for the first time. And why today today

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<v Speaker 1>is the first day that spy the first et F

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<v Speaker 1>started trading lotter years ago, thirty years ago exactly A

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<v Speaker 1>lot of people will go to January two, but that's

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<v Speaker 1>when it was seated. It started trading on the twenty nine,

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<v Speaker 1>and so that's exactly thirty years to the day today.

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<v Speaker 1>And so we made this really good documentary. Of all

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<v Speaker 1>the things I've done in my career, this is in

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<v Speaker 1>the top ten um. This will be something people can

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<v Speaker 1>go to over and over. Some of the people we

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<v Speaker 1>interviewed are no longer with us, and we really went

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<v Speaker 1>all out, got the right people trace the story of

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<v Speaker 1>the e t F and the evolution, and I think

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<v Speaker 1>fossilized uh this situation so that over the next for

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<v Speaker 1>posterity the next you know, five fifteen years, people who

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<v Speaker 1>want to just kind of get a quick briefer of

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<v Speaker 1>the e t F market. Can come listen to this

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<v Speaker 1>sort of Ken Burns esque documentary on it, especially if

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<v Speaker 1>you know people are would rather listen than read. Uh,

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<v Speaker 1>this will do the trick. One thing we should mention

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<v Speaker 1>is that we have not touched these episodes for five years,

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<v Speaker 1>so you're gonna hear some numbers that are no longer accurate.

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<v Speaker 1>At the time that we did the recording, SPY had

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<v Speaker 1>about two seventy billion in assets. What's it up to now,

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<v Speaker 1>eric three hundred and seventy five billion, and that includes

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<v Speaker 1>outflows that the e t F has seen. And what

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<v Speaker 1>about the e t F industry overall? At the time

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<v Speaker 1>that we did the recording, I had about three trillion

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<v Speaker 1>in assets, more than double today six point eight trillion. Okay,

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<v Speaker 1>so just incredible. The story of the e t F

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<v Speaker 1>can gen used to grow, uh, as you're about to

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<v Speaker 1>find out, it begins with Black Monday and goes so

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<v Speaker 1>much farther than that. One thing I think we're both

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<v Speaker 1>really proud of. Here are all the names that we

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<v Speaker 1>got to speak to about the e t F and

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<v Speaker 1>its history. Who are some of the ones If you

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<v Speaker 1>want to rattle through the big names eric that we

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<v Speaker 1>we spoke with. Yeah, sure, this is this is the

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<v Speaker 1>hard part. You gotta go track these people down. I

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<v Speaker 1>remember recording some of them in like different studios all

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<v Speaker 1>over Bloomberg. Um, in some cases we went to see them.

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<v Speaker 1>Um here's some of the names we have. I'll start

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<v Speaker 1>with two that are no longer with us, Jack Bogel

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<v Speaker 1>of Vanguard and Kathleen Moriarty, both of which who had

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<v Speaker 1>a profound impact on the spy and the E t

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<v Speaker 1>F industry. Some other ones are Bob Toll, who was

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<v Speaker 1>Morgan Stanley back in the day. UM, Gary Eisenich was

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<v Speaker 1>the first market maker on spy. Dave Ritter was the

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<v Speaker 1>SEC chairman in who was sort of uh overseeing the

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<v Speaker 1>SEC as the spy documents got filed. And also here

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<v Speaker 1>over so the eight seven crash. Dave not Egg E

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<v Speaker 1>t F guru analysts, sort of like the Yoda of

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<v Speaker 1>E t F analysts. John O'Brien who worked with some

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<v Speaker 1>competing product to spy back then. Reggie Brown, Mr E

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<v Speaker 1>t F, Bruce Levine who was early at with Bond ETFs,

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<v Speaker 1>Bruce Bond who started really Smart Beta. I think he

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<v Speaker 1>brought power shares a smart Beta, Robert not also. So

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<v Speaker 1>some of those names are people who uh sort of

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<v Speaker 1>took the e t F and evolved it and put

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<v Speaker 1>all these different things in it. So we don't just

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<v Speaker 1>track spy, we track the evolution. There's one name I

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<v Speaker 1>want to end on here that I am most proud of.

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<v Speaker 1>When you and I teamed up with Bloomberg Markets to

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<v Speaker 1>rate sort of the story of the e t F

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<v Speaker 1>in a written form, what we What we found is

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<v Speaker 1>that Nate Most and Steve Bloom, who were at the

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<v Speaker 1>American Stock Exchange, they got the idea or the spark

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<v Speaker 1>for the idea of the of the first e t

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<v Speaker 1>F from an SEC report. The SEC report was a

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<v Speaker 1>post mortem on Black Monday. So we went and found

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<v Speaker 1>the guy at the SEC who wrote the section of

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<v Speaker 1>that report that gave Steve Bloom and Nate Most the idea.

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<v Speaker 1>His name is Howard Kramer, and he was a young

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<v Speaker 1>lawyer working at the SEC. Had he not written that,

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<v Speaker 1>it's it's possible Nate Mos and Steve Bloom do not

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<v Speaker 1>have that spark of inspiration. Will never know. But we

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<v Speaker 1>got him too, and that's pretty cool. I also want

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<v Speaker 1>to give a special shout out to Jordan's Bell, who

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<v Speaker 1>produced this special series. So this is going to lead

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<v Speaker 1>straight into the first episode of the E t F Story,

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<v Speaker 1>and you'll find the rest after that in your feet

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<v Speaker 1>this time mon Trillions the E t F Story. One

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<v Speaker 1>of the things we all love about business stories are

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<v Speaker 1>the humble beginnings, like when two buddies go from tinkering

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<v Speaker 1>in their Palo Alto garage to creating the world's most

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<v Speaker 1>valuable company Apple. Sometimes everyday events even inspire something remarkable,

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<v Speaker 1>like when a Swiss engineer takes a walk in the woods,

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<v Speaker 1>marvels at the seeds that stick to his clothes, and

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<v Speaker 1>ends up inventing velcro. The story we're about to tell

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<v Speaker 1>you is a little bit like those, and it culminates

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<v Speaker 1>with a three trillion dollar industry that's still growing. What's

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<v Speaker 1>this We're talking about the exchange traded fund. We're going

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<v Speaker 1>to trace how it came to be with some of

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<v Speaker 1>the people who made it happen. We'll look at the

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<v Speaker 1>state of things before it existed, find out where the

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<v Speaker 1>spark came from, learn why the idea worked, and what

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<v Speaker 1>it actually took for this financial tool to get where

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<v Speaker 1>it is today. This is Trillions presents the e t

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<v Speaker 1>F Story. I'm Joe Weber, and I'm the editor of

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<v Speaker 1>Bloomberg Business Week. Over the course of the next six episodes,

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<v Speaker 1>with the help of Eric Baltunas, who's an e t

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<v Speaker 1>F expert and an analyst with Bloomberg Intelligence, we're going

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<v Speaker 1>to document the story of the ETF. We'll hear from

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<v Speaker 1>people who were there at the beginning. Will also take

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<v Speaker 1>you on a few fuel trips, but mostly we'll be

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<v Speaker 1>sharing the human stories behind an industry that's hoovering up

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<v Speaker 1>trillions of dollars every year. So this all really begins

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<v Speaker 1>when the stuck market crushes on October nine, Black Monday.

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<v Speaker 1>If you have been away from your television set and

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<v Speaker 1>haven't heard about the stock market, this was it. The

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<v Speaker 1>market declined to Practimately, I think that everyone, every American

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<v Speaker 1>at this stage of the game, needs to get their

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<v Speaker 1>house in order. I'm ready to jump out of a window.

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<v Speaker 1>And it was a pretty pretty sickening experience, almost like

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<v Speaker 1>are we at the Apocalypse? O Precipice right now? Good evening,

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<v Speaker 1>I'm Tom Brokaw. Black Monday is now in the book.

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<v Speaker 1>Then the question is what will happen Tuesday and beyond?

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<v Speaker 1>Even got a term black Monday. I mean that sounds

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<v Speaker 1>like a horror movie. This, of course is our resident

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<v Speaker 1>et F analyst, and for the purposes of the show

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<v Speaker 1>are historian Eric Faltu Nous. The nine eighties were a

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<v Speaker 1>great decade for the American economy. Modern finance was coming

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<v Speaker 1>into its own. Two cities were especially interesting Chicago, where

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<v Speaker 1>people were trading futures contracts of commodities like corn or oil.

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<v Speaker 1>In New York, where you've got the stock exchanges and

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<v Speaker 1>people trading equities. Well, the market had been going up

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<v Speaker 1>for a while, nothing goes up forever. There was probably

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<v Speaker 1>a sell off that was gonna happen anyway, So the

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<v Speaker 1>conditions were ripe for a sell off. And at the

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<v Speaker 1>same time you had a build up of this hot

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<v Speaker 1>thing called portfolio insurance, which was to use futures in

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<v Speaker 1>order to hedge your stock position. This portfolio insurance was

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<v Speaker 1>created by the firm Leland O'Brien Rubinstein to deal with

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<v Speaker 1>the big crash of the nineteen seventies. John O'Brien, who

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<v Speaker 1>was part of the team that developed it, says portfolio

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<v Speaker 1>insurance really started to take off once JP Morgan started

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<v Speaker 1>doing it, but most people in the Wall Street didn't

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<v Speaker 1>understand what that was. Some big outset managers did, some

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<v Speaker 1>big dealers did, and they realized when the market went down,

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<v Speaker 1>portfolio insurance required selling stock and buying bonds. O'Brien's is

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<v Speaker 1>on the Friday before Black Monday, the market has his

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<v Speaker 1>biggest drop since so all of US portfolio insurance folks

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<v Speaker 1>had difficulty getting off enough sales of futures contracts to

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<v Speaker 1>get down in the equity exposure to the level we

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<v Speaker 1>should have had at the close of business on Friday,

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<v Speaker 1>Act over seventeen. A couple of the big focus recognize this,

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<v Speaker 1>so over the weekend they went short the US dot

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<v Speaker 1>market and foreign exchanges and joe in the stock market

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<v Speaker 1>opened on Monday at over nineteen. There was a big

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<v Speaker 1>drop and the right away portfolio injurors had to sell

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<v Speaker 1>more futures contract and more of that got transmitted to

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<v Speaker 1>the New York Stock Exchange, and they specialists on the

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<v Speaker 1>exchange saw every major firm spending all of its run,

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<v Speaker 1>all of the post selling, all of the doctors, and

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<v Speaker 1>the specialists didn't understand that this was all a mechanical things,

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<v Speaker 1>and they thought, you know, World War three had broken

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<v Speaker 1>out somewhere and they didn't know about it, so they

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<v Speaker 1>just dropped all their bids and went to launch and

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<v Speaker 1>went to the doctor, went to the bed where basically

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<v Speaker 1>wouldn't trade. The monke just you know, collapse. Uh. And

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<v Speaker 1>it was all mistake, a big mistake that now has

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<v Speaker 1>to be cleaned up. In terms of government official at

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<v Speaker 1>the time, it was probably the scariest time of than

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<v Speaker 1>in my sixteen years to the sec that Monday and

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<v Speaker 1>into Tuesday. This is Howard Kramer. During the crash. He

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<v Speaker 1>was Assistant Director of the Division of Market Regulation at

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<v Speaker 1>the U S Securities and Exchange Commission or the sec.

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<v Speaker 1>I had oversight over all of the nation's securities exchange,

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<v Speaker 1>so that included both the stock exchanges and the options exchanges.

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<v Speaker 1>He says he has a few sharp memories from that day.

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<v Speaker 1>On the afternoon of the crash, Cramer went over to

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<v Speaker 1>the Commodity Futures Trading Commission to talk about what was

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<v Speaker 1>going on. Yeah, pretty distinctly remember being in the room

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<v Speaker 1>and you know, as the stock market was tanking and thinking,

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<v Speaker 1>you know, these these were commissioners who have experienced mostly

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<v Speaker 1>in agricultural products and futures and here we are discussing

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<v Speaker 1>what's happening with the stock market. Another one was being

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<v Speaker 1>in with some other senior staffers and one of the

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<v Speaker 1>commissioners coming down and trying to find out what was happening,

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<v Speaker 1>and then saying that he needed to call the White House.

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<v Speaker 1>So they needed to call the White House. So they

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<v Speaker 1>basically asked us to clear out of the room, and

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<v Speaker 1>I did. It was so bad that the SEC decided

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<v Speaker 1>to make a task force and immediately for the next

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<v Speaker 1>few months study what happened. And that's what they do

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<v Speaker 1>in the form of a massive report called October Market Break.

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<v Speaker 1>David Ruder, who was the chairman of the SEC at

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<v Speaker 1>the time, says the goal of the report was factual.

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<v Speaker 1>The goal was to say what had happened. The goal

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<v Speaker 1>was not in an advance to plan some result from

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<v Speaker 1>the report. But the idea was to create a factual

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<v Speaker 1>reconstruction of what happened and then to make suggestions based

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<v Speaker 1>upon that report. And it was a long, arduous process.

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<v Speaker 1>I'd say for the next three months through early January,

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<v Speaker 1>a bunch of us had two jobs, which was, you know,

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<v Speaker 1>investigating what happened and writing to report up and doing

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<v Speaker 1>our day job. Did you get paid double for that. No, no,

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<v Speaker 1>we didn't get paid double, I said, but from Thanksgiving

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<v Speaker 1>a New Year is the only day I took off

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<v Speaker 1>with Christmas. Literally, my life still remembers that. It um No,

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<v Speaker 1>it was. It was pretty intense period. So this report

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<v Speaker 1>ends up being eight hundred and forty pages. It was

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<v Speaker 1>thicker than the Manhattan phone Book, for sure. It was.

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<v Speaker 1>You know, obviously we we sent a number of copies

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<v Speaker 1>off the Congress. You know. It was available for a

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<v Speaker 1>couple more years, and eventually it became a collector's item.

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<v Speaker 1>I have two in my office. If anybody wants to

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<v Speaker 1>bid for it, I'm ready to do it on eBay.

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<v Speaker 1>Before Kramer could sell anything on eBay, we borrowed one

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<v Speaker 1>of his copies to see it for ourselves. So it

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<v Speaker 1>says October market break. It really is like a phone book.

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<v Speaker 1>I mean it's that's exactly that. The feel, it's just

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<v Speaker 1>all r Joel. I'm gonna flip through it just so

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<v Speaker 1>you get an idea of how big this is. Right,

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<v Speaker 1>So this may take a few seconds hanging there still going.

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<v Speaker 1>You're like halfway, and it is going. That was not

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<v Speaker 1>quite halfway. It gets more dramatic as you keep going, wow,

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<v Speaker 1>I see some charts. Wow, let's hear it. Drop ye,

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<v Speaker 1>take your pick of Harry Potter books to Harry Potter

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<v Speaker 1>books side by side. That's about the dimensions. Let me

0:13:18.520 --> 0:13:23.440
<v Speaker 1>go more highbrow here. This is Warren Pace squared. Oh yeah,

0:13:23.600 --> 0:13:27.640
<v Speaker 1>nailed it. This thing. Yeah, like my mom's five ft

0:13:27.760 --> 0:13:29.600
<v Speaker 1>and she has to use this like little thing in

0:13:29.640 --> 0:13:32.439
<v Speaker 1>the car. This is like what you could use if

0:13:32.440 --> 0:13:33.840
<v Speaker 1>you were like an eleven year old and you stole

0:13:33.880 --> 0:13:35.679
<v Speaker 1>your parents car and you need to see you over

0:13:35.720 --> 0:13:38.480
<v Speaker 1>the steering wheel. I mean it literally could be used.

0:13:38.520 --> 0:13:41.400
<v Speaker 1>It's like a booster seat. Yeah. Could you imagine reading this?

0:13:41.800 --> 0:13:43.559
<v Speaker 1>I will say the ends a lot of charts, Like

0:13:43.600 --> 0:13:47.000
<v Speaker 1>I think the last two is charts and numbers, but

0:13:47.120 --> 0:13:49.760
<v Speaker 1>I mean there is a lot of stuff, some footnotes,

0:13:49.880 --> 0:13:52.360
<v Speaker 1>right yeah. And you're saying like one page of this

0:13:52.760 --> 0:13:55.360
<v Speaker 1>is a huge piece of landscape here, I mean it's

0:13:55.400 --> 0:13:57.440
<v Speaker 1>a big big I'm also thinking somebody was on a

0:13:57.440 --> 0:14:00.120
<v Speaker 1>typewriter doing this, Yeah, I mean they had to be

0:14:02.040 --> 0:14:04.640
<v Speaker 1>What would it take Eric, This is a huge report.

0:14:05.480 --> 0:14:07.120
<v Speaker 1>I can't imagine how long it would take you to

0:14:07.160 --> 0:14:09.080
<v Speaker 1>read it, But what would it take you to be

0:14:09.120 --> 0:14:12.360
<v Speaker 1>able to actually like plat through this. I would probably

0:14:12.400 --> 0:14:15.720
<v Speaker 1>need illegal substances to get through this thing. If not, okay,

0:14:15.760 --> 0:14:19.000
<v Speaker 1>on the legal side, a lot of coffee, a latte,

0:14:19.400 --> 0:14:22.920
<v Speaker 1>and some were very quiet because the littlest distraction hold

0:14:22.960 --> 0:14:26.920
<v Speaker 1>the milk, anything that a noise in the attic would

0:14:26.960 --> 0:14:28.680
<v Speaker 1>be like, oh, let me go check that out, because

0:14:28.760 --> 0:14:43.320
<v Speaker 1>I am not. So what was in this big report

0:14:43.320 --> 0:14:46.160
<v Speaker 1>we've been talking over. They just broke down what program

0:14:46.200 --> 0:14:48.520
<v Speaker 1>trading was, They broke down what portfolio insurance was, They

0:14:48.520 --> 0:14:50.400
<v Speaker 1>broke down what happened that day. That was the first

0:14:50.400 --> 0:14:54.040
<v Speaker 1>part of the report. The second part gave suggestions about

0:14:54.080 --> 0:14:59.000
<v Speaker 1>how a future crash could be avoided. But meanwhile, in

0:14:59.040 --> 0:15:02.000
<v Speaker 1>downtown New York, you had the American Stock Exchange, and

0:15:02.040 --> 0:15:05.480
<v Speaker 1>this is an exchange that was in third place in trading.

0:15:05.680 --> 0:15:09.120
<v Speaker 1>It had fallen down. The American Stock Exchange people call

0:15:09.160 --> 0:15:12.600
<v Speaker 1>AMEX from here on out was basically an exchange that

0:15:12.720 --> 0:15:16.960
<v Speaker 1>was looking for a winner. And that's where Nate Most

0:15:17.560 --> 0:15:21.840
<v Speaker 1>and Steve Bloom we're working together. These are market nerds. Okay,

0:15:21.880 --> 0:15:26.200
<v Speaker 1>These are not like salespeople. They're not. They're not portfolio managers.

0:15:26.240 --> 0:15:29.720
<v Speaker 1>They are They're into derivatives, they're into data, they're into

0:15:29.720 --> 0:15:33.040
<v Speaker 1>the Exchange. So these market nerds, Nathan Most and Stephen

0:15:33.080 --> 0:15:37.040
<v Speaker 1>Bloom are kind of an unusual pair. Most is seventy

0:15:37.040 --> 0:15:39.200
<v Speaker 1>four years old at the time and he's the vice

0:15:39.240 --> 0:15:43.160
<v Speaker 1>president of new Development at AMES, and Bloom is just

0:15:44.320 --> 0:15:47.720
<v Speaker 1>fresh from Harvard with a PhD in economics. Nate died

0:15:47.760 --> 0:15:50.160
<v Speaker 1>in two thousand four, but we found in our reporting

0:15:50.160 --> 0:15:52.440
<v Speaker 1>that he made a big impression on those he worked with.

0:15:54.080 --> 0:15:56.960
<v Speaker 1>Arthur Lovitt, who was running AMS in the nineties, says

0:15:56.960 --> 0:15:59.480
<v Speaker 1>he was blessed to have inherited Nate Most, who at

0:15:59.480 --> 0:16:02.320
<v Speaker 1>the time was trying to create products and trading mechanisms

0:16:02.600 --> 0:16:06.520
<v Speaker 1>that would give AMEX a competitive edge and to the

0:16:06.640 --> 0:16:12.840
<v Speaker 1>extent to which PHTF became a reality of the credit

0:16:12.920 --> 0:16:17.160
<v Speaker 1>Tony I can remember saying to him that if this

0:16:17.280 --> 0:16:20.240
<v Speaker 1>is something he believes and it wants to do, he

0:16:20.360 --> 0:16:22.920
<v Speaker 1>has my full support to go ahead and do it.

0:16:23.080 --> 0:16:26.200
<v Speaker 1>And Nate Most had this eclectic background. He'd served in

0:16:26.200 --> 0:16:28.760
<v Speaker 1>the Navy as a submarine engineer during World War Two.

0:16:29.440 --> 0:16:32.360
<v Speaker 1>Afterward he worked as a trader for Pacific Vegetable Oil

0:16:32.920 --> 0:16:36.120
<v Speaker 1>and then became president of the Pacific Commodities Exchange for

0:16:36.160 --> 0:16:40.360
<v Speaker 1>a time. Oh, he was great. He was wonderful. He

0:16:40.400 --> 0:16:43.880
<v Speaker 1>was a tall man, and he was kind of not

0:16:44.080 --> 0:16:47.800
<v Speaker 1>very he was kind of all shocks on us. This

0:16:47.840 --> 0:16:50.440
<v Speaker 1>is Kathleen Moriarty, who played a major role on the

0:16:50.520 --> 0:16:52.720
<v Speaker 1>legal side of the story and worked quite a bit

0:16:52.760 --> 0:16:55.000
<v Speaker 1>with Nate most. I remember one time I was at

0:16:55.000 --> 0:16:58.720
<v Speaker 1>a meeting with him and some Goldmen people, and these

0:16:58.760 --> 0:17:01.320
<v Speaker 1>guys who were probably like in their thirties looked at

0:17:01.400 --> 0:17:04.199
<v Speaker 1>Nate and he had thick black glasses and it was

0:17:04.240 --> 0:17:06.720
<v Speaker 1>clear that they thought he was like somebody who didn't

0:17:06.720 --> 0:17:08.920
<v Speaker 1>really know much of anything. So he went out to

0:17:08.960 --> 0:17:11.000
<v Speaker 1>go to the men's room and they looked at each

0:17:11.000 --> 0:17:13.920
<v Speaker 1>other and they said, oh, he's not a rocket scientist,

0:17:13.960 --> 0:17:16.800
<v Speaker 1>And I said, actually, he is a rocket scientist. Yeah,

0:17:16.880 --> 0:17:19.520
<v Speaker 1>he was literally a rocket scientist. The guy had a

0:17:19.560 --> 0:17:22.760
<v Speaker 1>PhD in physics. And what's more, he's got the help

0:17:22.760 --> 0:17:25.720
<v Speaker 1>of Stephen Bloom and Steve was his assistant. Steve was much,

0:17:25.760 --> 0:17:28.280
<v Speaker 1>you know, much younger, he was probably you know, somewhere

0:17:28.320 --> 0:17:30.600
<v Speaker 1>around my age at the time, and you know, somebody

0:17:30.600 --> 0:17:32.960
<v Speaker 1>who was, you know, at a very sharp mind for

0:17:33.080 --> 0:17:37.400
<v Speaker 1>numbers and did a lot of the assistance and kind

0:17:37.440 --> 0:17:40.320
<v Speaker 1>of secondary lifting for Nate. So they were a good team.

0:17:40.320 --> 0:17:44.240
<v Speaker 1>They worked very well together. So you've got these two

0:17:44.240 --> 0:17:46.400
<v Speaker 1>smart guys who have their work cut out for them

0:17:46.520 --> 0:17:49.480
<v Speaker 1>in their roles at AMEX, which has Levitt puts, it

0:17:50.359 --> 0:17:54.320
<v Speaker 1>was kind of and had been kind of a backwater exchange,

0:17:54.880 --> 0:17:59.800
<v Speaker 1>struggling for relevance and gradually losing listings to the New

0:17:59.880 --> 0:18:04.000
<v Speaker 1>York our stock exchange across the street. And no matter

0:18:04.280 --> 0:18:07.880
<v Speaker 1>what we tried to do to compete against New York,

0:18:08.119 --> 0:18:13.360
<v Speaker 1>the stature and status and prestige of New York managed

0:18:13.400 --> 0:18:18.119
<v Speaker 1>to whittle away the listings that we're the lifeblood of exchange,

0:18:18.480 --> 0:18:21.440
<v Speaker 1>here's Kramer again. To stay relevant, it had to continue

0:18:21.440 --> 0:18:25.760
<v Speaker 1>to develop new products, particularly new options products or or

0:18:25.880 --> 0:18:29.240
<v Speaker 1>options like products. Steve and Nate were behind that development

0:18:29.280 --> 0:18:33.560
<v Speaker 1>initiative of the AMEX, so let's fit in pretty nicely

0:18:33.720 --> 0:18:36.800
<v Speaker 1>into their sweet spot. Trying to come up with a

0:18:36.880 --> 0:18:40.959
<v Speaker 1>product to stay ahead of other competitors that may have

0:18:41.240 --> 0:18:44.320
<v Speaker 1>some investor appeal. And what Kramer is referring to is

0:18:44.320 --> 0:18:46.960
<v Speaker 1>a section in chapter three of the Market Breake Report

0:18:47.080 --> 0:18:50.840
<v Speaker 1>with the suggestion for a market basket trading instrument that

0:18:50.920 --> 0:18:53.840
<v Speaker 1>could be used instead of the futures to hedge and

0:18:53.880 --> 0:18:57.600
<v Speaker 1>would be something that the sec could regulate. So the

0:18:57.640 --> 0:19:00.960
<v Speaker 1>market break report makes its way to amp X, and

0:19:01.080 --> 0:19:04.520
<v Speaker 1>most in Bloom were through the whole thing. Bloom calls

0:19:04.520 --> 0:19:08.760
<v Speaker 1>it riveting and one particular part especially caught his eye.

0:19:09.080 --> 0:19:11.439
<v Speaker 1>When Bloom read that paragraph, you know, it was like

0:19:11.480 --> 0:19:13.440
<v Speaker 1>a light bulb went off, you know. He told me

0:19:13.560 --> 0:19:17.040
<v Speaker 1>that he ran into Nate Most office immediately and basically said,

0:19:17.160 --> 0:19:19.199
<v Speaker 1>here's an opening we could drive a truck throw. We

0:19:19.240 --> 0:19:22.199
<v Speaker 1>didn't feel like it was a panacea to what we

0:19:22.240 --> 0:19:25.640
<v Speaker 1>were trying to address, but we felt it was. It

0:19:25.720 --> 0:19:29.159
<v Speaker 1>was a novel idea, a panacea or not. Most in

0:19:29.200 --> 0:19:31.959
<v Speaker 1>Bloom go with it, and Kramer says it's best that

0:19:32.080 --> 0:19:34.600
<v Speaker 1>they or someone in the marketplace would take up the

0:19:34.640 --> 0:19:38.520
<v Speaker 1>idea because it wasn't a regulatory proposal. So we were

0:19:38.560 --> 0:19:41.560
<v Speaker 1>hoping that they would take debate, so to speak, and

0:19:41.560 --> 0:19:58.520
<v Speaker 1>and run with it. And uh, the AMEX did. Next

0:19:58.560 --> 0:20:02.240
<v Speaker 1>time on Trillions presents, most in Bloom share their idea

0:20:02.400 --> 0:20:07.200
<v Speaker 1>with maybe the most influential investor of all time, Jack Bogle,

0:20:07.320 --> 0:20:11.399
<v Speaker 1>and I said to however, Nathan, Mr Moss Nate they

0:20:11.480 --> 0:20:14.840
<v Speaker 1>proposed you sent me last week doesn't work. It has

0:20:14.880 --> 0:20:18.560
<v Speaker 1>these three flaws, and you're gonna have to get them

0:20:18.600 --> 0:20:23.679
<v Speaker 1>fixed before you can never do anything with it. Thanks

0:20:23.680 --> 0:20:27.439
<v Speaker 1>for listening to Trillions Presents Until next time. You can

0:20:27.440 --> 0:20:31.760
<v Speaker 1>find us on the Bloomberg Terminal, Bloomberg dot com, Apple Podcasts,

0:20:32.160 --> 0:20:36.280
<v Speaker 1>and whatever else you listen to podcasts. Trillions Presents is

0:20:36.320 --> 0:20:40.480
<v Speaker 1>produced by Jordan Belle. Francesco Levy is the head of

0:20:40.560 --> 0:20:55.920
<v Speaker 1>Bloomberg Podcasts. Bye, oh, one more tiny little thing. Here's

0:20:55.920 --> 0:20:58.919
<v Speaker 1>any strike for you. I have a question when we

0:20:58.960 --> 0:21:00.640
<v Speaker 1>send this back to him, would you right on e bay?

0:21:01.119 --> 0:21:05.680
<v Speaker 1>M No, I'm not that I'm in deep, but I'm

0:21:05.680 --> 0:21:09.240
<v Speaker 1>not that in deep. H