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Speaker 1: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, alongside

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Speaker 1: my co host Matt Miller. Every business day, we bring

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Speaker 1: you interviews from CEOs, market pros, and Bloomberg experts, along

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Speaker 1: with essential market moving news. Find the Bloomberg Markets Podcast

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Speaker 1: on Apple Podcasts or wherever you listen to podcasts, and

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Speaker 1: at Bloomberg dot com slash podcast. We have a great

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Speaker 1: Bloomberg intelligence strategists in here. Erica Addleberg is an NBS strategist.

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Speaker 1: And the reason that I find this so cool is

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Speaker 1: that the FED bought so much of these securities, right,

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Speaker 1: mortgage backed securities, and now they're selling them off in

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Speaker 1: quantitative tightening. Um, And I wonder how it's affecting the

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Speaker 1: actual market that consumers access. Erica does it? Do you

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Speaker 1: see it? Because we've seen a little bit of volatility

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Speaker 1: and mortgage race. Right, they went up to five seven

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Speaker 1: and came down to five three. That's I think, uh,

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Speaker 1: the f H, the Fannie MAE, Freddie mcnumb. But bank

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Speaker 1: rat maybe it is different. Nonetheless, a little bit of yeah,

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Speaker 1: um yeah. They own an impressive amount of mortgage backed securities.

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Speaker 1: They own over two point seven trillion at this point.

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Speaker 1: Which is about a third of the mortgage market. So

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Speaker 1: what they own really has an influence, and what they

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Speaker 1: do has an influence on mortgage back securities, which translates

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Speaker 1: into an influence on mortgage rates. They haven't technically started

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Speaker 1: to sell mortgage backed securities yet, they've mentioned job owned

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Speaker 1: at least that they may at some point in the

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Speaker 1: future in a way that technically they don't want to

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Speaker 1: disrupt the markets, but they have stopped adding them in

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Speaker 1: any significant size to their portfolio, and in fact they're

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Speaker 1: letting it run off, so as the paydouns and refinances

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Speaker 1: come in, they're not reinvesting the full amount, and they're

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Speaker 1: going to actually stop reinvesting all paydounds going forward. So far,

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Speaker 1: just the the influence of them not adding has pushed

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Speaker 1: mortgage rates up to around six percent. That's partly also

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Speaker 1: because treasuries have sold off an anticipation of FED funds

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Speaker 1: being pushed off, which has started to happen, but also

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Speaker 1: spreads have widened in mortgage backed securities relative to treasuries.

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Speaker 1: The current coupon, which is basically what's most closely tied

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Speaker 1: to the consumer rate, is up to about a hundred

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Speaker 1: forty basis points. It was as tight as sixty basis

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Speaker 1: points last year, So that's eight tenths of our percent

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Speaker 1: rise just because mortgages are widening, because the FED is

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Speaker 1: no longer planning to support the market. So if they sell,

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Speaker 1: when they sell, they're going to sell, right, They're not

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Speaker 1: just going to sit here and let them run off.

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Speaker 1: I mean, there are certainly a number of FED governors

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Speaker 1: have said that they don't believe in supporting the mortgage

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Speaker 1: market in this environment and are talking about selling. But

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Speaker 1: for every FED governor that says that, another one. I

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Speaker 1: heard UH Chair Williams talk at a mortgage banker conference

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Speaker 1: and he's like, if if that happens, we're going to

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Speaker 1: give you a lot of no is. It's going to

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Speaker 1: be pretty far in the future, and it's we're going

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Speaker 1: to do it in a way that doesn't disrupt the

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Speaker 1: secondary market. So, you know, I think they're kind of

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Speaker 1: talking out of both sides of their mouths, and I

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Speaker 1: think they want to give themselves the opportunity to sell um,

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Speaker 1: but probably not going to do so in a size

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Speaker 1: that really destroys the market. Hopefully. Erica, you know, you're

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Speaker 1: witnessing a pretty historic moment. Here and that Matt Miller

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Speaker 1: talked about mortgage rates. About talking about his own mortgage

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Speaker 1: never happens. He likes to brag about just how how

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Speaker 1: great of a rate he got, locked it in at

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Speaker 1: three and we just do it. You ruined us excellently.

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Speaker 1: You ruined it. Um. But anyways, point of the point

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Speaker 1: of that is affordability at the end of the day,

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Speaker 1: and that seems to be at the core of this

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Speaker 1: housing market story, especially you know, people like me who

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Speaker 1: are probably not in the market for for houses. Well,

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Speaker 1: a lot of my friends already put down payments on

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Speaker 1: them because they could. Um, I'm curious about the affordability story.

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Speaker 1: How does that change? Well, you know, affordability numbers came

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Speaker 1: out yesterday reflecting numbers as of the end of May,

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Speaker 1: so it reflected most of the rising mortgage rates, but

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Speaker 1: not all of it, and most of the rise and

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Speaker 1: home prices, but not all of it. That number is

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Speaker 1: now one oh two point five at a hundred. That

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Speaker 1: means that the average median income no longer will be

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Speaker 1: above the qualifying income below that. We're talking about housing

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Speaker 1: market nationally being unaffordable, and believe it or not, the

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Speaker 1: housing of affordability index, as run by National Association Realtors,

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Speaker 1: has never been below a hundred, so we are approaching

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Speaker 1: historic not you know, lack of affordability in the housing

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Speaker 1: market and one of few things palpable by the way,

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Speaker 1: I mean, because so many people I know either have

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Speaker 1: been priced out or have had to stretch so far

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Speaker 1: that they can't afford to do anything else. Yeah. One

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Speaker 1: of the interesting things we're actually seeing in the Mortgage

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Speaker 1: Banker Association Loan um Application Index is that the loan

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Speaker 1: sizes are decreasing while home prices we know are still

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Speaker 1: going up. So I think what that means is that

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Speaker 1: people are compromising on the type of house or the

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Speaker 1: location of the house that they want to buy, and

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Speaker 1: probably that that's a trend we might see going forward. Um,

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Speaker 1: I've heard of other people anecdotally that you know, finally

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Speaker 1: where their bid was finally accepted on a house in

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Speaker 1: this competitive housing market, and then they can't qualify for

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Speaker 1: the mortgage rates. So there's also been a big drop

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Speaker 1: in locks rate locks relative history. All right, Erica, thanks

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Speaker 1: so much for joining us. Eric Heddelberg here she is

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Speaker 1: a mortgage backed security strategist for Bloomberg Intelligence. Talking to

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Speaker 1: us about I think one of the issues that almost

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Speaker 1: everyone cares about. You know, either you're in the market,

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Speaker 1: or you want to get in the market, or you're

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Speaker 1: priced out of the market. UM, or like Paul Sweeney,

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Speaker 1: you're happy to be out of the market and you'll

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Speaker 1: never get back in. Let's get back to the markets here.

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Speaker 1: We have a little bit of an undecided Uh. We

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Speaker 1: don't really have a direction today, but we did have

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Speaker 1: an up week last week in face of so many

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Speaker 1: people calling a recession. San Sean Snyder joins us head

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Speaker 1: of investment Strategy at City US Wealth Management and Sean

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Speaker 1: um more and more people are saying we are currently

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Speaker 1: in a recession. I think um Ken Lane going recently

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Speaker 1: uh added his name to that pile as well. UM,

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Speaker 1: what do you think? Well, first off, thank you Matt,

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Speaker 1: and thank you Cretive for having me on the show.

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Speaker 1: You know, it's really interesting times. You know, I think

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Speaker 1: it is you know normal to think that the you know,

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Speaker 1: typical technical definition is going to be correct, which is

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Speaker 1: two negative quarters of economic growth. But it's not always

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Speaker 1: technically right. So if we look at the actual definition,

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Speaker 1: which is set by the National Bureau of Economic Research, UH,

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Speaker 1: it is a period of broad economic decline across you know,

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Speaker 1: a swap of the economy over a period of at

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Speaker 1: least several months, it's not two quarters of negative decline.

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Speaker 1: So if we actually look at the recession that occurred

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Speaker 1: in two thousand one, the US economy never experienced two

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Speaker 1: consecutive quarters of economic decline. And similarly, in the global

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Speaker 1: financial crisis, uh, the economy technically entered a recession December

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Speaker 1: two thousand seven, but the economy didn't experience two consecutive

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Speaker 1: quarters of contraction till the fourth quarter of two thousand eight.

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Speaker 1: So you know, that is the metric people tend to watch.

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Speaker 1: We had a negative UM one point six percent print

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Speaker 1: in the first quarter. It looks like we're tracking, according

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Speaker 1: to the Atlanta Fed, at maybe minus one point two

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Speaker 1: percent in the second quarter UM. But you know, in

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Speaker 1: those paths two recessions two one eight, the consecutive monthly

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Speaker 1: job losses are actually better metric in terms of calling

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Speaker 1: a US recession. And we're still seeing a really quite

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Speaker 1: strong labor market. And the other thing i'd say about

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Speaker 1: this two negative GDP prints that we've seen that are

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Speaker 1: potentially you're going to see, are really referencing a change

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Speaker 1: in private inventories. We have a glut of inventories that's

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Speaker 1: actually dragging down the GDP number. If you took out

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Speaker 1: that kind of anomaly being caused by the supply chain disruptions,

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Speaker 1: well then we'd actually have positive GDP. Consumer spending is

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Speaker 1: still positive, and I think, uh, this is likely not

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Speaker 1: mark the beginning of recession will probably come later in Well,

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Speaker 1: speaking of recession, I want to ask you about commodities

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Speaker 1: here because we are seeing a six point well almost

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Speaker 1: seven percent decline here in w t I. It feels

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Speaker 1: like the commodity's trade has been so overtalked about. I

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Speaker 1: mean everyone was saying that this is how you hedge

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Speaker 1: a portfolio that's just been dropping all year long. You

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Speaker 1: buy a barrel of oil, you add some of those

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Speaker 1: kind of contracts to your portfolio. It was the macro

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Speaker 1: head that was supposed to work. It's not the macro head.

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Speaker 1: So that's working right now, Sean, what do you do

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Speaker 1: with commodities. Well, you know, we technically still have a

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Speaker 1: global overweight on not resources, oil field services, and some

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Speaker 1: other defensive equities like dividend growers. But you know, if

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Speaker 1: you look at what's happening in the commodity space, you're

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Speaker 1: seeing aluminum prices come down, copper prices come down. That

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Speaker 1: is kind of a normal path to follow if we

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Speaker 1: are indeed headed towards the recession. But you've seen the

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Speaker 1: oil prices, you know, up until recently hold up better.

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Speaker 1: But again, you know, in some ways it might be

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Speaker 1: a positive. Right, So if oil can stay below hundred

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Speaker 1: dollars of barrel, then maybe that shaves off a couple

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Speaker 1: of percentage points off the headline CPI by the end

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Speaker 1: of the year. So essentially, the FED is trying to

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Speaker 1: cool off the economy through policy expectations. We're seeing that

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Speaker 1: feed through into commodities. And in a sense, yes, those

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Speaker 1: portfolio hedges that were meant to be um you know,

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Speaker 1: used as insurance aren't working right now. But it may

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Speaker 1: actually be a positive in the sense that Fed policies

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Speaker 1: working and that could help us avoid hard landing. So

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Speaker 1: it may not be completely negative. Sean just quickly got

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Speaker 1: thirty seconds here. What do you expect from earning earning season? Well,

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Speaker 1: I think it's gonna be interesting earning seasons. It seems

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Speaker 1: to be a disconnect with you know, investors expecting uh

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Speaker 1: ten percent EPs growth in two, but yet we have

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Speaker 1: to market down. It seems quite odd, but I think

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Speaker 1: energy companies are actually holding up that number. If you

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Speaker 1: strip out the energy company's contribution to earnings in the

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Speaker 1: second quarter, you actually have a negative earnings print about

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Speaker 1: three point eight percent, I believe. So it's really important

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Speaker 1: what happens to energy as far as the headline EPs,

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Speaker 1: and to me, it's not so much the earnings in two,

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Speaker 1: it's really what happens to earnings in three. Consensus is

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Speaker 1: still looking for eight point three percent headline EPs growth

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Speaker 1: in three, but if we do enter a session that's

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Speaker 1: gonna be wrong. It's going to be negative. Sean, thanks

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Speaker 1: so much for joining us. Shawn Snyder there, he is

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Speaker 1: head of investment strategy over at City US Wealth Management.

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Speaker 1: Matt Miller here with pretty good to Paul Sweeney out

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Speaker 1: this week, and it's his loss because ed Price is

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Speaker 1: with US senior fellow and former British senior fell at

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Speaker 1: n y U and former British trade official. And there

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Speaker 1: is a ton to talk about um ED starting with

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Speaker 1: the whole gas situation. We keep getting these warnings. I

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Speaker 1: think brutal Bruno Lamary yesterday was saying they could cut

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Speaker 1: you off completely. And today Janet Yellen Um was talking

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Speaker 1: more about trying to cap UH prices for everybody buying

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Speaker 1: Russian oil, which seems to me it's like poking the bear.

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Speaker 1: Right at some point they're gonna say, fine, we have

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Speaker 1: strong enough, strong enough pounce sheet that we don't need

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Speaker 1: to give you any oil, so they could just pull

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Speaker 1: everything off the market. What do you think. I think

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Speaker 1: we've been poking the bear, and we are poking the bear,

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Speaker 1: and I wouldn't be surprised if the bear pokes was back.

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Speaker 1: So you're talking about gas. I think that's that's the

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Speaker 1: right indicator. I think that's behind a lot of the

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Speaker 1: currency movements that it's so weird to see, Like Jordan

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Speaker 1: Rochester was on surveillance earlier and he's talking about his

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Speaker 1: euro call driven all by gas flows through Nordstream one pipeline.

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Speaker 1: That's just an odd connection to make. It's odd. It's

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Speaker 1: not the traditional fundamentals that you that you look at,

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Speaker 1: right Um. But I think I think that's right, and

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Speaker 1: I think that maybe the sort of slightly scary, slightly

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Speaker 1: simply way to think about that is that we are

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Speaker 1: kind of war with Russia right now and I think

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Speaker 1: that as that sinks in, markets are turning away from

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Speaker 1: the traditional numbers and gazing out of the window and thinking, Okay, well,

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Speaker 1: what would this look like if it really kicked off.

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Speaker 1: I mean, you guys tell me if that's an exaggeration. No, No,

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Speaker 1: I mean certainly financial right, because everyone is accusing Russia

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Speaker 1: of using energy resources, of weaponizing them, and of course

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Speaker 1: they're just doing that in retaliation for the sanctions that

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Speaker 1: we put on them, really sanctioned them because they attacked Ukraine.

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Speaker 1: So yeah, it definitely seems like a cold war. It

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Speaker 1: seems like a cold war that's heating up and becoming

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Speaker 1: a potential hot war. And one of the things that

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Speaker 1: I worry about is, for example, we've said that we're

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Speaker 1: not going to close the air space. Fine, um, and

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Speaker 1: we've said that we're not going to close the air

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Speaker 1: space because we're worried that that would be considered a

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Speaker 1: NATO intervention. Or we don't have a monopoly on what

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Speaker 1: constitutes a NATO intervention, do we. Because we're in a

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Speaker 1: two player game, Pewton could very well turn around and say, look,

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Speaker 1: I found this thing in the wreckage of one of

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Speaker 1: my hanks, and it says it says made in the

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Speaker 1: USA on it. So I feel like we've already crossed

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Speaker 1: some lines. And if we've if we've crossed those lines,

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Speaker 1: that one logic is that we continue to cross them

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Speaker 1: and have to continue to cross them, and this thing

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Speaker 1: spire us both militarily and financially. But there's there's a

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Speaker 1: certain level of exposure that continental Europe has that the

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Speaker 1: UK does not, and I have to ask to what

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Speaker 1: extent does that almost help the UK in the face

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Speaker 1: of all the other issues that it has. Yes, so,

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Speaker 1: um economics is always a relative beauty contest, and I

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Speaker 1: think that the post Brexit UK will be looking a

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Speaker 1: little bit better if it's not exposed to certain things

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Speaker 1: directly that are going on in the continent. I'm thinking,

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Speaker 1: of course, of the potential fiscal risk if we see

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Speaker 1: another U Area crisis, and of course the war in Ukraine.

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Speaker 1: That does look a bit better. However, it's not fundamentally

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Speaker 1: in the UK's interest to see Europe on fire. Right,

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Speaker 1: We've done that twice. It wasn't fun, it's not good.

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Speaker 1: So what we really want is a is a strong

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Speaker 1: European economy. We want a trading partner at whatever reduced

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Speaker 1: level after exit. But we want a trading partner that functions.

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Speaker 1: And I think that if you, if you go back

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Speaker 1: to the aforementioned Mr Puton m one definition of how

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Speaker 1: he wins this war is just to continue. It is

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Speaker 1: just to continue this grind so that the economic and

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Speaker 1: the financial and the energy consequences become ever more apparent. Well,

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Speaker 1: I mes pin here. I'm sorry because I'm going to

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Speaker 1: ask the question that I've kind of feels a little

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Speaker 1: contrary at the moment. I'm probably gonna get a lot

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Speaker 1: of Twitter heat for this, but I'm curious. We can

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Speaker 1: talk about your dollar parody for months now. Um, should

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Speaker 1: we be talking about pound parody with the dollar? Yes

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Speaker 1: we should, We should, not not necessarily right now, Okay,

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Speaker 1: but pound parity with the dollar is not outside the realm, which,

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Speaker 1: by the way, we have. I don't think we've ever

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Speaker 1: hit no no, no no, But I don't think that

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Speaker 1: it's impossible. Um, And so I think that we're going

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Speaker 1: to have to go back to again the fundamentals again,

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Speaker 1: how we think about currency, how we think about effects markets,

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Speaker 1: and really dig down into well, what do we think

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Speaker 1: is the equilibrium level for each of these currencies? And

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Speaker 1: why is it that we're wrong in our sort of

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Speaker 1: opening assumption every morning when we open the newspaper. They're

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Speaker 1: both getting crushed by the dollar right now, and neither

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Speaker 1: one is doing better than the other, which I know

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Speaker 1: because I see the euro at one dollar, I see

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Speaker 1: the pound at one eighteen euro pound is eighty five

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Speaker 1: eighty five cents or is that what you call it?

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Speaker 1: Hence sorry, europound is eight five pence. And I recall

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Speaker 1: about five or six years ago I was looking to

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Speaker 1: buy a Ducati S four R T in Sheffield dealership

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Speaker 1: and I was in Berlin and I was waiting for

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Speaker 1: the euro pound to uh, you know, adjust to my

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Speaker 1: favorite but it was at eight five pence then as well. Right,

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Speaker 1: so they're both moving down in Unison. Well, it makes sense,

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Speaker 1: right because again, if if the world is on fire,

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Speaker 1: which is a bit of a bit of an exaggeration,

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Speaker 1: but if the world is on fire, where do people go?

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Speaker 1: Certainly not the end? Certainly not the end. Although I

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Speaker 1: think I think B O J is not sweating it

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Speaker 1: as bad right now because they're thinking this is this

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Speaker 1: is not sustainable above two percent. I think they're looking

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Speaker 1: at supply chains and thinking we need to at a

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Speaker 1: bit further um with our easing program, because then we

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Speaker 1: might get to a sustainable two UM. But yeah, so look,

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Speaker 1: currency is are wild and I really don't rule anything out.

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Speaker 1: So for the pound here, let's go back for the

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Speaker 1: UK here. Broadly, we're also dealing with new leadership potentially

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Speaker 1: at the HELM. What kind of leadership are we talking about?

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Speaker 1: What kind of risks are we talking about? It kind

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Speaker 1: of seems like the Brexit controversy has has dropped that

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Speaker 1: whoever is in charge or does end up becoming a

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Speaker 1: charge's still going to become have very aggressive Brexit stands.

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Speaker 1: But I'm curious what are the nuances there that we

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Speaker 1: could see based on I think we have like how

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Speaker 1: many candidates, like six seven, I think it's seven hundred

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Speaker 1: the last time I shocked. I think I'm in the list.

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Speaker 1: But it's basically Rishi, Sunac and list, trust this, trust

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Speaker 1: the others that would cut taxes. Rishi is the conservative

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Speaker 1: candidate and everybody else wants to be it sort of

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Speaker 1: a populace. Yeah, Hunts would cut taxes. I think I

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Speaker 1: think most people want to cut taxes. But Richie's saying, look,

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Speaker 1: we've got this inflationary problem. We have to get our

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Speaker 1: arms around that fust So to your question, I think

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Speaker 1: that the real the real issue right now is where

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Speaker 1: is the tax policy land how fiscally responsible or otherwise

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Speaker 1: will the next pm B. So it's not really anything.

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Speaker 1: It's not really like a Labor versus Tory right now.

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Speaker 1: It's one nation Tory versus Prexittory. For international audience, we

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Speaker 1: should add to a lot of American listeners. Obviously, UM,

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Speaker 1: correct me if I'm wrong. We haven't actually had tax

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Speaker 1: cuts in the last three years, right, which has been um,

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Speaker 1: counter contrary to contrarian It's yeah, it's counterintuitive because the

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Speaker 1: Conservative Party, if it stands for anything, it probably stands

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Speaker 1: for lowering taxes. So this again it goes back to

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Speaker 1: the debate in the Tory party right now, which is

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Speaker 1: which one comes first, tax cuts or growth. And some

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Speaker 1: are arguing that if you cut taxes, you get growth,

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Speaker 1: and some are saying, well, we have to wait until

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Speaker 1: we get growth in order to cut taxes. So if

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Speaker 1: you're a you know, American audience are watching UK and

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Speaker 1: thinking about what the immediate indicators going to be. If

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Speaker 1: if Rishi wins, you can expect more fiscal discipline I

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Speaker 1: think the big concern for Americans right now is do

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Speaker 1: we end up with the same kind of rationing that

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Speaker 1: you have put in place today. At ETHRI, they're capping

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Speaker 1: the flights. Capping flights. That's not difficult. That's not good.

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Speaker 1: That's that's that's very much not good. And it lobbies

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Speaker 1: for building some more runways whatever whatever the climate love

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Speaker 1: he says, right, I mean, it's just getting some more

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Speaker 1: employees in, right, and getting some more people in shore

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Speaker 1: from Eastern Europe. Have you thought about boosting immigration from

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Speaker 1: Eastern Europe? I think about every morning, man. I think. Look,

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Speaker 1: if you look at the UK economy, it's like any economy.

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Speaker 1: If you want growth, you want productivity, you want population,

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Speaker 1: and you want per capita GDP. Garthur's result ed, Ed,

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Speaker 1: Thanks so much for coming in ed Price there, senior

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Speaker 1: fellow at n y U, Greg, Thanks very much. Now

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Speaker 1: you've probably heard Elon Musk's move determinate his deal with

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Speaker 1: Twitter is set to wind up in chancery court in Delaware,

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Speaker 1: but you may not know. Musk's actions also led to

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Speaker 1: a lawsuit back in May against the Tesla CEO on

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Speaker 1: behalf of Twitter shareholders for the drastic decline in Twitter

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Speaker 1: stock value. Joe Catchett is the senior partner at Cotchett,

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Speaker 1: Petrie and McCarthy, which, along with Bottini and Bottini, brought

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Speaker 1: the suit in the U. S. District Court for the

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Speaker 1: Northern District to California. Bloomberg, Dreg Jarrett and San Francisco

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Speaker 1: had an exclusive interview with Cotchett. They talked about the

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Speaker 1: shareholder suit against Musk and Twitter. Joe, you guys actually

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Speaker 1: filed a suit back on May against Elon Musk, and

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Speaker 1: it made news at the time, but it seems to

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Speaker 1: be taking on more prominence more importance right now. Can

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Speaker 1: you tell me about that suit. Well, it's absolutely clear

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Speaker 1: that we saw at the outset where Musk was going.

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Speaker 1: We alleged the complaint that much of what he did

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Speaker 1: was simply to drab the price down. We alleged that

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Speaker 1: he did this on purpose. She wanted to pick up

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Speaker 1: Twitter at a cheap price. And you show what happened

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Speaker 1: to these people at owned Twitter stock. They all lost

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Speaker 1: of the value and it was clear from the outset.

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Speaker 1: It's just amazing that everybody didn't see what was going on.

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Speaker 1: Many people did see it, stood by and watched the

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Speaker 1: whole scenario play out as we allege. We don't think.

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Speaker 1: We don't think. The facts will show that he had

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Speaker 1: a full intention at the outset to buy it at

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Speaker 1: the price he offered. The visions about fake accounts, he

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Speaker 1: knew all about it. As a matter of fact, Twitter

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Speaker 1: did have fake accounts. They just settled a major lawsuit

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Speaker 1: a year ago over the fake accounts. He was fully

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Speaker 1: aware of all of this. This is one of the

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Speaker 1: great great American Wolf Street stories of what's going on

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Speaker 1: with our stock market and the failure to be brutally

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Speaker 1: candid with you, the failure of our SEC to protect

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Speaker 1: people investing in the market these days. Joe, how many

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Speaker 1: shareholders are you representing and are you asking for anything

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Speaker 1: in this lawsuit? Yeah, we're asking that Twitter go after

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Speaker 1: Musk and pick up that one billion dollar penalty for

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Speaker 1: not going through with the deal. Further, we're asking that

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Speaker 1: must be liable for the downfall of that stop five

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Speaker 1: had to wet down. It involves knowledge and by the way,

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Speaker 1: just to work clear, a lot of the shareholders came

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Speaker 1: from pension funds, nonprofits, things of this nature. So it's

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Speaker 1: a it's an extraordinary case that the SEC should be

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Speaker 1: what effect do you think, if any, the chance to

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Speaker 1: record in Delaware will have on your suit. They're taking

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Speaker 1: it there to figure out exactly what to do about this,

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Speaker 1: and do you have any prediction of an outcome? Uh, well,

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Speaker 1: we know one thing. We know there's going to be

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Speaker 1: a wild court room fight, whether it is in the

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Speaker 1: chancery court or whether it is in the Northern District,

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Speaker 1: California where Twitter is home. Will see downstream. By the way,

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Speaker 1: I found it very interesting in your lawsuit that you

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Speaker 1: were talking about his leverage of Tesla stock in order

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Speaker 1: to be able to back alone, and the indication that

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Speaker 1: he was only able to leverage up to what of

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Speaker 1: the value of the Tesla stock in order to be

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Speaker 1: able to complete the loan to make the purchase of Twitter,

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Speaker 1: and that that had something to do or a lot

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Speaker 1: to do with him wanting to back out of this

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Speaker 1: in order to drive the price down. Can you can

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Speaker 1: you outline that for me? You know, he is holding

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Speaker 1: in Tesla, and Tesla was all part of the deal.

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Speaker 1: He wanted to use that as a leverage, if you will,

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Speaker 1: I shouldn't say leverage. He wanted to use it as

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Speaker 1: the basis for getting the money to buy Twitter and

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Speaker 1: was chaos. Both test Less shareholders suffered. Twitter shareholders suffered.

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Speaker 1: Everybody suffered as we allege into complaints through whatever you

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Speaker 1: want to call it. You want to call it arrogance,

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Speaker 1: you want to call it just flexing your your richest

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Speaker 1: man in the world muscle, or whatever you want to

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Speaker 1: call it. Uh, it's something that are our capitalist system

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Speaker 1: can't allow to happen. Too many people are affected by this.

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Speaker 1: Too many at tension funds have been hammered, too many

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Speaker 1: average people on the street that have money invested in

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Speaker 1: the stock market. Uh, we're taking advantage of and this

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Speaker 1: is a good example for the government to get off

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Speaker 1: their rear end and take a look at what's happening

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Speaker 1: out there, because this is happening in many different situations.

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Speaker 1: This one happens to be the epitome of arrogance. How

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Speaker 1: long is this courtroom winding road going to be between

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Speaker 1: your lawsuit the chance to record in Delaware? And there's

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00:24:04,520 --> 00:24:07,880
Speaker 1: got to be a whole lot more happening here. It'll

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Speaker 1: be several months, but it is going to be chaos

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Speaker 1: in the in the courtroom wherever it ends up. Uh,

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Speaker 1: it will certainly be an interesting uh issue for all

448
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Speaker 1: of the America to take a look at Greg Jarrett

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00:24:23,080 --> 00:24:27,520
Speaker 1: with that interview. Uh wait is Greg with us right now? Greg? So,

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Speaker 1: uh wrap it up for us? Um, what do you

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Speaker 1: think considering what we've learned in the past few days?

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Speaker 1: I mean, how's this going to turn out? Well? I've

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Speaker 1: got to tell you that Chet has a great track record.

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Speaker 1: You may remember he won three point three billion dollar

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Speaker 1: jury verdict against Lincoln Savings and Loan and Charles Keating.

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Speaker 1: He also represented former c I A agent Valerie, playing

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00:24:48,000 --> 00:24:51,879
Speaker 1: against Dick Dick Cheney at all In and he's inflamed

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Speaker 1: over this. When I talked with him, Uh, he went

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Speaker 1: a lot further. He pretty much alleges right stock manipulation.

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Speaker 1: He says, every time you hear something from Elon Musk,

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00:25:04,680 --> 00:25:08,240
Speaker 1: those stocks move wildly. And you know, he and his

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Speaker 1: clients speculate that that's for the purpose simply of making

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Speaker 1: more money. Fascinating, fascinating stuff, and I think also something

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Speaker 1: that we're all watching. They're these sort of not secret secrets, um,

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Speaker 1: that we could all agree on, but no one would

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Speaker 1: want to allege that sort of thing, certainly not on

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Speaker 1: public radio broadcast. Thanks for listening to the Bloomberg Markets podcast.

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Speaker 1: You can subscribe and listen to interviews at Apple Podcasts

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00:25:36,200 --> 00:25:40,120
Speaker 1: or whatever podcast platform you prefer. I'm Matt Miller. I'm

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Speaker 1: on Twitter at Matt Miller three. Put on fall Sweeney

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Speaker 1: I'm on Twitter at pt Sweeney. Before the podcast, you

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Speaker 1: can always catch us worldwide at Bloomberg Radio