WEBVTT - Key Beast Risk: BMNR, 10%, OLMA

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<v Speaker 1>Bloomberg Audio Studios, Podcasts, Radio News.

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<v Speaker 2>Katy, you haven't talked about this, but I watched five minutes,

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<v Speaker 2>five randomly selected minutes of the Golden Globes last weekend.

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<v Speaker 2>Oh my god, it happened to be the five minutes

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<v Speaker 2>during which Snoop dogg It gave an award for Best Podcast.

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<v Speaker 2>So and we won something to aspire to. We did.

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<v Speaker 2>We were not even whatever like seven tiers below nominated

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<v Speaker 2>it is. We weren't that either.

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<v Speaker 3>Our faces weren't in a box on the screen. It

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<v Speaker 3>was Amy Poehler was Amy. Yeah, I'm a huge fan.

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<v Speaker 3>I thought you were going to talk about Timothy Shalmey

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<v Speaker 3>and Kylie Jenner, but.

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<v Speaker 2>I was not. I didn't see those five minutes or.

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<v Speaker 1>Their pda IT award shows. I'm into it.

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<v Speaker 2>Okay, okay, Hello, and welcome to The Money Stuff Podcast,

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

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

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<v Speaker 2>for Bloomberg Opinion.

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

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<v Speaker 1>an anchor for Bloomberg Television. We actually have a lot

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<v Speaker 1>to talk about today, some of it all, right, about first,

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<v Speaker 1>do you want to talk about mister Beest. I guess yes.

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<v Speaker 2>This is a cultural phenomenon that I am cleansically familiar with.

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<v Speaker 1>I only read really the headline, and I feel like

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<v Speaker 1>we're doing great.

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<v Speaker 2>We're clearly the best podcast.

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<v Speaker 3>Mister Beast nabs two hundred million dollar investment from Tom

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<v Speaker 3>Lee's Bitmine. Mister Beast, if you don't know, we're talking

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<v Speaker 3>about Jimmy Donaldson, better known as mister Beasts, who is

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<v Speaker 3>a YouTube phenomenon. I've also not watched him, but he's

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<v Speaker 3>a billionaire. Yeah, he's got an empire. Yeah yeah, and

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<v Speaker 3>now he's got two hundred million dollars from.

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<v Speaker 2>Bitmin another content creator who's more successful than were. Yeah,

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<v Speaker 2>you get two und million dollars from bitmine. To me,

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<v Speaker 2>the interesting thing is the bitmind more than the mister

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<v Speaker 2>be But go on, well, I mean, mister Beast is

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<v Speaker 2>a content creation joy you're not.

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<v Speaker 3>Also, I should point out it's for a stake in

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<v Speaker 3>Beast Industries.

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<v Speaker 1>Not the man, not the Beast himself.

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<v Speaker 2>No, no, he's a little phenomenous. I do wonder a

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<v Speaker 2>little right at this moment, I had not thought about

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<v Speaker 2>it variously, but the Beast industry's succession plan looks like

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<v Speaker 2>because like he is, you know that is that is

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<v Speaker 2>largely an investment in.

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<v Speaker 1>The beast himself Ken Risk Key.

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<v Speaker 2>Beast Risk now. But like to me, the interesting thing

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<v Speaker 2>is like bid Mind, which is a fabulous company. Its

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<v Speaker 2>name is Bitmine Immersion.

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<v Speaker 1>Technologies like a nice bath.

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<v Speaker 2>Yes, the reason it was named that is because one

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<v Speaker 2>year ago it had been for several years a bitcoin

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<v Speaker 2>mining operation whose differentiating factor was that it immersed its

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<v Speaker 2>bitcoin mining rigs and a nice bath to keep them cool.

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<v Speaker 1>Amazing.

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<v Speaker 2>Yeah, I don't know a lot about the physics of this.

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<v Speaker 2>I assume it's not just it's not just dunking computers

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<v Speaker 2>and water. There's some more complicated thing going on. But

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<v Speaker 2>immersion is in the name because they immersed, they bathed

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<v Speaker 2>their bitcoin matters and cool cool liquid.

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<v Speaker 3>That is a really fascinating backstory because now they're better

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<v Speaker 3>known as being the largest corporate holder of ether.

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<v Speaker 2>Yes, in the last year, they pivoted away from being

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<v Speaker 2>a minor to being a treasury company, and they pit

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<v Speaker 2>it away from bitcoin to being an etherorem company.

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<v Speaker 1>Didn't pivot, the name didn't pivot.

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<v Speaker 2>The name didn't get around to that yet. But so

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<v Speaker 2>now they're like a treasury company with like kind of

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<v Speaker 2>fourteen billion dollars of mostly ethereum, although also some like

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<v Speaker 2>dollar cash and some random stuff. And we've talked a

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<v Speaker 2>lot about crypto treasury companies. Sure it was a great

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<v Speaker 2>trade to do six months ago, nine months ago, which

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<v Speaker 2>is roughly when they did it. You could put fourteen

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<v Speaker 2>billion dollars with theoreum in a pot and trade to

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<v Speaker 2>twenty eight billion dollars and you make this is great.

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<v Speaker 2>Now if you put fourteen billion dollars with Thereum in

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<v Speaker 2>a pot you trade to like thirteen billion dollars, it's

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<v Speaker 2>not as good a trade. And so there are a

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<v Speaker 2>lot of people who run crypto treasury companies who are

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<v Speaker 2>kind of looking around and being like, what are you

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<v Speaker 2>going to do with this? And one answer is your

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<v Speaker 2>fourteen billion dollars you can go make investments. Right, So

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<v Speaker 2>one thing that seems to be happening here is they're like, wow,

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<v Speaker 2>we have a lot of money, and like just putting

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<v Speaker 2>the next incremental dollar into ethereum is not going to

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<v Speaker 2>move the needle for us. But like mister Beast is

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<v Speaker 2>right there.

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<v Speaker 1>Yeah, it's pretty funny.

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<v Speaker 3>I saw this read Spike alert on my phone, and

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<v Speaker 3>I think I described it to you in an email,

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<v Speaker 3>is like, it's very fun twenty twenty six headline mad libs.

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<v Speaker 1>Yeah, and for a crypto treasury.

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<v Speaker 3>Company, you know, in the opening weeks of twenty twenty six,

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<v Speaker 3>maybe not a bad diversification play.

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<v Speaker 2>Yeah, crypto treasury companies are going to generate a lot

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<v Speaker 2>of twenty twenty six mad lives because like, it's not

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<v Speaker 2>as simple and obvious and good a trade as it was,

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<v Speaker 2>but all these people are raised billions of dollars to

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<v Speaker 2>do it. And now look, now, what right? And the

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<v Speaker 2>answer is mister beast or some other weird answer that

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<v Speaker 2>we're gonna find in the next couple of months.

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<v Speaker 3>I do like like this line from the article, and

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<v Speaker 3>it's written by my very good friend FORLL Donna Hirich,

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<v Speaker 3>so I don't want to dunk on her. But the

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<v Speaker 3>move highlights the growing convert between digital finance and the

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<v Speaker 3>creator economy, as crypto native firms look to align with

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<v Speaker 3>brands that dominate gen Z and jen Alpha attention. I

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<v Speaker 3>didn't know that this convergence was happening.

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<v Speaker 2>So my take on this is that they have a

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<v Speaker 2>pot of money, like the thing they were doing. The

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<v Speaker 2>money doesn't make sense anymore, so they're doing other things

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<v Speaker 2>with them. They're like an investing firm. But you can

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<v Speaker 2>have another view, which is more like wait hold Ona wrote,

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<v Speaker 2>which is that crypto treasury companies would all say, we're

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<v Speaker 2>not just an investment company. We're not just a pot

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<v Speaker 2>of money. We are building a new digital asset infrastructure.

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<v Speaker 2>And like one aspect of that in a lot of

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<v Speaker 2>like the presentations that crypto treasury companies made is investor education.

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<v Speaker 2>We're going to increase adoption of whatever our preferred token is, right, Yeah,

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<v Speaker 2>And so a lot of that was just like Michael Saylor,

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<v Speaker 2>like putting up presentations and like you know, himself being

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<v Speaker 2>an evangelist for bitcoin. But there are other ways to

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<v Speaker 2>do that. In one way is you give mister bast

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<v Speaker 2>two hundred million dollars and maybe in his vast content

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<v Speaker 2>juggernaut he says, hey, guys, buy ethereum, and maybe the

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<v Speaker 2>price of the goes up, and maybe that makes the

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<v Speaker 2>price of your part of the theoreum go up. I

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<v Speaker 2>don't know.

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<v Speaker 1>You forgot Sailor also posting AI generated images of himself

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<v Speaker 1>in various inspiring poses.

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<v Speaker 2>He's great, I mean say he does it, he's great

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<v Speaker 2>to say he's either great or he does a lot

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<v Speaker 2>of this sort of thing. But like the people who

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<v Speaker 2>run the other not micro not strategy, crypto treasury companies,

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<v Speaker 2>you know, they maybe need some help from, you know,

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<v Speaker 2>the greatest content creator for his generation. I think they

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<v Speaker 2>call them.

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<v Speaker 1>Yeah, that's the thing.

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<v Speaker 3>I don't want to be too glib about mister Beast

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<v Speaker 3>because Beast Industries it oversees basically the YouTube business, which

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<v Speaker 3>is YouTube's most watched series.

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<v Speaker 2>Creachy be clear, we can't be glit Like we have

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<v Speaker 2>a podcast and he has a better podcast.

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<v Speaker 1>He certainly does, no Amy Polar but like you know, also.

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<v Speaker 3>In October, Beast Industries filed a trademark application for mister

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<v Speaker 3>beasts Financial, which lists services such as a cryptocurrency exchange

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<v Speaker 3>or a cryptocurrency exchange platform just everywhere. Also consumer lend it. Yeah,

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<v Speaker 3>so I mean, we joke now, but he's going to

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<v Speaker 3>run our lives the Jeff Bezos of his time.

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<v Speaker 2>Would you borrow money from a Beast?

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<v Speaker 3>Someone would? Maybe these Jen Alpha people that we're talking about.

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<v Speaker 2>I've never felt more old. This whole conversation, so much

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<v Speaker 2>younger than I am, you.

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<v Speaker 3>Know, I keep telling myself, I'm going to watch a

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<v Speaker 3>Mister Beast's YouTube video. And I'm always looking for things

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<v Speaker 3>to watch on YouTube. I mostly just watch US and

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<v Speaker 3>L clips, and probably for market research or my job,

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<v Speaker 3>it'd probably at this point be a good idea to

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<v Speaker 3>watch a Mister Beast video.

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<v Speaker 2>Yes, if you come away from thinking, boy, I better

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<v Speaker 2>buy some ether, then.

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<v Speaker 4>I'll text you.

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<v Speaker 2>You know who else is a consumer lender who you

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<v Speaker 2>wouldn't want to borrow money from?

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<v Speaker 1>Tell me every banks.

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<v Speaker 2>Credit every credit card company. I don't know. My impression

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<v Speaker 2>is that the average interest rate on credit.

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<v Speaker 1>Cards is super high.

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<v Speaker 2>Eight tho.

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<v Speaker 1>I know someone I know someone who wants to change that.

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<v Speaker 1>His name is Donald J. Trump.

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<v Speaker 3>He's the President of the United States, and he would

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<v Speaker 3>like to see those rates capped at ten percent.

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<v Speaker 1>Do you have anything to say about I.

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<v Speaker 3>Mean, it's pretty amazing. This isn't a new topic, right,

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<v Speaker 3>and it's not.

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<v Speaker 2>Like a traditional Republican party talking. It's like more of

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<v Speaker 2>a you know, Elizabeth Warren introduced legislation sort of plan,

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<v Speaker 2>like a Bernie Sanders kind of Well.

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<v Speaker 3>It's amazing because Bernie Sanders and AOC I think they

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<v Speaker 3>were advocating for like fifteen percent originally, like back in

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<v Speaker 3>twenty nineteen ten. Yeah, so President Trump undercut them at

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<v Speaker 3>their own game, which is pretty amazing.

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<v Speaker 1>Make at five ye why not?

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<v Speaker 3>The banks, of course are it seems like trying to

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<v Speaker 3>one up each other on like doomsday predictions of what

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<v Speaker 3>this would mean. It seems like the consensus is that

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<v Speaker 3>they would basically offer less credit.

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<v Speaker 2>Right Like I and I think a lot of financial

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<v Speaker 2>columnists have bad intuitions around the credit component of credit

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<v Speaker 2>cards because like I pay my balance every month, I

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<v Speaker 2>get rewards. Credit cards are a way to get points

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<v Speaker 2>and a convenient payment mechanism and not a credit mechanism.

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<v Speaker 2>The reason they're not a credit mechanism they charge like

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<v Speaker 2>twenty percent interest and if you want credit, there are

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<v Speaker 2>other ways to get credit. For some people, that's less true.

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<v Speaker 2>And it's a standard form of consumer debt. And my

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<v Speaker 2>assumption is that the rates are so high because one

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<v Speaker 2>the default risk is high and two years short of

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<v Speaker 2>getting adversely selected, right because the people who carry a

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<v Speaker 2>balance with the people who are not going to be

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<v Speaker 2>able to.

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<v Speaker 1>Pay at off.

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<v Speaker 2>But there is like research, you know, Brian Sheer at

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<v Speaker 2>Vanderbilt has research on this that is kind of possibly

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<v Speaker 2>underpinning some of these arguments, saying that the credit card

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<v Speaker 2>industry is so profitable that it could rain and interest

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<v Speaker 2>rates save billions for Americans and small businesses and still

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<v Speaker 2>make profits. Right, so there's there's some fat to be cut.

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<v Speaker 2>Here is something that some economists think, although you will

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<v Speaker 2>not hear that from.

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<v Speaker 3>Banks, No, No, What you will hear from banks is

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<v Speaker 3>the CFO of JP Morgan, for example, saying that if

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<v Speaker 3>it were to happen, it would be very bad for consumers,

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<v Speaker 3>very bad for the economy, and basically that their card

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<v Speaker 3>operation would be a business that we would have to

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<v Speaker 3>significantly change. And I've seen, you know, Bloomberg News basically

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<v Speaker 3>describe the card's business is like the crown jewel of banks.

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<v Speaker 2>Well, I mean the crown jewel of banks are used

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<v Speaker 2>against JP market. It's so good, then it could be

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<v Speaker 2>less good and still you know, give credit to people.

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<v Speaker 2>But my intuition is that they are right. And like

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<v Speaker 2>in particular, if banks had to cut my credit card

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<v Speaker 2>interest rate to ten percent, that wouldn't affect anyone because

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<v Speaker 2>I don't pay interest on my credit card. But if

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<v Speaker 2>they had to cut like the lowest credit score bars

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<v Speaker 2>to ten percent, They would probably do a lot less

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<v Speaker 2>credit provision to those bars, right, and there would be

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<v Speaker 2>you know, you'd see just the migration to credit cards

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<v Speaker 2>being a like less available product and for people with

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<v Speaker 2>higher credit scores.

0:11:28.600 --> 0:11:32.640
<v Speaker 3>Yeah, and those people who would be cut out, seems

0:11:32.679 --> 0:11:35.000
<v Speaker 3>like again the consensus would be that they would go

0:11:35.040 --> 0:11:39.440
<v Speaker 3>to like payday lenders more who don't exactly offer better

0:11:39.520 --> 0:11:40.439
<v Speaker 3>rates necessarily.

0:11:40.520 --> 0:11:42.960
<v Speaker 2>Yeah, I mean, I don't like the consumer credit right

0:11:43.000 --> 0:11:45.000
<v Speaker 2>now is interesting, right because there's been a huge rise

0:11:45.080 --> 0:11:48.760
<v Speaker 2>and buy now pay later, which is often structured as

0:11:49.320 --> 0:11:54.960
<v Speaker 2>zero interest, fairly sure repayment periods, and loosely speaking, they

0:11:54.960 --> 0:11:57.120
<v Speaker 2>make their money on like interchanin on like swipe fees, right,

0:11:57.480 --> 0:11:59.480
<v Speaker 2>and so there would be some of that, right, but

0:11:59.520 --> 0:12:02.880
<v Speaker 2>that would probrobably you probably get less credit provision that way, right,

0:12:02.880 --> 0:12:04.840
<v Speaker 2>Like you probably couldn't run up as much of a

0:12:04.880 --> 0:12:06.599
<v Speaker 2>balance on your Binea appay.

0:12:06.400 --> 0:12:07.720
<v Speaker 1>Later, yeah product.

0:12:08.520 --> 0:12:11.000
<v Speaker 2>The other thing that Trump wants is to he's also

0:12:11.160 --> 0:12:15.800
<v Speaker 2>talked about swipe fees. Yes, you squeeze credit cards from

0:12:15.840 --> 0:12:17.600
<v Speaker 2>both ends, right, And like, if you're a credit card

0:12:17.600 --> 0:12:20.440
<v Speaker 2>company and you can charge a lot of money in

0:12:20.520 --> 0:12:23.880
<v Speaker 2>swipe fees, then like you can make a lower interest

0:12:23.920 --> 0:12:27.240
<v Speaker 2>rate work in some form for some time, But if

0:12:27.240 --> 0:12:29.079
<v Speaker 2>you both have to give up your swipe fees and

0:12:29.120 --> 0:12:30.560
<v Speaker 2>you have to give out your interest, it's like a

0:12:30.640 --> 0:12:31.600
<v Speaker 2>much worse product.

0:12:31.840 --> 0:12:32.200
<v Speaker 1>Yeah.

0:12:32.840 --> 0:12:34.800
<v Speaker 3>I am really interested to see what happens over the

0:12:34.880 --> 0:12:37.719
<v Speaker 3>next couple of days with this, because we're recording this

0:12:38.200 --> 0:12:40.440
<v Speaker 3>on January fifteenth.

0:12:40.040 --> 0:12:42.560
<v Speaker 2>I'll tell it's gonna happen over the next couple of days. Okay, well, no,

0:12:42.640 --> 0:12:45.240
<v Speaker 2>I shouldn't say it. My genuine instinct is nothing, but like,

0:12:45.280 --> 0:12:47.360
<v Speaker 2>the things are crazy now, so maybe.

0:12:47.080 --> 0:12:50.199
<v Speaker 1>Maybe well specifically I'm referring to January twentieth.

0:12:50.600 --> 0:12:54.240
<v Speaker 2>Oh, yes, that's when if you don't stop charging more

0:12:54.280 --> 0:12:56.720
<v Speaker 2>than ten percent interest, you'll be in violation of the law.

0:12:56.800 --> 0:12:57.800
<v Speaker 1>The law, the law?

0:12:57.840 --> 0:12:58.280
<v Speaker 2>What law?

0:12:58.600 --> 0:13:00.319
<v Speaker 1>That's what I would like to know, And that's what

0:13:00.360 --> 0:13:00.880
<v Speaker 1>I was going.

0:13:00.720 --> 0:13:02.640
<v Speaker 2>To ask, secret law and Donald Trump's had.

0:13:02.559 --> 0:13:04.800
<v Speaker 3>Well, apparently a lot of these banks are going to

0:13:04.800 --> 0:13:06.120
<v Speaker 3>be in violation of it.

0:13:06.120 --> 0:13:07.200
<v Speaker 2>It does seem that way.

0:13:07.400 --> 0:13:10.040
<v Speaker 1>You know, who won't built, Built?

0:13:10.280 --> 0:13:10.720
<v Speaker 2>I love it.

0:13:10.760 --> 0:13:14.600
<v Speaker 1>Built is seizing the moment unveiling three new credit cards

0:13:14.600 --> 0:13:16.400
<v Speaker 1>with interest rates capped at ten percent.

0:13:17.080 --> 0:13:19.320
<v Speaker 2>That's not true, right, It's isn't it? A one year

0:13:19.440 --> 0:13:23.320
<v Speaker 2>promotional rate. Yes, because that's really interesting about this, Like

0:13:23.360 --> 0:13:25.840
<v Speaker 2>Trump is not like credit cards can only charge ten

0:13:25.840 --> 0:13:28.000
<v Speaker 2>percent for the rest of time. He's like for the

0:13:28.040 --> 0:13:31.640
<v Speaker 2>next year until the midterm elections, you have to charge

0:13:31.679 --> 0:13:34.559
<v Speaker 2>cha percent or less. And you know credit card companies

0:13:34.600 --> 0:13:36.360
<v Speaker 2>do that all the time all the time. They offer

0:13:36.440 --> 0:13:40.920
<v Speaker 2>like zero percent introductory rates, right, Like you can like

0:13:41.520 --> 0:13:44.800
<v Speaker 2>have some sort of promotional program that charges ten percent

0:13:44.920 --> 0:13:47.200
<v Speaker 2>or less to attract customers, right and then you know

0:13:47.240 --> 0:13:50.600
<v Speaker 2>eventually jacking up to thirty percent. What a great time

0:13:50.760 --> 0:13:53.440
<v Speaker 2>to have a promotional But these promotional preyers, like you

0:13:53.480 --> 0:13:56.120
<v Speaker 2>often see people being like zero percent introductory APR for

0:13:56.120 --> 0:13:58.360
<v Speaker 2>the first six months it built, is like ten percent,

0:13:58.640 --> 0:14:01.400
<v Speaker 2>no problem, ten percent directory right for one year.

0:14:01.320 --> 0:14:02.439
<v Speaker 1>After new purchases.

0:14:03.559 --> 0:14:06.880
<v Speaker 2>It's a great like combination of politics and marketing.

0:14:06.960 --> 0:14:09.440
<v Speaker 3>Yeah, I'm trying to find all the different asterisks here,

0:14:09.679 --> 0:14:13.040
<v Speaker 3>but yeah, it is great promotion. And I mean you

0:14:13.040 --> 0:14:15.480
<v Speaker 3>haven't really seen anyone else, or at least not in

0:14:15.559 --> 0:14:18.680
<v Speaker 3>like a big splashy way like this sort of take

0:14:18.720 --> 0:14:21.080
<v Speaker 3>advantage of this moment. It's mostly been pushed back from

0:14:21.120 --> 0:14:21.440
<v Speaker 3>the bank.

0:14:21.560 --> 0:14:23.280
<v Speaker 2>Yeah, because if you if you were a bank with

0:14:23.360 --> 0:14:26.920
<v Speaker 2>a long standing portfolio like and you're like tenversent the

0:14:26.960 --> 0:14:29.040
<v Speaker 2>directory rate on our new card. Like it's a little

0:14:29.040 --> 0:14:32.120
<v Speaker 2>bit like people notice that you're mostly not charging that right.

0:14:32.400 --> 0:14:36.400
<v Speaker 2>Built I think has some advantages and the like my

0:14:36.440 --> 0:14:38.440
<v Speaker 2>impression is like they have fairly high credit quality and

0:14:38.560 --> 0:14:40.640
<v Speaker 2>like like they're the pay your rent with a credit

0:14:40.720 --> 0:14:42.840
<v Speaker 2>card thing, Like I think they have probably different economics

0:14:42.880 --> 0:14:43.680
<v Speaker 2>from a regular bank.

0:14:43.760 --> 0:14:46.560
<v Speaker 3>Yeah, we were talking about this earlier in person that

0:14:47.320 --> 0:14:50.680
<v Speaker 3>we've talked about Built on this podcast before, and I.

0:14:50.240 --> 0:14:53.160
<v Speaker 2>Believe you and you told me that I forget.

0:14:51.600 --> 0:14:55.760
<v Speaker 3>What the specific We've definitely talked about it on this podcast,

0:14:55.880 --> 0:14:58.360
<v Speaker 3>but yeah, they have a really interesting model.

0:14:58.840 --> 0:15:01.240
<v Speaker 2>But yeah, you how worked and you didn't know. I

0:15:01.400 --> 0:15:04.040
<v Speaker 2>don't frankly know either. But like my impression is that,

0:15:04.080 --> 0:15:06.560
<v Speaker 2>like you can't normally put your rent on your credit

0:15:06.600 --> 0:15:10.320
<v Speaker 2>card because like that'll cost your landlord, you know, three

0:15:10.320 --> 0:15:14.040
<v Speaker 2>percent interchange pee. But Built has negotiated with landlords to

0:15:14.040 --> 0:15:16.560
<v Speaker 2>make them like Built so much that they can charge

0:15:16.600 --> 0:15:17.640
<v Speaker 2>renting their credit card.

0:15:18.000 --> 0:15:21.120
<v Speaker 1>And now mortgages and no mortgages, pay for your mortgage

0:15:21.160 --> 0:15:21.840
<v Speaker 1>with your card.

0:15:21.880 --> 0:15:24.160
<v Speaker 2>They have enough like moving pieces that like, you know,

0:15:24.480 --> 0:15:26.680
<v Speaker 2>the twenty percent interest on balances is not the most

0:15:26.680 --> 0:15:28.360
<v Speaker 2>important part of their business, and they can go around

0:15:28.400 --> 0:15:29.200
<v Speaker 2>mean like ten percent.

0:15:29.720 --> 0:15:31.160
<v Speaker 1>Yeah, there you go, Donald Trump.

0:15:31.320 --> 0:15:35.560
<v Speaker 3>Yeah, the countdown's on. As of right now, we're five

0:15:35.640 --> 0:15:37.400
<v Speaker 3>days away from all those life.

0:15:37.400 --> 0:15:41.600
<v Speaker 2>I still think the answer to happen on there's nothing but.

0:15:41.480 --> 0:15:44.400
<v Speaker 1>What if they're all arrested, arrested.

0:15:45.440 --> 0:15:47.360
<v Speaker 2>Law law, nobody knows.

0:15:47.560 --> 0:15:54.160
<v Speaker 1>We'd have an emergency podcast, emergency podcast hiding. Is there

0:15:54.160 --> 0:15:55.960
<v Speaker 1>anything else to say about this specific topic.

0:15:56.000 --> 0:15:57.720
<v Speaker 2>I'm sure there's a lot of things. My impression is

0:15:57.720 --> 0:16:00.440
<v Speaker 2>that people on financial television and frankly and financial journalism,

0:16:00.440 --> 0:16:02.200
<v Speaker 2>I've been talking about it pretty months, not for a week,

0:16:02.320 --> 0:16:03.120
<v Speaker 2>you know what's amazing.

0:16:03.920 --> 0:16:05.800
<v Speaker 3>I would have been one of those people, but I

0:16:05.840 --> 0:16:08.040
<v Speaker 3>spent the first half of this week at the JP

0:16:08.120 --> 0:16:11.480
<v Speaker 3>Morgan Healthcare conference, so I was watching these headlines fly by,

0:16:12.240 --> 0:16:14.960
<v Speaker 3>and no, not this year.

0:16:15.640 --> 0:16:19.200
<v Speaker 1>At least, that was my understanding. It's too busy dealing

0:16:19.240 --> 0:16:21.440
<v Speaker 1>with Yeah.

0:16:21.520 --> 0:16:28.840
<v Speaker 3>Because sent that truth Social last Friday night. I remember

0:16:28.840 --> 0:16:29.400
<v Speaker 3>it was at night.

0:16:29.440 --> 0:16:33.480
<v Speaker 1>I was on my couch, run your couch, looking at you. No,

0:16:33.560 --> 0:16:34.080
<v Speaker 1>I wasn't.

0:16:34.160 --> 0:16:36.200
<v Speaker 3>I actually I don't have a truth Social account. But

0:16:36.240 --> 0:16:39.960
<v Speaker 3>everything that he posts then reed spikes on the terminal,

0:16:40.000 --> 0:16:41.840
<v Speaker 3>so I get it through my app anyway. So it's

0:16:41.920 --> 0:16:44.880
<v Speaker 3>it's like having a truth social account, I imagine. I

0:16:44.880 --> 0:16:46.960
<v Speaker 3>don't know what the other posters are up to. I

0:16:47.000 --> 0:16:50.760
<v Speaker 3>don't know if it's one man platform or what someone

0:16:51.160 --> 0:16:51.600
<v Speaker 3>let us know.

0:16:53.040 --> 0:17:11.600
<v Speaker 1>Regeneration true beast mode speaking of healthcare, Yeah.

0:17:11.480 --> 0:17:15.600
<v Speaker 2>Go on, I read this speek about this lovely well

0:17:15.680 --> 0:17:19.760
<v Speaker 2>terrible insider trading case. These like three brothers are accused

0:17:19.800 --> 0:17:23.679
<v Speaker 2>of doing all sorts of insider trading. I think they're like,

0:17:23.680 --> 0:17:26.119
<v Speaker 2>they're like healthcare people. Like I think they worked in

0:17:26.160 --> 0:17:28.160
<v Speaker 2>healthcare banking, or at least one of them did, and

0:17:28.480 --> 0:17:31.480
<v Speaker 2>they do a lot of trading in healthcare stocks and

0:17:31.680 --> 0:17:35.320
<v Speaker 2>allegedly insider trading and market manipulation and healthcare stocks, and

0:17:35.359 --> 0:17:38.080
<v Speaker 2>some of the accusations are wild. Like this is the

0:17:38.080 --> 0:17:40.159
<v Speaker 2>most interesting to me, is like, you know, I love.

0:17:40.000 --> 0:17:42.199
<v Speaker 1>Insider trading and like doing it.

0:17:42.280 --> 0:17:44.560
<v Speaker 2>So like the main thing they're accused of doing is

0:17:44.600 --> 0:17:45.680
<v Speaker 2>like just standard stuff.

0:17:45.720 --> 0:17:45.840
<v Speaker 3>Right.

0:17:45.840 --> 0:17:48.120
<v Speaker 2>They had a friend who they like. The one guy

0:17:48.119 --> 0:17:51.080
<v Speaker 2>had worked with him and he was a fairly junior

0:17:51.119 --> 0:17:54.399
<v Speaker 2>banker at Lizard. He's a healthcare banker, and so he

0:17:54.560 --> 0:17:59.000
<v Speaker 2>had some information about Lazard's healthcare deal flow and he

0:17:59.000 --> 0:18:03.040
<v Speaker 2>would just tell his buddy allegedly, hey, you know this

0:18:03.080 --> 0:18:05.600
<v Speaker 2>deal is coming, and the buddy would allegedly trade options

0:18:05.600 --> 0:18:08.440
<v Speaker 2>and made like forty million dollars right like the ring

0:18:08.440 --> 0:18:10.679
<v Speaker 2>of them made forty millions. And in exchange for this,

0:18:11.520 --> 0:18:15.840
<v Speaker 2>the brother gave the banker gifts, including a Rolex watch,

0:18:16.000 --> 0:18:20.240
<v Speaker 2>fine help in drafting slides for a PowerPoint presentation that

0:18:20.280 --> 0:18:22.440
<v Speaker 2>he was preparing as part of his job at Lizard,

0:18:22.880 --> 0:18:26.840
<v Speaker 2>which is like, really, he's facing up to twenty five

0:18:26.920 --> 0:18:29.360
<v Speaker 2>years in prison or whatever. I want a PowerPoint.

0:18:29.400 --> 0:18:32.240
<v Speaker 1>I want to see the power point. It's probably it

0:18:32.240 --> 0:18:36.600
<v Speaker 1>can only be so good. I mean that's what you say.

0:18:36.640 --> 0:18:39.520
<v Speaker 2>Now, No, like, if you're doing your power point, if

0:18:39.560 --> 0:18:42.320
<v Speaker 2>your banking job with Bizard, like the floor is high,

0:18:42.359 --> 0:18:44.720
<v Speaker 2>it has to be good, but the ceiling is low,

0:18:45.000 --> 0:18:46.439
<v Speaker 2>it can't be that good. And I also give him

0:18:46.440 --> 0:18:48.680
<v Speaker 2>advice and assistance in his search for a new investment

0:18:48.720 --> 0:18:51.040
<v Speaker 2>banking position, which did not work out well because it's

0:18:51.040 --> 0:18:53.440
<v Speaker 2>hard to keep the investment banking job once you're charged

0:18:53.440 --> 0:18:53.639
<v Speaker 2>with the.

0:18:54.320 --> 0:18:56.720
<v Speaker 3>Most valuable piece of advice probably would have been to

0:18:56.800 --> 0:18:58.040
<v Speaker 3>stop insider trading.

0:18:58.400 --> 0:19:00.800
<v Speaker 2>Yes, the one piece of advice he could not provide

0:19:00.880 --> 0:19:03.359
<v Speaker 2>in the circumstances. But yes, But so that's most of

0:19:03.400 --> 0:19:06.000
<v Speaker 2>what they did, most of the money that they're used

0:19:06.000 --> 0:19:07.600
<v Speaker 2>of making. But they also did like other wild stuff,

0:19:07.600 --> 0:19:12.399
<v Speaker 2>including insider trading on drug trials, right, so, like you

0:19:12.400 --> 0:19:15.119
<v Speaker 2>have a biotech company, it's like trialing a cancer drug.

0:19:15.720 --> 0:19:17.480
<v Speaker 2>If the results are good, a stock will go up.

0:19:17.480 --> 0:19:19.160
<v Speaker 2>If the results are bad, the stock will go down.

0:19:19.560 --> 0:19:23.679
<v Speaker 2>And so they allegedly set up fake email addresses for

0:19:23.760 --> 0:19:27.119
<v Speaker 2>fake doctors and would email the people doing the trial

0:19:27.200 --> 0:19:29.000
<v Speaker 2>to be like, I have a cancer patient who would

0:19:29.000 --> 0:19:30.879
<v Speaker 2>like to be part of the trial, and they'd be

0:19:30.880 --> 0:19:34.120
<v Speaker 2>like okay, and then they'd be like, can you tell

0:19:34.119 --> 0:19:35.879
<v Speaker 2>me how it's going so that I know whether I

0:19:35.880 --> 0:19:37.600
<v Speaker 2>should put my cancer patient into the trial.

0:19:37.600 --> 0:19:39.040
<v Speaker 1>And they'd allegedly.

0:19:38.720 --> 0:19:43.639
<v Speaker 2>Get information that was useful for a hypothetical doctor, but

0:19:43.720 --> 0:19:45.679
<v Speaker 2>also useful for an investor, right because if it's like

0:19:45.720 --> 0:19:48.680
<v Speaker 2>a trial is going very well, then you can buy

0:19:48.720 --> 0:19:51.960
<v Speaker 2>call options on the stock. And so they allegedly did that.

0:19:52.040 --> 0:19:56.080
<v Speaker 2>They got some information. Apparently it wasn't like market moving enough,

0:19:56.600 --> 0:19:59.920
<v Speaker 2>is my impression, because instead of using that information to reaptions,

0:20:00.080 --> 0:20:02.720
<v Speaker 2>also like made up fake information saying the trial was

0:20:02.760 --> 0:20:05.280
<v Speaker 2>going really well, and then instead of like putting out

0:20:05.280 --> 0:20:07.879
<v Speaker 2>a fake press release or just like talking about it

0:20:07.920 --> 0:20:12.919
<v Speaker 2>on Twitter, they like very subtly created like fake profiles

0:20:12.920 --> 0:20:16.679
<v Speaker 2>on cancer support sites and like leaked it in a

0:20:16.680 --> 0:20:18.679
<v Speaker 2>way that didn't seem like they were hyping a stock,

0:20:18.760 --> 0:20:20.720
<v Speaker 2>but that made it seem like it was like legitimate

0:20:20.840 --> 0:20:23.199
<v Speaker 2>medical information. And then they took that and leaked it

0:20:23.240 --> 0:20:25.439
<v Speaker 2>on Twitter, and like the stock pannel, they didn't make

0:20:25.440 --> 0:20:29.320
<v Speaker 2>a lot of money on this. This is very convoluted. Yes,

0:20:29.880 --> 0:20:32.679
<v Speaker 2>like forty million dollars on just straightforwardly being told about mergers, right,

0:20:32.720 --> 0:20:35.240
<v Speaker 2>so so like that's a better deal. But this was

0:20:35.280 --> 0:20:38.199
<v Speaker 2>the very sophisticated and interesting form of insider trading that

0:20:38.480 --> 0:20:40.000
<v Speaker 2>it didn't work as well as the regular form of

0:20:40.040 --> 0:20:40.760
<v Speaker 2>insider showing.

0:20:40.880 --> 0:20:42.639
<v Speaker 1>It seems more evil.

0:20:42.920 --> 0:20:46.240
<v Speaker 3>Oh yeah, yeah, Kevin, that we're talking about like breast

0:20:46.280 --> 0:20:47.199
<v Speaker 3>cancer drug trials.

0:20:47.320 --> 0:20:52.000
<v Speaker 2>Right, it's gross, but also like you could imagine the

0:20:52.080 --> 0:20:57.080
<v Speaker 2>upshot of this being people who run biotech companies and

0:20:57.160 --> 0:21:00.879
<v Speaker 2>doctors who run drug trials thinking, ohn, know, we have

0:21:00.920 --> 0:21:04.480
<v Speaker 2>to worry about insider trading by the doctors and patients

0:21:04.480 --> 0:21:07.199
<v Speaker 2>in this trial and sort of having more safeguards to

0:21:07.240 --> 0:21:10.600
<v Speaker 2>prevent that in a way that is bad for cancer patients,

0:21:10.920 --> 0:21:14.240
<v Speaker 2>but that like you know, prevents this sort of insider trading.

0:21:14.320 --> 0:21:14.560
<v Speaker 1>Right.

0:21:14.640 --> 0:21:16.359
<v Speaker 2>It's like, if you're a cancer patient and you go

0:21:16.400 --> 0:21:18.720
<v Speaker 2>to a drug trial, like nobody's like, oh, you better

0:21:18.760 --> 0:21:20.639
<v Speaker 2>sign this piece of paper saying that you want insider

0:21:20.640 --> 0:21:22.280
<v Speaker 2>trade on and we're going to monitor your training because

0:21:22.280 --> 0:21:23.000
<v Speaker 2>it's not that important.

0:21:23.080 --> 0:21:24.240
<v Speaker 1>Like that is so far.

0:21:24.480 --> 0:21:28.439
<v Speaker 2>Right, exactly, it's not far from these guys. Yeah ideas,

0:21:28.480 --> 0:21:30.080
<v Speaker 2>and so now it's like you've sort of made the

0:21:30.080 --> 0:21:32.040
<v Speaker 2>whole drug trial process a little bit worse for everyone.

0:21:32.240 --> 0:21:34.359
<v Speaker 3>I was going to say that, Unfortunately, it feels like

0:21:35.760 --> 0:21:40.520
<v Speaker 3>drug trials, especially for small publicly listed biotech stocks, or

0:21:40.600 --> 0:21:43.360
<v Speaker 3>like sort of the perfect place for this sort of thing.

0:21:43.480 --> 0:21:44.200
<v Speaker 1>Yeah, and there's.

0:21:44.040 --> 0:21:47.000
<v Speaker 2>Tons of insider trading on them or like cases, but

0:21:47.040 --> 0:21:51.480
<v Speaker 2>they're never patients. They're like a consulting doctor is leaking

0:21:51.520 --> 0:21:52.280
<v Speaker 2>to a hedge finanale.

0:21:52.359 --> 0:21:52.520
<v Speaker 4>You know.

0:21:52.680 --> 0:21:55.000
<v Speaker 2>There's a long history of people worrying about insider trading

0:21:55.040 --> 0:21:58.480
<v Speaker 2>and drug trials, but for the patients, that's kind of

0:21:58.480 --> 0:21:58.920
<v Speaker 2>a new though.

0:21:59.359 --> 0:22:03.080
<v Speaker 3>Yeah, the fake patients, fake patients, the patients themselves.

0:22:03.600 --> 0:22:05.239
<v Speaker 2>They wrote about this, and I was like, hypothetically, if

0:22:05.240 --> 0:22:06.879
<v Speaker 2>you were a patient and you took the drug and

0:22:06.920 --> 0:22:08.960
<v Speaker 2>it worked really well in your case, and then you

0:22:09.000 --> 0:22:11.080
<v Speaker 2>bought call options on that. Would that be insider trading?

0:22:11.320 --> 0:22:13.480
<v Speaker 2>And the answer sort of depends on what you've signed.

0:22:13.520 --> 0:22:16.399
<v Speaker 2>I think legal advice, but also like no one's going

0:22:16.480 --> 0:22:19.840
<v Speaker 2>to come after you, like come on, but yeah, these

0:22:19.880 --> 0:22:21.679
<v Speaker 2>guys kind of run it for a well.

0:22:21.680 --> 0:22:24.040
<v Speaker 3>In the setup, you did ask the popular question that

0:22:24.400 --> 0:22:26.240
<v Speaker 3>you know, say you were on a Boeing plane that.

0:22:26.280 --> 0:22:30.120
<v Speaker 1>Was going down and it's like a big Reddit. What

0:22:30.200 --> 0:22:30.800
<v Speaker 1>was the answer?

0:22:32.520 --> 0:22:33.800
<v Speaker 2>Yeah, so this is like a class. This is like

0:22:33.840 --> 0:22:36.160
<v Speaker 2>a Reddit thing that people send me a lot when

0:22:36.200 --> 0:22:39.200
<v Speaker 2>it was first posted and then periodically send me every

0:22:39.200 --> 0:22:42.359
<v Speaker 2>month since. But there was a Boeing plane where like

0:22:42.400 --> 0:22:44.879
<v Speaker 2>the door popped off in midair and it was pretty

0:22:44.920 --> 0:22:46.840
<v Speaker 2>hairing for the people on the plane, and someone posted

0:22:46.920 --> 0:22:49.040
<v Speaker 2>on Reddit if I were on that plane, could I

0:22:49.040 --> 0:22:53.320
<v Speaker 2>have bought put options on Boeing? Would that be insider trading?

0:22:53.480 --> 0:22:56.399
<v Speaker 2>And my answer is not legal advice is no, that's fine,

0:22:56.440 --> 0:22:58.480
<v Speaker 2>Like that's you know, it's like you're using your product right,

0:22:58.480 --> 0:23:01.280
<v Speaker 2>Like it's like if you have an iPhone and like, yeah,

0:23:01.320 --> 0:23:02.920
<v Speaker 2>you don't think it works very well. You can sell

0:23:02.920 --> 0:23:04.439
<v Speaker 2>Apple stock and if you think it works great, you

0:23:04.440 --> 0:23:07.040
<v Speaker 2>can buy Apple stock like this normal people interact with

0:23:07.080 --> 0:23:10.159
<v Speaker 2>the stock market is like you experience the company's products

0:23:10.240 --> 0:23:11.600
<v Speaker 2>or services and then you trade on it.

0:23:11.680 --> 0:23:13.520
<v Speaker 3>I guess if like you're on that plane and you've

0:23:13.520 --> 0:23:16.040
<v Speaker 3>called all your loved ones everyone you would want to

0:23:16.040 --> 0:23:18.600
<v Speaker 3>talk to, and you have some extra time, that it's

0:23:18.640 --> 0:23:20.840
<v Speaker 3>not unreasonable that you would think to buy puts.

0:23:21.840 --> 0:23:24.000
<v Speaker 2>I feel like the framing of the question and Reddit

0:23:24.160 --> 0:23:26.400
<v Speaker 2>suggests that, like you don't have that many loved ones,

0:23:26.880 --> 0:23:30.120
<v Speaker 2>like kind of a DJA. But yeah, sure, sure, sure, sure.

0:23:30.040 --> 0:23:34.160
<v Speaker 3>Yeah, I just I like to make everything personal, right,

0:23:34.440 --> 0:23:35.080
<v Speaker 3>I would.

0:23:34.800 --> 0:23:38.440
<v Speaker 2>Not I think have the presence of mind to buy

0:23:38.440 --> 0:23:41.080
<v Speaker 2>puts on Boeing is the planet is like the plane

0:23:41.160 --> 0:23:44.080
<v Speaker 2>lands maybe, but anyway, plant is I think it's fine.

0:23:44.359 --> 0:23:52.119
<v Speaker 2>I think it's fine, but it's something like this. And

0:23:52.200 --> 0:23:53.600
<v Speaker 2>that was the Money Stuff Podcast.

0:23:53.920 --> 0:23:56.040
<v Speaker 1>I'm Matt Levine and I'm Katie Greifeld.

0:23:56.240 --> 0:23:58.400
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