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Speaker 1: Bloomberg Audio Studios, Podcasts, radio news anyway. Hello, and welcome

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Speaker 1: to the Money Stuff Podcast.

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Speaker 2: Your weekly podcast.

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Speaker 1: Okay, all right, we're gonna.

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Speaker 2: Get through this. Hello, and welcome to the Money Stuff Podcast,

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Speaker 2: your weekly podcast where we talk about stuff related to money.

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Speaker 2: I'm Matt Levine and I write the Money Stuff column

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Speaker 2: for Bloomberg Opinion.

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Speaker 1: And I'm Katie Greifeld, a reporter for Bloomberg News and

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Speaker 1: an anchor for Bloomberg Television. It's good on, Katie, great question.

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Speaker 1: We're going to talk about Meme stocks and the week

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Speaker 1: that has been. We're going to talk about biddle it's

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Speaker 1: a tokenized money market fund, essentially stable coin, whatever you

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Speaker 1: want to call it. And then we are going to

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Speaker 1: talk about election contracts and how much the CFTC does

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Speaker 1: not like them.

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Speaker 2: But I feel like I've said that on these signpostings before.

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Speaker 1: Yeah, certain amount is usually the answer. So Meme sucks.

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Speaker 1: This started on Sunday one, right right, This episode ended

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Speaker 1: in two, and we started and ended twenty twenty one.

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Speaker 1: Redormant for a while, Roaring Kitty. He came back, question Mark,

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Speaker 1: did he for real come back his account?

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Speaker 2: Did I just took it for granted? That he came back.

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Speaker 2: I'm not so sure anymore.

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Speaker 1: I also took it for granted that, oh, the account

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Speaker 1: posted it must be him. There is some speculation that

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Speaker 1: it's not actually Raring Kitty. We haven't he said.

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Speaker 2: Who Ryan Kitty is? Did we say who Ryan Kiddy?

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Speaker 1: Okay? His name is Keith Gill. He's a real man.

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Speaker 1: He had a starring role in the twenty twenty one

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Speaker 1: episode of Memes sock Mania.

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Speaker 2: You did tell Congress I am not a cat, which

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Speaker 2: is like.

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Speaker 1: A great it was. It was perfect. He also said

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Speaker 1: what was he likes the suck.

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Speaker 2: He really liked GameStop. Yeah, and he made a lot

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Speaker 2: of money really liking GameStop into the early twenty twenty

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Speaker 2: one rally and GameStop where he made tens of millions

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Speaker 2: of dollars.

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Speaker 1: I do think his origin story is really interesting though,

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Speaker 1: because in addition to being Roaring Kitty, he's also known

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Speaker 1: as d Yeah deep Value exactly. Yeah, like this truly

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Speaker 1: started because he actually did like the stop.

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Speaker 2: Yeah, he's become this MEMI character. But he's like a

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Speaker 2: guy who did fundamental research on GameStop and thought it

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Speaker 2: was undervalued and did like multi hour YouTube tutorials and

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Speaker 2: why GameStop was a good company. Like, he's pretty serious

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Speaker 2: about it exactly.

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Speaker 1: So he started from, you know, a place of fundamental analysis.

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Speaker 1: He tweeted again on Sunday after not tweeting since June

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Speaker 1: twenty twenty one. The pace of his tweets have been breathless.

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Speaker 1: He has been posting so much.

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Speaker 2: How many of them have been about game Stop?

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Speaker 1: Ah, that's the thing, Like it's zero surely, yeah, I

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Speaker 1: mean he did or the account posted a clip of

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Speaker 1: CNBC talking about game Stop, right, so that blurs the lines.

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Speaker 1: But you're right that the thing that kicked it all

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Speaker 1: off on Sunday was just a cartoon man leaning forward

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Speaker 1: in a chair. He didn't mention game Stop, but GameStop Skyrocket.

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Speaker 2: Yeah, I mean it's the cartoon man was represented him

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Speaker 2: and the leaning forward in the chair represented he was

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Speaker 2: coming back to lead the masses to victory and GameStop

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Speaker 2: to the moon. That's how people interpreted it. He is

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Speaker 2: not commented.

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Speaker 1: We haven't seen his face, he hasn't posted any YouTube videos.

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Speaker 2: Hasn't posted on Reddit, I believe. Yeah, so it's really

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Speaker 2: really magical that this Twitter account can move, you know.

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Speaker 2: It added to like three or four billion dollars to

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Speaker 2: the market cap of Game Stop on like Monday. Yeah,

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Speaker 2: just like forgetting the band back together, like for the rolls.

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Speaker 2: Nothing happened. Neither Game Stop nor allegedly Roaring Kitty said

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Speaker 2: anything about Game Stop. There's no news. There's just like, Oh,

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Speaker 2: that guy's back, that'll be fun.

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Speaker 1: So the question I have for you, and you pose

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Speaker 1: this in one of your columns in the context of

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Speaker 1: if you were designing an exam, could this count as

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Speaker 1: market manipulation given that he didn't mention Game Stop? But

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Speaker 1: what if he had bought a whole bunch of calls

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Speaker 1: on Game Stop and then he posted what I.

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Speaker 2: Learned about market manipulation? Though these many years ago, people

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Speaker 2: talked about materiality and like the reasonable investor information was

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Speaker 2: material to the reasonable investor, you know, if it was

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Speaker 2: useful and the reasonable investors investment decisions, and you know,

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Speaker 2: if you lie about material stuff, that's fraud. The materiality

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Speaker 2: is the sort of standard for all of the securities

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Speaker 2: last stuff. And one thing that has happened in recent

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Speaker 2: years is you're like, what does the reasonable investor have

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Speaker 2: to do with anything? Right? Because if he would gone

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Speaker 2: back to me in law school and said, is it

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Speaker 2: material to the price of game stop stock that a

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Speaker 2: guy treated a picture of a guy leaning forward in

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Speaker 2: a chair? I wouldy sapt that has nothing to do

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Speaker 2: with the reasonable investor or anything else or game Stop.

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Speaker 2: Like he's never mentioned, you know, he didn't mention GameStop

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Speaker 2: in the tweet, so he couldn't possibly have been like

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Speaker 2: tricking anyone about anything material. So it seems hard to

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Speaker 2: argue that there's any sort of market manipulation, even if,

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Speaker 2: by the way, like even if he was like doing

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Speaker 2: it as nefariously as possible, even if he like bought

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Speaker 2: a bunch of call options and like tweeted the thing

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Speaker 2: and then sold the call option. If you butt coll

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Speaker 2: options and tweeted like GameStop discovered the cure for cancer

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Speaker 2: and then told his co options, like, that's obviously market manipulation.

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Speaker 2: But like if you just replaced tweeting something about games

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Speaker 2: Stop with tweeting a picture of him leaning forward in

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Speaker 2: the chair, which has way more of an effect, right,

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Speaker 2: I think it becomes not anything that the SEC can

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Speaker 2: do anything about because he's not saying anything, he's not

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Speaker 2: lying misrepresenting anything. He's just you know, tweeting a picture

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Speaker 2: of a guy in a chair. Now, I will say

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Speaker 2: there's an amazing case about bed bath and beyond, where

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Speaker 2: like Ryan Cohen, the actually Game Stop CEO now was

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Speaker 2: also dabbling in that stock and he tweeted you can

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Speaker 2: reply to someone. He tweeted like a moon or a

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Speaker 2: rocket munamagi, which doesn't it looks like a smiley face,

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Speaker 2: but it's allegedly a munomagic and someone sued saying that

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Speaker 2: was a fraud, and judge we wrote a long opinion

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Speaker 2: being like, well, the moon emoji represents his views on

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Speaker 2: the fundamentals and basically decided the fox switch could go hard,

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Speaker 2: So like, there is some ambiguity here, but I do

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Speaker 2: think that even if he was like trading on these tweets,

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Speaker 2: he's still clean. Now, the really interesting question is, you know,

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Speaker 2: as you say, no one seems really sure that he's back.

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Speaker 2: If you hacked his Twitter and still his account, or

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Speaker 2: if you bought his Twitter from him and you were

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Speaker 2: just tweeting these things which have nothing to do with

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Speaker 2: Game Stop, but which have caused the price of game

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Speaker 2: slop to go up by billions of dollars, is that

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Speaker 2: market manipulation If you're trading on that, and again, you're

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Speaker 2: not saying to make games stop, so it's really hard

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Speaker 2: to argue that it is. But it also feels like

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Speaker 2: it is.

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Speaker 1: Yeah, yeah, I love it. And what if he just

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Speaker 1: sold his account.

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Speaker 2: I mean, if he just sold his account, he's out

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Speaker 2: of it. But who I was using the account is like,

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Speaker 2: if he sold his account to anyone other than someone

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Speaker 2: planning to manipulate the price of game stop, he got

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Speaker 2: a bad deal, right, because it's a valuable account. Yeah,

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Speaker 2: and Twitter or an ex Patrick McKenzie tweeted, you shouldn't

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Speaker 2: be able to increase the market capitalization of a company

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Speaker 2: by billions of dollars by pointedly not mentioning in a tweet,

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Speaker 2: But at least two people can. One is nearly the

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Speaker 2: richest person on Earth and the other's labor is deeply mispriced. Right,

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Speaker 2: so one is like Elon Musk when he tweets about something.

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Speaker 2: You know, he famously tweeted you Signal about the encorected

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Speaker 2: messaging app, and like the price of this unrelated company

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Speaker 2: called Signal went up. So when he like doesn't tweet

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Speaker 2: it out companies, he can still cause their price to

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Speaker 2: go up. He's made some use of that skill and

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Speaker 2: also happens to be extremely wealthy. But then Keith Gills

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Speaker 2: has done pretty well for himself. Keith Gill's labor is

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Speaker 2: not that underpriced. He's made a lot of money. But

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Speaker 2: even game still.

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Speaker 1: If you or I were only to become Keith Gill,

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Speaker 1: how do you capitalize on this power in a legal way?

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Speaker 2: I don't want to give legal it. More to the point,

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Speaker 2: if I just like acquired Keith Gill's Twitter account, right,

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Speaker 2: I think I would have tweated exactly what was tweeated here.

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Speaker 2: I don't know what people were trading. But what I

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Speaker 2: would have done is I would have bought a lot

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Speaker 2: of call options on game stop. I would have tweeted

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Speaker 2: something like I'm back there you go, no reference the

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Speaker 2: game stuff, and then I would have sold all the

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Speaker 2: call options. Yeah, and then let you do you get

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Speaker 2: diminishing returns, But.

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Speaker 1: I think we're there.

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Speaker 2: Yeah, yeah, well, I think you're probably right. But like,

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Speaker 2: if you do this once, you got to do it

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Speaker 2: for a lot of money, and you got to do

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Speaker 2: it as levered as possible, like call options.

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Speaker 1: I'm just piecing together the price action with how often

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Speaker 1: he has been tweeting on May fifteenth, he tweeted at

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Speaker 1: least twenty times, sorry.

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Speaker 2: You diminishing returns, going away and coming back right since

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Speaker 2: his first tweet from his Sunday comeback like heat. Nothing

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Speaker 2: after that unless you start tweeting about game stuff, which

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Speaker 2: seems riskier.

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Speaker 1: No one is really succinctly defined to me what him

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Speaker 1: being back means, Well, he's just.

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Speaker 2: Going to see it, but coming from his account about movies,

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Speaker 2: like movie clips are being tweeted from his account.

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Speaker 1: Yeah, but he hasn't posted anything substantial.

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Speaker 2: I don't know.

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Speaker 1: Why does it matter that he's back? Why does it

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Speaker 1: matter that he's tweeting?

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Speaker 2: I'm asking almost like the deepest questions of financial markets.

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Speaker 1: Yeah, doesn't matter that is.

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Speaker 2: Tweeting movie clips. Maybe it doesn't. Maybe we're wasting our

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Speaker 2: time here, but like, get know. I mean it caused

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Speaker 2: the price of game stops to go up by three

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Speaker 2: or four billion dollars, and like why because GameStop was

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Speaker 2: like the quintessential meme stock. And what a memestock is

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Speaker 2: like something whose trading action is entertaining and gives people

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Speaker 2: a sense of community. And it's like fun to be

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Speaker 2: a part of this online message board community where you

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Speaker 2: like trade jokes and share memes and then also by

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Speaker 2: call options on game Stop.

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Speaker 1: Right.

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Speaker 2: That died down for a number of reasons, one of

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Speaker 2: which is that the price of game Stop, after going

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Speaker 2: up a lot in twenty twenty one, came down. But

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Speaker 2: other are other ones, like the pandemic ended, and so

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Speaker 2: people who were like shut at home got to go

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Speaker 2: out or you know, entertainment moves on, right, and people

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Speaker 2: like found other things that were fun, and so the

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Speaker 2: community fun meme sensibility that grew around game Stop ended

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Speaker 2: and when he comes back by tweeting memes like there's

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Speaker 2: nothing to do with the fundamentals of game Stop business,

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Speaker 2: but it's oh great, this fun thing is back. Like

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Speaker 2: our online friends are back, Like we can go have

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Speaker 2: fun together online. And when they go have fun together online,

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Speaker 2: one thing that means is by call options on game Stop,

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Speaker 2: and so the price goes up.

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Speaker 1: Yeah. I think I'm searching too hard here. Yeah, I

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Speaker 1: just haven't.

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Speaker 2: None of it makes sense. Well, but it sort of does, right,

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Speaker 2: I mean, like it is a fun thing to do online,

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Speaker 2: and like part of the fund is like you do

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Speaker 2: trade the stock, and so like the entertainment franchise is back,

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Speaker 2: like we're in season two of Game Stop. And so

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Speaker 2: that does make sense on its own terms, it just

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Speaker 2: doesn't make sense on like financial terms.

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Speaker 1: The thing that I do find fun and that I

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Speaker 1: do find interesting is that when what you're describing this

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Speaker 1: sense of community, we're in it for the loles, when

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Speaker 1: it actually does translate into the fundamentals of the business.

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Speaker 1: And I'm talking about AMC and what AMC did this week.

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Speaker 2: Yeah, this has kind of always been how it's worked,

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Speaker 2: going back to twenty twenty one. Game Stop has always

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Speaker 2: been like, we don't understand what being a meme stop

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Speaker 2: meme stock is, and you know, like they are a

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Speaker 2: meme stock. They're run by a meme stock guy, and

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Speaker 2: like they like the memes, but they don't do anything

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Speaker 2: corporate financy with it. Whereas AMC, at every moment when

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Speaker 2: their price has rallied irrationally, they've been like, we are

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Speaker 2: selling stock, we are raising money. We are going to

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Speaker 2: get through like our tough financial times by selling stock

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Speaker 2: to people at the best possible time. And so AMC

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Speaker 2: actually didn't quite hit the best possible time.

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Speaker 1: They got really lucky, though.

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Speaker 2: So they were selling stock for the last six weeks. Yeah,

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Speaker 2: and so they almost entirely missed this rally. They got

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Speaker 2: some of it, but like they ended their stock sell

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Speaker 2: plan basically on that first day when AMC rallied and

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Speaker 2: sympathy with game Stop and everything else and all the

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Speaker 2: other being stocks. But then they did turn around like

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Speaker 2: the next day and sell a bunch of stock, not

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Speaker 2: in the open market, but they like exchanged a bunch

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Speaker 2: of their debt for stock. Yeah, So basically AMC's always

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Speaker 2: this is always been AMC's strategy. They're like a very indebted,

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Speaker 2: somewhat struggling movie theater chain, and every time their stock rallies,

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Speaker 2: they're like, we're gonna get rid of some of our

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Speaker 2: debt by like exchanging it for this like incredibly over

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Speaker 2: valued stock.

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Speaker 1: Yeah, in terms of why they always seek to capitalize

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Speaker 1: and maybe game Stop doesn't. If you take a look

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Speaker 1: at the debt profiles, a still has four and a

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Speaker 1: half billion dollars in tent on.

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Speaker 2: Answers they need to. But you also think there's like

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Speaker 2: a personality issue. Really Yeah, AMC, like their CEO at

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Speaker 2: and Aaron, it's like I'm going to lean into being

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Speaker 2: the leader of the Apes as they call themselves, and

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Speaker 2: as he calls them, like the retail meme traders who

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Speaker 2: love AMC, like, yeah, all in on King an online personality.

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Speaker 1: It is wild to me that in the Year of

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Speaker 1: Our Lord twenty twenty four, like I get amc ape

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Speaker 1: or some variation of that trending on x for me

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Speaker 1: all the time. And I made the mistake of tweeting

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Speaker 1: that I fell asleep during Doune two. I went to

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Speaker 1: like midnight showing and I shouldn't have and I fell asleep,

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Speaker 1: and I tweeted that, and I thought it was pretty innocent,

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Speaker 1: and my mentions and my inbox were destroyed from people

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Speaker 1: who just love AMC and are in the cult of AMC.

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Speaker 2: They're not like Dune two was a great note and

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Speaker 2: we're offended by you not liking it. There like movie

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Speaker 2: theaters are.

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Speaker 1: Great and we're yeah sleeping exactly, yeah, because it was

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Speaker 1: like exclusive to AMC or or something that I didn't

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Speaker 1: realize before I said it. They weren't upset that I

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Speaker 1: didn't like the content of the movie.

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Speaker 2: It was really typically in the pay of AMC short sellers.

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Speaker 1: That's exactly what they thought. Let me clear the record

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Speaker 1: right now, I am not but anyway gave stop. I

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Speaker 1: thought this was interesting. It has long term debt of

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Speaker 1: seventeen point seven million dollars and it remains limited to

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Speaker 1: a low interest, unsecured term loan associated with the French

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Speaker 1: government's response to COVID nineteen.

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Speaker 2: Yeah, yeah, that's good debt. AMC's that was like, I

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Speaker 2: figure out exactly what it's called, but it's ten slast

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Speaker 2: twelve percent pic toggle secondly and supported. It's all the

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Speaker 2: words that you were like, oh, that's bad debt.

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Speaker 1: Yeah, my heart started racing. That's a lot of words. Yeah,

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Speaker 1: did get a little bit into the fundamentals. I would

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Speaker 1: also add that the movie business is really tough right

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Speaker 1: now to be a movie theater.

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Speaker 2: Chain, even keep Kenny Raff all the.

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Speaker 1: Week, No no, and you think about the lagged effects

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Speaker 1: of the writers and actors strike. There was some forecast

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Speaker 1: out there that there won't be a single summer blockbuster

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Speaker 1: to break a billion dollars, which is pretty terrible. And

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Speaker 1: then you take a look at GameStop and it's trading

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Speaker 1: at more than twelve hundred times it's expected twelve months

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Speaker 1: forward earnings. So a lot of movement on the charts

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Speaker 1: and a lot of silly valuations right now, right.

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Speaker 2: Right, If any of this were being discussed on Keeth

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Speaker 2: gils Twitter accat.

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Speaker 1: Yeah, different, it would be different.

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Speaker 2: The summer Blockbuster, the summer Entertainment is Keith giels Twitter account.

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Speaker 1: I'm just searching. I'm searching too hard for meaning, but

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Speaker 1: I need something to ground me in this life. Are

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Speaker 1: you done talking about this?

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Speaker 2: No, I'm going to talk about this more on the

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Speaker 2: Bloomberg Big Take podcast about memes thoughts.

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Speaker 1: Sounds like a riot. It's something you can listen to

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Speaker 1: it on Apple podcasts, Spotify or wherever you get your podcasts.

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Speaker 2: Wait, are there lots of sirens in.

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Speaker 1: This podcast going on? Should I call my mom? Should

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Speaker 1: we go to section two? I think I would feel

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Speaker 1: a lot better grounded, more in touch with reality if

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Speaker 1: we started talking about the blockchain and tokenized whatever this is.

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Speaker 2: Memeslas are so twenty twenty one. Another back. I feel

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Speaker 2: like I tried to walk away from the blockchain a

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Speaker 2: little bit in recent months, but now like really back.

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Speaker 1: You're really bad? You are you saying that officially? You

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Speaker 1: are really back?

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Speaker 2: Like youth Gil, No, I would say that like I

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Speaker 2: happened to write a lot about crypto this week.

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Speaker 1: Yeah, there's that there is.

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Speaker 2: Not like looking forward to doing it again next week.

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Speaker 1: But you did talk.

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Speaker 2: I was hoping not to.

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Speaker 1: You wrote about it in a very sedate, grown up

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Speaker 1: way because you wrote about blackrock involved crypto.

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Speaker 2: Yes, is that true? I always wonder like if you

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Speaker 2: walk into the black crypto floor like wearing shorts, and.

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Speaker 1: I somehow doubt that.

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Speaker 2: Yeah, it's still pretty blackrocks.

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Speaker 1: I don't think you're seeing any knees there, notions. I

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Speaker 1: think they're all wearing pants. But let's talk about biddle, biddle,

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Speaker 1: take it away.

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Speaker 2: That's spelled like build but wrong like b U, I

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Speaker 2: D like hoddle, like hoddle, right, hoddle, which is crypto

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Speaker 2: for hold and uh crypto for build, but actually it

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Speaker 2: stands or something right, it's an acronym and it is

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Speaker 2: the black.

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Speaker 1: Rock USD Institutional Digital Liquidity Funds.

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Speaker 2: Yeah, biddle, I have I love like crypto does a

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Speaker 2: lot of fun stuff with names, but like traditional finance,

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Speaker 2: you know, I grew up in a derivative structuring desk

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Speaker 2: and that job is forty percent coming up with acronyms

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Speaker 2: for things, and so like I respect that black Rock

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Speaker 2: is like we're gonna just very casually slip this acronym

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Speaker 2: name into it.

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Speaker 1: Yeah, I grew up in New Jersey, so a little

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Speaker 1: bit different.

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Speaker 2: You can come at it from trad file, you can

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Speaker 2: come at it from like crypto, the traditional answers, like

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Speaker 2: this is a money market musual. It's a short term

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Speaker 2: treasury bill liquidity fund. So it's just the money market fund.

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Speaker 2: But you can trade it on the blockchain, right, It's

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Speaker 2: on the Ethereum blockchain, and you can send your units

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Speaker 2: of Biddle from your Ethereum wallet to someone else's and

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Speaker 2: so you can use it on the blockchain for crypto trades.

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Speaker 2: If you're doing a cryptoderivative trade and you need collateral,

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Speaker 2: you can post Biddle as collateral, or you can use

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Speaker 2: it as money and pay people with Biddle. I guess

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Speaker 2: if you come in fro another way from the crypto,

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Speaker 2: it's a stable coin, right, Yeah, it's like a thing

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Speaker 2: that is worth a dollar, that is, you know, stably

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Speaker 2: worth a dollar, that is underpinned by like short term

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Speaker 2: money good US dollar debt obligations, and that was on

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Speaker 2: the blockchain. So it's a stable coin that is in

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Speaker 2: competition with the circle ustc coin or tether, but unlike those,

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Speaker 2: it pays interest like natively.

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Speaker 1: In a world where fed funds is like five percent,

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Speaker 1: that's pretty attractive.

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Speaker 2: Right. Crypto is in many ways a low interest rate phenomenon, right,

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Speaker 2: because it's like, oh, all these projects that have no

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Speaker 2: cash flows but like weird, grandiose promises, that's a better

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Speaker 2: pitch in a world of low discount It's but like

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Speaker 2: stable coins in particular are a low interest rate phenomenon

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Speaker 2: because when teather is like, we'll take your money and

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Speaker 2: do something weird with it, but we'll give you back

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Speaker 2: the dollar whenever you ask for it, that's a better trade.

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Speaker 2: If like you can't get five percent interest on your

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Speaker 2: dollar elsewhere, but now you get five percent on your

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Speaker 2: dollar elsewhere. Tether is not a particularly attractive pure investment opportunity.

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Speaker 2: Now there are ways to use teather in crypto to

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Speaker 2: make money, but the proposition at tether is like you

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Speaker 2: give them your dollar and they invest it and probably

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Speaker 2: charger is or something.

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Speaker 1: And that's what they would say.

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Speaker 2: That's what they say, But and then they are in,

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Speaker 2: you know, five percent interest and they keep it and

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Speaker 2: they don't give it to you, whereas like biddle is

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Speaker 2: like kind of the same thing, but we will give

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Speaker 2: you the interest.

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Speaker 1: So thinking about it in the framing of who is

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Speaker 1: this for and it's for people in crypto helped me

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Speaker 1: understand this a lot more because when you're talking about

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Speaker 1: it as a money market fund that's on the blockchain

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Speaker 1: in tokenized my first reaction is that is a long

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00:19:01,960 --> 00:19:04,439
Speaker 1: walk for a short drink of water. But then you

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Speaker 1: think about it from the perspective of this is for

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Speaker 1: crypto people. It's not necessarily like a gateway to bring

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Speaker 1: institutional suppliers into cryptos. For people who are already in crypto,

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Speaker 1: who actually want to earn interest on basically their cash management,

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Speaker 1: it makes a lot more sense.

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Speaker 2: I think that the fact that Blackrock has a cryptodivision

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Speaker 2: is a bet on some notions of crypto will become

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Speaker 2: more accepted in broader institutional finance, right Yeah, And so

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Speaker 2: one thing that means is that if traditional institutions are

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Speaker 2: going to get more into crypto, stable coins are kind

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Speaker 2: of like an important part of crypto trading, of collateralizing trades,

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Speaker 2: of payment for trades, and you know, at some level

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Speaker 2: institutions are going to say I'm not going to keep

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Speaker 2: my money in a stable coin that is one possibly

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Speaker 2: issued by someone who's in more regulatory hot water than Blackrock,

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Speaker 2: and two that doesn't pay interest, right, and so Blackroy's like, well,

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Speaker 2: we have this alternative product where you can get paid

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Speaker 2: interest and you can have your money with Blackrock, and

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Speaker 2: like not just Blackrock, but a Blackrock money market fund,

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Speaker 2: which is like a thing that people understand, right, Like

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Speaker 2: it's easy to understand what a money market fund is

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Speaker 2: because it's like exists and it's like well known technology.

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Speaker 2: And so if you're a sort of long term bets,

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Speaker 2: like more traditional institutions are going to get into crypto

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Speaker 2: than like having this traditionally appealing product helps with your

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Speaker 2: offering and crypto. But yeah, I also think, right, it's

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Speaker 2: like you're a crypto trader and like you need to

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Speaker 2: hold stable coins and like we'll give you interest, right.

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Speaker 1: I mean, maybe that is BlackRock's long term vision. I'm

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Speaker 1: thinking about the position of the securitized CEO. Blackrock of

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Speaker 1: course partnered with Securitize for this thing. His name is

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Speaker 1: Carlos Domingo, and his perspective on who this is for

437
00:20:40,760 --> 00:20:44,480
Speaker 1: is that this particular product, so specifically this one, it's

438
00:20:44,520 --> 00:20:47,399
Speaker 1: geared towards crypto institutions that want to have a cash

439
00:20:47,480 --> 00:20:52,880
Speaker 1: management product for treasury management on the blockchain. So it's

440
00:20:52,960 --> 00:20:54,480
Speaker 1: more for the cryptation.

441
00:20:54,600 --> 00:20:57,439
Speaker 2: Yeah. Right, If you're a traditional institution, you're just not

442
00:20:58,000 --> 00:20:59,320
Speaker 2: need to be on a blockchain r exactly.

443
00:20:59,400 --> 00:21:01,680
Speaker 1: You would just buy a money market fund.

444
00:21:01,800 --> 00:21:04,760
Speaker 2: I will say, though, the Financial Times article about this

445
00:21:05,080 --> 00:21:07,120
Speaker 2: mentions two plus one settlement.

446
00:21:07,240 --> 00:21:08,520
Speaker 1: Yeah, this is where it lost me.

447
00:21:08,680 --> 00:21:11,399
Speaker 2: It loses me as well. Yeah, but I'm going to

448
00:21:11,440 --> 00:21:13,800
Speaker 2: put it out there. This is more of a twenty

449
00:21:13,880 --> 00:21:17,760
Speaker 2: seventeen thing. But like people used to think that having

450
00:21:17,760 --> 00:21:21,760
Speaker 2: a blockchain would somehow speed up trading and settlement in

451
00:21:21,840 --> 00:21:25,680
Speaker 2: financial markets. That like, right now, things exist on computers

452
00:21:26,119 --> 00:21:28,760
Speaker 2: and in databases that are too slow, and if you

453
00:21:28,760 --> 00:21:30,600
Speaker 2: put them on the blockchain, and they'll be faster and

454
00:21:30,640 --> 00:21:33,720
Speaker 2: you can settle trades instantly rather than having to wait

455
00:21:33,760 --> 00:21:35,760
Speaker 2: for P plus one or two post two settlement. And

456
00:21:35,840 --> 00:21:39,199
Speaker 2: so the idea here, supposedly this is not decided to

457
00:21:39,200 --> 00:21:41,000
Speaker 2: black rock or securitize. This is just an idea that

458
00:21:41,119 --> 00:21:45,159
Speaker 2: is floating out there, is that tokenizing things like you know,

459
00:21:45,200 --> 00:21:49,160
Speaker 2: money cash management will allow for like faster settlement of transactions,

460
00:21:49,240 --> 00:21:52,639
Speaker 2: and ultimately the traditional finance system will move to a

461
00:21:52,680 --> 00:21:56,080
Speaker 2: blockchain based system and you'll need this for that to work. Now,

462
00:21:57,280 --> 00:21:59,600
Speaker 2: in twenty seventeen, people really did go around saying the

463
00:21:59,600 --> 00:22:02,040
Speaker 2: traditional finance system will move to a blockchain bysed system

464
00:22:02,160 --> 00:22:04,439
Speaker 2: in twenty twenty four. That's like a little embarrassing to say.

465
00:22:04,280 --> 00:22:06,480
Speaker 1: Because the Erry Think is still into it.

466
00:22:06,640 --> 00:22:08,879
Speaker 2: Well, then that's there, you go, Larry I Think is

467
00:22:08,920 --> 00:22:10,520
Speaker 2: the CEO of Blackrock.

468
00:22:10,200 --> 00:22:13,640
Speaker 1: Case you know, still in twenty twenty four expressing support.

469
00:22:13,880 --> 00:22:16,280
Speaker 2: For a long time, there's been a competitive tension between

470
00:22:16,400 --> 00:22:18,400
Speaker 2: money market funds and checking accounts.

471
00:22:18,640 --> 00:22:20,679
Speaker 1: Yeah, bank accounts, right, yes.

472
00:22:20,440 --> 00:22:23,560
Speaker 2: Because money market funds have advertised themselves as like, we

473
00:22:23,640 --> 00:22:26,320
Speaker 2: are a place that pays high interest rates and you

474
00:22:26,359 --> 00:22:27,920
Speaker 2: can use it as cash, you can use it as

475
00:22:27,920 --> 00:22:29,879
Speaker 2: for checking and you know, money market funds are interested

476
00:22:29,960 --> 00:22:33,080
Speaker 2: in being a cash substitute for companies and individuals and institutions.

477
00:22:33,440 --> 00:22:35,960
Speaker 2: And if you think the future of payments, for the

478
00:22:36,000 --> 00:22:39,720
Speaker 2: future of security settlement is on the blockchain, who controls

479
00:22:39,840 --> 00:22:43,000
Speaker 2: cash on the blockchain, Well, the answer is like tether, right,

480
00:22:43,080 --> 00:22:45,320
Speaker 2: the answer is like the big stable coin issures. But

481
00:22:45,359 --> 00:22:48,199
Speaker 2: like arguably, if Blackrock can build a better product for

482
00:22:48,320 --> 00:22:50,760
Speaker 2: offering cash on the blockchain, then not only does that

483
00:22:50,800 --> 00:22:52,840
Speaker 2: mean that they're you know, they have a good crypto product,

484
00:22:52,880 --> 00:22:54,840
Speaker 2: or like they're offering a good product to people who

485
00:22:54,880 --> 00:22:56,360
Speaker 2: are currently in crypto. But it's like, if you think

486
00:22:56,359 --> 00:22:59,440
Speaker 2: the future involves the blockchain, then this product can insert

487
00:22:59,480 --> 00:23:01,280
Speaker 2: you into the heart of the payments infrastructure.

488
00:23:01,440 --> 00:23:02,960
Speaker 1: So and that's that's I.

489
00:23:02,920 --> 00:23:04,520
Speaker 2: Think that's all far fetched, but I think it's an

490
00:23:04,560 --> 00:23:05,240
Speaker 2: interesting bet.

491
00:23:05,320 --> 00:23:07,639
Speaker 1: Well. I mean, I feel like that's the future that

492
00:23:07,800 --> 00:23:09,760
Speaker 1: the SEC would certainly that it's Blackrock.

493
00:23:09,800 --> 00:23:11,800
Speaker 2: Oh yeah, absolutely. I don't think the SEC is going

494
00:23:11,840 --> 00:23:16,919
Speaker 2: around hoping for a chain basedto future of payments, but like,

495
00:23:17,160 --> 00:23:19,240
Speaker 2: if they're going to have a crypto based future of payments,

496
00:23:19,600 --> 00:23:21,679
Speaker 2: I think they would prefer that it be Blackrock then

497
00:23:21,760 --> 00:23:22,560
Speaker 2: tether right.

498
00:23:22,760 --> 00:23:43,159
Speaker 1: Four dimensional chess by Blackrock. Are you ready?

499
00:23:44,440 --> 00:23:44,920
Speaker 2: I'm ready.

500
00:23:45,320 --> 00:23:48,399
Speaker 1: Time to bring it home. It's our third act and

501
00:23:48,440 --> 00:23:51,879
Speaker 1: we're going to talk about events contracts. Oh yeah yeah.

502
00:23:51,920 --> 00:23:52,440
Speaker 2: Elections.

503
00:23:52,560 --> 00:23:57,600
Speaker 1: Let the people trade, let them trade events contracts. You

504
00:23:57,640 --> 00:24:00,960
Speaker 1: have places like Kelsey you have predicted the pretty popular.

505
00:24:01,200 --> 00:24:04,359
Speaker 2: They're very popular despite being like people want to know

506
00:24:04,359 --> 00:24:06,679
Speaker 2: who's going to win the election, right, and like the

507
00:24:06,760 --> 00:24:12,160
Speaker 2: sort of standard model of looking at polls feels unreliable

508
00:24:12,240 --> 00:24:15,800
Speaker 2: and someone out dated, and the prediction market feels like

509
00:24:15,840 --> 00:24:17,760
Speaker 2: it should tell you the answer. It should be like, oh,

510
00:24:17,880 --> 00:24:25,640
Speaker 2: the smart money thinks that the odds of you know, Trump.

511
00:24:25,320 --> 00:24:28,840
Speaker 1: Winning, you can say it.

512
00:24:28,680 --> 00:24:31,240
Speaker 2: Or whatever, fifty five percent or whatever, and so therefore

513
00:24:31,320 --> 00:24:33,720
Speaker 2: that's like the correct dodds. Right, there's like the Nate

514
00:24:33,720 --> 00:24:36,480
Speaker 2: Silver model of translating polling results into probabilities. But there's

515
00:24:36,480 --> 00:24:39,120
Speaker 2: like the simple model of like markets providing the probabilities

516
00:24:39,119 --> 00:24:41,520
Speaker 2: and like people like that. But like those markets are

517
00:24:41,520 --> 00:24:44,360
Speaker 2: thin in part because they're illegal. Right. The US Commodity

518
00:24:44,359 --> 00:24:47,280
Speaker 2: Future Trading Commission has just never really been a fan

519
00:24:47,440 --> 00:24:50,119
Speaker 2: of election prediction markets. You know. The way it works

520
00:24:50,160 --> 00:24:53,119
Speaker 2: is you to list the prediction event contract, you go

521
00:24:53,160 --> 00:24:55,680
Speaker 2: to the CFTC and ask for permission, and if it's

522
00:24:55,680 --> 00:24:57,600
Speaker 2: an election contract, they just say no. And so CALSHI

523
00:24:57,640 --> 00:24:59,679
Speaker 2: has been told now and other exchanges like that have

524
00:24:59,720 --> 00:25:03,840
Speaker 2: been told no. And last week the CFTZ proposed a

525
00:25:03,920 --> 00:25:06,280
Speaker 2: rule I would just say it's always no, right, Like,

526
00:25:06,320 --> 00:25:10,960
Speaker 2: instead of asking us, we'll just categorically exclude certain kinds

527
00:25:11,000 --> 00:25:14,000
Speaker 2: of event contracts. Yeah, and the kinds are for the

528
00:25:14,040 --> 00:25:20,240
Speaker 2: most part, sports, the oscars and elections, those all count

529
00:25:20,200 --> 00:25:23,800
Speaker 2: as gambling and so they're not allowed to be listed

530
00:25:23,880 --> 00:25:25,760
Speaker 2: on US commodities exchanges.

531
00:25:25,840 --> 00:25:29,000
Speaker 1: Yeah. CFDC commissioners voted three to two to release the

532
00:25:29,000 --> 00:25:34,439
Speaker 1: proposed regulation for public review agencies. Three Democratic commissioners voted

533
00:25:34,480 --> 00:25:38,399
Speaker 1: in favor, you had two Republicans dissenting. I don't know

534
00:25:38,480 --> 00:25:42,679
Speaker 1: so I, as a journalist like prediction markets just because

535
00:25:42,720 --> 00:25:44,760
Speaker 1: it's nice to see what people are thinking.

536
00:25:44,840 --> 00:25:47,359
Speaker 2: As a consumer, I really want there to be a

537
00:25:47,400 --> 00:25:50,280
Speaker 2: deep liquid prediction market that could tell me what election

538
00:25:50,320 --> 00:25:50,600
Speaker 2: ods are.

539
00:25:50,680 --> 00:25:52,159
Speaker 1: Well, we were on the way there because did you

540
00:25:52,200 --> 00:25:55,159
Speaker 1: see the news from April that Susquehanna is starting a

541
00:25:55,200 --> 00:25:59,720
Speaker 1: trading desk focused on events contract in partnership with Calshi,

542
00:26:00,119 --> 00:26:03,320
Speaker 1: plan to act as a market maker for transactions with CALSHI,

543
00:26:03,720 --> 00:26:07,479
Speaker 1: which is obviously trying to expand. Obviously this would they

544
00:26:07,520 --> 00:26:11,000
Speaker 1: weren't able to do elections in gaming. I think the

545
00:26:11,200 --> 00:26:14,520
Speaker 1: reasons for why the CFTC doesn't want to do this

546
00:26:15,240 --> 00:26:17,760
Speaker 1: are interesting. Tell me what, I forget his name, but

547
00:26:17,840 --> 00:26:18,800
Speaker 1: the election cop guy.

548
00:26:19,000 --> 00:26:21,680
Speaker 2: The election cop guy. Yeah, that's Ross and Bedham is

549
00:26:21,680 --> 00:26:25,760
Speaker 2: the chair of the CFTC. Gaylor really interesting statement when

550
00:26:25,760 --> 00:26:28,400
Speaker 2: proposing these rules, saying basically he doesn't want the CFTC

551
00:26:28,520 --> 00:26:30,560
Speaker 2: to be election cops. So like the way it works

552
00:26:30,600 --> 00:26:35,760
Speaker 2: is that the CFTC mostly regulates the commodity's futures markets,

553
00:26:36,240 --> 00:26:39,280
Speaker 2: and so if you like spoof and putting in orders

554
00:26:39,280 --> 00:26:41,240
Speaker 2: for whak futures, then you get in trouble with the CFTC.

555
00:26:41,600 --> 00:26:44,720
Speaker 2: But also they regulate the underlying commodities to make sure

556
00:26:44,760 --> 00:26:46,720
Speaker 2: that futures markets are fair. So if you go burn

557
00:26:46,760 --> 00:26:49,040
Speaker 2: a cornfield, you'll get in trouble with the CFTC probably

558
00:26:49,040 --> 00:26:52,520
Speaker 2: other people too, because you've manipulated the market for corn features.

559
00:26:53,000 --> 00:26:56,320
Speaker 2: The theory here is that if they're election futures, the

560
00:26:56,320 --> 00:27:00,280
Speaker 2: CFTC will regulate them, and if you then throw away

561
00:27:00,280 --> 00:27:03,880
Speaker 2: a bunch of ballots or whatever, then the CFTC will

562
00:27:03,880 --> 00:27:06,040
Speaker 2: have to come in and decide whether you've committed an

563
00:27:06,080 --> 00:27:09,600
Speaker 2: election fraud that affects a CFTC regulated contract. And the

564
00:27:09,640 --> 00:27:11,879
Speaker 2: CFTC is like, we don't want that responsibility.

565
00:27:11,920 --> 00:27:14,080
Speaker 1: I mean, maybe I'm being naive, but it just seems

566
00:27:14,400 --> 00:27:16,919
Speaker 1: unlikely that would ever be their responsibility. I get that

567
00:27:16,920 --> 00:27:20,080
Speaker 1: they have to regulate the underlying market, but even still,

568
00:27:20,240 --> 00:27:20,800
Speaker 1: I hear you.

569
00:27:21,080 --> 00:27:23,000
Speaker 2: But like, one thing that I've been writing about for

570
00:27:23,080 --> 00:27:26,840
Speaker 2: a long time is that the sec the securities regulator

571
00:27:27,800 --> 00:27:31,800
Speaker 2: has a surprising amount of responsibility for regulating all sorts

572
00:27:31,840 --> 00:27:34,760
Speaker 2: of stuff that doesn't sound like securities law because of

573
00:27:34,800 --> 00:27:37,080
Speaker 2: how it affects the securities of public companies. And so

574
00:27:37,119 --> 00:27:41,639
Speaker 2: the SEC is very interested in greenhouse gas emissions, regulating

575
00:27:41,680 --> 00:27:45,280
Speaker 2: how companies account for and disclose and also do like

576
00:27:45,320 --> 00:27:48,040
Speaker 2: their carbon emissions, because this SEC says, well, yeah, that's

577
00:27:48,119 --> 00:27:50,600
Speaker 2: relevant to investors, and so like, all this environmental stuff

578
00:27:50,640 --> 00:27:53,040
Speaker 2: gets wrapped up into stock prices and so we regulate it.

579
00:27:53,240 --> 00:27:56,560
Speaker 2: The SEC has rules about conflict diamonds. They did an

580
00:27:56,640 --> 00:27:59,359
Speaker 2: enforcement action against SeaWorld for its mistreatment of killer whales.

581
00:27:59,359 --> 00:28:02,800
Speaker 2: Like all this stuff where if it affects securities markets,

582
00:28:02,840 --> 00:28:04,439
Speaker 2: the SEC is like, oh, well we'll ti put her

583
00:28:04,440 --> 00:28:07,199
Speaker 2: hand in that. Well'll be interested in that. And I

584
00:28:07,240 --> 00:28:09,080
Speaker 2: write about this a lot. I say everything is security

585
00:28:09,119 --> 00:28:11,200
Speaker 2: is frud right, It's some combination of the SEC is

586
00:28:11,240 --> 00:28:13,480
Speaker 2: interested in expanding its power as much as possible, and

587
00:28:13,480 --> 00:28:16,320
Speaker 2: so they're like, ooh, we'll be an environmental regulator. But

588
00:28:16,400 --> 00:28:21,360
Speaker 2: it's also like us politics are not necessarily good at

589
00:28:21,359 --> 00:28:24,399
Speaker 2: writing substance of regulations, and so like people are like,

590
00:28:24,480 --> 00:28:26,760
Speaker 2: I want to fix this problem, and the way I'm

591
00:28:26,800 --> 00:28:29,879
Speaker 2: going to fix it is by suing for securities fraud.

592
00:28:30,000 --> 00:28:32,639
Speaker 2: It's a thing that courts and the sec are just

593
00:28:32,640 --> 00:28:34,800
Speaker 2: more responsive to than to a lot of other complaints.

594
00:28:34,920 --> 00:28:37,120
Speaker 2: You get a sympathetic hearing in court, and so like

595
00:28:37,359 --> 00:28:40,160
Speaker 2: all of this stuff in the world gets smuggled into

596
00:28:40,160 --> 00:28:42,920
Speaker 2: securities law. And the CFTC is looking at that and saying,

597
00:28:43,000 --> 00:28:45,800
Speaker 2: the election gets smuggled into commodities future's law. That's going

598
00:28:45,840 --> 00:28:48,000
Speaker 2: to be really controversial. We're going to get in trouble

599
00:28:48,240 --> 00:28:50,440
Speaker 2: for trying to regulate that. So I think they want

600
00:28:50,440 --> 00:28:51,960
Speaker 2: to stay away from it. And I agree with you

601
00:28:52,040 --> 00:28:54,440
Speaker 2: that it sounds far fetched to everyone except me because

602
00:28:54,440 --> 00:28:56,120
Speaker 2: it's the thing I've been thinking about for a decade.

603
00:28:56,160 --> 00:28:57,840
Speaker 2: So and I'm like, oh, yeah, I see where you're

604
00:28:57,840 --> 00:28:58,720
Speaker 2: coming from, CFTC.

605
00:28:59,040 --> 00:29:02,400
Speaker 1: So I mean decade, I'll be there as well. By

606
00:29:02,440 --> 00:29:05,080
Speaker 1: the same token this podcast for that one. Yeah, so

607
00:29:05,480 --> 00:29:11,840
Speaker 1: we'll revisit this before the four yeah, five hundred maybe

608
00:29:12,160 --> 00:29:14,920
Speaker 1: by the same token. You think about some of the

609
00:29:14,960 --> 00:29:19,760
Speaker 1: proponents of course betting on or sorry, predicting, prediction.

610
00:29:19,480 --> 00:29:20,680
Speaker 2: Marketing, betting on.

611
00:29:21,600 --> 00:29:24,160
Speaker 1: You think about some of the proponents for these political

612
00:29:24,160 --> 00:29:26,880
Speaker 1: events contracts. They argue that they could be a valuable

613
00:29:26,920 --> 00:29:29,680
Speaker 1: source of data for forecasting election outcomes. This is from

614
00:29:29,720 --> 00:29:32,360
Speaker 1: the Wall Street Journal. Kind of agree with that as

615
00:29:32,360 --> 00:29:34,960
Speaker 1: a journalist, it's true, but then that they would also

616
00:29:35,040 --> 00:29:40,239
Speaker 1: allow companies to hedge risk associated with either Democrats or

617
00:29:40,280 --> 00:29:42,880
Speaker 1: Republicans coming to power. I don't super know what that.

618
00:29:42,960 --> 00:29:44,560
Speaker 2: Yeah, I don't really believe that. I think that people

619
00:29:44,600 --> 00:29:48,200
Speaker 2: are pretty bad about predicting the directional impact of elections

620
00:29:48,360 --> 00:29:52,280
Speaker 2: on like financial quantities. So if you're like, oh, the

621
00:29:52,360 --> 00:29:54,680
Speaker 2: price of oil will go up if a Democrat is elected,

622
00:29:54,760 --> 00:29:56,600
Speaker 2: so I have to head that you just buy oil futures,

623
00:29:56,680 --> 00:29:59,120
Speaker 2: Like you shouldn't like if you think, oh, it'll be

624
00:29:59,280 --> 00:30:01,560
Speaker 2: bad for my business since some unspecified way if a

625
00:30:01,600 --> 00:30:04,120
Speaker 2: Democrat is elected, that's probably wrong, and like you should

626
00:30:04,160 --> 00:30:06,040
Speaker 2: probably think about how it will be bad for your

627
00:30:06,080 --> 00:30:08,560
Speaker 2: business and hedging like those financial markets, rather than hedge

628
00:30:08,560 --> 00:30:11,320
Speaker 2: by like betting on Democrats winning an election.

629
00:30:11,200 --> 00:30:13,840
Speaker 1: On Calshie on Calshie. Yeah, that's pretty funny.

630
00:30:13,920 --> 00:30:17,560
Speaker 2: To the extent you're hedging, you are undermining the predictive impact, right, Yeah,

631
00:30:17,560 --> 00:30:19,880
Speaker 2: it's like you're not like betting, You're you're like, I

632
00:30:19,920 --> 00:30:21,800
Speaker 2: don't know who's going to win, but if they win,

633
00:30:21,920 --> 00:30:22,880
Speaker 2: that's bad for me someone.

634
00:30:22,920 --> 00:30:25,640
Speaker 1: That's something I think about a lot with these prediction markets.

635
00:30:25,720 --> 00:30:29,000
Speaker 1: I don't know much about betting. I'm not a better

636
00:30:29,120 --> 00:30:31,760
Speaker 1: But the way I understand it, if like they're super

637
00:30:31,960 --> 00:30:36,160
Speaker 1: long odds on something and I wanted to bet on

638
00:30:36,200 --> 00:30:39,720
Speaker 1: something outlandish but that has a high potential payout, I

639
00:30:39,720 --> 00:30:42,080
Speaker 1: would take that bet. And that's not necessarily what I

640
00:30:42,120 --> 00:30:43,080
Speaker 1: think is going to happen.

641
00:30:43,320 --> 00:30:46,520
Speaker 2: You're implicitly saying the probability that happening is higher than

642
00:30:46,560 --> 00:30:50,240
Speaker 2: the probability reflected in the market. That's true, implicitly, like

643
00:30:50,280 --> 00:30:52,400
Speaker 2: you're not really Probably a lot of people are taking

644
00:30:52,400 --> 00:30:54,160
Speaker 2: one percent bets, not because I think the odds are

645
00:30:54,160 --> 00:30:56,480
Speaker 2: two percent, but because you.

646
00:30:56,440 --> 00:31:00,320
Speaker 1: Know, I just think that. Yeah, I get I did

647
00:31:00,400 --> 00:31:03,720
Speaker 1: like two party elections. Yeah. True, But it's not like

648
00:31:03,760 --> 00:31:06,520
Speaker 1: a survey where I'm one hundred percent always going to

649
00:31:06,560 --> 00:31:08,840
Speaker 1: say what I think is going to happen. I'm betting,

650
00:31:09,120 --> 00:31:10,680
Speaker 1: and there's some strategy to that.

651
00:31:11,000 --> 00:31:15,480
Speaker 2: Yeah. But the counterpoint is, like surveys doesn't affect you, Right,

652
00:31:15,560 --> 00:31:17,520
Speaker 2: there's real money online betting. You know, if you had

653
00:31:17,560 --> 00:31:21,800
Speaker 2: a big liquid prediction market for elections, that would incentivize big,

654
00:31:22,760 --> 00:31:26,040
Speaker 2: smart financial institutions to invest time and resources into figuring

655
00:31:26,040 --> 00:31:27,600
Speaker 2: out who's going to win, so they could bet on

656
00:31:27,640 --> 00:31:29,720
Speaker 2: the winning side, and then they would probably be.

657
00:31:29,640 --> 00:31:31,720
Speaker 1: Accurate and they could hedge themselves.

658
00:31:31,880 --> 00:31:34,280
Speaker 2: They could hedge themselves. Sure, I don't think it's something.

659
00:31:34,560 --> 00:31:37,080
Speaker 1: I'm curious to see how this actually turns out. So

660
00:31:37,120 --> 00:31:39,640
Speaker 1: they're opening it to public review. I mean, there's a

661
00:31:39,720 --> 00:31:42,480
Speaker 1: chance that nothing changes before the election itself.

662
00:31:42,360 --> 00:31:44,120
Speaker 2: Big chance, right, and then like after that, you know,

663
00:31:44,280 --> 00:31:48,160
Speaker 2: like a'll butts are up. I will say that one

664
00:31:48,200 --> 00:31:51,000
Speaker 2: of the Republicans City Center was like, this is a

665
00:31:51,040 --> 00:31:53,520
Speaker 2: weird thing here where there's like two ways to bet

666
00:31:53,560 --> 00:31:56,520
Speaker 2: on sports. There's like event contracts regulated by the CFTC,

667
00:31:56,720 --> 00:31:59,160
Speaker 2: and then there's like regular sports coupling, which is regulated

668
00:31:59,160 --> 00:32:01,280
Speaker 2: by the states. And it used to be that the

669
00:32:01,320 --> 00:32:03,560
Speaker 2: way it worked is that gambling was kind of illegal

670
00:32:03,560 --> 00:32:05,880
Speaker 2: almost everywhere, and so like the CFTC was like, you

671
00:32:05,920 --> 00:32:09,400
Speaker 2: can't have betting on sports on CFTC exchanges, and I

672
00:32:09,440 --> 00:32:11,040
Speaker 2: was like, oh, of course. And all the states were

673
00:32:11,040 --> 00:32:12,280
Speaker 2: like you kindt of betting on sports here, and I

674
00:32:12,440 --> 00:32:14,840
Speaker 2: was like, okay, fine, we'll do it illegally. Most states

675
00:32:14,880 --> 00:32:17,640
Speaker 2: now have like legalized sports campling, and so there's a

676
00:32:17,680 --> 00:32:20,400
Speaker 2: lot of sports campling. O. It's very easy to gamble

677
00:32:20,440 --> 00:32:22,560
Speaker 2: on sports. It's very easy to gamble on sports on

678
00:32:22,600 --> 00:32:25,360
Speaker 2: your computer. Right. And then also there are these people

679
00:32:25,360 --> 00:32:27,240
Speaker 2: who are like, we're going to run a national futures exchange,

680
00:32:27,280 --> 00:32:29,160
Speaker 2: We're have events contracts, and the CFTC is like, no,

681
00:32:29,240 --> 00:32:31,000
Speaker 2: you can't do that. There's like a really kind of

682
00:32:31,000 --> 00:32:34,440
Speaker 2: like fuzzy distinction between like what is a futures exchange

683
00:32:34,720 --> 00:32:37,560
Speaker 2: that allows events contracts and is ready to by the

684
00:32:37,560 --> 00:32:40,440
Speaker 2: CFTC and what is a sports book that is on

685
00:32:40,520 --> 00:32:43,160
Speaker 2: the internet and that allows sports betting. Right, one of

686
00:32:43,160 --> 00:32:46,280
Speaker 2: the commissioners who dissented was like, we are stepping on

687
00:32:46,280 --> 00:32:48,959
Speaker 2: state jurisdiction by saying, you know, you can't have sports gambling,

688
00:32:49,200 --> 00:32:51,440
Speaker 2: and I actually don't know how it works, Like I'm

689
00:32:51,720 --> 00:32:53,719
Speaker 2: very puzzled if any sports book is going to get

690
00:32:53,720 --> 00:32:56,520
Speaker 2: in trouble with the CFTC saying actually, you're running a

691
00:32:56,560 --> 00:32:59,040
Speaker 2: futures exchange with events contract and you're not allowed to

692
00:32:59,040 --> 00:32:59,280
Speaker 2: do that.

693
00:32:59,320 --> 00:33:01,200
Speaker 1: We've talked about for us who've talked about the election,

694
00:33:01,240 --> 00:33:03,480
Speaker 1: Are we going to talk about the oscars or oh yeah.

695
00:33:03,280 --> 00:33:06,240
Speaker 2: The oscars. The CFTC like doesn't want to promote gambling,

696
00:33:06,280 --> 00:33:08,520
Speaker 2: and so they're like, you can't bet on the oscars.

697
00:33:09,240 --> 00:33:11,280
Speaker 2: But Ray, why the heck not? It seems fun.

698
00:33:11,520 --> 00:33:12,360
Speaker 1: It does seem fun.

699
00:33:12,440 --> 00:33:15,000
Speaker 2: And I wrote this, but like, the CFTC doesn't want

700
00:33:15,000 --> 00:33:17,040
Speaker 2: to be an election cop, and I think that is

701
00:33:17,240 --> 00:33:19,200
Speaker 2: wise of them. But they aren't have fun to be

702
00:33:19,240 --> 00:33:22,080
Speaker 2: like the oscars cop. Right, they have the CFTC auditor

703
00:33:22,080 --> 00:33:22,920
Speaker 2: in the room.

704
00:33:22,640 --> 00:33:25,600
Speaker 1: So I'm sure it's rigged already, so they'd find that

705
00:33:25,680 --> 00:33:29,040
Speaker 1: they'd get to get the CFTC in there to finally.

706
00:33:28,720 --> 00:33:31,440
Speaker 2: Get it right. Wouldn't if you were a CFTC enforcement layer,

707
00:33:31,440 --> 00:33:33,880
Speaker 2: wouldn't you want to be the one cracking whether the

708
00:33:33,880 --> 00:33:38,640
Speaker 2: oscar I would be salivating. There's a case this week

709
00:33:38,640 --> 00:33:40,640
Speaker 2: about someone running a cattle ponzi scheme.

710
00:33:40,760 --> 00:33:43,320
Speaker 1: No, that's also good of it, But how on earth

711
00:33:43,360 --> 00:33:48,200
Speaker 1: does that? Do the cattles not exist? I figured it out.

712
00:33:50,680 --> 00:33:52,160
Speaker 2: And that was the Money Stuff Podcast.

713
00:33:52,400 --> 00:33:54,760
Speaker 1: I'm Matt Living and I'm Katie Krayfield.

714
00:33:55,280 --> 00:33:57,160
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715
00:33:57,200 --> 00:33:58,880
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716
00:33:58,480 --> 00:34:00,680
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717
00:34:00,760 --> 00:34:03,080
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718
00:34:03,360 --> 00:34:04,920
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719
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720
00:34:07,520 --> 00:34:09,279
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721
00:34:09,520 --> 00:34:11,880
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722
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723
00:34:13,960 --> 00:34:15,279
Speaker 1: people find the show for.

724
00:34:15,360 --> 00:34:18,400
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725
00:34:18,440 --> 00:34:19,239
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726
00:34:19,280 --> 00:34:21,240
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727
00:34:21,480 --> 00:34:24,240
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728
00:34:24,040 --> 00:34:26,360
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729
00:34:26,560 --> 00:34:28,960
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730
00:34:29,000 --> 00:34:30,560
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