1 00:00:02,720 --> 00:00:07,200 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. 2 00:00:08,400 --> 00:00:10,719 Speaker 2: So it's a beautiful day in New York City. I'm 3 00:00:10,800 --> 00:00:14,560 Speaker 2: having real lizard thoughts, you know what I mean, Like, 4 00:00:14,600 --> 00:00:18,239 Speaker 2: I want to believe what you mean. Okay, let me explain. 5 00:00:18,640 --> 00:00:22,479 Speaker 2: I want to believe I'm more complex than Oh, the 6 00:00:22,560 --> 00:00:25,120 Speaker 2: sun is shining and the air feels good, but I'm 7 00:00:25,160 --> 00:00:28,320 Speaker 2: not because when it's nice outside the weather, I am 8 00:00:28,360 --> 00:00:31,120 Speaker 2: immediately so much happier. So in that way, I kind 9 00:00:31,120 --> 00:00:32,560 Speaker 2: of feel like a lizard. Just simple. 10 00:00:33,400 --> 00:00:35,519 Speaker 1: Yes, I thought we were gonna tire the fact that 11 00:00:35,560 --> 00:00:38,400 Speaker 1: you have plans to leave this podcast and go home 12 00:00:38,400 --> 00:00:39,000 Speaker 1: and take your. 13 00:00:38,880 --> 00:00:41,120 Speaker 2: Turtles out to the roof to some I have some 14 00:00:41,159 --> 00:00:43,280 Speaker 2: baby turtles in my apartment that I've been taking care of. 15 00:00:44,560 --> 00:00:47,040 Speaker 2: This is what reptile brains. I've been taking care of 16 00:00:47,120 --> 00:00:49,000 Speaker 2: them over the course of the winter, and they're going 17 00:00:49,080 --> 00:00:50,960 Speaker 2: to be going back outside very soon. That's where they 18 00:00:50,960 --> 00:00:53,559 Speaker 2: primarily live. But anyway, it's nice to take them to 19 00:00:53,600 --> 00:00:56,240 Speaker 2: the roof and feed them their mealworms in the sunshine. 20 00:00:56,280 --> 00:00:57,040 Speaker 2: They tend to like that. 21 00:00:57,240 --> 00:00:59,000 Speaker 1: You and they both signing yourselves. 22 00:00:59,120 --> 00:01:02,000 Speaker 2: Yeah, pretty much warming our scales. 23 00:01:03,960 --> 00:01:06,800 Speaker 1: Hello and welcome to The Money Stuff Podcast, your weekly 24 00:01:06,840 --> 00:01:11,080 Speaker 1: podcast where we talk about stuff related to money. I'm 25 00:01:11,080 --> 00:01:13,080 Speaker 1: Matt Levian and I write The Money Stuff Colum for 26 00:01:13,120 --> 00:01:13,959 Speaker 1: Bloomberg Opinion. 27 00:01:14,120 --> 00:01:16,640 Speaker 2: And I'm Katie Greifeld, a reporter for Bloomberg News and 28 00:01:16,680 --> 00:01:18,200 Speaker 2: an anchor for Bloomberg Television. 29 00:01:20,120 --> 00:01:22,720 Speaker 1: It's another all tariffs edition of the Money Stuff podcast. 30 00:01:22,760 --> 00:01:24,720 Speaker 2: Yeah, you know, it started as a joke and then 31 00:01:25,400 --> 00:01:28,959 Speaker 2: it got really real. It's hard to talk about anything 32 00:01:29,000 --> 00:01:31,399 Speaker 2: other than what is going on with the US trade policy. 33 00:01:31,720 --> 00:01:34,680 Speaker 1: Yeah, we're gonna try. Yeah, It's like it's not really 34 00:01:34,760 --> 00:01:36,119 Speaker 1: an all tariffs. 35 00:01:35,920 --> 00:01:39,040 Speaker 2: But it's like at least a third tariff's maybe half 36 00:01:39,760 --> 00:01:40,600 Speaker 2: a certain. 37 00:01:40,280 --> 00:01:43,480 Speaker 1: Amount of what is going on in the world. 38 00:01:47,240 --> 00:01:49,440 Speaker 2: I feel like we need to say what day we're 39 00:01:49,480 --> 00:01:52,000 Speaker 2: recording it, since it changes so much. We'll talk about 40 00:01:52,000 --> 00:01:53,920 Speaker 2: whether or not that is the strategy. But we are 41 00:01:53,960 --> 00:01:56,760 Speaker 2: recording this on a Thursday. It's the twenty fourth of April. 42 00:01:57,120 --> 00:02:00,720 Speaker 1: When last I looked, the market was up today. 43 00:02:00,920 --> 00:02:03,639 Speaker 2: Yeah, after being yesterday, Yeah, and the day before. 44 00:02:04,040 --> 00:02:06,960 Speaker 1: It's not literally a first in the last three months, 45 00:02:06,960 --> 00:02:08,000 Speaker 1: but it feels like that. 46 00:02:08,520 --> 00:02:10,720 Speaker 2: Well, it's funny that we're rallying so hard right now 47 00:02:10,760 --> 00:02:13,280 Speaker 2: because you have China on one hand insisting that the 48 00:02:13,440 --> 00:02:18,080 Speaker 2: US and China are not talking, that negotiations aren't currently happening, 49 00:02:18,160 --> 00:02:20,200 Speaker 2: they do not exist. And then you have President Trump 50 00:02:20,320 --> 00:02:23,400 Speaker 2: saying that no, they had a meeting this morning, and 51 00:02:23,440 --> 00:02:27,800 Speaker 2: then a reporter asked him the follow up, what administration 52 00:02:27,840 --> 00:02:30,360 Speaker 2: officials were involved in discussions? Who are you talking to? 53 00:02:30,680 --> 00:02:31,600 Speaker 2: And Trump said, it. 54 00:02:31,720 --> 00:02:34,560 Speaker 1: Doesn't matter who they is. We may reveal it later. 55 00:02:34,680 --> 00:02:38,120 Speaker 2: But they had meetings this morning, and we've been meeting 56 00:02:38,120 --> 00:02:43,360 Speaker 2: with China. So it's unclear what is actually what is 57 00:02:43,400 --> 00:02:46,440 Speaker 2: actually going on, whether or not the US and China 58 00:02:46,480 --> 00:02:49,520 Speaker 2: actually are talking. But it seems like the market just 59 00:02:49,639 --> 00:02:53,760 Speaker 2: really wants the Trump administration to blink and is rallying 60 00:02:54,000 --> 00:02:56,760 Speaker 2: merrily along hoping that they have right. 61 00:02:57,400 --> 00:03:01,400 Speaker 1: It's so odd that, like the explicit statements from Trump 62 00:03:01,480 --> 00:03:05,160 Speaker 1: as candidate and as president were tariffs are great, let's 63 00:03:05,160 --> 00:03:09,040 Speaker 1: have lots of them, and the market in the lead 64 00:03:09,120 --> 00:03:13,000 Speaker 1: up to his inauguration clearly, like very heavily discounted that. Yeah, 65 00:03:13,000 --> 00:03:16,080 Speaker 1: and then the Liberation Day happened in the market crash 66 00:03:16,240 --> 00:03:19,240 Speaker 1: realizing that in fact, he was serious about tariffs, and 67 00:03:19,280 --> 00:03:20,240 Speaker 1: now we're right back to. 68 00:03:20,480 --> 00:03:23,440 Speaker 2: Nah, he can't be serious about tariffs. Yeah, it feels 69 00:03:23,520 --> 00:03:26,520 Speaker 2: very like first Trump administration where this sort of mantra 70 00:03:26,760 --> 00:03:30,160 Speaker 2: was to take Trump seriously but not literally. And it 71 00:03:30,160 --> 00:03:31,320 Speaker 2: feels like we're back there. 72 00:03:31,800 --> 00:03:34,520 Speaker 1: Yes, and like we say, the all tariffs episode. But 73 00:03:34,520 --> 00:03:38,320 Speaker 1: I feel like the other sort of big thing hanging 74 00:03:38,360 --> 00:03:42,240 Speaker 1: over this week anyway, is firing Trump Powell. Yeah, get 75 00:03:42,320 --> 00:03:43,640 Speaker 1: rid of FED independence. 76 00:03:43,840 --> 00:03:44,640 Speaker 2: Yeah that was pretty well. 77 00:03:44,680 --> 00:03:46,880 Speaker 1: It also seems to have been walked back, but who knows. 78 00:03:47,080 --> 00:03:51,960 Speaker 2: Yeah, so Trump, in denying that he had any intention 79 00:03:52,120 --> 00:03:54,480 Speaker 2: to fire trum Powell said that the media ran away 80 00:03:54,480 --> 00:03:56,520 Speaker 2: with it. But you did have Kevin Hassett, who is 81 00:03:56,560 --> 00:04:00,320 Speaker 2: the top White House economist, say last Friday that Trump 82 00:04:00,400 --> 00:04:03,320 Speaker 2: is looking at options here when it comes to removing 83 00:04:03,400 --> 00:04:06,440 Speaker 2: Jerome Pal. So it wasn't entirely just the media. 84 00:04:06,560 --> 00:04:08,120 Speaker 1: Right. Also, he's like been in truth, so I was 85 00:04:08,120 --> 00:04:09,600 Speaker 1: tallying about stupid. 86 00:04:10,360 --> 00:04:12,119 Speaker 2: Yeah, said he can't wait for his termination. 87 00:04:12,320 --> 00:04:15,720 Speaker 1: Yeah right. You combine like the legal team studying Rais 88 00:04:15,800 --> 00:04:18,440 Speaker 1: to fire him and Trump saying how bad he is. 89 00:04:20,839 --> 00:04:24,320 Speaker 2: In both situations, both when it comes to trade and 90 00:04:24,360 --> 00:04:26,680 Speaker 2: the possibility of removing Pal from the FED. It kind 91 00:04:26,720 --> 00:04:29,479 Speaker 2: of feels like Trump is just negotiating with the markets, 92 00:04:29,520 --> 00:04:32,240 Speaker 2: like seeing how far the markets will let him go 93 00:04:32,360 --> 00:04:37,240 Speaker 2: before long dated treasury yields skyrocket higher, which you've seen 94 00:04:37,279 --> 00:04:40,200 Speaker 2: that happen, and then you see the Trump administration back off. 95 00:04:40,240 --> 00:04:42,400 Speaker 2: But someone made the point today that it kind of 96 00:04:42,400 --> 00:04:44,159 Speaker 2: feels like every time we see a little bit of 97 00:04:44,160 --> 00:04:46,840 Speaker 2: green in the equity markets because maybe there's hope that 98 00:04:47,400 --> 00:04:50,760 Speaker 2: we're going to get to a more reasonable place on trade, 99 00:04:50,800 --> 00:04:54,400 Speaker 2: that it seems like the Trump administration has felt more 100 00:04:54,400 --> 00:04:57,039 Speaker 2: emboldened by that, and we just enter this cycle again. 101 00:04:57,120 --> 00:04:59,200 Speaker 2: But it's on the third day of the rally. 102 00:04:59,400 --> 00:05:03,159 Speaker 1: People talking about the phrase the Trump put gets turned around, right, So, 103 00:05:03,240 --> 00:05:05,480 Speaker 1: like you have like the classic like Powell put or 104 00:05:05,560 --> 00:05:08,000 Speaker 1: whatever the Fed chairs at the time. You know, the 105 00:05:08,240 --> 00:05:10,880 Speaker 1: idea that if things get bad, the federal step in 106 00:05:11,000 --> 00:05:13,320 Speaker 1: to rescue the market, and so there's some floor under 107 00:05:13,320 --> 00:05:16,480 Speaker 1: stock prices. My impressions that people think of the Powell 108 00:05:16,560 --> 00:05:19,359 Speaker 1: put as being like kind of close to at the money, 109 00:05:19,440 --> 00:05:23,080 Speaker 1: where like, you know, if you're the Fed, you're interested 110 00:05:23,120 --> 00:05:27,760 Speaker 1: in steady economic growth, and like any sign of wabbling 111 00:05:27,760 --> 00:05:31,839 Speaker 1: in the market is a negative. The Trump put that 112 00:05:31,960 --> 00:05:35,600 Speaker 1: we've maybe seen this week feels like it's quite far 113 00:05:35,600 --> 00:05:37,920 Speaker 1: out of the money. You know, It's like things have 114 00:05:37,960 --> 00:05:40,920 Speaker 1: to go really off the rails to have the trump 115 00:05:40,960 --> 00:05:43,520 Speaker 1: put kick in. And also, like you just said, it's 116 00:05:43,520 --> 00:05:46,440 Speaker 1: like it's not just a floor. It's like yeah, right, 117 00:05:46,560 --> 00:05:48,760 Speaker 1: Like if the market gets too good, it's like, oh, 118 00:05:48,800 --> 00:05:51,800 Speaker 1: we have weird stuff. Right, the market gets too bad, 119 00:05:51,839 --> 00:05:53,400 Speaker 1: you stop the word stuff. It's like a it's like 120 00:05:53,440 --> 00:05:55,200 Speaker 1: a carter. It's like a like a call spread. 121 00:05:55,440 --> 00:06:00,000 Speaker 2: Yeah, that's I don't know. It's a very tactical market. 122 00:06:00,120 --> 00:06:03,040 Speaker 2: It makes for some real tactical trading strategies. 123 00:06:04,279 --> 00:06:05,880 Speaker 1: I had a headline this week that was like, at 124 00:06:05,920 --> 00:06:08,600 Speaker 1: least the market isn't boring, and so we're back. You're like, yeah, 125 00:06:08,640 --> 00:06:11,160 Speaker 1: it's great if you're trading this market. And it's like, yeah, 126 00:06:11,160 --> 00:06:13,200 Speaker 1: I got like a high vacancy trading for like you know, 127 00:06:13,520 --> 00:06:19,200 Speaker 1: like it's so good for some people. Yeah, right, Like 128 00:06:19,240 --> 00:06:23,000 Speaker 1: if you're a degenerate gambler, if you're a market maker, 129 00:06:23,920 --> 00:06:26,120 Speaker 1: probably this is great, right, Like market makers that I 130 00:06:26,120 --> 00:06:28,880 Speaker 1: have on volatility, some of them blow up on volatility, 131 00:06:28,880 --> 00:06:31,599 Speaker 1: but yeah, a lot of them, it's probably great. And 132 00:06:31,600 --> 00:06:34,560 Speaker 1: then if you're like a you know, like a manufacturing 133 00:06:34,640 --> 00:06:36,120 Speaker 1: CEO trying to decide whether to. 134 00:06:36,040 --> 00:06:39,480 Speaker 2: Build a factory or you know, or to hire or 135 00:06:39,520 --> 00:06:42,440 Speaker 2: fire people. Yeah, it's been interesting. And some of the 136 00:06:42,520 --> 00:06:47,160 Speaker 2: earnings reports you've seen companies, you know, you report your 137 00:06:47,200 --> 00:06:49,039 Speaker 2: numbers and you give guidance. You've had a lot of 138 00:06:49,040 --> 00:06:51,960 Speaker 2: firms either downgrade their guidance, pull their guidance all together. 139 00:06:52,000 --> 00:06:54,000 Speaker 2: You've seen a few companies come out with like a 140 00:06:54,120 --> 00:06:57,839 Speaker 2: range of options for what could happen, like different blueprints 141 00:06:57,839 --> 00:07:00,440 Speaker 2: for different scenarios, which I think is kind of one 142 00:07:00,440 --> 00:07:02,479 Speaker 2: of the airlines didn't. I wish I could remember, But 143 00:07:03,000 --> 00:07:05,520 Speaker 2: I mean, what else can you do? It's impossible to 144 00:07:05,680 --> 00:07:10,000 Speaker 2: forecast what six months from now will look like. 145 00:07:10,760 --> 00:07:13,760 Speaker 1: My intuition is that that's just that, right that like 146 00:07:14,040 --> 00:07:18,040 Speaker 1: being able that's a stupid saying. Being able to plan 147 00:07:18,120 --> 00:07:21,560 Speaker 1: six months ahead is useful for business, right, Yeah, Like 148 00:07:21,600 --> 00:07:25,320 Speaker 1: an economy wide basis, you would rather have businesses generally 149 00:07:25,400 --> 00:07:29,800 Speaker 1: be able to plan basic macroeconomic building blocks six months 150 00:07:29,840 --> 00:07:34,120 Speaker 1: ahead than not, right, Yeah, And so one possibility is 151 00:07:34,160 --> 00:07:37,040 Speaker 1: that this is all error, right, Like they're just like 152 00:07:37,200 --> 00:07:42,920 Speaker 1: they're not doing a good job of stewarding the economy, right, 153 00:07:44,400 --> 00:07:48,400 Speaker 1: which seems to me like probably the correct analysis. But 154 00:07:48,480 --> 00:07:51,040 Speaker 1: like people want there to be some sort of plan here, right, 155 00:07:51,320 --> 00:07:53,160 Speaker 1: They want there to be some sort of explanation here 156 00:07:53,160 --> 00:07:55,880 Speaker 1: that is more satisfying than like they keep changing their 157 00:07:55,920 --> 00:07:58,280 Speaker 1: mind or they don't really know what they're doing, or 158 00:07:58,840 --> 00:08:01,200 Speaker 1: the messaging is just treamly ud clear for no reason. 159 00:08:01,400 --> 00:08:01,800 Speaker 2: Yeah. 160 00:08:01,920 --> 00:08:03,160 Speaker 1: I don't know if that is though. 161 00:08:03,600 --> 00:08:05,800 Speaker 2: Yeah, the end game is a question that comes up 162 00:08:05,840 --> 00:08:08,320 Speaker 2: a lot when it comes to, you know, the shifting 163 00:08:09,120 --> 00:08:12,640 Speaker 2: trade winds coming out of the administration. I mean, we 164 00:08:12,720 --> 00:08:15,120 Speaker 2: know that Trump loves tariffs, We know that they want 165 00:08:15,160 --> 00:08:18,119 Speaker 2: to rebalance the global trade landscape. What that actually means 166 00:08:18,440 --> 00:08:21,280 Speaker 2: seems to be sort of shifting goalposts. 167 00:08:21,480 --> 00:08:23,800 Speaker 1: I think I've read a few times, Like one way 168 00:08:23,840 --> 00:08:27,560 Speaker 1: to interpret their statements and actions is that they want 169 00:08:28,240 --> 00:08:31,160 Speaker 1: America to be reindustrialized, to find like they say, but 170 00:08:31,200 --> 00:08:35,440 Speaker 1: also like definancialized, right, Like shifting from having a lot 171 00:08:35,480 --> 00:08:38,760 Speaker 1: of foreigners selling goods to us getting cash and investing 172 00:08:38,760 --> 00:08:41,760 Speaker 1: it in US financial assets, shifting to like investing the 173 00:08:41,760 --> 00:08:44,600 Speaker 1: cash they get into US you know, manufactured goods. Right. Yeah, 174 00:08:44,640 --> 00:08:47,640 Speaker 1: so we're selling fewer financial assets, and like the financial 175 00:08:47,640 --> 00:08:50,040 Speaker 1: sector becomes a less important part of the American economy 176 00:08:50,080 --> 00:08:53,280 Speaker 1: relative to like manufacturing. Right. That's one way I think 177 00:08:53,280 --> 00:08:55,560 Speaker 1: to interpret some of the stuff that Trump Economic team 178 00:08:55,559 --> 00:08:58,079 Speaker 1: does and says, But then you look at the actual 179 00:08:58,080 --> 00:09:00,000 Speaker 1: effect and it's like, if you were going to high 180 00:09:00,040 --> 00:09:02,120 Speaker 1: your kids are training, frame like, this is amazing. There's 181 00:09:02,280 --> 00:09:04,760 Speaker 1: so much volatility. And then if you were at a manufacturer, 182 00:09:04,800 --> 00:09:06,720 Speaker 1: you're like, this is terrible. There's so much volatility. 183 00:09:06,800 --> 00:09:09,040 Speaker 2: Well, also, you don't know if these tariffs are going 184 00:09:09,040 --> 00:09:11,079 Speaker 2: to stick, like you have no visibility into that. And 185 00:09:11,120 --> 00:09:14,960 Speaker 2: there's also the very real question of what incentivizes a 186 00:09:15,040 --> 00:09:19,040 Speaker 2: company to bring manufacturing back to the US. The Whirlpool 187 00:09:19,160 --> 00:09:23,360 Speaker 2: CEO said on their earnings call this week that first 188 00:09:23,360 --> 00:09:25,160 Speaker 2: of all, they think that actually they're going to benefit 189 00:09:25,160 --> 00:09:27,560 Speaker 2: from tariffs. But the CEO, even with that in mind, 190 00:09:27,600 --> 00:09:31,160 Speaker 2: said that twenty percent tariffs aren't going to you know, 191 00:09:31,240 --> 00:09:33,800 Speaker 2: move factories away from China. And you think about like 192 00:09:34,800 --> 00:09:37,760 Speaker 2: about one hundred and perhaps, but you think about, you 193 00:09:37,800 --> 00:09:40,560 Speaker 2: know a lot of these pharma companies who make their 194 00:09:40,600 --> 00:09:44,080 Speaker 2: drugs in Ireland, for example, they're probably not going to 195 00:09:44,080 --> 00:09:47,040 Speaker 2: shift those factories to the US. They're probably just going 196 00:09:47,040 --> 00:09:51,320 Speaker 2: to have to accept that things cost more now. So 197 00:09:51,440 --> 00:09:54,400 Speaker 2: I don't know if tariffs are the way to incentivize 198 00:09:55,040 --> 00:09:59,280 Speaker 2: bringing manufacturing back versus tax breaks for example. 199 00:09:59,280 --> 00:10:01,360 Speaker 1: One thing that is happening here is that it seems 200 00:10:01,400 --> 00:10:05,280 Speaker 1: so haphazard as a way of encouraging manufacturing, right, Like, 201 00:10:05,640 --> 00:10:08,120 Speaker 1: if you wanted to encourage manufacturing, you would do things 202 00:10:08,160 --> 00:10:12,640 Speaker 1: like not imposed tariffs on raw materials and intermediate goods 203 00:10:12,720 --> 00:10:15,320 Speaker 1: so that you could make it easier for people to 204 00:10:15,320 --> 00:10:18,160 Speaker 1: start factories here. But like you're constantly reading stories about 205 00:10:18,160 --> 00:10:20,640 Speaker 1: like people who run factories here who like find that 206 00:10:20,760 --> 00:10:23,280 Speaker 1: like their inputs have gone up because of tariffs, and 207 00:10:23,320 --> 00:10:25,560 Speaker 1: so they can't run their factories anymore. Yeah, it's just 208 00:10:25,679 --> 00:10:31,120 Speaker 1: it's it's not like a industrial policy designed to support manufacturing. 209 00:10:31,160 --> 00:10:32,439 Speaker 1: It's like tariffs are good. 210 00:10:32,720 --> 00:10:33,679 Speaker 2: Yeah, I don't know. 211 00:10:33,880 --> 00:10:36,839 Speaker 1: People want there to be an explanation that is like 212 00:10:37,800 --> 00:10:41,640 Speaker 1: a human you know, either like clever or like galaxy 213 00:10:41,640 --> 00:10:44,600 Speaker 1: brain bad. Like one reason for the recent the rally 214 00:10:44,600 --> 00:10:46,920 Speaker 1: the last couple of days is like Scott Bessant giving 215 00:10:46,960 --> 00:10:50,640 Speaker 1: a speech at a closed door investor some it saying basically, 216 00:10:50,720 --> 00:10:53,120 Speaker 1: we're gonna have like a thaw in the China situation. 217 00:10:53,240 --> 00:10:57,840 Speaker 2: Very we're scandalized by that, and like it's definitely like 218 00:10:57,920 --> 00:11:00,640 Speaker 2: you can definitely read like takes that are like this 219 00:11:00,800 --> 00:11:02,960 Speaker 2: is like corruption and the whole thing is like for 220 00:11:03,040 --> 00:11:06,600 Speaker 2: cronyism and to like give the favored people, you know, 221 00:11:07,040 --> 00:11:09,120 Speaker 2: a lot of volatility trade and a lot of inside 222 00:11:09,120 --> 00:11:12,520 Speaker 2: information about what the decisions will be, which is honestly 223 00:11:12,640 --> 00:11:17,120 Speaker 2: like a more optimistic view than my view, which is 224 00:11:17,160 --> 00:11:17,600 Speaker 2: that people just. 225 00:11:17,640 --> 00:11:21,160 Speaker 1: Change their mind constantly and are not really yeah planning 226 00:11:21,240 --> 00:11:22,520 Speaker 1: that nefariously far ahead. 227 00:11:22,640 --> 00:11:25,680 Speaker 2: Well, the cynical takeout there too is that you know, 228 00:11:25,960 --> 00:11:29,680 Speaker 2: Trump changes his mind based on who he lost. I 229 00:11:29,679 --> 00:11:32,000 Speaker 2: don't know. I don't think you got notes from Neil 230 00:11:32,040 --> 00:11:35,080 Speaker 2: Duddo of Renaissance Macro No, okay. He had a really 231 00:11:35,080 --> 00:11:38,520 Speaker 2: interesting note oubt this week that he used the NT 232 00:11:38,800 --> 00:11:42,080 Speaker 2: function on his Bloomberg terminal, which is way to chart 233 00:11:42,120 --> 00:11:44,800 Speaker 2: news trends. He found that since the beginning of March, 234 00:11:44,840 --> 00:11:46,600 Speaker 2: the S and P five hundred has shed a total 235 00:11:46,679 --> 00:11:49,520 Speaker 2: of seven hundred and nineteen points on days that Howard 236 00:11:49,559 --> 00:11:53,319 Speaker 2: Lutnik and Peter Navarro have been the biggest story. By contrast, 237 00:11:53,440 --> 00:11:55,920 Speaker 2: if Besson has been the biggest story on the day, 238 00:11:55,960 --> 00:11:57,880 Speaker 2: the S and P five hundred has advanced a total 239 00:11:57,920 --> 00:12:01,160 Speaker 2: of fifty two points. So he concludes Bessen is good 240 00:12:01,160 --> 00:12:04,160 Speaker 2: for about one percentage point up on the S and p. 241 00:12:04,200 --> 00:12:06,920 Speaker 2: Five hundred. By contrast, the others are a drag of 242 00:12:06,960 --> 00:12:10,520 Speaker 2: about thirteen and a half percentage points. So I mean 243 00:12:10,559 --> 00:12:13,920 Speaker 2: those are the dueling forces. All three of those men 244 00:12:14,000 --> 00:12:15,480 Speaker 2: are dueling for Trump's attention. 245 00:12:16,120 --> 00:12:18,360 Speaker 1: Yeah, I mean there's a story about like Lutnik and 246 00:12:18,400 --> 00:12:21,760 Speaker 1: Bessant actually rushing into drum when Navarro was like in 247 00:12:21,800 --> 00:12:29,360 Speaker 1: the right. You might imagine someone thinking, we have the 248 00:12:29,400 --> 00:12:30,959 Speaker 1: guy who's good for the economy, and we have the 249 00:12:31,000 --> 00:12:32,760 Speaker 1: guys who are bad for the economy, So let's turn 250 00:12:32,760 --> 00:12:34,400 Speaker 1: out the dial and the guy who's good for the economy. 251 00:12:34,440 --> 00:12:37,920 Speaker 1: But I don't think that's your description of what's going 252 00:12:37,920 --> 00:12:38,320 Speaker 1: on here. 253 00:12:38,559 --> 00:12:41,240 Speaker 2: Yeah, it seems like Bessen at least looking at the 254 00:12:41,280 --> 00:12:43,520 Speaker 2: reporting from this week, and things shift all the change. 255 00:12:43,559 --> 00:12:47,000 Speaker 2: But apparently, you know, Bessen had a big hand according 256 00:12:47,000 --> 00:12:50,640 Speaker 2: to people familiar and talking Trump off the ledge when 257 00:12:50,640 --> 00:12:53,760 Speaker 2: it comes to firing Jerome Palell. Also, like you said, 258 00:12:53,760 --> 00:12:56,240 Speaker 2: there was that story that when Peter Navarro was at 259 00:12:56,240 --> 00:12:58,920 Speaker 2: the White House cafeteria or something along those lines, that 260 00:12:59,000 --> 00:13:02,760 Speaker 2: him and Lutnix in We'll see. I mean, I don't 261 00:13:02,800 --> 00:13:04,560 Speaker 2: know how to segue to this point, but I do 262 00:13:04,640 --> 00:13:07,800 Speaker 2: want to make the point that Besson is also apparently, 263 00:13:07,840 --> 00:13:10,240 Speaker 2: you know, playing a leading role in trade talks with Japan. 264 00:13:10,320 --> 00:13:13,080 Speaker 2: He's also expressed that he would like the US to 265 00:13:13,760 --> 00:13:17,000 Speaker 2: basically make agreements with its allies on trade and then 266 00:13:17,000 --> 00:13:20,280 Speaker 2: they'll all approached China as a group. But it seems 267 00:13:20,320 --> 00:13:23,520 Speaker 2: like that is very much not happening, because on Thursday 268 00:13:23,640 --> 00:13:26,840 Speaker 2: you had two different stories drop One was that Japan 269 00:13:27,120 --> 00:13:29,920 Speaker 2: is going to resist Trump's efforts to form a trade 270 00:13:29,960 --> 00:13:32,679 Speaker 2: block against China, and then you also had a story 271 00:13:32,679 --> 00:13:37,920 Speaker 2: about how the EU and Beijing are basically in talks. 272 00:13:38,360 --> 00:13:42,400 Speaker 1: Right like one analysis that I saw of the Liberation 273 00:13:42,480 --> 00:13:47,120 Speaker 1: Day situation, right or Trump announced enormous, fake reciprocal tariffs 274 00:13:47,160 --> 00:13:48,240 Speaker 1: on every country. 275 00:13:48,000 --> 00:13:51,240 Speaker 2: Incredibly I was with my grandmother, as discussed. 276 00:13:50,760 --> 00:13:53,520 Speaker 1: And then in a fairly short time period walk them 277 00:13:53,520 --> 00:13:55,760 Speaker 1: all back, except he raised tariffs on. 278 00:13:55,760 --> 00:13:57,400 Speaker 2: China one hundred and forty five percent. 279 00:13:57,800 --> 00:14:01,080 Speaker 1: One reading of that was that Trump had just announced 280 00:14:01,280 --> 00:14:04,280 Speaker 1: giant TIFFs on China and also like small towers on 281 00:14:04,280 --> 00:14:06,880 Speaker 1: the rest of the world. Then everyone would have been 282 00:14:06,920 --> 00:14:09,360 Speaker 1: shocked and trade would have shifted away from the US 283 00:14:09,400 --> 00:14:12,480 Speaker 1: to China. But by instead doing it in this shocking 284 00:14:12,480 --> 00:14:14,800 Speaker 1: Liberation Day way and then walking to that all back. 285 00:14:15,679 --> 00:14:18,880 Speaker 1: He primed people to think, oh, this could be a 286 00:14:18,920 --> 00:14:22,680 Speaker 1: lot worse, and in fact he's only targeting China, so 287 00:14:22,840 --> 00:14:27,240 Speaker 1: we should make deals at the US and cut out China. 288 00:14:27,640 --> 00:14:30,760 Speaker 1: And so this was a sort of shock therapy way 289 00:14:30,800 --> 00:14:34,440 Speaker 1: to reorient the talks to make it a essentially trade 290 00:14:34,480 --> 00:14:36,120 Speaker 1: block of the rest of the world, or at least 291 00:14:36,120 --> 00:14:38,880 Speaker 1: the US and its allies, with China on the outside, right, 292 00:14:38,880 --> 00:14:41,040 Speaker 1: So it was a way to accomplish exactly that sort 293 00:14:41,040 --> 00:14:44,000 Speaker 1: of like, you know, make deals with everyone else and 294 00:14:44,040 --> 00:14:48,920 Speaker 1: then have the upper hand against China. And I don't 295 00:14:48,960 --> 00:14:51,240 Speaker 1: know that was a reading of what happened, but it 296 00:14:51,240 --> 00:14:54,240 Speaker 1: doesn't seem to have. No particularly had that effect. And 297 00:14:54,840 --> 00:14:57,080 Speaker 1: because you're optimistic to think it'll have, you have to 298 00:14:57,080 --> 00:14:59,800 Speaker 1: be like like, oh, people are so relieved and so 299 00:15:00,040 --> 00:15:02,120 Speaker 1: happy that the tariffswordt as bad as we thought that 300 00:15:02,200 --> 00:15:04,720 Speaker 1: now they'll be rushing to negotiate with Donald Trump. But 301 00:15:04,760 --> 00:15:07,080 Speaker 1: the alternative reading is people will be like, this was 302 00:15:07,160 --> 00:15:10,200 Speaker 1: so erratic and chaotic that we should be rushing to 303 00:15:10,240 --> 00:15:13,560 Speaker 1: negotiate with China because like they're predictable. 304 00:15:13,760 --> 00:15:16,520 Speaker 2: Yeah, that's the thing. I mean, I could definitely see 305 00:15:16,520 --> 00:15:20,560 Speaker 2: the argument for that strategy, but the narrative also exists 306 00:15:20,560 --> 00:15:23,040 Speaker 2: out there that no, the US is just an unreliable 307 00:15:23,080 --> 00:15:26,360 Speaker 2: trading partner, and who knows if you agree to a 308 00:15:26,440 --> 00:15:28,760 Speaker 2: deal that it'll stick. I mean, you think about what's 309 00:15:28,760 --> 00:15:32,600 Speaker 2: going on with Canada and Mexico right now, the USMCA, 310 00:15:33,560 --> 00:15:37,400 Speaker 2: that was Trump's trade deal and now apparently it's just 311 00:15:37,440 --> 00:15:38,040 Speaker 2: been ripped up. 312 00:15:38,120 --> 00:15:40,560 Speaker 1: Yeah, yeah, right, And it's related to the point about 313 00:15:40,760 --> 00:15:43,680 Speaker 1: insane volatility in the market right like, none can plan ahead. 314 00:15:44,440 --> 00:15:48,760 Speaker 1: This is not an administration that places any value on predictability. 315 00:15:49,560 --> 00:15:53,640 Speaker 1: And in a lot of domain spritability is really useful. 316 00:15:54,080 --> 00:15:56,200 Speaker 2: It's going to be interesting to see what access like 317 00:15:56,240 --> 00:15:59,560 Speaker 2: this stabilization mechanism. It seems like the bond market does 318 00:15:59,600 --> 00:16:02,200 Speaker 2: have some with Donald Trump, so bond investors. 319 00:16:02,480 --> 00:16:04,960 Speaker 1: I think the sample size of that is small. 320 00:16:04,680 --> 00:16:07,280 Speaker 2: It's small. There was also an interesting note doubt from 321 00:16:07,520 --> 00:16:10,000 Speaker 2: thinking Chada over at Deutsche Bank. So he lowered his 322 00:16:10,120 --> 00:16:12,480 Speaker 2: s and P five hundred target to sixty one fifty 323 00:16:12,600 --> 00:16:15,880 Speaker 2: from seven thousand, sixty one to fifty. Sounds incredible to 324 00:16:15,920 --> 00:16:18,200 Speaker 2: a lot of people right now because we're like at 325 00:16:18,200 --> 00:16:21,280 Speaker 2: fifty five hundred on the SMP five hundred. But he 326 00:16:21,520 --> 00:16:24,960 Speaker 2: said that if you start to see approval ratings drop, 327 00:16:25,440 --> 00:16:28,360 Speaker 2: then that might cause an actual I forget the word 328 00:16:28,360 --> 00:16:30,840 Speaker 2: he used, but that's when you might actually see things 329 00:16:30,840 --> 00:16:33,120 Speaker 2: calm down. Maybe that will be the over. 330 00:16:33,040 --> 00:16:36,000 Speaker 1: Some I've seen that. Secondly, I don't know why that's 331 00:16:36,000 --> 00:16:36,800 Speaker 1: a mechanism. 332 00:16:37,080 --> 00:16:39,160 Speaker 2: I mean, the pushback to that point is that, Okay, 333 00:16:39,200 --> 00:16:41,640 Speaker 2: he's in his second term. He's not going to run again. 334 00:16:41,800 --> 00:16:45,120 Speaker 2: Unless he does, that's also an open question. So who knows. 335 00:16:45,120 --> 00:16:47,720 Speaker 1: Maybe he decides to run again, approval ratings will not 336 00:16:47,760 --> 00:16:48,560 Speaker 1: be an impediment. 337 00:16:48,840 --> 00:16:53,200 Speaker 2: No, no, But I mean there is some momentum building 338 00:16:53,240 --> 00:16:55,960 Speaker 2: behind that idea that if you see approval ratings drop 339 00:16:56,000 --> 00:16:58,600 Speaker 2: in a big way, maybe Trump would soften his stance. 340 00:16:58,680 --> 00:17:00,080 Speaker 1: I'll think the other side of that, I think I 341 00:17:00,120 --> 00:17:02,320 Speaker 1: would rate the bond market above appropal ratings. But I 342 00:17:02,360 --> 00:17:03,080 Speaker 1: don't know what I know. 343 00:17:04,280 --> 00:17:06,480 Speaker 2: Okay, Well, goodbye everyone, goodbye? 344 00:17:06,760 --> 00:17:07,840 Speaker 1: Oh wait, other things? 345 00:17:08,000 --> 00:17:23,679 Speaker 2: Oh right, right right? What else is there going on? 346 00:17:24,000 --> 00:17:27,959 Speaker 2: Golden Goldman? The good thing is that David Solomon and 347 00:17:28,040 --> 00:17:30,840 Speaker 2: John Waldron are going to be paid a lot of money. 348 00:17:31,320 --> 00:17:33,560 Speaker 1: What does a lot of money mean? I mean they're 349 00:17:33,560 --> 00:17:39,280 Speaker 1: getting paid. It means they got their eighty million dollars 350 00:17:39,320 --> 00:17:40,200 Speaker 1: special retention. 351 00:17:40,400 --> 00:17:42,320 Speaker 2: I got to tell you, I was, you know, biting 352 00:17:42,320 --> 00:17:43,560 Speaker 2: my nails over this one. 353 00:17:43,920 --> 00:17:46,560 Speaker 1: It was closed, like both of the big Chryler advisory 354 00:17:46,600 --> 00:17:49,320 Speaker 1: firms said they shouldn't get them. 355 00:17:49,480 --> 00:17:51,680 Speaker 2: And still they won sixty six percent of the vote. 356 00:17:51,680 --> 00:17:53,159 Speaker 1: Though it's not that high. 357 00:17:53,480 --> 00:17:55,520 Speaker 2: It is down from I think it was in the 358 00:17:55,560 --> 00:17:56,880 Speaker 2: eighties the last time. 359 00:17:57,240 --> 00:17:59,520 Speaker 1: You get on Pivot. 360 00:18:00,119 --> 00:18:02,360 Speaker 2: We don't have the exact summer kind of a loss 361 00:18:02,600 --> 00:18:04,639 Speaker 2: I prepared. So I want to tell you last year, 362 00:18:04,760 --> 00:18:07,280 Speaker 2: Golden won eighty six percent of the vote from shareholders, 363 00:18:07,359 --> 00:18:10,800 Speaker 2: despite also opposition from Glass Lewis. 364 00:18:10,880 --> 00:18:13,879 Speaker 1: Yeah, these guys get paid sort of market rates for 365 00:18:14,320 --> 00:18:17,439 Speaker 1: big bank CEOs, right. I think David Solom got thirty 366 00:18:17,560 --> 00:18:19,879 Speaker 1: nine million dollars last year and Waldron got thirty eight 367 00:18:19,880 --> 00:18:22,480 Speaker 1: million dollars, which is like, you know, comparable to like 368 00:18:22,520 --> 00:18:25,520 Speaker 1: a Jamie Diamond or whatever. And so getting an extra 369 00:18:25,560 --> 00:18:29,240 Speaker 1: eighty million dollar bonus just for being good guys and 370 00:18:29,280 --> 00:18:33,240 Speaker 1: wanting them to stick around seems high, right, Like they're 371 00:18:33,240 --> 00:18:35,080 Speaker 1: getting paid market rate. It's like, why do they need 372 00:18:35,080 --> 00:18:39,120 Speaker 1: the extra bonus? And part of the answer is, literally, 373 00:18:39,160 --> 00:18:42,640 Speaker 1: like Waldron, who is the number two at Goldman, there's 374 00:18:42,640 --> 00:18:45,320 Speaker 1: a reporting that he was approached by Apollo to come 375 00:18:45,440 --> 00:18:50,320 Speaker 1: be some sort of high up executive there and offered 376 00:18:50,680 --> 00:18:53,879 Speaker 1: what the article character has that's life changing money even 377 00:18:53,920 --> 00:18:56,840 Speaker 1: for him, which is like, I don't know if I 378 00:18:56,920 --> 00:18:59,239 Speaker 1: made thirty eight million dollars a year, you would need 379 00:18:59,240 --> 00:19:00,600 Speaker 1: a lot of money to in my life. But I 380 00:19:00,600 --> 00:19:01,399 Speaker 1: think they offered him that. 381 00:19:01,480 --> 00:19:03,560 Speaker 2: Well, it's like, I don't just want my great great 382 00:19:03,600 --> 00:19:06,520 Speaker 2: grandchildren to be well off. I want their great great 383 00:19:06,560 --> 00:19:08,720 Speaker 2: grandchildren to also do well, right. 384 00:19:08,640 --> 00:19:11,480 Speaker 1: Like, I don't have a conception of how your life 385 00:19:11,520 --> 00:19:14,200 Speaker 1: could change above making thirty eight million. 386 00:19:14,240 --> 00:19:16,359 Speaker 2: Well, that's just a lack of imagination, I know. 387 00:19:16,960 --> 00:19:19,479 Speaker 1: And I should I should, I should be thinking bigger. 388 00:19:19,520 --> 00:19:21,520 Speaker 1: But anyways, he was offered life changing money, and he 389 00:19:21,600 --> 00:19:23,560 Speaker 1: decided to stay because, yeah, he likes Goldvin it's a 390 00:19:23,560 --> 00:19:26,320 Speaker 1: good place whatever. Yeah, but also because they were like, yeah, 391 00:19:26,359 --> 00:19:27,840 Speaker 1: I we'll find out I any paid more. Right, So 392 00:19:27,840 --> 00:19:29,280 Speaker 1: they got't paid any million dollars more. 393 00:19:29,440 --> 00:19:32,600 Speaker 2: Something that I find interesting is I like to imagine 394 00:19:32,600 --> 00:19:35,360 Speaker 2: how you know, the rest of Goldman feels about that. 395 00:19:35,400 --> 00:19:38,280 Speaker 2: You had Mike Mayo from Wells Fargo say that this 396 00:19:38,320 --> 00:19:41,359 Speaker 2: could be alienating to Goldman's workforce. He said, that before 397 00:19:41,359 --> 00:19:43,760 Speaker 2: the vote, and in one of the articles written by 398 00:19:43,880 --> 00:19:47,640 Speaker 2: Todd Gillespie, he did write that under Solomon's tenure, payouts 399 00:19:47,640 --> 00:19:49,919 Speaker 2: for its top brass have been a thorny issue that 400 00:19:50,080 --> 00:19:53,320 Speaker 2: until now was mostly expressed by the bank's partner class. 401 00:19:53,520 --> 00:19:56,720 Speaker 2: Some privately grumbled that packages for its leaders were excessive 402 00:19:56,760 --> 00:19:59,320 Speaker 2: relative to the firm's performance, and the awards being set 403 00:19:59,320 --> 00:20:00,760 Speaker 2: aside for the rest to the staff. 404 00:20:01,080 --> 00:20:02,920 Speaker 1: Yeah. So one thing I've written about a lot over 405 00:20:02,960 --> 00:20:05,800 Speaker 1: the last few years is like Golbin has long had 406 00:20:05,840 --> 00:20:09,280 Speaker 1: this partnership culture where there's a group of people who 407 00:20:09,280 --> 00:20:12,199 Speaker 1: are called partners. They're not exactly like partners in the 408 00:20:12,240 --> 00:20:13,080 Speaker 1: classic sense, but. 409 00:20:13,000 --> 00:20:14,600 Speaker 2: They were like they're sort of. 410 00:20:14,600 --> 00:20:17,360 Speaker 1: Successors to the partners when Goldman was a private partnership, 411 00:20:17,800 --> 00:20:22,320 Speaker 1: and they sort of viewed the firm as a continuation 412 00:20:22,359 --> 00:20:24,320 Speaker 1: of that partnership where the partners had a big say 413 00:20:24,320 --> 00:20:28,119 Speaker 1: in running the firm. There was a sort of egalitarianism 414 00:20:28,320 --> 00:20:30,760 Speaker 1: among the partners where the CEO was like sort of 415 00:20:30,760 --> 00:20:34,159 Speaker 1: the managing partner, but he wasn't like the boss of 416 00:20:34,200 --> 00:20:36,960 Speaker 1: all the partners or anything like that. And I think 417 00:20:37,040 --> 00:20:39,680 Speaker 1: under Solomon that has really changed, and they've consolidated into 418 00:20:39,680 --> 00:20:42,920 Speaker 1: being much more of a normal public company and maybe 419 00:20:42,920 --> 00:20:45,280 Speaker 1: not the most important, but one symptom of that is 420 00:20:45,840 --> 00:20:47,680 Speaker 1: it used to be that Golden was like a partnership 421 00:20:47,720 --> 00:20:49,240 Speaker 1: run for the benefit of the partners, and so like 422 00:20:49,240 --> 00:20:51,160 Speaker 1: if they had a good year, the partners all got paid, right, 423 00:20:51,200 --> 00:20:54,040 Speaker 1: And now under the Solomon regime, it's a little bit 424 00:20:54,080 --> 00:20:56,920 Speaker 1: more like we're going to pay like a public company 425 00:20:57,000 --> 00:20:59,760 Speaker 1: and sort of maximize shareholder value and like not just 426 00:21:00,040 --> 00:21:02,119 Speaker 1: toretiously pay partners just because you know they're going to 427 00:21:02,359 --> 00:21:05,040 Speaker 1: them based on competitive pressures. And there's like sort of 428 00:21:05,119 --> 00:21:07,920 Speaker 1: a walk in the opposite direction with like Solomon and Waldron, 429 00:21:07,920 --> 00:21:10,480 Speaker 1: where like they're getting paid a lot of money as 430 00:21:10,480 --> 00:21:13,200 Speaker 1: the partners are no longer like the people divan at 431 00:21:13,240 --> 00:21:17,040 Speaker 1: the pod. So I think that like the partners, on 432 00:21:17,080 --> 00:21:21,320 Speaker 1: the one hand, some of them resent being like relegated 433 00:21:21,359 --> 00:21:23,280 Speaker 1: to a second tier status and no longer feeling that 434 00:21:23,320 --> 00:21:24,959 Speaker 1: they run the firm. And on the other hand, they're like, 435 00:21:25,040 --> 00:21:27,440 Speaker 1: these guys are getting paid so much money, right, Yeah. 436 00:21:27,280 --> 00:21:30,000 Speaker 2: Well maybe they should go all work as an alts manager. 437 00:21:30,160 --> 00:21:31,840 Speaker 1: Yeah. I mean, like one thing that that toddyts to 438 00:21:31,840 --> 00:21:33,760 Speaker 1: be right is that Goldman is trying to position its 439 00:21:33,760 --> 00:21:36,080 Speaker 1: off as an ALTS manager because that's better, you know, 440 00:21:36,080 --> 00:21:39,520 Speaker 1: you get a better multiple as everyone's trying to position, 441 00:21:39,720 --> 00:21:41,600 Speaker 1: like we've talked about black Rock on this ship, like 442 00:21:41,640 --> 00:21:44,879 Speaker 1: the position itself as an ALTS manager because you get 443 00:21:44,920 --> 00:21:46,760 Speaker 1: a higre multiple as an AULTS manager then as a 444 00:21:46,960 --> 00:21:48,320 Speaker 1: you know, Index one manager. 445 00:21:48,359 --> 00:21:52,320 Speaker 2: It's also it's like me trying to reruin myself as 446 00:21:52,359 --> 00:21:54,800 Speaker 2: a podcaster versus you know, a TV anchor. 447 00:21:54,880 --> 00:21:57,640 Speaker 1: It makes sense, are multiple podcasters? 448 00:21:57,720 --> 00:22:00,879 Speaker 2: Yeah, there you call Goldman sex Hasset managed. They have 449 00:22:00,960 --> 00:22:05,000 Speaker 2: about five hundred billion dollars of private assets under management. 450 00:22:05,440 --> 00:22:09,760 Speaker 2: Blackstone for contacts has more than one trillion dollars. So 451 00:22:09,800 --> 00:22:10,720 Speaker 2: I mean they are up there. 452 00:22:11,080 --> 00:22:12,840 Speaker 1: They're really you know, I remember being you know, I 453 00:22:12,880 --> 00:22:16,120 Speaker 1: was at Goldman. I Hurt did Goldman more than fifteen 454 00:22:16,200 --> 00:22:21,480 Speaker 1: years ago. I were fifteen years ago, and there was 455 00:22:21,520 --> 00:22:27,399 Speaker 1: a big focus on private equity as a you know, 456 00:22:27,680 --> 00:22:30,040 Speaker 1: important component of the firm. You know, I was a 457 00:22:30,119 --> 00:22:32,480 Speaker 1: fairly junior person, and I experienced it as like almost 458 00:22:32,480 --> 00:22:34,600 Speaker 1: the recruiting thing where like, you know, the cool place 459 00:22:34,680 --> 00:22:38,119 Speaker 1: to work in finance was private equity. So for Goldman 460 00:22:38,160 --> 00:22:39,879 Speaker 1: to be able to be like we run private equity 461 00:22:40,000 --> 00:22:43,040 Speaker 1: was good for you know, recruiting young people, but like similarly, 462 00:22:43,080 --> 00:22:46,679 Speaker 1: it's good for recruiting shareholders because you're like, you know, 463 00:22:46,760 --> 00:22:49,080 Speaker 1: the multiples that are given to alts managers are higher 464 00:22:49,080 --> 00:22:51,800 Speaker 1: than the multiples given to investment banks. Yeah, and like 465 00:22:51,840 --> 00:22:54,359 Speaker 1: the you know, the revenue is a little bit more stable, 466 00:22:54,359 --> 00:22:58,800 Speaker 1: and like it's a little bit certainly its executives get 467 00:22:58,800 --> 00:22:59,240 Speaker 1: paid more. 468 00:22:59,400 --> 00:23:02,359 Speaker 2: Yeah. So I mean to put some numbers to Blackstone 469 00:23:02,400 --> 00:23:05,800 Speaker 2: Trades at a p of like thirty seven. Goldman's closer 470 00:23:05,840 --> 00:23:10,359 Speaker 2: to twelve, which is less than thirty seven. But I 471 00:23:10,359 --> 00:23:15,280 Speaker 2: mean Blackstone KKR those are pure play alts managers. 472 00:23:15,480 --> 00:23:17,680 Speaker 1: What that means They're not pure playing. 473 00:23:18,800 --> 00:23:24,400 Speaker 2: Relatives relative to Goldman. Yeah, I mean when I think 474 00:23:24,440 --> 00:23:27,320 Speaker 2: of Goldman, my first thought isn't their alts business? 475 00:23:27,320 --> 00:23:30,320 Speaker 1: Obviously of course, right, no, they're not primarily business. But 476 00:23:30,680 --> 00:23:34,639 Speaker 1: I think of KKR like as a growing capital markets business. 477 00:23:35,240 --> 00:23:38,280 Speaker 1: Like the big alts managers want to get bigger. I'd 478 00:23:38,280 --> 00:23:39,760 Speaker 1: want me to get bigger, is to get into some 479 00:23:39,800 --> 00:23:41,720 Speaker 1: of the businesses that like the Goldman's of the world 480 00:23:41,720 --> 00:23:45,800 Speaker 1: are in, right, Like, there is a convergence, and obviously 481 00:23:45,840 --> 00:23:48,040 Speaker 1: you'd rather have the multiple of being a more or 482 00:23:48,119 --> 00:23:50,280 Speaker 1: less pure alts manager than being a more or less 483 00:23:50,280 --> 00:23:53,199 Speaker 1: pure investment bank. But like they're in a lot of 484 00:23:53,240 --> 00:23:54,440 Speaker 1: overlapping businesses. 485 00:23:54,640 --> 00:23:56,880 Speaker 2: Yeah, and the KRE people. 486 00:23:56,680 --> 00:23:58,280 Speaker 1: Get paid more. So. One thing I wrote this week 487 00:23:58,359 --> 00:24:00,199 Speaker 1: is like some of that is like the youth of 488 00:24:00,200 --> 00:24:04,040 Speaker 1: those firms, you know, like those rooms, you know, they 489 00:24:04,080 --> 00:24:06,520 Speaker 1: went public after Goldman did. They were founded way after 490 00:24:06,560 --> 00:24:09,480 Speaker 1: Goldman was. They were still like at like the sort 491 00:24:09,520 --> 00:24:13,800 Speaker 1: of closing stages of the like giant private equity like 492 00:24:14,080 --> 00:24:17,840 Speaker 1: gold rush of the you know eighties and nineties and 493 00:24:17,840 --> 00:24:21,199 Speaker 1: two thousands, whereas like you know, investment banks has been 494 00:24:21,200 --> 00:24:24,280 Speaker 1: a lot around longer. Like they're no founders. I mean 495 00:24:24,280 --> 00:24:26,440 Speaker 1: there are founders, right, they're founders of investment banks who've 496 00:24:26,440 --> 00:24:29,000 Speaker 1: made very good money. But like the founders of like 497 00:24:29,240 --> 00:24:32,040 Speaker 1: Bacon pulchbracket investment banks, right, like those guys, you know, 498 00:24:32,160 --> 00:24:33,480 Speaker 1: those those banks a one hundred. 499 00:24:33,320 --> 00:24:34,720 Speaker 2: Years old, they're resting peacefully. 500 00:24:34,880 --> 00:24:38,879 Speaker 1: Yeah. Some of what's happening is that the alts managers, 501 00:24:38,960 --> 00:24:43,200 Speaker 1: like the people who are senior executives there, took real 502 00:24:43,359 --> 00:24:47,400 Speaker 1: risks getting into new businesses, whereas like people who grew 503 00:24:47,480 --> 00:24:49,840 Speaker 1: up as partners at Colman were like in a you 504 00:24:49,880 --> 00:24:52,159 Speaker 1: know sort of well established business. So like, of course 505 00:24:52,640 --> 00:24:54,360 Speaker 1: the people who took those risks to start the alts 506 00:24:54,359 --> 00:24:55,560 Speaker 1: managers get paid a lot more. 507 00:24:55,640 --> 00:24:59,480 Speaker 2: Yeah, like took the risk to become a podcaster. It 508 00:24:59,480 --> 00:25:20,960 Speaker 2: should be for that. Yeah, reading your column actually listening 509 00:25:21,040 --> 00:25:25,959 Speaker 2: to it on my text to speech chiefly motivated me 510 00:25:26,000 --> 00:25:29,240 Speaker 2: to find where there are still inefficiencies in the market. 511 00:25:29,320 --> 00:25:31,480 Speaker 1: Do you think it's podcasting in terms of. 512 00:25:31,400 --> 00:25:37,080 Speaker 2: The media landscape? Perhaps certainly doesn't seem like it's linear television. 513 00:25:37,359 --> 00:25:43,399 Speaker 1: But you know what it is. Oh No, it's like 514 00:25:43,440 --> 00:25:45,280 Speaker 1: some it's a horrifying fourth thing. 515 00:25:45,400 --> 00:25:49,240 Speaker 2: God, it's like you it's YouTube's like twenty years old. 516 00:25:49,960 --> 00:25:54,000 Speaker 1: If I even said, it's like TikTok uh, you can 517 00:25:54,800 --> 00:25:59,520 Speaker 1: picture me shaking my fist at a cloud. It's it's 518 00:25:59,560 --> 00:26:02,480 Speaker 1: sure is where the kids are at some form video 519 00:26:02,440 --> 00:26:05,639 Speaker 1: so entirely other thing it's like it's like a brain implant. 520 00:26:05,800 --> 00:26:08,800 Speaker 2: Yeah, it's brutal out there. Maybe glasses that you put 521 00:26:08,840 --> 00:26:11,080 Speaker 2: on and it's just our faces. I was gonna say, 522 00:26:11,080 --> 00:26:13,600 Speaker 2: it seems like the inefficiency still left to till in 523 00:26:13,640 --> 00:26:15,520 Speaker 2: the market, to plow in the market. I don't know 524 00:26:15,520 --> 00:26:18,840 Speaker 2: what farming metaphorm trying to use. Perhaps we should all 525 00:26:18,880 --> 00:26:20,760 Speaker 2: just start bit coin treasury companies. 526 00:26:21,560 --> 00:26:25,240 Speaker 1: I do think that, like so much of the crypto 527 00:26:25,359 --> 00:26:27,840 Speaker 1: boom has been like people from traditional finance being like, 528 00:26:27,880 --> 00:26:29,840 Speaker 1: oh my god, look at the bits spretz here. Right, 529 00:26:29,840 --> 00:26:34,040 Speaker 1: It's like, yeah, crypto is so inefficient, and also you 530 00:26:34,040 --> 00:26:35,879 Speaker 1: could kind of get into it efficiently, so like all 531 00:26:35,960 --> 00:26:38,600 Speaker 1: these people from traditional finance like jumped in to capture 532 00:26:38,600 --> 00:26:40,800 Speaker 1: those spreads. But yeah, so this week the amazing thing 533 00:26:40,880 --> 00:26:41,640 Speaker 1: is twenty one. 534 00:26:42,040 --> 00:26:43,959 Speaker 2: Twenty one one great net for a company. 535 00:26:44,080 --> 00:26:48,560 Speaker 1: It is twenty one is a merger between a counter 536 00:26:48,600 --> 00:26:51,720 Speaker 1: Fitzgerald spack. Right, the cantor raised the spack a special 537 00:26:51,760 --> 00:26:54,960 Speaker 1: purpose acquisition coming they sold stock, so one hundred million 538 00:26:55,000 --> 00:26:57,200 Speaker 1: dollars with the stock to public investors a while back, 539 00:26:57,600 --> 00:26:59,760 Speaker 1: and like they had that pot and they were like 540 00:26:59,800 --> 00:27:04,080 Speaker 1: looking around for some sort of operating company to merge 541 00:27:04,119 --> 00:27:06,280 Speaker 1: with and take it public with this pack. And what 542 00:27:06,359 --> 00:27:09,720 Speaker 1: they found was not an operating company. It was a 543 00:27:09,800 --> 00:27:13,120 Speaker 1: pile of bitcoin managed by Tether, and also a pilo 544 00:27:13,119 --> 00:27:15,000 Speaker 1: of bitcoin managed by bidfin X, which is sort of 545 00:27:15,040 --> 00:27:18,040 Speaker 1: related to Tether, and also a pileo of bitcoin managed 546 00:27:18,040 --> 00:27:20,240 Speaker 1: by soft Bank, and also probably some other piles of bitcoin. 547 00:27:20,280 --> 00:27:23,040 Speaker 1: But Anyway, they mushed all these things together, counters one 548 00:27:23,119 --> 00:27:25,760 Speaker 1: hundred million dollars of cash and then all the other 549 00:27:25,760 --> 00:27:28,480 Speaker 1: people's bitcoin. You mush them all together. You have a 550 00:27:28,520 --> 00:27:31,520 Speaker 1: giant pot of bitcoin that is publicly listed because the 551 00:27:31,720 --> 00:27:34,639 Speaker 1: pack has a public listing. And so they announced the 552 00:27:34,640 --> 00:27:37,960 Speaker 1: merger this week, and it's always it's a very easy 553 00:27:37,960 --> 00:27:41,199 Speaker 1: merger because everyone is just a pot, and so you 554 00:27:41,240 --> 00:27:42,960 Speaker 1: can be like, okay, so your pot is one hundred 555 00:27:42,960 --> 00:27:44,680 Speaker 1: million dollars, so you get like one hundred million dollars 556 00:27:44,720 --> 00:27:47,879 Speaker 1: worth of stock. Your pot is three billion dollars of bitcoin, 557 00:27:47,960 --> 00:27:49,600 Speaker 1: so you get three billion dollars with it. So you like, 558 00:27:49,720 --> 00:27:52,920 Speaker 1: you know, allocated based on how much stuff the different 559 00:27:53,000 --> 00:27:57,320 Speaker 1: pots bring to the thing. And so you know, the 560 00:27:57,359 --> 00:28:00,480 Speaker 1: counter Fitzgerald Spack got roughly one hundred million dollars worth 561 00:28:00,560 --> 00:28:04,520 Speaker 1: of the pot and it probably like tripled in price. Yeah, 562 00:28:04,680 --> 00:28:09,879 Speaker 1: so that suggests roughly that the stock market values the 563 00:28:09,920 --> 00:28:14,119 Speaker 1: bitcoin in this pot at roughly three times the actual 564 00:28:14,240 --> 00:28:15,200 Speaker 1: lure of the bitcoin. 565 00:28:14,920 --> 00:28:16,240 Speaker 2: Of the Yeah, it's amazing. 566 00:28:16,720 --> 00:28:20,200 Speaker 1: It's not like they invented this. No, this investor presentation 567 00:28:20,200 --> 00:28:22,880 Speaker 1: which is amazing and which is like look at micro 568 00:28:22,920 --> 00:28:25,840 Speaker 1: strategy or now it's called Strategy. You know, the Strategy 569 00:28:25,880 --> 00:28:29,119 Speaker 1: company which has been buying bitcoin, putting them in a 570 00:28:29,119 --> 00:28:30,920 Speaker 1: pot and selling shares for twice. 571 00:28:30,720 --> 00:28:31,960 Speaker 2: The value for like five years. 572 00:28:31,960 --> 00:28:34,080 Speaker 1: Now, I don't think it's literally five years. 573 00:28:33,920 --> 00:28:35,399 Speaker 2: But it feels like no, I think it was like 574 00:28:35,480 --> 00:28:36,199 Speaker 2: twenty twenty. 575 00:28:36,359 --> 00:28:38,000 Speaker 1: Yeah, I think, yeah. 576 00:28:37,920 --> 00:28:38,480 Speaker 2: You're right time. 577 00:28:40,640 --> 00:28:42,880 Speaker 1: But you know they've been doing it forever, and there's 578 00:28:42,960 --> 00:28:43,640 Speaker 1: room for more. 579 00:28:44,320 --> 00:28:48,960 Speaker 2: Apparently my natural reaction when I saw this headline yesterday 580 00:28:49,120 --> 00:28:52,120 Speaker 2: was how many strategies do there need to be out there? 581 00:28:52,240 --> 00:28:53,400 Speaker 2: Apparently there's room. 582 00:28:53,840 --> 00:28:57,080 Speaker 1: Right. It's like they came to it from opposite directions, right, 583 00:28:57,120 --> 00:29:01,000 Speaker 1: So Strategy was like a company and it's CEO got 584 00:29:01,000 --> 00:29:05,160 Speaker 1: really into bitcoin. Then CEO now Chairmanry Taylor, and he 585 00:29:05,240 --> 00:29:06,840 Speaker 1: was like, what if we bought a lot of bitcoin 586 00:29:06,880 --> 00:29:09,520 Speaker 1: because like that would be a good investment for our company, right, 587 00:29:09,600 --> 00:29:11,320 Speaker 1: Like we should own bitcoin because it'll go up and 588 00:29:11,440 --> 00:29:15,240 Speaker 1: our company will be worth more. And that metamorphosed than 589 00:29:15,280 --> 00:29:17,120 Speaker 1: to like what if we were only a lot of 590 00:29:17,160 --> 00:29:20,000 Speaker 1: bitcoin because people keep wanting to pay more for our 591 00:29:20,040 --> 00:29:22,120 Speaker 1: stock than the bitcoin is worth. So they just did 592 00:29:22,120 --> 00:29:25,479 Speaker 1: more and more buying and bitcoin. But like they started 593 00:29:25,520 --> 00:29:27,040 Speaker 1: from a place of like we're a public company and 594 00:29:27,080 --> 00:29:29,800 Speaker 1: you'd like to buy bitcoin. Twenty one starts from the 595 00:29:29,800 --> 00:29:31,520 Speaker 1: place of I mean, I don't know how the merger 596 00:29:31,560 --> 00:29:33,920 Speaker 1: conversations came to you. Yeah, but essentially starts in a 597 00:29:33,920 --> 00:29:36,400 Speaker 1: place of like, we are Tether, Yeah, we own some bitcoin. 598 00:29:36,480 --> 00:29:38,560 Speaker 1: By the way, it's weird that Tether own so much bitcoin. Yeah, 599 00:29:38,600 --> 00:29:40,640 Speaker 1: because Tether is mostly in the business of like selling 600 00:29:41,000 --> 00:29:44,240 Speaker 1: stable coin tokens for dollars and parking the money in dollars. 601 00:29:44,360 --> 00:29:46,360 Speaker 1: But they have some like legacy businesses owning bitcoin. And 602 00:29:46,360 --> 00:29:48,760 Speaker 1: also they've made so many profits that they invest in bitcoin, 603 00:29:48,880 --> 00:29:52,360 Speaker 1: so they own a lot of bitcoin. And if you're 604 00:29:52,400 --> 00:29:55,160 Speaker 1: a pot of bitcoin, if you're a crypto native owner 605 00:29:55,200 --> 00:29:58,560 Speaker 1: of bitcoins, and you look at strategy, you're like, wow, 606 00:29:58,880 --> 00:30:02,600 Speaker 1: those guys can get incredibly cheap funding for their bitcoin 607 00:30:02,640 --> 00:30:04,920 Speaker 1: because they can sell stock at two x the value 608 00:30:04,920 --> 00:30:09,320 Speaker 1: of their bitcoin. So if you're just like a bitcoin manager, 609 00:30:09,920 --> 00:30:12,320 Speaker 1: how could you not be tempted to get into that business. 610 00:30:12,440 --> 00:30:13,720 Speaker 2: Yeah, And so they did, and. 611 00:30:13,680 --> 00:30:16,680 Speaker 1: They did it by like essentially buying a public company, 612 00:30:16,720 --> 00:30:18,600 Speaker 1: but like in this case, buying a spact to make 613 00:30:18,640 --> 00:30:21,160 Speaker 1: it really clean. And so now they have a public 614 00:30:21,240 --> 00:30:23,680 Speaker 1: listing for their pot of bitcoin, which is worth three 615 00:30:23,720 --> 00:30:24,960 Speaker 1: times with the bitcoin is worth. 616 00:30:25,080 --> 00:30:28,400 Speaker 2: I do just say I like the ticker XXI twenty one, 617 00:30:28,520 --> 00:30:32,520 Speaker 2: got it. So Jack Maller's is going to be the CEO. 618 00:30:32,760 --> 00:30:35,960 Speaker 2: He's thirty one, which is my age. But he made 619 00:30:36,000 --> 00:30:37,880 Speaker 2: that point as a selling point that we're not a 620 00:30:37,920 --> 00:30:41,840 Speaker 2: pivoting company, we're pure bitcoin. And also talking about Tether, 621 00:30:41,960 --> 00:30:44,200 Speaker 2: he said that how the deal came together was just 622 00:30:44,240 --> 00:30:46,200 Speaker 2: that he's known tether for a while, that you know, 623 00:30:46,280 --> 00:30:49,200 Speaker 2: a decade ago, there weren't many bitcoiners out there, and 624 00:30:49,240 --> 00:30:52,320 Speaker 2: I had the same reaction to Tether is a stable coin? 625 00:30:52,360 --> 00:30:52,720 Speaker 2: Is sure? 626 00:30:52,880 --> 00:30:55,240 Speaker 1: That usually ship with bitcoin. It's more interesting. They are 627 00:30:55,400 --> 00:30:58,480 Speaker 1: now basically in the business of taking dollars and parking 628 00:30:58,480 --> 00:31:02,120 Speaker 1: those dollars and treasury bills. But like the history of 629 00:31:02,160 --> 00:31:05,360 Speaker 1: the producing dollars out of bitcoin is an interesting one, right, 630 00:31:05,360 --> 00:31:08,760 Speaker 1: I mean, they have been making collateralized loans against bitcoin 631 00:31:08,800 --> 00:31:11,120 Speaker 1: to create more tether dollars, like they're an interesting business. 632 00:31:11,160 --> 00:31:14,880 Speaker 2: But yeah, interesting business is you know, pretty diplomatic. 633 00:31:15,600 --> 00:31:19,240 Speaker 1: But Jack Maller's I did seriously, but also yes. 634 00:31:19,440 --> 00:31:22,240 Speaker 2: I'm taking you you know at your word at face value, 635 00:31:22,400 --> 00:31:25,920 Speaker 2: tetherin is an interesting business. Jack Mallers went on Bloomberg 636 00:31:25,960 --> 00:31:28,280 Speaker 2: TV to talk about this deal on Wednesday. I didn't 637 00:31:28,320 --> 00:31:31,680 Speaker 2: interview him, my colleagues Caroline Hyde and At Ludlow did. 638 00:31:32,200 --> 00:31:35,480 Speaker 2: It was so fun. So he's going to be the 639 00:31:35,520 --> 00:31:37,480 Speaker 2: CEO of this company. He's also going to be the 640 00:31:37,520 --> 00:31:41,520 Speaker 2: CEO of Strike And they asked him about that and 641 00:31:41,560 --> 00:31:44,400 Speaker 2: he said, you can just do things and I'm going 642 00:31:44,480 --> 00:31:47,880 Speaker 2: to lead both businesses. I truly believe my purpose on 643 00:31:47,920 --> 00:31:50,520 Speaker 2: this planet is to try and help bitcoin have a 644 00:31:50,600 --> 00:31:51,640 Speaker 2: chance to change the world. 645 00:31:52,480 --> 00:31:54,800 Speaker 1: This is not a business, this is a part of bitcoin. 646 00:31:55,040 --> 00:31:58,680 Speaker 2: Well, they asked him, what is your day to day 647 00:31:58,880 --> 00:32:01,800 Speaker 2: going to be If you're just stroke the bitcoin, you're 648 00:32:01,880 --> 00:32:04,880 Speaker 2: just accumulating bitcoin, what do you do all day? And 649 00:32:05,400 --> 00:32:07,440 Speaker 2: I mean he basically said, is my job and what 650 00:32:07,480 --> 00:32:10,120 Speaker 2: I've dedicated to do for our shareholders is grower bitcoin 651 00:32:10,160 --> 00:32:11,960 Speaker 2: per share. That's what he's going to do, so, which 652 00:32:12,040 --> 00:32:13,320 Speaker 2: just means he's going to buy bitcoin. 653 00:32:13,640 --> 00:32:15,840 Speaker 1: Anyway, I did explode and you said that, but let 654 00:32:15,880 --> 00:32:17,800 Speaker 1: me say a couple of things. So one like growing 655 00:32:17,800 --> 00:32:20,720 Speaker 1: your bitcoin for shore just buying bitcoin bit fineey yeah. Two. No, 656 00:32:20,800 --> 00:32:22,800 Speaker 1: they say in their presentation that they're going to do 657 00:32:23,360 --> 00:32:27,440 Speaker 1: bitcoin education and branding, including branded video media, and acting 658 00:32:27,440 --> 00:32:30,080 Speaker 1: as the go to content partner for major conferences, web 659 00:32:30,080 --> 00:32:32,560 Speaker 1: three firms and fintech institutions. Which makes sense because like 660 00:32:33,240 --> 00:32:36,280 Speaker 1: my analysis of these things, by which I mean Strategy this, 661 00:32:36,440 --> 00:32:39,880 Speaker 1: and like there's like forty imitators. My analysis is like 662 00:32:40,080 --> 00:32:42,240 Speaker 1: you're sort of like Meme stocking bitcoin, right, Like you're 663 00:32:42,280 --> 00:32:45,560 Speaker 1: sort of like finding people who are so excited about 664 00:32:45,560 --> 00:32:48,000 Speaker 1: the story you're telling that they're willing to pay two 665 00:32:48,160 --> 00:32:50,560 Speaker 1: or three times the value of the bitcoin in your 666 00:32:50,560 --> 00:32:52,880 Speaker 1: pot for your stock, right, So how do you sustain that? 667 00:32:52,960 --> 00:32:54,280 Speaker 1: I mean, like one thing is you have to like 668 00:32:54,760 --> 00:32:57,840 Speaker 1: be very visible, right, And like Strategy and Michael Saylor 669 00:32:57,880 --> 00:33:00,320 Speaker 1: have done a really good job of being visible and 670 00:33:00,400 --> 00:33:04,520 Speaker 1: identified with bitcoin, and like these guys have a great 671 00:33:04,560 --> 00:33:07,240 Speaker 1: head start because they're like Tether, right, They're like they're 672 00:33:07,240 --> 00:33:11,200 Speaker 1: people who are visibly identified with bitcoin. But you can't 673 00:33:11,240 --> 00:33:13,400 Speaker 1: just rest on your laurels. You got to keep producing 674 00:33:13,400 --> 00:33:16,960 Speaker 1: branded video to make people think no bitcoin. And also 675 00:33:17,080 --> 00:33:19,240 Speaker 1: because I like bitcoin, I got to buy the stock 676 00:33:19,280 --> 00:33:19,960 Speaker 1: of twenty one. 677 00:33:20,320 --> 00:33:22,960 Speaker 2: Yeah, so I want to read you more of this interview. 678 00:33:23,240 --> 00:33:26,640 Speaker 2: I really enjoyed watching it. So he said, I want 679 00:33:26,640 --> 00:33:29,240 Speaker 2: to grow our bitcoin per share his BPS. When you 680 00:33:29,280 --> 00:33:31,960 Speaker 2: buy a share of twenty one, let's say our BPS 681 00:33:32,040 --> 00:33:34,200 Speaker 2: is zero point zero five, our intent is to be 682 00:33:34,240 --> 00:33:37,240 Speaker 2: able to grow that to zero point zero six, et cetera. 683 00:33:37,720 --> 00:33:40,480 Speaker 2: Whereas a vehicle like an ETF, your exposure is static. 684 00:33:40,720 --> 00:33:44,000 Speaker 2: He said, we will never have negative bitcoin per share, 685 00:33:44,360 --> 00:33:46,920 Speaker 2: at least that's our intent. How would they get there 686 00:33:47,480 --> 00:33:49,440 Speaker 2: negative bitcoin? Yeah? Does that? 687 00:33:49,680 --> 00:33:52,000 Speaker 1: I think he means negative bitcoin per share growth? Right? 688 00:33:53,280 --> 00:33:56,520 Speaker 2: He said we will never have BPS negative at least 689 00:33:56,520 --> 00:33:57,280 Speaker 2: that's our intent. 690 00:33:57,880 --> 00:33:59,479 Speaker 1: He must mean negative growth. 691 00:34:00,040 --> 00:34:02,600 Speaker 2: I was just there. I was at my desk, I 692 00:34:02,720 --> 00:34:06,840 Speaker 2: was watching the interview, was typing curiously, and I guess that's. 693 00:34:06,680 --> 00:34:09,600 Speaker 1: Like the inverse bitcoin exchange. 694 00:34:09,960 --> 00:34:13,040 Speaker 2: How would you just like sell? How would you have 695 00:34:13,160 --> 00:34:14,839 Speaker 2: negative bitcoin for sure? How do you get there? 696 00:34:15,680 --> 00:34:17,399 Speaker 1: Borrow a lot of money and then you sell every 697 00:34:17,560 --> 00:34:19,080 Speaker 1: I don't know. I don't have a great answer. I 698 00:34:19,160 --> 00:34:19,560 Speaker 1: don't think. 699 00:34:19,760 --> 00:34:22,719 Speaker 2: I think he must mean negative growth, Jack, friend of 700 00:34:22,760 --> 00:34:24,600 Speaker 2: the show, come on, tell us what you meant? 701 00:34:25,320 --> 00:34:29,239 Speaker 1: Yeah, negative bitcoin for sure? I should start that. 702 00:34:29,320 --> 00:34:32,200 Speaker 2: I wonder if that would you know? Why would you 703 00:34:32,280 --> 00:34:33,720 Speaker 2: ever issue? 704 00:34:33,880 --> 00:34:35,960 Speaker 1: What you do is you borrow in bitcoin then you 705 00:34:35,960 --> 00:34:37,160 Speaker 1: buy bonds? 706 00:34:37,800 --> 00:34:42,280 Speaker 2: Yeah, well I should do that. 707 00:34:41,840 --> 00:34:45,080 Speaker 1: Right, because like the basic theory of these bitcoin treasury 708 00:34:45,120 --> 00:34:47,600 Speaker 1: companies is you borrow in dollars and you buy bitcoin. 709 00:34:47,920 --> 00:34:50,000 Speaker 1: Like that theory isn't even true, Like they mostly issue 710 00:34:50,040 --> 00:34:52,440 Speaker 1: stock and buy bitcoin. Like these these things all say like, 711 00:34:52,480 --> 00:34:56,200 Speaker 1: oh we're super levered, they're not that lever. Yeah, but no, 712 00:34:56,320 --> 00:34:58,880 Speaker 1: the way you would do a negative bitcoin company is 713 00:34:58,920 --> 00:35:04,720 Speaker 1: you would go to like crypto firms, uh huh, borrow 714 00:35:04,760 --> 00:35:07,680 Speaker 1: bitcoin from them, and then you'll use those bitcoin to 715 00:35:07,680 --> 00:35:10,839 Speaker 1: buy treasury bonds. Okay, have negative bitcoin. 716 00:35:10,520 --> 00:35:14,799 Speaker 2: For share, yeah, because the vast majority of companies have 717 00:35:15,400 --> 00:35:19,880 Speaker 2: zero bitcoin. Yeah, zero. 718 00:35:21,360 --> 00:35:25,480 Speaker 1: Negative would be weird but doable, possibly worth doing. I 719 00:35:25,480 --> 00:35:26,480 Speaker 1: should start this company? 720 00:35:26,560 --> 00:35:27,520 Speaker 2: You should? Why not? 721 00:35:28,400 --> 00:35:29,160 Speaker 1: A lot of reasons. 722 00:35:29,239 --> 00:35:30,640 Speaker 2: We'll see what multiple you got. 723 00:35:31,560 --> 00:35:35,600 Speaker 1: Negative multiple, It would probably be terrible, just like you know, 724 00:35:36,120 --> 00:35:39,120 Speaker 1: because bitcoin is very volatile, and the bitcoin treasury companies 725 00:35:39,160 --> 00:35:41,359 Speaker 1: that we're gonna be levered bitcoin in vestments are one 726 00:35:41,440 --> 00:35:43,359 Speaker 1: not that leverage, and two they're smartly levered, like they 727 00:35:43,440 --> 00:35:48,040 Speaker 1: do you know, long term non margin callable convertible debt 728 00:35:48,040 --> 00:35:51,240 Speaker 1: to buy bitcoin, right, So like they're really not taking 729 00:35:51,239 --> 00:35:54,120 Speaker 1: on a lot of near term leverage risk. Right, If 730 00:35:54,160 --> 00:35:56,360 Speaker 1: you borrowed bitcoin and used to buy treasury bonds and 731 00:35:56,360 --> 00:35:58,680 Speaker 1: then bitcoin went up a lot. You could get margin 732 00:35:58,719 --> 00:36:02,520 Speaker 1: calls from your crypto. Not fun people to deal with. 733 00:36:02,560 --> 00:36:05,600 Speaker 2: Necessary that could be you getting. 734 00:36:05,360 --> 00:36:07,440 Speaker 1: The margin calls. Yeah, no, never mind, I'm not doing it, 735 00:36:07,520 --> 00:36:09,400 Speaker 1: but telling should do it. It'd be fun, be funny. 736 00:36:09,440 --> 00:36:09,719 Speaker 1: All right. 737 00:36:09,760 --> 00:36:12,400 Speaker 2: Well, I've got turtles to go sit out. 738 00:36:12,280 --> 00:36:15,400 Speaker 1: In the sun, go enjoy your mealworms. 739 00:36:16,680 --> 00:36:18,200 Speaker 2: They're kind of big, so I have to actually cut 740 00:36:18,200 --> 00:36:21,120 Speaker 2: them up for the turtles. So I've thought jump on 741 00:36:21,239 --> 00:36:26,880 Speaker 2: mealworms by accident. Okay, I want. 742 00:36:26,719 --> 00:36:28,160 Speaker 1: To hear much more about the cutting up of the 743 00:36:28,200 --> 00:36:28,680 Speaker 1: nail ORMs. 744 00:36:28,680 --> 00:36:31,040 Speaker 2: They're just like an inch long, and the turtles are 745 00:36:31,080 --> 00:36:34,480 Speaker 2: also an inch long, so it's too it's too big 746 00:36:34,520 --> 00:36:38,920 Speaker 2: the turtle. To be clear, they're dead the mealworms. Right, 747 00:36:40,239 --> 00:36:40,879 Speaker 2: let's go home. 748 00:36:43,160 --> 00:36:44,640 Speaker 1: And that was the Money Stuff Podcast. 749 00:36:44,800 --> 00:36:46,840 Speaker 2: I'm Matt Lvia and I'm Katie Greifeld. 750 00:36:47,239 --> 00:36:49,319 Speaker 1: You can find my work by subscribing to the Money 751 00:36:49,360 --> 00:36:51,560 Speaker 1: Stuff newsletter on Bloomberg dot com. 752 00:36:51,320 --> 00:36:53,799 Speaker 2: And you can find me on Bloomberg TV every day 753 00:36:53,840 --> 00:36:56,920 Speaker 2: on Open Interest between nine to eleven am Eastern. 754 00:36:57,360 --> 00:36:59,080 Speaker 1: We'd love to hear from you. You can send an 755 00:36:59,080 --> 00:37:02,239 Speaker 1: email to you money at bloomberg dot Net. Ask us 756 00:37:02,239 --> 00:37:03,520 Speaker 1: a question, or we might answer. 757 00:37:03,320 --> 00:37:05,600 Speaker 2: It on air. You can also subscribe to our show 758 00:37:05,600 --> 00:37:07,920 Speaker 2: wherever you're listening right now and leave us a review. 759 00:37:07,960 --> 00:37:10,719 Speaker 2: It helps more people find the show with the Money. 760 00:37:10,520 --> 00:37:14,080 Speaker 1: Stuff podcast that is produced by Anamazerakus and Moses ibm Ar. 761 00:37:14,120 --> 00:37:16,080 Speaker 2: Thea music was composed by Blake Maples. 762 00:37:16,360 --> 00:37:19,040 Speaker 1: Brandon Francis Nudim is our executive producer. 763 00:37:18,800 --> 00:37:20,960 Speaker 2: And Stage Bauman is Bloomberg's head of podcasts. 764 00:37:21,280 --> 00:37:23,600 Speaker 1: Thanks for listening for The Money Stuff Podcast. We'll be 765 00:37:23,680 --> 00:37:24,960 Speaker 1: back next week with Morristo