1 00:00:02,720 --> 00:00:09,559 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. That's your body battery. 2 00:00:09,960 --> 00:00:12,480 Speaker 2: Oh my god, I slept terribly last night. I'm so 3 00:00:12,560 --> 00:00:16,239 Speaker 2: glad you asked. This is bad. I'm at seventeen. I 4 00:00:16,280 --> 00:00:18,599 Speaker 2: woke up in my body battery. It was at fifty one. 5 00:00:18,720 --> 00:00:21,280 Speaker 2: Usually I wake up in the eighties or the low nineties. 6 00:00:21,480 --> 00:00:22,880 Speaker 1: So what was wearing on you? 7 00:00:24,400 --> 00:00:28,640 Speaker 2: I'm moving tomorrow. I'm psyched. I'm going back to New Jersey. 8 00:00:28,720 --> 00:00:29,640 Speaker 2: It's where I belong. 9 00:00:30,200 --> 00:00:31,480 Speaker 1: I thought you were going to say you're a stressed 10 00:00:31,480 --> 00:00:32,200 Speaker 1: about your bird. 11 00:00:32,320 --> 00:00:34,160 Speaker 2: Oh god, I'm so glad you brought up the bird. 12 00:00:34,320 --> 00:00:36,080 Speaker 1: So, Katy is a bird? 13 00:00:36,400 --> 00:00:37,000 Speaker 2: Have a bird? 14 00:00:37,159 --> 00:00:39,360 Speaker 1: So this is like the Katy's Exotic pet hower. 15 00:00:39,600 --> 00:00:41,600 Speaker 2: Yeah. I have a lot to say about this bird. 16 00:00:41,640 --> 00:00:43,080 Speaker 2: So he's a European starling. 17 00:00:43,200 --> 00:00:45,479 Speaker 1: Sure, by the way, one of my proudest moments. And like, 18 00:00:45,520 --> 00:00:47,320 Speaker 1: you didn't really notice this, but you showed me like 19 00:00:47,320 --> 00:00:49,360 Speaker 1: two pictures of this bird on your phone. Yeah, he's 20 00:00:49,360 --> 00:00:50,879 Speaker 1: like pretty small on this pictures. And I was on 21 00:00:50,920 --> 00:00:53,800 Speaker 1: your phone and I was like, oh, a starling. You're like, yes, 22 00:00:53,840 --> 00:00:56,000 Speaker 1: it's the starling. I was like, yes, yeah, you closed 23 00:00:56,320 --> 00:00:57,240 Speaker 1: the bird identifier. 24 00:00:57,440 --> 00:01:01,440 Speaker 2: Yeah, Well they're super common around these parts because they're 25 00:01:01,440 --> 00:01:06,600 Speaker 2: an invasive species, which explains why now we're in possession 26 00:01:06,600 --> 00:01:09,560 Speaker 2: of the bird. My dad actually found him at my parents' house, 27 00:01:10,000 --> 00:01:13,320 Speaker 2: like as a creepy crawley little like no feathers, alien 28 00:01:13,360 --> 00:01:16,479 Speaker 2: baby thing. And I called the Raptor Trust and they said, 29 00:01:16,560 --> 00:01:19,040 Speaker 2: you know, because it's a non native species, we can't 30 00:01:20,080 --> 00:01:22,480 Speaker 2: help it. They said, try to return to the nest. 31 00:01:22,520 --> 00:01:25,120 Speaker 2: I tried that, I couldn't find the nest. And I said, 32 00:01:25,200 --> 00:01:28,280 Speaker 2: hypothetically speaking, how hard would it be to raise this bird? 33 00:01:28,760 --> 00:01:31,360 Speaker 2: And they said, actually, it's really easy to hand raise 34 00:01:31,680 --> 00:01:34,160 Speaker 2: European starlings. So that's what we've done. 35 00:01:34,440 --> 00:01:36,200 Speaker 1: He's sitting here at the podcast right now. 36 00:01:36,600 --> 00:01:40,200 Speaker 2: My parents are taking care of him at my direction. 37 00:01:40,319 --> 00:01:42,480 Speaker 2: It's kind of fun because it feels like they're my employees. 38 00:01:42,680 --> 00:01:44,560 Speaker 1: How many like video calls? Are you doing a day 39 00:01:44,600 --> 00:01:45,240 Speaker 1: with your parents? 40 00:01:45,240 --> 00:01:47,760 Speaker 2: Many? Actually have a new photo to show you now 41 00:01:47,840 --> 00:01:50,760 Speaker 2: he's about three to four weeks old. I'm really proud 42 00:01:50,760 --> 00:01:53,000 Speaker 2: of this photo, not that anyone listening can see it. 43 00:01:53,320 --> 00:01:56,360 Speaker 2: Hold on put in. My dad texted it to me 44 00:01:56,520 --> 00:01:57,080 Speaker 2: this morning. 45 00:01:57,240 --> 00:01:58,960 Speaker 1: You know, we can put it in my email. 46 00:01:59,080 --> 00:02:00,720 Speaker 2: Oh my god. Yeah, Well I won't put this photo. 47 00:02:01,440 --> 00:02:02,120 Speaker 2: Look at him. 48 00:02:02,640 --> 00:02:03,720 Speaker 1: Oh he's a bird. 49 00:02:03,920 --> 00:02:06,840 Speaker 2: Yeah, he's a real bird now, so we want to 50 00:02:06,880 --> 00:02:11,120 Speaker 2: release him? So no, not yet. There's three important milestones 51 00:02:11,320 --> 00:02:13,880 Speaker 2: that this bird needs to pass before we can think 52 00:02:13,880 --> 00:02:16,120 Speaker 2: about releasing him to the wild. He needs to be 53 00:02:16,160 --> 00:02:19,079 Speaker 2: able to perch. He's getting better. My mom has been 54 00:02:19,080 --> 00:02:21,120 Speaker 2: putting him on a stick and he will perch on 55 00:02:21,160 --> 00:02:24,360 Speaker 2: the stick. He needs to be able to fly. Obviously 56 00:02:24,840 --> 00:02:27,320 Speaker 2: he's flapping around. He's not flying yet. 57 00:02:27,560 --> 00:02:30,040 Speaker 1: Is your mom like clapping our arms to demonstrate to him? 58 00:02:30,160 --> 00:02:33,480 Speaker 2: That's what the conversation we keep having is we're not birds, 59 00:02:34,040 --> 00:02:36,760 Speaker 2: so it's not a bird. It's really hard. And the 60 00:02:36,800 --> 00:02:38,240 Speaker 2: third thing he needs to be able to do is 61 00:02:38,280 --> 00:02:41,280 Speaker 2: feed himself. The hand of God has been feeding him 62 00:02:41,360 --> 00:02:46,520 Speaker 2: mush mush for weeks now, so he needs to you know, Oh, 63 00:02:46,560 --> 00:02:49,840 Speaker 2: I'm so glad you asked. So high protein dry cat food. 64 00:02:49,880 --> 00:02:53,399 Speaker 2: You soak it for you know a while. I've been 65 00:02:53,440 --> 00:02:57,840 Speaker 2: doing a hard boiled egg and then you mash it up. Yeah, 66 00:02:58,000 --> 00:03:01,240 Speaker 2: it's kind of feels bad, hag to a bird, but 67 00:03:01,639 --> 00:03:04,519 Speaker 2: he doesn't know. And then I have this like egg 68 00:03:04,760 --> 00:03:09,440 Speaker 2: shell mix it's made for chickens to try to give 69 00:03:09,440 --> 00:03:12,680 Speaker 2: them more calcium so they lay better eggs. But basically, 70 00:03:12,760 --> 00:03:16,200 Speaker 2: what starling, baby, Starling, growing Starling's need is a lot 71 00:03:16,240 --> 00:03:19,160 Speaker 2: of protein and a lot of calcium. So this mix 72 00:03:19,320 --> 00:03:21,760 Speaker 2: seems to be working pretty well. I've adjusted it as 73 00:03:21,800 --> 00:03:24,840 Speaker 2: he's gotten a little bit older. As the photo shows, 74 00:03:24,880 --> 00:03:27,800 Speaker 2: he looks like a real bird, so we'll see if 75 00:03:27,840 --> 00:03:31,120 Speaker 2: his bones will support himself as he continues to learn 76 00:03:31,160 --> 00:03:31,960 Speaker 2: how to perch and fly. 77 00:03:32,240 --> 00:03:33,840 Speaker 1: Well, I hope you will bring him into the podcast 78 00:03:33,880 --> 00:03:34,280 Speaker 1: before you. 79 00:03:34,639 --> 00:03:38,360 Speaker 2: Yeah. Well, the thing is, and I promise we'll move 80 00:03:38,400 --> 00:03:42,080 Speaker 2: on soon, is that if he's not able to be released, 81 00:03:42,200 --> 00:03:44,160 Speaker 2: and we're not going to release him to a certain death, 82 00:03:44,200 --> 00:03:47,120 Speaker 2: if he isn't meeting these milestones, then we just have 83 00:03:47,200 --> 00:03:50,520 Speaker 2: a bird now, which isn't the worst thing. 84 00:03:50,720 --> 00:03:53,240 Speaker 1: No, it's clearly the outcome you're rooting for. All right, 85 00:03:53,560 --> 00:03:55,080 Speaker 1: I think we're done. We'll see you next week. 86 00:03:55,200 --> 00:03:57,000 Speaker 2: Yeah, no, I think that that was a good update. 87 00:03:57,080 --> 00:04:02,520 Speaker 1: And yeah, hello, come to the Money Stuff Podcast. You're 88 00:04:02,520 --> 00:04:05,720 Speaker 1: a weekly podcast where we talk about stuff related to money. 89 00:04:05,960 --> 00:04:08,080 Speaker 1: I'm Matt Levigne and I write the Money Stuff column 90 00:04:08,080 --> 00:04:09,360 Speaker 1: for Bloomberg Opinion. 91 00:04:09,120 --> 00:04:11,520 Speaker 2: And I'm Katie Greifeld, a reporter for Bloomberg news and 92 00:04:11,560 --> 00:04:12,920 Speaker 2: an anchor for Bloomberg Television. 93 00:04:13,200 --> 00:04:15,040 Speaker 1: Hey, there's been some tariff news. 94 00:04:15,280 --> 00:04:18,160 Speaker 2: Yeah. I feel like we have to timestamp this conversation 95 00:04:18,279 --> 00:04:21,080 Speaker 2: because everything is changing very rapidly. 96 00:04:21,320 --> 00:04:24,320 Speaker 1: We're recording this at four o'clock on the Thursday, May 97 00:04:24,360 --> 00:04:24,960 Speaker 1: twenty ninth. 98 00:04:25,279 --> 00:04:29,200 Speaker 2: Yeah, and about twenty four hours ago or less than that. 99 00:04:29,760 --> 00:04:32,160 Speaker 2: A court, which I learned existed. 100 00:04:31,880 --> 00:04:33,800 Speaker 1: So U asked Court for International Trade. 101 00:04:33,960 --> 00:04:39,120 Speaker 2: Yeah, based in Manhattan. Sure, yeah, so it blocked the 102 00:04:39,120 --> 00:04:43,279 Speaker 2: the tariffs that Trump put on on Liberation Day. 103 00:04:43,360 --> 00:04:46,279 Speaker 1: Yeah, most of his tariffs are, yeah, the Liberation Day tariffs, 104 00:04:46,320 --> 00:04:49,560 Speaker 1: and actually like the pre Liberation Day like Canada and 105 00:04:49,640 --> 00:04:53,440 Speaker 1: China tariffs, the opioid tariffs, the personal tariffs, those were 106 00:04:53,480 --> 00:05:02,440 Speaker 1: all blocked by the court as of like Thursday afternoon. 107 00:05:02,760 --> 00:05:05,800 Speaker 1: The Appeals Court for the Federal Circuit, which is like 108 00:05:05,839 --> 00:05:08,719 Speaker 1: the appeals court the handles that you also just learned exist. 109 00:05:08,760 --> 00:05:10,960 Speaker 1: That the handles it feels from the court from the 110 00:05:11,040 --> 00:05:15,000 Speaker 1: International Trade. That court at a temporary stay, so it 111 00:05:15,040 --> 00:05:17,159 Speaker 1: could like consider whether to put a longer stay. So 112 00:05:17,760 --> 00:05:19,600 Speaker 1: everything's very much in flex. But yeah, the Court for 113 00:05:19,680 --> 00:05:22,440 Speaker 1: International Trade said these tariffs are illegal. 114 00:05:22,680 --> 00:05:25,000 Speaker 2: Yeah, and it seems like we're heading to the Supreme Court. 115 00:05:25,279 --> 00:05:28,480 Speaker 1: Well, I mean certainly, yeah, yeah, yes, yeah. Probably won't 116 00:05:28,480 --> 00:05:30,160 Speaker 1: be at the Supreme Court by the time this podcast 117 00:05:30,240 --> 00:05:31,200 Speaker 1: air is on Friday. 118 00:05:31,320 --> 00:05:34,240 Speaker 2: Probably not. But you know, crazy things have happened. I mean, 119 00:05:34,400 --> 00:05:38,000 Speaker 2: coming into this morning, futures were up a ton on 120 00:05:38,040 --> 00:05:39,919 Speaker 2: the S and P five hundred because it was like, Okay, 121 00:05:39,960 --> 00:05:42,720 Speaker 2: the trade war's over. It's not. It seems like the 122 00:05:42,760 --> 00:05:45,360 Speaker 2: consensus that has emerged is that Trump has plenty of 123 00:05:45,400 --> 00:05:49,560 Speaker 2: other tools to put on tariffs somehow, And I don't 124 00:05:49,560 --> 00:05:53,760 Speaker 2: know what this does to the US negotiating stance. It 125 00:05:53,800 --> 00:05:56,240 Speaker 2: feels like it lessens it by quite a bit. 126 00:05:56,520 --> 00:05:58,840 Speaker 1: I guess that's right. I don't know. It's just like 127 00:05:58,920 --> 00:06:03,080 Speaker 1: it feels like the US negotiating stance is so mercurial 128 00:06:03,600 --> 00:06:08,320 Speaker 1: and so unreliable that I'm not sure how much it 129 00:06:08,320 --> 00:06:10,479 Speaker 1: affects the negotiating stents or going. On the one hand, 130 00:06:10,839 --> 00:06:12,400 Speaker 1: as you said, he has a lot of tools to 131 00:06:12,440 --> 00:06:15,960 Speaker 1: put on tariffs, and if you are a trade partner 132 00:06:16,160 --> 00:06:18,960 Speaker 1: in negotiations with him, the threat has gone from I 133 00:06:18,960 --> 00:06:21,360 Speaker 1: will put on whatever tariffs I like, pursuing to my 134 00:06:21,480 --> 00:06:25,240 Speaker 1: unlimited authority to put on tariffs too. I will find 135 00:06:25,279 --> 00:06:28,400 Speaker 1: some stuff to do and it'll be super annoying and confusing. 136 00:06:28,560 --> 00:06:30,400 Speaker 1: It's like that's not that much better, right, That's still 137 00:06:30,400 --> 00:06:34,960 Speaker 1: a pretty bad threat. And in some ways, I feel 138 00:06:34,960 --> 00:06:36,480 Speaker 1: like a lot of what I read about people who 139 00:06:36,480 --> 00:06:38,520 Speaker 1: are in the posture of negotiating with Trump, like you 140 00:06:38,600 --> 00:06:41,320 Speaker 1: read about this, and like the situation with Harvard, right, 141 00:06:41,680 --> 00:06:46,520 Speaker 1: people worry about making deals because he is not a 142 00:06:46,640 --> 00:06:50,039 Speaker 1: reliable interlocutor and can always just change the deal and 143 00:06:50,080 --> 00:06:53,360 Speaker 1: there's not a lot you can do about it. In 144 00:06:53,400 --> 00:06:56,719 Speaker 1: some ways, like you having a little court supervision might 145 00:06:56,800 --> 00:06:58,840 Speaker 1: be kind of good for negotiating postures. I don't know 146 00:06:58,880 --> 00:07:01,280 Speaker 1: that's true, but like it's just like it's nice that 147 00:07:01,320 --> 00:07:05,560 Speaker 1: there's like just a soup song of like law here, right, 148 00:07:05,880 --> 00:07:09,320 Speaker 1: and like procedures, because you know, I wrote about this today. 149 00:07:08,720 --> 00:07:11,400 Speaker 1: There's in some ways this is a complicated case. There's 150 00:07:11,440 --> 00:07:14,640 Speaker 1: all these statutes, there's all these questions of like what 151 00:07:14,880 --> 00:07:17,840 Speaker 1: things should be left to the executive's discretion. But in 152 00:07:17,880 --> 00:07:20,200 Speaker 1: many ways it's a very very simple case, which is 153 00:07:20,240 --> 00:07:21,840 Speaker 1: that the Constitution of the United States just like a 154 00:07:21,880 --> 00:07:23,440 Speaker 1: real document. You can read it like it's a real 155 00:07:23,480 --> 00:07:26,400 Speaker 1: thing that exists, right, Like, not everyone involved in the 156 00:07:26,440 --> 00:07:28,440 Speaker 1: government has read it. But like, you know, there's like 157 00:07:28,520 --> 00:07:31,440 Speaker 1: a real document that people at least say they care about. 158 00:07:31,880 --> 00:07:34,040 Speaker 1: The Constitution just says the Congress has the power to 159 00:07:34,040 --> 00:07:36,040 Speaker 1: impose taffs and the president doesn't. So like all this 160 00:07:36,080 --> 00:07:39,680 Speaker 1: stuff of like executive orders imposing tariffs is really like 161 00:07:40,880 --> 00:07:44,760 Speaker 1: on a first order analysis, just not what the Constitution says. 162 00:07:44,800 --> 00:07:47,080 Speaker 1: And I think that's kind of the court starting point here. Yeah, 163 00:07:47,200 --> 00:07:51,200 Speaker 1: so it seems like kind of simple stuff and there's 164 00:07:51,200 --> 00:07:55,200 Speaker 1: more complicated stuff, but it is in some ways a 165 00:07:55,240 --> 00:07:59,440 Speaker 1: relief to see that the Constitution still has some controlling power. 166 00:08:00,200 --> 00:08:02,680 Speaker 2: Yeah, that does seem like something a couple hours that 167 00:08:02,760 --> 00:08:03,560 Speaker 2: you would root for. 168 00:08:03,960 --> 00:08:05,240 Speaker 1: I do. I'm weird like that. 169 00:08:05,320 --> 00:08:09,000 Speaker 2: Yeah, when it comes into the negotiating stance, the standpoint 170 00:08:09,080 --> 00:08:12,200 Speaker 2: that I've seen bandied about is basically, if you're another 171 00:08:12,200 --> 00:08:15,720 Speaker 2: country negotiating with the US, like this kind of removes 172 00:08:15,720 --> 00:08:18,240 Speaker 2: the urgency or the incentive to make a deal with 173 00:08:18,280 --> 00:08:20,880 Speaker 2: the US because now it's in flux. You know how 174 00:08:20,960 --> 00:08:24,400 Speaker 2: much power Trump actually has to enact these tariffs. 175 00:08:24,520 --> 00:08:29,239 Speaker 1: Yeah, that's right. But you wouldn't that against him having 176 00:08:29,280 --> 00:08:32,160 Speaker 1: a lot of power to do whatever he wants, if. 177 00:08:32,080 --> 00:08:35,600 Speaker 2: You would, I don't know, yeah, yeah, I don't know. 178 00:08:35,720 --> 00:08:38,120 Speaker 1: The one can say spring quick tomorrow. 179 00:08:38,800 --> 00:08:41,400 Speaker 2: Yeah, at least on this Thursday. The consensus that has 180 00:08:41,440 --> 00:08:43,320 Speaker 2: seemed to emerge throughout the day. And you've seen this 181 00:08:43,400 --> 00:08:45,880 Speaker 2: in like the slow bleed of the S and P 182 00:08:46,000 --> 00:08:49,160 Speaker 2: five hundred from you know, our pre market euphoria was 183 00:08:49,679 --> 00:08:52,560 Speaker 2: this just turns up the volume so much on the 184 00:08:52,600 --> 00:08:55,719 Speaker 2: trade policy noise because who knows what's going to happen and. 185 00:08:55,679 --> 00:08:59,120 Speaker 1: Not other noise, right, I mean, like one overhang to 186 00:08:59,640 --> 00:09:03,439 Speaker 1: finance is how much rule of law is there? And 187 00:09:03,960 --> 00:09:07,079 Speaker 1: every time the court says Trump can't do something, you 188 00:09:07,120 --> 00:09:11,640 Speaker 1: have wider variant in the outcome of how much rule 189 00:09:11,679 --> 00:09:13,560 Speaker 1: of fla is there because like maybe you'll be like, 190 00:09:13,600 --> 00:09:17,200 Speaker 1: oh yeah, the constitution does say that never mind, or 191 00:09:17,240 --> 00:09:20,880 Speaker 1: maybe like Peter Navara said, nothing has changed after a 192 00:09:20,960 --> 00:09:23,400 Speaker 1: court said the terriss around constitutional Like how did that's 193 00:09:23,400 --> 00:09:24,440 Speaker 1: like ating posture? 194 00:09:24,920 --> 00:09:27,400 Speaker 2: It was kind of funny that this all happens within 195 00:09:27,520 --> 00:09:30,600 Speaker 2: hours of Trump being told about the taco trade. The 196 00:09:30,679 --> 00:09:35,640 Speaker 2: tacos trade, taco trade being Trump always chickens out. It 197 00:09:35,720 --> 00:09:36,680 Speaker 2: was coined by an. 198 00:09:36,559 --> 00:09:38,240 Speaker 1: FT columnist Rob Armshuk at the FT. 199 00:09:38,360 --> 00:09:41,439 Speaker 2: Yeah, yeah, basically that okay, Trump comes out with this 200 00:09:42,360 --> 00:09:45,880 Speaker 2: big announcement, you know, we're going to slap a gazillion 201 00:09:45,920 --> 00:09:49,280 Speaker 2: percent tariff on so and so, and then you know, 202 00:09:49,320 --> 00:09:52,480 Speaker 2: inevitably it's walked back, and that's the taco trade. You 203 00:09:52,559 --> 00:09:55,880 Speaker 2: bet on this is going to be walked back. And 204 00:09:55,960 --> 00:09:58,760 Speaker 2: Trump was told about that in the Oval Office, and 205 00:09:58,800 --> 00:10:01,240 Speaker 2: he was upset, as you would imagine, and said, no, 206 00:10:01,320 --> 00:10:04,160 Speaker 2: this is negotiating. This is how it's done, which you know, 207 00:10:04,200 --> 00:10:06,120 Speaker 2: maybe there's some truth to that, but you know, as 208 00:10:06,400 --> 00:10:09,200 Speaker 2: an investor, I can see how you could also turn 209 00:10:09,240 --> 00:10:11,400 Speaker 2: that into a trade, even though it feels like, you know, 210 00:10:11,480 --> 00:10:13,720 Speaker 2: in the last couple of weeks or so, it's become 211 00:10:14,080 --> 00:10:18,400 Speaker 2: less profitable because it feels like the shock value is fading, right, right, right. 212 00:10:18,440 --> 00:10:21,000 Speaker 1: So a couple of things. One like Trump always chickens 213 00:10:21,000 --> 00:10:24,720 Speaker 1: out is the insulting to him phrasing of it. Yeah, 214 00:10:24,760 --> 00:10:30,080 Speaker 1: but the trade is when a drastic tariff announcement comes out, 215 00:10:30,240 --> 00:10:33,360 Speaker 1: the actual result will be less than that, either because 216 00:10:33,400 --> 00:10:35,000 Speaker 1: of the negotiation or because you checked, like you can 217 00:10:35,040 --> 00:10:36,720 Speaker 1: be agnostic about the cause, or you can just say, like, 218 00:10:36,800 --> 00:10:39,160 Speaker 1: this isn't as bad as it sounds. The second thing 219 00:10:39,200 --> 00:10:43,200 Speaker 1: I want to say is that Lewis Astroth at ft Alphaville, 220 00:10:43,240 --> 00:10:46,400 Speaker 1: like apparently got jealous of his colleagues ability to quinna 221 00:10:46,840 --> 00:10:49,280 Speaker 1: term that became so famous, so he wrote a bunch 222 00:10:49,280 --> 00:10:53,440 Speaker 1: of other potential acronyms, like Mexican food themed acronyms, and 223 00:10:53,480 --> 00:10:55,880 Speaker 1: the one I liked was takita, which is Trump always 224 00:10:55,920 --> 00:10:59,439 Speaker 1: quickly undoes initial trade offensive just like a little thing. 225 00:10:58,960 --> 00:11:02,800 Speaker 1: It's more a specific about the thing that's happening. The 226 00:11:02,840 --> 00:11:04,800 Speaker 1: other thing I want to say is that a reader 227 00:11:04,800 --> 00:11:06,880 Speaker 1: emailed me to be like, would it be a good 228 00:11:06,960 --> 00:11:11,000 Speaker 1: trade if you were a journalist to short the market 229 00:11:11,240 --> 00:11:14,800 Speaker 1: and then ask Trump about the taco trade, because like 230 00:11:15,000 --> 00:11:17,079 Speaker 1: the mechanism there is like you asked Trump about the 231 00:11:17,120 --> 00:11:20,200 Speaker 1: taco trade and he gets really mad, and then he 232 00:11:20,240 --> 00:11:22,720 Speaker 1: says I'll never chicken out again, and tarriffs get higher, 233 00:11:23,080 --> 00:11:25,400 Speaker 1: the market drops, Like I think, like you could have 234 00:11:25,480 --> 00:11:28,559 Speaker 1: imagined for a second that like Trump getting mad about 235 00:11:28,559 --> 00:11:32,439 Speaker 1: the phrase taco trade could have been bad for stock prices, 236 00:11:32,559 --> 00:11:34,440 Speaker 1: but of course it was quickly followed by the trade 237 00:11:34,480 --> 00:11:37,719 Speaker 1: cord ruling, which is good for stack prices. So it's 238 00:11:37,720 --> 00:11:40,400 Speaker 1: a little hard to isolate the impact of getting Trump 239 00:11:40,480 --> 00:11:42,240 Speaker 1: mad about the taco trade Yeah. 240 00:11:42,040 --> 00:11:45,720 Speaker 2: That's pretty funny. It could work if he had explicitly 241 00:11:45,760 --> 00:11:48,760 Speaker 2: said I'm going to tear iff even harder. Right now, 242 00:11:49,160 --> 00:11:49,679 Speaker 2: I think. 243 00:11:49,480 --> 00:11:51,400 Speaker 1: That it would have been reasonable to think that he 244 00:11:51,480 --> 00:11:54,480 Speaker 1: might have thought that. But then, you know, events moved on. 245 00:11:54,840 --> 00:11:56,000 Speaker 2: Yeah, that's what happens a lot. 246 00:11:56,160 --> 00:11:58,040 Speaker 1: That's kind of the real core of the taco trade, 247 00:11:58,040 --> 00:11:59,480 Speaker 1: which is events just keep moving on. 248 00:11:59,679 --> 00:12:02,560 Speaker 2: Yeah. Well, it'll be interesting to see what happens to 249 00:12:02,640 --> 00:12:07,320 Speaker 2: the taco trade as we continue to muddle through whether 250 00:12:07,400 --> 00:12:10,400 Speaker 2: or not these tariffs are illegal and what other types 251 00:12:10,400 --> 00:12:12,400 Speaker 2: of terrifts were going to get. There's all these different 252 00:12:12,960 --> 00:12:16,079 Speaker 2: tariffs that this ruling doesn't cover. When you think about 253 00:12:16,120 --> 00:12:18,880 Speaker 2: steel and aluminum for example, Well. 254 00:12:18,960 --> 00:12:25,000 Speaker 1: So the Liberation Day tariffs are ten percent to you know, 255 00:12:25,240 --> 00:12:28,079 Speaker 1: one hundred and fifty percent towers on everything, right, it's 256 00:12:28,200 --> 00:12:30,480 Speaker 1: ten percent baseline, But then every country had like quote 257 00:12:30,520 --> 00:12:33,880 Speaker 1: unquote reciprocal tariffs that were much higher. Amazing calculation of 258 00:12:33,920 --> 00:12:35,640 Speaker 1: the trade deficits. It's like the whole thing. It was 259 00:12:35,640 --> 00:12:39,800 Speaker 1: like truly universal, and it was basically you talk about 260 00:12:39,800 --> 00:12:41,760 Speaker 1: like steel taffs, there's like you have like a sort 261 00:12:41,800 --> 00:12:44,320 Speaker 1: of national security justification or whatever right you have some 262 00:12:44,480 --> 00:12:48,200 Speaker 1: theory behind steel tiers. But like this the Liberation Day tariffs, 263 00:12:48,240 --> 00:12:50,679 Speaker 1: where the US runs a trade deficit and we want 264 00:12:50,679 --> 00:12:52,280 Speaker 1: to stop that, and so we have tariffs that are 265 00:12:52,280 --> 00:12:57,440 Speaker 1: calculated through some formula designed to zero the trade deficit essentially, right, 266 00:12:57,840 --> 00:13:02,000 Speaker 1: And the court said you can't do that. The law 267 00:13:02,040 --> 00:13:06,439 Speaker 1: that he used AEPA International Emergency Economic Powers Act of 268 00:13:06,480 --> 00:13:09,280 Speaker 1: nineteen seventy seven. The AEPA allows you to respond to 269 00:13:09,320 --> 00:13:12,600 Speaker 1: an emergency, and if you have tariffs that are responsive 270 00:13:12,600 --> 00:13:14,800 Speaker 1: to an emergency, that's fine, but like, it can't be 271 00:13:14,840 --> 00:13:17,360 Speaker 1: the case that all international trade for the last thirty 272 00:13:17,400 --> 00:13:19,760 Speaker 1: years is an emergency. Like this is like too much, 273 00:13:19,880 --> 00:13:22,560 Speaker 1: it's like too much power to the executive. So you 274 00:13:22,640 --> 00:13:26,360 Speaker 1: can't do that. But can you find specific goods to 275 00:13:26,480 --> 00:13:29,400 Speaker 1: tariff and use other laws that say you have like 276 00:13:29,679 --> 00:13:33,840 Speaker 1: specific economic tariffing powers, like maybe probably often there are 277 00:13:33,840 --> 00:13:35,680 Speaker 1: more limits in those laws if you have to like 278 00:13:35,880 --> 00:13:38,640 Speaker 1: do fact finding and like put out a report and 279 00:13:39,240 --> 00:13:42,200 Speaker 1: they're time limited, right, So it's not as completely broad 280 00:13:42,240 --> 00:13:44,240 Speaker 1: as the powers that they claimed under AYEPA, which is 281 00:13:44,240 --> 00:13:45,959 Speaker 1: why they did the AEPA stuff. They're like, we're you 282 00:13:46,040 --> 00:13:48,760 Speaker 1: do everything all at once with no you know, review, 283 00:13:48,840 --> 00:13:51,280 Speaker 1: no fact finding. So AEPA was the law they thought 284 00:13:51,280 --> 00:13:53,400 Speaker 1: they could use for that. If they can't use that, 285 00:13:53,440 --> 00:13:57,440 Speaker 1: then they have to find other laws which will be 286 00:13:57,480 --> 00:13:59,400 Speaker 1: a little bit more narrow, but you can still do 287 00:13:59,440 --> 00:13:59,960 Speaker 1: a lot of terror. 288 00:14:00,679 --> 00:14:04,360 Speaker 2: Yeah, I mean, there's section two thirty two, for example, 289 00:14:04,760 --> 00:14:07,720 Speaker 2: that's what's being used on steel, aluminum, vehicle and auto parts. 290 00:14:08,000 --> 00:14:11,679 Speaker 2: There's other laws as well, but usually there's some investigation 291 00:14:11,960 --> 00:14:15,240 Speaker 2: associated with him, so it takes months versus President Trump 292 00:14:15,240 --> 00:14:17,439 Speaker 2: is sitting in the Oval office and he signed something. 293 00:14:17,280 --> 00:14:22,120 Speaker 1: Because again, like the Constitution says that Congress can make tariffs. Yeah, 294 00:14:22,160 --> 00:14:26,400 Speaker 1: and so Congress has in the past past laws saying 295 00:14:26,840 --> 00:14:29,240 Speaker 1: here are some tariffs that the president can impose, right, 296 00:14:29,280 --> 00:14:31,560 Speaker 1: but like, ultimately it's the Congress's tariff power, and the 297 00:14:31,600 --> 00:14:34,960 Speaker 1: Congress doesn't say in any of those laws the president 298 00:14:34,960 --> 00:14:37,440 Speaker 1: can make any tariffs he wants. It says, you know, 299 00:14:37,560 --> 00:14:40,760 Speaker 1: he does an investigation these particular things, for these particular reasons, 300 00:14:40,760 --> 00:14:42,520 Speaker 1: you can make tariffs. But it's not an open ended 301 00:14:42,520 --> 00:14:46,800 Speaker 1: grant of power. And one thing that the court so 302 00:14:47,000 --> 00:14:49,160 Speaker 1: yesterday is that if it were an open ended grant 303 00:14:49,200 --> 00:14:51,280 Speaker 1: of power, and one way to read AIPA is that's 304 00:14:51,320 --> 00:14:53,400 Speaker 1: an open ended grant to make whatever twists you want. 305 00:14:53,440 --> 00:14:54,840 Speaker 1: I don't think it's a good reading, but it's like 306 00:14:54,880 --> 00:14:57,400 Speaker 1: the Trump administration reading the court said, if you read 307 00:14:57,440 --> 00:14:59,680 Speaker 1: it that way, then it would be unconstitutional for the 308 00:15:00,040 --> 00:15:03,120 Speaker 1: Congress to give all of its tariff power to the 309 00:15:03,160 --> 00:15:08,840 Speaker 1: president with no limitations whatsoever. And I think that's right. 310 00:15:09,520 --> 00:15:11,400 Speaker 1: I have a personal interest in this. I don't know 311 00:15:11,400 --> 00:15:13,920 Speaker 1: if I've talked about this on the podcast a column, 312 00:15:13,920 --> 00:15:17,720 Speaker 1: but like that idea that Congress can't just give its 313 00:15:17,760 --> 00:15:20,840 Speaker 1: power to the executive with no constraints is called the 314 00:15:20,920 --> 00:15:26,600 Speaker 1: non delegation doctrine and it is had a controversial career 315 00:15:26,720 --> 00:15:29,920 Speaker 1: in the Supreme Court. But one of the important cases 316 00:15:30,240 --> 00:15:33,480 Speaker 1: in the recent Supreme Court about the non delegation doctrine 317 00:15:33,720 --> 00:15:36,800 Speaker 1: was argued by my wife. Wow, he's a criminal defense layer. 318 00:15:37,200 --> 00:15:39,200 Speaker 1: And so I was in the audience for that, and 319 00:15:39,320 --> 00:15:41,840 Speaker 1: so you know, I have like a little rooting interest 320 00:15:41,840 --> 00:15:43,600 Speaker 1: in the non delegation doctrine. 321 00:15:43,720 --> 00:15:47,120 Speaker 2: I get it, even though to oversimplify and dumb it down. 322 00:15:47,160 --> 00:15:49,680 Speaker 2: It seems like that is what has happened here, and 323 00:15:49,720 --> 00:15:52,200 Speaker 2: it does just seem like Congress is too upset about it. 324 00:15:52,400 --> 00:15:55,840 Speaker 1: So the podded history of the non delegation doctrine is 325 00:15:55,840 --> 00:15:59,040 Speaker 1: that it's never had any effect whatsoever. Like there is 326 00:15:59,400 --> 00:16:02,280 Speaker 1: lip service paid to the idea that Congress can't delegate 327 00:16:02,320 --> 00:16:04,920 Speaker 1: all of its legislative powers to the president, but that 328 00:16:05,000 --> 00:16:07,080 Speaker 1: lip service has always paid in cases saying but this 329 00:16:07,160 --> 00:16:12,280 Speaker 1: delegation is fine, right, including my West case. But there 330 00:16:12,360 --> 00:16:15,160 Speaker 1: is like this notion that interest in it has been relived, 331 00:16:15,200 --> 00:16:17,240 Speaker 1: and like one day they're going to find a delegation 332 00:16:17,320 --> 00:16:19,800 Speaker 1: that is too broad and maybe it's ayepa. I don't know. 333 00:16:19,960 --> 00:16:23,560 Speaker 2: Yeah, I don't know. Again timestamp this is on Thursday. 334 00:16:23,560 --> 00:16:24,880 Speaker 2: It'll be fun to see how this shakes out. I 335 00:16:24,880 --> 00:16:26,280 Speaker 2: don't know. I would love to be a fly on 336 00:16:26,320 --> 00:16:29,400 Speaker 2: the wall and like some of these negotiations, because I 337 00:16:29,400 --> 00:16:31,880 Speaker 2: don't know, if you're Japan negotiating with the US right 338 00:16:31,920 --> 00:16:34,200 Speaker 2: now or India, do you just wait and see. 339 00:16:34,760 --> 00:16:37,880 Speaker 1: I don't understand why this would really change it that much. 340 00:16:38,000 --> 00:16:40,000 Speaker 1: I just think that like the thing that you know 341 00:16:40,200 --> 00:16:42,800 Speaker 1: as like the Japan trade negotiator or whatever, is that 342 00:16:43,080 --> 00:16:46,960 Speaker 1: Trump really wants to make deals, he really wants to 343 00:16:47,000 --> 00:16:51,000 Speaker 1: have wins, he really doesn't trust free trade. He's really 344 00:16:51,080 --> 00:16:53,400 Speaker 1: willing to push the boundaries of the law as much 345 00:16:53,400 --> 00:16:56,320 Speaker 1: as possible. He's not really aware of what those boundaries are. 346 00:16:56,640 --> 00:16:59,920 Speaker 1: To think like I'm going to tell him to stuff 347 00:17:00,240 --> 00:17:03,960 Speaker 1: because a court struck him down. Seems crazy, Like now 348 00:17:04,040 --> 00:17:07,280 Speaker 1: more than ever, you make a deal, more than you're like, look, 349 00:17:07,760 --> 00:17:11,480 Speaker 1: this court was wrong. We understand. Here's our tariff concessions. 350 00:17:11,600 --> 00:17:13,879 Speaker 1: Like maybe you get a better deal now, and like 351 00:17:13,960 --> 00:17:15,440 Speaker 1: you're rushing to make a deal. I don't know. I 352 00:17:15,440 --> 00:17:18,480 Speaker 1: don't understand the idea that like now you're like, oh, 353 00:17:18,560 --> 00:17:21,240 Speaker 1: it's fine, like no more tariffs, Like I'll just walk 354 00:17:21,280 --> 00:17:22,640 Speaker 1: away from the negotiating table. 355 00:17:22,680 --> 00:17:24,760 Speaker 2: So it's crazy. I don't know. Maybe you don't walk away, 356 00:17:24,760 --> 00:17:27,280 Speaker 2: but maybe you say, why don't we break for lunch 357 00:17:27,440 --> 00:17:28,800 Speaker 2: for a little bit. Why don't we. 358 00:17:28,920 --> 00:17:30,880 Speaker 1: I think that was the opportunity to make a bigod deal. 359 00:17:30,880 --> 00:17:32,520 Speaker 1: I don't know. I don't listen to me, I don't 360 00:17:32,560 --> 00:17:36,000 Speaker 1: I don't know anything, but like to me like calling 361 00:17:36,080 --> 00:17:38,439 Speaker 1: him up and being like, I'm in your camp, buddy, 362 00:17:38,600 --> 00:17:40,320 Speaker 1: I want to make a deal. I know that you 363 00:17:40,359 --> 00:17:43,520 Speaker 1: have the constitual parademphosies tariffs. Let's make a deal. To me, 364 00:17:43,640 --> 00:17:45,280 Speaker 1: listen to the opportunity. You don't break for. 365 00:17:45,280 --> 00:17:46,280 Speaker 2: Lunch that's true. 366 00:17:46,440 --> 00:17:49,600 Speaker 1: You cut the deal now, Yeah, no exaggerating because like 367 00:17:50,440 --> 00:17:53,919 Speaker 1: if the deal involves like him imposing lower ABA tariffs 368 00:17:53,960 --> 00:17:56,560 Speaker 1: on you, like those are illegal maybe maybe. So I 369 00:17:56,560 --> 00:17:58,280 Speaker 1: don't know. It's harder to know what the deal is, 370 00:17:58,320 --> 00:18:00,040 Speaker 1: but I don't know how it changes the poster. 371 00:17:59,880 --> 00:18:18,199 Speaker 2: That most of our topics today are vaguely and in 372 00:18:18,240 --> 00:18:22,720 Speaker 2: some cases explicitly. Donald Trump related Fanny and Freddy for example, 373 00:18:23,400 --> 00:18:24,000 Speaker 2: back in the. 374 00:18:23,880 --> 00:18:27,200 Speaker 1: News another bit of you knowilateral. 375 00:18:26,720 --> 00:18:30,560 Speaker 2: Pol an explicit implicit guarantee. 376 00:18:31,200 --> 00:18:33,800 Speaker 1: Yeah, Donald Trump, the verb is so hard. I want 377 00:18:33,840 --> 00:18:35,800 Speaker 1: to say he tweeted, but in fact he posted on 378 00:18:35,840 --> 00:18:37,600 Speaker 1: truth social which you can say he truthed. 379 00:18:37,840 --> 00:18:38,560 Speaker 2: Yeah, the truth. 380 00:18:38,960 --> 00:18:42,560 Speaker 1: I am working on all caps taking these amazing companies public, 381 00:18:43,040 --> 00:18:44,600 Speaker 1: but I want to be clear the US government will 382 00:18:44,680 --> 00:18:48,080 Speaker 1: keep its implicit all caps guarantees, and I will stay 383 00:18:48,080 --> 00:18:50,320 Speaker 1: strong in my position on overseeing them as president. So 384 00:18:50,359 --> 00:18:53,639 Speaker 1: Fanny and Freddie, the government sponsored enterprises had a long 385 00:18:54,160 --> 00:18:57,639 Speaker 1: prehistory as being implicitly guaranteed by the US government. So 386 00:18:57,720 --> 00:19:02,040 Speaker 1: like they explicitly said, Morgus, they have trillion dollars Morgue, 387 00:19:02,440 --> 00:19:05,800 Speaker 1: and they issued mortgage backed securities that are guaranteed by them, 388 00:19:06,200 --> 00:19:09,880 Speaker 1: and those securities. Always said, these securities are not guaranteed 389 00:19:09,880 --> 00:19:12,480 Speaker 1: by the US government, And they said that because otherwise 390 00:19:12,480 --> 00:19:15,119 Speaker 1: you'd be confused, because everyone thought they were guaranteed by 391 00:19:15,119 --> 00:19:17,560 Speaker 1: the US government. That's what it's called an implicit guarantee. 392 00:19:17,920 --> 00:19:20,400 Speaker 1: They say it's not guaranteed, but everyone thinks it's guaranteed. 393 00:19:20,760 --> 00:19:22,200 Speaker 1: And then in two thousand and eight they went past 394 00:19:22,240 --> 00:19:24,600 Speaker 1: and they turned out to be guaranteed by the US 395 00:19:24,640 --> 00:19:26,920 Speaker 1: government effectively because the government like stepped in and took 396 00:19:26,960 --> 00:19:29,240 Speaker 1: them over, bailed them out, and made sure that creditors 397 00:19:29,240 --> 00:19:33,200 Speaker 1: were made whole. And that was roughly sixteen years ago. 398 00:19:33,480 --> 00:19:36,400 Speaker 1: And ever since, people have said this can't continue forever. 399 00:19:36,480 --> 00:19:39,440 Speaker 1: They have to return to private hands. And I always said, why, 400 00:19:39,440 --> 00:19:43,600 Speaker 1: it's fine, like no one. Yeah. But so now once again, 401 00:19:44,080 --> 00:19:47,199 Speaker 1: because Trump is in office, and because there's a lot 402 00:19:47,200 --> 00:19:49,720 Speaker 1: of money to me, there's a talk of returning Fanny 403 00:19:49,720 --> 00:19:52,480 Speaker 1: and Freddie to private hands. And the mechanics of that 404 00:19:52,560 --> 00:20:00,880 Speaker 1: are really complicated, and there's opportunity for people to get 405 00:20:01,160 --> 00:20:04,760 Speaker 1: hundreds of billions of dollars of value. Yeah, and so 406 00:20:05,320 --> 00:20:07,600 Speaker 1: that's of great interest to a lot of investors. 407 00:20:07,760 --> 00:20:11,400 Speaker 2: Yeah, there's bags to be made, uh, bags to be made, yeah, 408 00:20:11,440 --> 00:20:13,520 Speaker 2: which could bring us to Bill Ackman, but we don't 409 00:20:13,560 --> 00:20:14,560 Speaker 2: have to talk about we don't have to. 410 00:20:14,600 --> 00:20:16,840 Speaker 1: But Bill Ackman is one of the big investors in 411 00:20:17,000 --> 00:20:21,240 Speaker 1: that trade. And when Fanny and Freddie were put into 412 00:20:21,280 --> 00:20:26,119 Speaker 1: conservativeship by the government in the financial crisis, their stock 413 00:20:26,400 --> 00:20:29,080 Speaker 1: became like you know, in the ballpark of worthless, but 414 00:20:29,160 --> 00:20:32,080 Speaker 1: never stopped trading. And at some point in like twenty twelve, 415 00:20:32,119 --> 00:20:34,560 Speaker 1: I think the government changed the deal from the bailout 416 00:20:34,600 --> 00:20:37,879 Speaker 1: to say from now on, all of the profits of 417 00:20:37,880 --> 00:20:40,959 Speaker 1: Fanny and Freddy forever we'll go to the government and 418 00:20:41,160 --> 00:20:44,719 Speaker 1: shareholders will never get anything ever again, which you might 419 00:20:44,720 --> 00:20:46,840 Speaker 1: think would make the stock worthless and like made it 420 00:20:46,880 --> 00:20:50,359 Speaker 1: almost worthless, yeah, but some people thought that can't be true, 421 00:20:50,680 --> 00:20:53,880 Speaker 1: like that'll change, and so they bought the stock and 422 00:20:54,920 --> 00:20:59,320 Speaker 1: now they own stock. And it is unclear from first 423 00:20:59,320 --> 00:21:02,480 Speaker 1: principles how you would reprivatize Fanny and Freddy, but it 424 00:21:02,560 --> 00:21:07,320 Speaker 1: seems likely that whatever happens, the current shareholders of Fanny 425 00:21:07,320 --> 00:21:09,040 Speaker 1: and Freddy, who bought the stock at you know penny 426 00:21:09,119 --> 00:21:11,600 Speaker 1: is when it was declared to be worthless for all time, 427 00:21:12,560 --> 00:21:15,399 Speaker 1: it seems like that the current shareholders will get a 428 00:21:15,480 --> 00:21:16,400 Speaker 1: back yeah. 429 00:21:16,760 --> 00:21:20,720 Speaker 2: Haven't they already though, like well like in market prices. 430 00:21:20,800 --> 00:21:24,000 Speaker 1: Yes, yeah, yeah, because people are anticipating that Fanny and 431 00:21:24,040 --> 00:21:26,400 Speaker 1: Freddy will be returned to private hands, and specifically their 432 00:21:26,440 --> 00:21:29,639 Speaker 1: private hands, like specifically the existing shareholders of Fanny and 433 00:21:29,640 --> 00:21:32,560 Speaker 1: Freddy will not in fact be zeroed, but will end 434 00:21:32,640 --> 00:21:35,399 Speaker 1: up being shareholders of Fanny Freddy and look at a 435 00:21:35,440 --> 00:21:36,800 Speaker 1: lot of value. 436 00:21:37,000 --> 00:21:39,199 Speaker 2: Yeah, it would be you know, kind of funny if 437 00:21:39,200 --> 00:21:41,919 Speaker 2: some of these big vocal investors who are calling for 438 00:21:41,920 --> 00:21:45,119 Speaker 2: the reprivatization, who you know, have bought the stock when 439 00:21:45,160 --> 00:21:48,159 Speaker 2: it was pretty much worthless sold now in this insane 440 00:21:48,240 --> 00:21:51,760 Speaker 2: run up that it's seens. Yeah, yeah, this is good. Yeah. 441 00:21:52,200 --> 00:21:54,360 Speaker 2: Stocks of both companies are trading at their highest level 442 00:21:54,400 --> 00:21:56,399 Speaker 2: since two thousand and eight. But you look at the 443 00:21:56,440 --> 00:21:59,359 Speaker 2: long term chart, like going back to the nineteen eighties, 444 00:21:59,400 --> 00:22:02,879 Speaker 2: and it's still nowhere close to where it was. 445 00:22:03,720 --> 00:22:06,600 Speaker 1: Yes, because right now they're controlled by the federal government 446 00:22:06,880 --> 00:22:09,560 Speaker 1: and they're charters. Say that their shareholders can never get 447 00:22:09,600 --> 00:22:12,680 Speaker 1: any money ever. Yeah, so that's worse than the old 448 00:22:12,920 --> 00:22:13,800 Speaker 1: old business model. 449 00:22:13,880 --> 00:22:16,760 Speaker 2: Yeah, for sure. I don't know this timeline. Even though 450 00:22:16,800 --> 00:22:19,000 Speaker 2: Trump is posting on truth social about it, it seems like 451 00:22:19,320 --> 00:22:21,760 Speaker 2: this has picked up an urgency, like this process would 452 00:22:21,800 --> 00:22:23,280 Speaker 2: take years and years. 453 00:22:23,480 --> 00:22:25,800 Speaker 1: I want to just be clear, Like there's two things. 454 00:22:25,840 --> 00:22:28,840 Speaker 1: There's like you can return Fanny and predat to private hands, 455 00:22:29,320 --> 00:22:31,400 Speaker 1: and then there's the specific question of like how much 456 00:22:31,440 --> 00:22:33,360 Speaker 1: of it do you give to the existing shareholders? Yeah, 457 00:22:33,359 --> 00:22:35,200 Speaker 1: weird as zero? You can say, Okay, the deal is 458 00:22:35,240 --> 00:22:37,680 Speaker 1: the deal. And by the way, the deal is probably controversial. 459 00:22:37,720 --> 00:22:40,919 Speaker 1: People think it's really unfair. There's been a lot of lawsuits. 460 00:22:41,280 --> 00:22:44,080 Speaker 1: I want to respect their feelings that, like, in fact, 461 00:22:44,440 --> 00:22:49,280 Speaker 1: the twenty twelve deal to zero the shareholders, there's a 462 00:22:49,280 --> 00:22:52,320 Speaker 1: good case that it's pretty unfair. But whatever, given that 463 00:22:52,359 --> 00:22:58,280 Speaker 1: it exists, you could reprivatize them without giving existing shareholders anything. 464 00:22:58,440 --> 00:23:00,520 Speaker 1: You could just raise new money to cap them. You 465 00:23:00,560 --> 00:23:04,639 Speaker 1: can say, I mean, but like there's like some corporate 466 00:23:04,640 --> 00:23:07,000 Speaker 1: complexities to doing that, but like, you know, you could 467 00:23:07,040 --> 00:23:09,040 Speaker 1: raise a lot of new money and like essentially dilute 468 00:23:09,040 --> 00:23:11,280 Speaker 1: the existing charolders down to zero. And you could do 469 00:23:11,359 --> 00:23:15,159 Speaker 1: that by saying, you know, the government has I think 470 00:23:15,200 --> 00:23:17,879 Speaker 1: when I last read about this in January, in the 471 00:23:17,880 --> 00:23:20,880 Speaker 1: accounting of Fanny and Freddy, they owe the government three 472 00:23:20,960 --> 00:23:23,520 Speaker 1: hundred and forty billion dollars before the sholders can get 473 00:23:23,520 --> 00:23:25,840 Speaker 1: anything right, and so you could say, well, okay, we're 474 00:23:25,840 --> 00:23:27,359 Speaker 1: gonna go out and raise three hundred and forty billion 475 00:23:27,400 --> 00:23:31,520 Speaker 1: dollars of new capital to repay the government. And after 476 00:23:31,560 --> 00:23:34,160 Speaker 1: he raised that three hundred and forty billion dollars, then 477 00:23:34,280 --> 00:23:38,040 Speaker 1: like you know, the existing cherolders will have you know, 478 00:23:38,440 --> 00:23:41,320 Speaker 1: zero point zero zero zero one percent of the companies 479 00:23:41,359 --> 00:23:43,440 Speaker 1: or whatever, and so like their shold will be worthless, 480 00:23:44,119 --> 00:23:47,120 Speaker 1: not worthless, that's not worth very much. But the other 481 00:23:47,160 --> 00:23:50,040 Speaker 1: extreme is you can say, you know what that three 482 00:23:50,080 --> 00:23:52,000 Speaker 1: hundred and forty billion dollars that Fanny and Freddy o 483 00:23:52,040 --> 00:23:54,520 Speaker 1: the government, that was a mistake. They don't really owe that, 484 00:23:54,640 --> 00:23:57,119 Speaker 1: so we'll just cancel that that right, And then the 485 00:23:57,160 --> 00:24:00,439 Speaker 1: existing shaerolders are sitting on shaares worth one hundred billions 486 00:24:00,480 --> 00:24:03,680 Speaker 1: of dollars, more than one hundred billion dollars. And those 487 00:24:03,680 --> 00:24:06,119 Speaker 1: are kind of the two poles, right easting shareolders have 488 00:24:06,160 --> 00:24:07,720 Speaker 1: nothing or they have like more than one hundred billion 489 00:24:07,760 --> 00:24:08,680 Speaker 1: dollars of equity. 490 00:24:08,800 --> 00:24:09,680 Speaker 2: Two scenarios. 491 00:24:09,720 --> 00:24:13,359 Speaker 1: Two scenarios. I don't think it's like a prayer necessary 492 00:24:13,520 --> 00:24:16,119 Speaker 1: to choose the second one. I think there's reasons to 493 00:24:16,200 --> 00:24:18,040 Speaker 1: choose the second one. You might think it's fairer to 494 00:24:18,080 --> 00:24:19,959 Speaker 1: the shareholders. You might think the sharelder's got a raw 495 00:24:19,960 --> 00:24:22,040 Speaker 1: deal on twenty twelve. It's a reasonable thing to think. 496 00:24:22,320 --> 00:24:24,280 Speaker 1: And you might think that giving the charrelders a good 497 00:24:24,280 --> 00:24:26,359 Speaker 1: deal is a good way too. You know, you'll need 498 00:24:26,359 --> 00:24:28,880 Speaker 1: to raise money for Pannion and Freddy. You'll have better 499 00:24:28,960 --> 00:24:32,240 Speaker 1: capital markets access if you treat the shareolders nicely. But 500 00:24:32,280 --> 00:24:35,560 Speaker 1: it's also the case that like giving one hundred billion 501 00:24:35,600 --> 00:24:38,400 Speaker 1: dollars of value to these existing shareholders is like it's 502 00:24:38,480 --> 00:24:40,600 Speaker 1: like a little bit of an optically strange move. 503 00:24:40,840 --> 00:24:43,520 Speaker 2: Yeah, yeah, I don't know. It feels like any scenario 504 00:24:43,600 --> 00:24:46,560 Speaker 2: is just going to be messy and optically strange. So 505 00:24:47,119 --> 00:24:51,280 Speaker 2: what I care about, circling back to ummoving is what 506 00:24:51,320 --> 00:24:52,800 Speaker 2: this could mean for mortgage rates. 507 00:24:53,080 --> 00:24:54,200 Speaker 1: Yeah. Yeah. 508 00:24:55,080 --> 00:24:58,720 Speaker 2: So Bill Polsey, he's the head of the FHFA, which 509 00:24:58,720 --> 00:25:01,159 Speaker 2: oversees Fanny and Freddy. He said back in February that 510 00:25:01,800 --> 00:25:06,720 Speaker 2: any effort to reprivatize the two must be carefully planned 511 00:25:07,000 --> 00:25:09,439 Speaker 2: to make sure that the housing markets to remain safe 512 00:25:09,440 --> 00:25:15,000 Speaker 2: without pressure on mortgage rates. So the explicit implicit guarantee, 513 00:25:15,040 --> 00:25:16,880 Speaker 2: even though you know, there's a lot of question marks 514 00:25:16,880 --> 00:25:19,000 Speaker 2: and details to be worked out there. At least that 515 00:25:19,119 --> 00:25:23,440 Speaker 2: seemed to remove some of the risk that mortgage rates 516 00:25:23,480 --> 00:25:25,560 Speaker 2: would spike here, right. 517 00:25:25,520 --> 00:25:28,119 Speaker 1: Like who knows what every privatized Fanny and Freddy looks like, 518 00:25:28,119 --> 00:25:30,639 Speaker 1: but like here's some possibilities. One is, like there's an 519 00:25:30,680 --> 00:25:33,119 Speaker 1: explicit government guarantee that they pay for, so there's like 520 00:25:33,160 --> 00:25:35,600 Speaker 1: a fee, Yeah, that would be incorporated into your mortgage rates. 521 00:25:35,600 --> 00:25:38,439 Speaker 1: It might raise rates because right now Fanning's Fredady kind 522 00:25:38,480 --> 00:25:41,600 Speaker 1: of have an implicit somewhat more than implicit but less 523 00:25:41,600 --> 00:25:44,520 Speaker 1: than explicit guarantee because like they're in conservatorship and that 524 00:25:44,800 --> 00:25:47,120 Speaker 1: line of credit with the federal government and they don't 525 00:25:47,119 --> 00:25:50,040 Speaker 1: pay for that, or they they pay a lot for it, 526 00:25:50,080 --> 00:25:52,119 Speaker 1: but the accounting is somewhat complicated. But like in a 527 00:25:52,160 --> 00:25:55,280 Speaker 1: world where the government charged a fifty basis point fee 528 00:25:55,320 --> 00:25:59,000 Speaker 1: for a mortgage guarantee, then like that's fifty basis points 529 00:25:59,040 --> 00:26:02,119 Speaker 1: on your mortgage. Right, you could have a fully private 530 00:26:02,160 --> 00:26:07,639 Speaker 1: Fanny and Freddy where either they are fortress balance sheet 531 00:26:07,920 --> 00:26:11,080 Speaker 1: triple A super safe and raise a lot of capital 532 00:26:11,440 --> 00:26:14,200 Speaker 1: and that raises their costs and thus raises mortgage rates, 533 00:26:14,760 --> 00:26:19,240 Speaker 1: or they're like, yeah, double a pretty good and like 534 00:26:19,560 --> 00:26:22,879 Speaker 1: rais capital and then like possibly the mortgage backed security 535 00:26:22,920 --> 00:26:25,000 Speaker 1: is trade wider and that raises your mortgage rates. Right, 536 00:26:26,119 --> 00:26:29,720 Speaker 1: the implicit guarantee is essentially they're backed by the government, 537 00:26:29,760 --> 00:26:33,199 Speaker 1: but they don't pay for that backing. That's probably the 538 00:26:33,280 --> 00:26:34,199 Speaker 1: cheapest free of mortgage. 539 00:26:34,280 --> 00:26:36,120 Speaker 2: Right, let's go with Allen then, seems to be what. 540 00:26:36,080 --> 00:26:36,600 Speaker 1: They're going with. 541 00:26:36,720 --> 00:26:37,160 Speaker 2: That's good. 542 00:26:37,520 --> 00:26:39,280 Speaker 1: I know there's other stuff too, Like I was reading 543 00:26:39,280 --> 00:26:42,520 Speaker 1: a paper today, like a privatized Fanny and Freddy, Like, 544 00:26:42,640 --> 00:26:44,560 Speaker 1: right now there are arms of the government. They kind 545 00:26:44,560 --> 00:26:45,960 Speaker 1: of have always been arms of the government. You could 546 00:26:46,000 --> 00:26:48,760 Speaker 1: imagine them being like more kind of free market, ye, right, 547 00:26:48,880 --> 00:26:51,840 Speaker 1: Like one thing that Fanny and Freddy do is there's 548 00:26:51,880 --> 00:26:54,359 Speaker 1: like a thing called a conforming mortgage. And if you 549 00:26:54,640 --> 00:26:57,840 Speaker 1: meet the requirements of a conforming mortgage, which are not 550 00:26:57,960 --> 00:27:00,280 Speaker 1: that low but not that high, then you kind of 551 00:27:00,280 --> 00:27:02,600 Speaker 1: get the same rate. The rate for a conforming mortgage 552 00:27:02,600 --> 00:27:04,199 Speaker 1: is the rate for a conforming mortgage. But like you 553 00:27:04,200 --> 00:27:07,640 Speaker 1: can imagine a fully private Fan and Freddy having more 554 00:27:08,280 --> 00:27:12,719 Speaker 1: discrimination among borrowers where there's less cross subsidization, and like 555 00:27:13,040 --> 00:27:16,040 Speaker 1: very credit worthy borrowers get lower rates than like medium 556 00:27:16,040 --> 00:27:18,119 Speaker 1: credit worthy borrowers, So like you could have the effect 557 00:27:18,160 --> 00:27:20,520 Speaker 1: of not raising her lowering mortgage rates, but just like 558 00:27:20,560 --> 00:27:23,240 Speaker 1: increasing the dispersion of mortgage rates. That would probably be 559 00:27:23,320 --> 00:27:24,520 Speaker 1: fine for you. 560 00:27:24,520 --> 00:27:27,159 Speaker 2: You don't know that. I guess maybe I have a 561 00:27:27,200 --> 00:27:28,679 Speaker 2: horrible credit score. You don't know. 562 00:27:29,040 --> 00:27:29,640 Speaker 1: I don't know. 563 00:27:32,960 --> 00:27:35,640 Speaker 2: So, yeah, well, seems like we're going to be talking 564 00:27:35,640 --> 00:27:36,359 Speaker 2: about this for years. 565 00:27:36,440 --> 00:27:39,240 Speaker 1: I know, I know, I've a lot. You know. It's 566 00:27:39,400 --> 00:27:41,760 Speaker 1: it's like it's like heated up and cool down over 567 00:27:41,760 --> 00:27:43,480 Speaker 1: the years. And I used to write about it a lot, 568 00:27:43,640 --> 00:27:45,520 Speaker 1: and then I didn't for a long time because like 569 00:27:45,520 --> 00:27:48,240 Speaker 1: in the Biden administration, nobody every time about this. And 570 00:27:48,240 --> 00:27:50,240 Speaker 1: it's right about it again in January because like people 571 00:27:50,280 --> 00:27:52,320 Speaker 1: started tweeting about it, and now it's like it feels 572 00:27:52,359 --> 00:27:53,600 Speaker 1: like it's kind of coming back. 573 00:27:53,720 --> 00:27:56,199 Speaker 2: I feel like the shares are just a good metric 574 00:27:56,320 --> 00:27:58,600 Speaker 2: of how much this is being tweeted about. 575 00:27:58,880 --> 00:28:02,440 Speaker 1: Yeah, the show's just yeah, the market some real action. 576 00:28:02,680 --> 00:28:17,359 Speaker 3: Yeah, there's a lot of social media activity. 577 00:28:20,680 --> 00:28:22,520 Speaker 1: Bitcoin treasury companies. 578 00:28:22,920 --> 00:28:26,200 Speaker 2: Yeah, when did that phrase become real? I guess Microsoft, 579 00:28:26,280 --> 00:28:26,639 Speaker 2: I think. 580 00:28:26,480 --> 00:28:29,560 Speaker 1: Micro Strategy probably years ago, but like it's become like 581 00:28:30,160 --> 00:28:31,600 Speaker 1: everywhere in the last few. 582 00:28:31,520 --> 00:28:35,240 Speaker 2: Yes, especially everywhere, like in just in the last few months, 583 00:28:35,320 --> 00:28:38,560 Speaker 2: because MicroStrategy started doing this in twenty twenty. 584 00:28:39,040 --> 00:28:42,440 Speaker 1: I think that when micro Strategy started doing the first 585 00:28:42,440 --> 00:28:45,160 Speaker 1: of all, the micro Strategy is kind of a real company, yeah. 586 00:28:45,400 --> 00:28:48,800 Speaker 2: And they are a software company, right, And like they. 587 00:28:48,720 --> 00:28:51,800 Speaker 1: Sort of started slow. They bought some bitcoin. It got 588 00:28:51,840 --> 00:28:54,040 Speaker 1: kind of MEMI and so like early in the days 589 00:28:54,040 --> 00:28:57,320 Speaker 1: of micro Strategy buying bitcoin, you could say, and I 590 00:28:57,360 --> 00:28:59,800 Speaker 1: probably did say that it looks like every time they 591 00:29:00,000 --> 00:29:02,280 Speaker 1: spend one dollar buying bitcoin, it increased their market cap 592 00:29:02,280 --> 00:29:04,080 Speaker 1: by two dollars and that's a good trade. But it 593 00:29:04,120 --> 00:29:07,640 Speaker 1: wasn't like super super super obvious, right, I think they 594 00:29:07,680 --> 00:29:09,760 Speaker 1: would say things are or levered bitcoin. It was like 595 00:29:10,320 --> 00:29:12,840 Speaker 1: they had a business. Who knows how you value the business? Yeah, 596 00:29:12,840 --> 00:29:16,120 Speaker 1: that stuff. You could look at that and be like, well, 597 00:29:16,240 --> 00:29:18,400 Speaker 1: I can't just copy that. I can't just like put 598 00:29:18,400 --> 00:29:21,120 Speaker 1: bitcoins in a public company and have them be worth 599 00:29:21,160 --> 00:29:24,480 Speaker 1: twice what they're worth as bitcoins. And so I think 600 00:29:24,480 --> 00:29:27,120 Speaker 1: it was a little bit slow adoption if people copy them, 601 00:29:27,120 --> 00:29:29,120 Speaker 1: but like it was, you know, not everyone covered them. 602 00:29:29,360 --> 00:29:31,160 Speaker 1: And then the last few months, like people have realized 603 00:29:31,200 --> 00:29:33,840 Speaker 1: that you could take any random public company and just 604 00:29:34,000 --> 00:29:37,120 Speaker 1: stuff it full of bitcoins and like it'll double the 605 00:29:37,160 --> 00:29:39,280 Speaker 1: value of the bitcoins, and so that just feels like 606 00:29:39,320 --> 00:29:40,719 Speaker 1: a great trade. There are a lot of people who 607 00:29:40,800 --> 00:29:42,720 Speaker 1: own a lot of bitcoins, right, And if you own 608 00:29:43,000 --> 00:29:45,520 Speaker 1: two hundred million dollars worth a bitcoin, you sell them 609 00:29:45,560 --> 00:29:47,400 Speaker 1: for two hundred million dollars. But if you stuff them 610 00:29:47,400 --> 00:29:50,240 Speaker 1: into a public company, they'll be worth a billion dollars 611 00:29:50,320 --> 00:29:52,440 Speaker 1: and that's more. Yeah, So everyone's doing it. 612 00:29:52,560 --> 00:29:56,200 Speaker 2: Everyone's doing it, and especially this week, it feels like 613 00:29:56,240 --> 00:29:58,840 Speaker 2: everyone is doing this. So you know, you kicked off 614 00:29:58,840 --> 00:30:00,520 Speaker 2: the week by talking about sharplink. 615 00:30:00,960 --> 00:30:02,400 Speaker 1: I guess they did it. No, they did this, they 616 00:30:02,480 --> 00:30:03,520 Speaker 1: did the Monday, Yeah, or. 617 00:30:04,040 --> 00:30:06,840 Speaker 2: Time they did this is a flat circle. 618 00:30:07,040 --> 00:30:09,239 Speaker 1: So sharplink is great. Like sharplink is the purest form 619 00:30:09,240 --> 00:30:11,280 Speaker 1: of list because they were a sports betting marketing company 620 00:30:11,360 --> 00:30:14,400 Speaker 1: or some Yeah, they had a two million dollar market 621 00:30:14,400 --> 00:30:17,760 Speaker 1: cap as of like mid last week. Someone pumped them 622 00:30:17,760 --> 00:30:19,920 Speaker 1: full of four hundred and twenty five million dollars of 623 00:30:20,040 --> 00:30:23,360 Speaker 1: ethereum right or eth and so now they're trading it 624 00:30:23,400 --> 00:30:27,400 Speaker 1: like a two plus billion dollar pro form a market cup. 625 00:30:28,200 --> 00:30:29,560 Speaker 1: I want to be clear, like I wrote about this 626 00:30:29,600 --> 00:30:31,600 Speaker 1: and I said market cup, but it's not. They're done 627 00:30:31,600 --> 00:30:33,160 Speaker 1: have two point four billion dollar market They have a 628 00:30:33,160 --> 00:30:35,600 Speaker 1: two point four billion dollar pro form a market cup 629 00:30:35,880 --> 00:30:38,440 Speaker 1: right now. They have some share with outstanding, not very 630 00:30:38,440 --> 00:30:40,520 Speaker 1: many of them, and the shares traded a high price, 631 00:30:40,520 --> 00:30:42,239 Speaker 1: and they have like whatever like Bloomberg will tell you 632 00:30:42,320 --> 00:30:45,920 Speaker 1: eighty million dollar market caps something like that. But they've 633 00:30:45,920 --> 00:30:48,920 Speaker 1: also agreed to issue all these shares to these investors 634 00:30:48,920 --> 00:30:51,800 Speaker 1: who want to pump them full of ethereum. And if 635 00:30:51,800 --> 00:30:53,680 Speaker 1: you count those shares to the market caps like two 636 00:30:53,680 --> 00:30:57,360 Speaker 1: and a half billion dollars. And this is important because 637 00:30:57,400 --> 00:31:00,000 Speaker 1: like you know, we talked about QXO a few times. Yeah, 638 00:31:00,080 --> 00:31:03,000 Speaker 1: same deal, where you have a company with like very 639 00:31:03,000 --> 00:31:07,320 Speaker 1: few shares outstanding and a huge pot of money coming in, 640 00:31:07,760 --> 00:31:10,479 Speaker 1: and like the retail investors are like, oh, look, this 641 00:31:10,560 --> 00:31:13,240 Speaker 1: company has four hundred million dollars with ethereum and its 642 00:31:13,280 --> 00:31:15,600 Speaker 1: market cap is eighty million dollars. I should buy some 643 00:31:15,640 --> 00:31:19,000 Speaker 1: more stock. Right, That's wrong, right, because like the eighty 644 00:31:19,000 --> 00:31:22,080 Speaker 1: million doesn't count the four and twenty five million of ethereum. 645 00:31:22,640 --> 00:31:26,800 Speaker 1: But the stock is like the publicly traded stub is 646 00:31:26,840 --> 00:31:29,480 Speaker 1: small enough, and like the market cap is confusing enough 647 00:31:29,480 --> 00:31:32,040 Speaker 1: that people are buying it at a five or ten 648 00:31:32,120 --> 00:31:34,760 Speaker 1: times premium to the value of the ethereum and the pot, 649 00:31:34,800 --> 00:31:37,120 Speaker 1: and like there's nothing else, right, two million dollar company, Right, 650 00:31:37,200 --> 00:31:38,840 Speaker 1: But there's a ethereum in a pot and it trades 651 00:31:38,880 --> 00:31:41,120 Speaker 1: at a large multiple of the value of the ethereum. 652 00:31:41,200 --> 00:31:44,240 Speaker 2: It is somewhat interesting that they went with ethereum versus bitcoin. 653 00:31:44,440 --> 00:31:46,160 Speaker 1: Oh, I just think that people need to pick a lane. 654 00:31:46,200 --> 00:31:49,040 Speaker 1: And like Bitcoin is so saturated that like people are 655 00:31:49,080 --> 00:31:50,840 Speaker 1: doing Solana, they're doing ethereum, they're. 656 00:31:50,640 --> 00:31:52,840 Speaker 2: Doing you mostly hear popcoin, they're. 657 00:31:52,600 --> 00:31:55,000 Speaker 1: Doing doage coin, they're doing everything. But yeah, a lot 658 00:31:55,000 --> 00:31:56,560 Speaker 1: of them aren't bitcoin. But it's not only bitcoin. 659 00:31:56,760 --> 00:31:57,760 Speaker 2: Yeah. Yeah. 660 00:31:57,880 --> 00:32:01,360 Speaker 1: I wrote about two other big ones this week, household 661 00:32:01,440 --> 00:32:05,200 Speaker 1: name meme companies are you know, DJT Trump Media and 662 00:32:05,240 --> 00:32:10,760 Speaker 1: Technology Group and game Stop both announced bitcoin treasury buys 663 00:32:11,280 --> 00:32:13,880 Speaker 1: and their stocks both went down, which is like, that's the. 664 00:32:13,840 --> 00:32:15,960 Speaker 2: End of it, Okay, the trade's over. 665 00:32:16,320 --> 00:32:18,080 Speaker 1: I don't think the trades are literally over, because I 666 00:32:18,080 --> 00:32:20,120 Speaker 1: think those are special cases of companies that were kind 667 00:32:20,120 --> 00:32:23,400 Speaker 1: of already meme stocks. But it's definitely the case that 668 00:32:23,720 --> 00:32:26,960 Speaker 1: any random company for at least several weeks that announced 669 00:32:26,960 --> 00:32:28,920 Speaker 1: it bought a lot of bitcoin, like the stock would 670 00:32:28,960 --> 00:32:30,800 Speaker 1: go way up and people are like, oh, we should 671 00:32:30,800 --> 00:32:34,000 Speaker 1: do that. Yeah, and then these two big name ish 672 00:32:34,160 --> 00:32:36,040 Speaker 1: meme companies announced it and their stocks went down. 673 00:32:36,080 --> 00:32:38,440 Speaker 2: It's like, yeah, trades over for game Stop. So they 674 00:32:38,560 --> 00:32:40,600 Speaker 2: announced in March that they plan to. 675 00:32:41,160 --> 00:32:43,840 Speaker 1: Actually this is not new news for games. They actually 676 00:32:43,840 --> 00:32:45,440 Speaker 1: bought them coin this week and it went down. 677 00:32:45,440 --> 00:32:48,560 Speaker 2: But like, in some ways, it's amazing that it took 678 00:32:48,560 --> 00:32:50,600 Speaker 2: this long for them to come up with the plan 679 00:32:50,680 --> 00:32:53,160 Speaker 2: that we're going to do this for game Stop. I 680 00:32:53,160 --> 00:32:54,960 Speaker 2: feel like, I don't know, I would have expected it 681 00:32:55,240 --> 00:32:56,880 Speaker 2: a couple of years ago, but here we are. 682 00:32:57,160 --> 00:32:59,280 Speaker 1: Okay, First of all, I would expect it from AMC, 683 00:32:59,480 --> 00:33:02,560 Speaker 1: who does everything like AFC bought a gold mine because 684 00:33:02,560 --> 00:33:04,720 Speaker 1: that was funny, right, like AFC. 685 00:33:04,520 --> 00:33:06,520 Speaker 2: Should somehow I had forgotten about. 686 00:33:06,240 --> 00:33:09,680 Speaker 1: That they bought a gold mine. 687 00:33:09,960 --> 00:33:12,440 Speaker 2: Maybe we should talk about that more. I would like 688 00:33:13,120 --> 00:33:14,600 Speaker 2: to get a status report on that. 689 00:33:14,920 --> 00:33:17,040 Speaker 1: I know every stuff, And I'm like, they bought a 690 00:33:17,040 --> 00:33:19,760 Speaker 1: gold mine and I read about it, but I never did. 691 00:33:20,800 --> 00:33:22,440 Speaker 1: I'm not even sure they literally, but I think they 692 00:33:22,520 --> 00:33:24,200 Speaker 1: like did some sort of murder with a gold coin. 693 00:33:24,240 --> 00:33:27,360 Speaker 1: I don't know anyway, Games Stop has always been like 694 00:33:27,360 --> 00:33:30,200 Speaker 1: a little bit less like doing every meme, but they 695 00:33:30,200 --> 00:33:32,920 Speaker 1: do a lot of memes stuff. But yeah, I think 696 00:33:32,960 --> 00:33:35,479 Speaker 1: that if you want to do a viitcoin treasury strategy, 697 00:33:35,480 --> 00:33:36,640 Speaker 1: you kind of have to be all in on it. 698 00:33:36,720 --> 00:33:39,360 Speaker 1: And like gamesop, I still want to sell video games 699 00:33:39,400 --> 00:33:42,480 Speaker 1: at them all, And I think it was reasonable for 700 00:33:42,520 --> 00:33:45,320 Speaker 1: a long time to think that if you're just GameStop, 701 00:33:45,400 --> 00:33:48,840 Speaker 1: you don't really have an advantage in doing that strategy. 702 00:33:49,040 --> 00:33:51,400 Speaker 1: M h macro strategy was there to do at first. 703 00:33:52,120 --> 00:33:55,760 Speaker 1: It's not clear why a copycat would be particularly valuable, 704 00:33:56,320 --> 00:33:59,000 Speaker 1: so you might have tried to do something else before 705 00:33:59,040 --> 00:34:00,160 Speaker 1: getting into the viccoins state. 706 00:34:00,600 --> 00:34:03,800 Speaker 2: So you wrote that, you know, you compare maybe Michael 707 00:34:03,800 --> 00:34:08,640 Speaker 2: Saylor will do something cooler with it's bitcoin than the 708 00:34:08,680 --> 00:34:12,400 Speaker 2: CEO of DJT. But it doesn't seem like there's anything 709 00:34:12,440 --> 00:34:14,560 Speaker 2: to do with it that's cool other than just buy 710 00:34:14,600 --> 00:34:14,960 Speaker 2: more of it. 711 00:34:15,000 --> 00:34:15,799 Speaker 1: Okay, I hear you. 712 00:34:15,960 --> 00:34:17,719 Speaker 2: I don't really disagree it. They're not going to say 713 00:34:17,719 --> 00:34:18,680 Speaker 2: I was being. 714 00:34:18,560 --> 00:34:22,080 Speaker 1: Intentionally vague about doing cool stuff, Okay. One view of 715 00:34:22,080 --> 00:34:24,120 Speaker 1: these bitcoin treasury companies is that like they're sort of 716 00:34:24,120 --> 00:34:27,040 Speaker 1: like a like meta pump for pitcoin, right, The idea 717 00:34:27,080 --> 00:34:28,680 Speaker 1: is they will buy all the bitcoin and not sell it, 718 00:34:28,719 --> 00:34:30,040 Speaker 1: and that will cause the price of pitcoin to go 719 00:34:30,120 --> 00:34:31,960 Speaker 1: up and they'll be rich. It's just like a diamond 720 00:34:32,040 --> 00:34:36,359 Speaker 1: hands like theory of pitcoin like abstracted back one level 721 00:34:36,400 --> 00:34:40,000 Speaker 1: to these treasury companies, but another theory and a related theory, 722 00:34:40,000 --> 00:34:42,760 Speaker 1: I guess is like a lot of them, including micro strategy. 723 00:34:42,880 --> 00:34:46,080 Speaker 1: We'll talk about like investor education efforts right right, And 724 00:34:46,160 --> 00:34:48,319 Speaker 1: we talked about this with like twenty one. It's like 725 00:34:48,440 --> 00:34:51,880 Speaker 1: another big Jack Muller's Jack Millers, Yeah, like big bitcoin 726 00:34:51,920 --> 00:34:55,959 Speaker 1: treasury company with like Tether's bitcoins and you know they're 727 00:34:55,960 --> 00:34:58,439 Speaker 1: like we're going to do investor education or like knack 728 00:34:58,480 --> 00:35:01,439 Speaker 1: Amoto holdings like merch the opioid company, like a. 729 00:35:01,400 --> 00:35:03,200 Speaker 2: Tiny drug company now on I haven't heard of. 730 00:35:03,360 --> 00:35:05,839 Speaker 1: It's called kindly Empty. It's just like it's just random mania, 731 00:35:06,160 --> 00:35:08,239 Speaker 1: all these like random like tiny companies, like you can 732 00:35:08,520 --> 00:35:10,879 Speaker 1: pump them full of bitcoins, and like they all talk 733 00:35:10,920 --> 00:35:16,839 Speaker 1: about like we're gonna do marketing, media, investor education. It's 734 00:35:16,840 --> 00:35:18,320 Speaker 1: all like you know, we're gonna make the price of 735 00:35:18,360 --> 00:35:20,560 Speaker 1: bitcoin go up, right yeah, And so like your theory 736 00:35:20,600 --> 00:35:22,239 Speaker 1: is not only will they own bitcoin, but they'll do 737 00:35:22,280 --> 00:35:24,799 Speaker 1: stuff to make the price of bitcoin go up. I 738 00:35:24,800 --> 00:35:26,520 Speaker 1: don't know why that would make you buy them rather 739 00:35:26,520 --> 00:35:28,440 Speaker 1: than bitcoin, but whatever. But like I will say, like 740 00:35:28,560 --> 00:35:31,759 Speaker 1: micro Strategy, I have like a really interesting capital market 741 00:35:31,840 --> 00:35:34,560 Speaker 1: strategy where they're like, we're gonna use every part of 742 00:35:34,560 --> 00:35:36,560 Speaker 1: our cab structure to raise more money to buy a bitcoin. 743 00:35:36,760 --> 00:35:38,960 Speaker 1: And you can imagine being like, I'll buy the equity 744 00:35:38,960 --> 00:35:41,680 Speaker 1: because like they will get more attractive funding to buy 745 00:35:41,680 --> 00:35:45,040 Speaker 1: bitcoin by like selling converts at a high volatility. I 746 00:35:45,080 --> 00:35:47,600 Speaker 1: don't know, that's not a crazy position, but like most 747 00:35:47,600 --> 00:35:49,320 Speaker 1: of these companies are, so yeah, we're gonna buy bitcoin 748 00:35:49,320 --> 00:35:52,279 Speaker 1: and we're gonna talk about buying bitcoin. Why would you 749 00:35:52,360 --> 00:35:53,239 Speaker 1: have a premium for that? 750 00:35:53,440 --> 00:35:58,040 Speaker 2: Yeah, I don't know. This is a tangent, but I 751 00:35:58,120 --> 00:36:01,480 Speaker 2: just want to talk to like the average employee at MicroStrategy, 752 00:36:01,520 --> 00:36:03,560 Speaker 2: which is now just strategy by the way, we've been 753 00:36:03,600 --> 00:36:04,480 Speaker 2: calling a micro strategy. 754 00:36:04,800 --> 00:36:06,400 Speaker 1: It's still like a fish or whatever. 755 00:36:06,920 --> 00:36:10,319 Speaker 2: Nothing matters because they employed thousands of people. I want 756 00:36:10,360 --> 00:36:14,000 Speaker 2: to talk to an average employee there who isn't involved 757 00:36:14,520 --> 00:36:16,839 Speaker 2: with the bitcoin strategy at all. 758 00:36:18,080 --> 00:36:21,879 Speaker 1: It is a little perplexing, but you know, like if 759 00:36:21,920 --> 00:36:23,600 Speaker 1: they get data stock, they're. 760 00:36:23,440 --> 00:36:27,400 Speaker 2: Pretty happy I don't know, but I agree obviously, But 761 00:36:27,680 --> 00:36:29,360 Speaker 2: you know, do they just think of it like I 762 00:36:29,440 --> 00:36:33,440 Speaker 2: work at a conglomerate, Like there's part of the business 763 00:36:33,440 --> 00:36:35,759 Speaker 2: that is just so totally disconnected to what I do. 764 00:36:36,239 --> 00:36:38,680 Speaker 1: Right, It's funny, I've already said that, like the software 765 00:36:38,680 --> 00:36:41,200 Speaker 1: company really matters because like I don't know, like some 766 00:36:41,360 --> 00:36:43,239 Speaker 1: part I don't know what part, at least some small 767 00:36:43,280 --> 00:36:45,560 Speaker 1: part of the micro strategy thesis is like they could 768 00:36:45,560 --> 00:36:47,600 Speaker 1: get in the S and B one day, yeah, and 769 00:36:47,640 --> 00:36:50,319 Speaker 1: then like yeah, you're in the NAZAC one yeah, right, 770 00:36:50,480 --> 00:36:52,359 Speaker 1: because they're a real company, right yeah, And like if 771 00:36:52,360 --> 00:36:55,200 Speaker 1: you're just a bitcoin ETF, you can't get into these indexes. 772 00:36:55,640 --> 00:36:57,440 Speaker 1: It's like a little bit harder for like an active 773 00:36:57,440 --> 00:37:00,239 Speaker 1: equity manager to buy an ETF share than it is 774 00:37:00,280 --> 00:37:02,920 Speaker 1: to buy a share of an operating company. So I 775 00:37:02,920 --> 00:37:05,440 Speaker 1: think like there's something very important about what the software 776 00:37:05,440 --> 00:37:08,320 Speaker 1: employees do at micro Strategy that's a little bit undermined 777 00:37:08,360 --> 00:37:13,880 Speaker 1: by like kindly MD and you know, sharplink, where like 778 00:37:15,120 --> 00:37:18,759 Speaker 1: the operating business is so small, so small compared to 779 00:37:18,760 --> 00:37:20,560 Speaker 1: the pot of the Coiner Earth theorem. 780 00:37:20,600 --> 00:37:22,640 Speaker 2: Just to your point that you know, perhaps you could 781 00:37:22,640 --> 00:37:24,960 Speaker 2: see micro strategy entered the S and P five hundred. 782 00:37:25,320 --> 00:37:29,799 Speaker 2: It is amusing how much crypto exposure there is in 783 00:37:29,840 --> 00:37:32,040 Speaker 2: the S and P five hundred right now, especially with 784 00:37:32,080 --> 00:37:36,200 Speaker 2: Coinbase being added. These are our I assume that your 785 00:37:36,239 --> 00:37:38,080 Speaker 2: four one k is in the S and P five hundred. 786 00:37:38,520 --> 00:37:41,000 Speaker 1: I don't own any crypto because in part because like 787 00:37:41,040 --> 00:37:43,040 Speaker 1: there's a notion of journalists together because you're not supposed 788 00:37:43,040 --> 00:37:45,000 Speaker 1: to enryptos. You've heard about it, and like to me, 789 00:37:45,160 --> 00:37:48,120 Speaker 1: I'm like, like I don't know like shares of Tesla, 790 00:37:48,480 --> 00:37:50,800 Speaker 1: but I own mostly index funds, which on's. 791 00:37:50,680 --> 00:37:51,960 Speaker 2: Tesla, right, Oh, yes, you do. 792 00:37:51,960 --> 00:37:55,680 Speaker 1: Yeah, and like to me, like, the neutral portfolio is 793 00:37:55,719 --> 00:37:58,640 Speaker 1: not owning nothing. The neutral portfolio is owning all of 794 00:37:58,640 --> 00:38:01,000 Speaker 1: the financial assets in the world proportion to their like, 795 00:38:01,160 --> 00:38:03,920 Speaker 1: you know, value. And so if you own zero bitcoin, 796 00:38:04,120 --> 00:38:07,040 Speaker 1: you're like structurally biased against bitcoin because bitcoin is like 797 00:38:07,440 --> 00:38:10,239 Speaker 1: a trillion dollars of value. So you should own like 798 00:38:10,239 --> 00:38:12,680 Speaker 1: a little bit of bitcoin to like fully reflect the 799 00:38:12,800 --> 00:38:14,200 Speaker 1: global financial portfolio. 800 00:38:14,680 --> 00:38:18,000 Speaker 2: And now I do through that, you do, yeah. 801 00:38:17,880 --> 00:38:19,920 Speaker 1: And you know, like why am I so smart? 802 00:38:20,000 --> 00:38:21,960 Speaker 2: Right? Like why are you so smart if. 803 00:38:21,840 --> 00:38:24,680 Speaker 1: One percent of like the global financial portfolio is bitcoin? 804 00:38:24,760 --> 00:38:27,360 Speaker 1: Like why shouldn't I own that one percent of mys 805 00:38:27,400 --> 00:38:27,880 Speaker 1: in bitcoin. 806 00:38:28,160 --> 00:38:30,040 Speaker 2: I think that's a pretty reasonable take. 807 00:38:31,000 --> 00:38:32,600 Speaker 1: And then I have to like it. But they have 808 00:38:32,640 --> 00:38:34,839 Speaker 1: to like a lot of companies, right, Like I'm not right. 809 00:38:35,280 --> 00:38:39,280 Speaker 2: Yeah, So you just want a market cap weighted total 810 00:38:39,680 --> 00:38:40,960 Speaker 2: asset portfolio. 811 00:38:41,840 --> 00:38:43,719 Speaker 1: You're looking at me like that's a weird thing to want. 812 00:38:43,840 --> 00:38:46,800 Speaker 1: That's like the most normal possible thing to want. Everyone 813 00:38:46,840 --> 00:38:48,719 Speaker 1: wants that, just you can't get it, but you can 814 00:38:48,760 --> 00:38:51,320 Speaker 1: get closer to it by like having bitcoin treasury companies 815 00:38:51,320 --> 00:38:51,759 Speaker 1: in the ass and. 816 00:38:51,800 --> 00:38:54,600 Speaker 2: P Maybe I sound skeptical, but I'm not. I think 817 00:38:54,600 --> 00:38:55,160 Speaker 2: that's great. 818 00:38:55,480 --> 00:38:58,280 Speaker 1: I'm a simple man. I just want the global financial 819 00:38:58,320 --> 00:38:59,160 Speaker 1: asset portfolio. 820 00:38:59,320 --> 00:39:01,960 Speaker 2: Simple man. I just want to go home and see 821 00:39:02,000 --> 00:39:02,520 Speaker 2: my bird. 822 00:39:05,400 --> 00:39:06,840 Speaker 1: And that is the Money Stuff Podcast. 823 00:39:07,000 --> 00:39:09,000 Speaker 2: I'm Matt Levian and I'm Katie Greifeld. 824 00:39:09,360 --> 00:39:11,399 Speaker 1: You can find my work by subscribing to the Money 825 00:39:11,440 --> 00:39:13,280 Speaker 1: stuffnewsletter on Bloomberg dot. 826 00:39:13,120 --> 00:39:15,799 Speaker 2: Com, and you can find me on Bloomberg TV every 827 00:39:15,880 --> 00:39:19,280 Speaker 2: day on Open Interest between nine to eleven am Eastern. 828 00:39:19,760 --> 00:39:21,440 Speaker 1: We'd love to hear from you. You can send an 829 00:39:21,480 --> 00:39:24,640 Speaker 1: email to you Moneypod at Bloomberg dot net. Ask us 830 00:39:24,640 --> 00:39:26,160 Speaker 1: a question and we might answer it on air. 831 00:39:26,320 --> 00:39:28,520 Speaker 2: You can also subscribe to our show wherever you're listening 832 00:39:28,560 --> 00:39:30,600 Speaker 2: right now and leave us a review. It helps more 833 00:39:30,600 --> 00:39:31,479 Speaker 2: people find the show. 834 00:39:32,200 --> 00:39:35,000 Speaker 1: The Money Stuff Podcast is produced by Anna Maserakus and 835 00:39:35,080 --> 00:39:36,160 Speaker 1: Moses ONEm Our. 836 00:39:36,200 --> 00:39:37,920 Speaker 2: Theme music was composed by Blake. 837 00:39:37,760 --> 00:39:41,759 Speaker 1: Maples, Brandon, Francis Nuinimnsara executive producer and Stage Bauman is 838 00:39:41,760 --> 00:39:44,479 Speaker 1: Bloomberg's head of Podcasts. Thanks for listening to The Money 839 00:39:44,480 --> 00:39:47,280 Speaker 1: Stuff Podcast. We'll be back next week with more stuff.