00:00:02 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. I met your mom yesterday. 00:00:09 Speaker 2: Yeah you did. That's so crazy. 00:00:12 Speaker 1: I went to your baby shower. 00:00:13 Speaker 2: Yeah it was supposed to be a surprise, but yes, you surprised. I figured it out. I do. I do. I love knowing things, so I try to just accumulate knowledge. So I did, unfortunately spoil the surprise for myself. But they brought in my mom, which was really nice. She met Matt, which was really exciting for her. You keep like circling around Greyfeld members who aren't my dad, and my dad is dying to meet you. 00:00:40 Speaker 1: Okay, maybe I'll meet him at your. 00:00:44 Speaker 2: Are you actually going? 00:00:45 Speaker 1: No, it's fun and I have too many children. 00:00:48 Speaker 2: That a cruel tease. I know that my mom complimented your voice. 00:00:56 Speaker 1: Yes she did to me, and I said to her, the reason this podcast exists is because enough people are like your great place for a podcasts, and I was like, I better do a podcast, and now here we are. 00:01:09 Speaker 2: I know. God, it's such a full circle moment. I'm having a real like supply chain day, like. 00:01:17 Speaker 1: Welcome to. 00:01:20 Speaker 2: Like if if one thing goes wrong, then everything everything else goes wrong. No, I'm not like thinking deeply. 00:01:28 Speaker 1: About transporting goods from me through the straight forms. 00:01:32 Speaker 2: I mean, actually that I should think about a little bit. 00:01:34 Speaker 1: What's gone wrong? 00:01:36 Speaker 2: Nothing so far, So maybe this is the thing. It's just a lot of events stacked on top of each other. Let's start the thing that's going to derail everything for me, and that's this podcast. 00:01:48 Speaker 1: Setter Sol's up for fire. Hello, and welcome to The Money Stuff Podcast, your weekly podcast where we talk about stuff related to money. I'm Matt Levin and I read the Money Stuff com from Bloomberg Opinion. 00:02:02 Speaker 2: And I'm Katie Greifeld, a reporter for Bloomberg News and an anchor for Bloomberg Television. 00:02:15 Speaker 1: So you just get elin out of the way. 00:02:16 Speaker 2: Yeah's out of the way. Is potentially a pair of ets ETFs. 00:02:24 Speaker 1: I've been like banging this jump for a while that, like, you know, everybody complains about SpaceX training stock indexes like a lot like this stuff comes up with but I've never really seen it to this degree of fervor. People are really really mad about SpaceX joining the NAZAC one X. They're really mad about the possibility that it might join the S and P. 00:02:46 Speaker 2: It's a little bit beautiful like this is the most the general public has ever cared about index technology. Yeah, I know, right, it's nice. 00:02:54 Speaker 1: And it's so strange because it's like, like, I'm really mad that they change their rules to allow face x in which you know, and NASAC sort of did and SMP thought about doing them didn't do. Yeah. For wrestle people got really emotional about like the sanctity of index constitution rules. What a time like to me, like it seemed like, okay, like this is a giant company and we're like a big index that represents the giant companies in the in the world. And if the giant company doesn't get into the next because of our roles, yeah, maybe should treat our rules. I think it's a reasonable thing for the index providers to think, But nobody else thinks that. Everyone thinks it's cheating for Elon Musk to get put into indexes, and so a lot of people are really mad about it, And there was a great Bloomberg article this week about retail investors being mad about it and saying things like I think he's on the side of evil. There are ways to not have Elon Musk in your stock portfolio, which people do in this article. One of these ways is to like switch out of the US stock indexes and into like international stock indexes, which seems like a crazy overreat. 00:03:59 Speaker 2: Yeah, you're making a lot of other choices that aren't related to ELONSK. 00:04:02 Speaker 1: When I wrote about like there should be an index fund with no elon, people were like, oh, what about this like small cap index It's like okay, yeah, but like that's a different problem. Yeah, but no, the obvious answer and like you know, the bloombergrater. As we talked about directing indexing. There's a lot of obvious answers, but one of the one of the main ones is like you know, by the naz like ninety nine ninety eight, by the NAZE like one hundred without the companies you don't want, And now subversive et APS is launching or is filed for Uh yes, the qqn E and spn E E S answer no elon, the NAZEK one hundred and SMP five hundred x elon. 00:04:40 Speaker 2: Yeah. 00:04:41 Speaker 1: So basically it's all of the companies in the NAZE like one hundred or the S and P five hundred except for those that are run by ELM Musk, which right now is SpaceX and Tesla. 00:04:52 Speaker 2: That's the thing, like for the S and P five hundred one, especially, like you're just excluding Tesla, and Tesla has a one point seventy five percent waiting in the S and P five hundred So it feels like, what's the point. 00:05:05 Speaker 1: Well, the point is that you are getting mostly the same thoughts, hopefully a comparable performance, but you are not having Elon, which clearly people want. Like that's the thing that people want. 00:05:16 Speaker 2: You have the moral whatever. 00:05:18 Speaker 1: You want, whatever the thing is that makes you like go around calling your broker being like, how can I find it? INEX with no Elon? You have that and now you're recoit. Oh here it is. 00:05:27 Speaker 2: Yeah, I don't know. 00:05:28 Speaker 1: It's just like a market like this is not based on like deep analysis of factor exposures. This is based on like people want the things that we'll give it to him. 00:05:36 Speaker 2: Yeah. I feel like you were about to say marketing, and that is what this is. 00:05:41 Speaker 1: Sure? Yeah, Like, man, how many ETFs have you we talked about like it's a it's a consumer product. Yeah, you want to give people the consumer product they want. 00:05:51 Speaker 2: Isabelleiott Bloomberg wrote this up. She quoted an ETF industry analyst who I chat with a lot. His name is Dave Natig, and he was one of those people who had a lot of opinions about SpaceX being added into a bunch of these indexes. But he said that they may well attrack some money that doesn't think too hard. But these kind of narrowcast micro ideas aren't really for anyone fun marketing, not a real investment thesis. So I mean, this is one of those investments well, I mean if you think about, but. 00:06:20 Speaker 1: Not a real investment, Like it's not a like systematic like based on broad study of the entire stock market. But like some people are like, look, I'm not a stock expert. I want to own the index pods. I'm not going to think about every company that I want to own a passive index thing. But this Elon stuff freaks me out right, and like that's not an unreasonable like the these companies traded, you know, very high multiples of sales, like SpaceX is trading on you know, plans for space data centers. Like it's not crazy to think I don't know a lot about stocks, but I think these stocks are overvalued, right, Like not investment advice, it's just like that's the thing that people clearly think. Like some people think, oh, I don't like the kind of Elon musks, but some people think, oh, these stocks are overvalued and it's bad that they've been put into the indexes. So yeah, you're like you're selling a real investment thesis to those people. Yeah, or you're selling them their investment. 00:07:10 Speaker 2: It's fair. I think the point that Dave is making, or maybe the point that I want him to be making, is that you think about these like very narrow niche ETFs, and they tend to exist for a while, they float along, they trade, they don't gather any money, and then they shut down within the next year. 00:07:28 Speaker 1: I agree, And this might be a very narrow niche eta, but like I don't know, Like we've been talking about this a lot, Like this thesis is not that narrow, right, Like this thesis is something that a lot of people are worried about. 00:07:38 Speaker 2: Yeah, well, the fun thing is that, I mean, if these launch, we can talk about it in six months and see how it's actually done. 00:07:46 Speaker 1: I know, But that people don't care, Like like. 00:07:49 Speaker 2: That's the problem. I Mean, you get all these like wild filings. 00:07:52 Speaker 1: And the liberal article about people trying to avoid Elon they quote a guy saying I would not feel bad about never buying SpaceX no matter how well it does. I'm saying, like the thing will know in six months. Well, I guess we'll know how much money it took in, which is important, but like there will also be performance, right, like either SpaceX will or won't outperform then that index. Yeah, and nobody in this fund will care. Yeah, I'm still gad I stayed out of SpaceX. 00:08:18 Speaker 2: Yeah. I would also love to check in with that guy specifically though, if I mean SpaceX quadruples and value or something, I would imagine that maybe he'll feel a little bit of fomo. I'm not a SpaceX really don't like I know, but people really like money. It's like competing. Yeah, to your point on no one caring. Again, As an ETF person, I take that as like you have all these strange little funds out there that have like no assets, that just bump around, but they get a lot of coverage because they're interesting. 00:08:57 Speaker 1: Yes, Like an ETF is a way is like a form of expression. It's like a way to like package an investment idea, and sometimes those investment ideas are appealing to a lot of investors, but other times they're just funny ideas and so they're fun to talk about, right, Yeah, it's just like a little thesis. This is subversive which launch these also runs the Nancy Pelosi copy trading ETF exactly, which again, like, like you have an investment thesis like Nancy Pelosi and other Democratic lawmakers are regularly trading on inside information. They also have a Republican one. They have a Democrat and Republican ETF. You can have a thesis like those guys are trading on inside information, so I want to copy them so I can make money. But I kind of think that mainly it's performance hard, right, Like it's mainly performance is kind of fun to have a ETF that copies Nancy Pelosi's trades. 00:09:45 Speaker 2: Yeah, I guess the key to not being grumpy about it is to view it in that way, like it is performance hard right. 00:09:52 Speaker 1: Dave Natig is an ETF purist who like believes that ETFs are important part of the portfolio and constructed in a responsible way. But like, I just there's a lot of investment options out there, and like this is a fun way to yeah, produce funny ones, but this one is not that fun like the Elon one. Like I really think the thesis is just like pretty normal and like we've talked about it in a very straightforward like this should be the product that people offer because people want them. 00:10:21 Speaker 2: Yeah, in terms of out their ideas, this is definitely I. 00:10:26 Speaker 1: Thought, like I had written, oh, they should, this should exist, but what I'd actually written is there should be like no SpaceX anthropic open eye one, which is like an overwrapping idea, but not the same idea because like people are mad about all those companies, like the rules being changed for all those companies, but the Elon musk is like more personally agitating to people. 00:10:44 Speaker 3: Yeah, else were in SpaceX also in SpaceX Training index right now. 00:11:04 Speaker 2: Yeah, that's a smooth transition. 00:11:07 Speaker 1: Yeah. So SpaceX as of last week was not in the NAZE like one hundred. So it's timely that the ETF lunched this week, filed this week. It didn't actually launch, but so the space Eggs joined the NAZAC one hundred basically Monday evening or Tuesday morning depend a Hay account, and it's been like it went down that day. He closed down on Monday, despite you know, tens of millions of shares trading hand because all the index ones had to buy it, and this brought some attention to the index three balancing trade. Will also brought attention to the index three balancing trade. Is that two portfolio managers that Millennium made three point seven billion dollars doing it last month? 00:11:44 Speaker 2: Yeah? At first I thought like year to date, like the three point seven billion dollars UH singular month of June was fantastic for these guys having the time of their life, and there was a lot happening in June. Obviously. 00:11:59 Speaker 1: I have talked to people who work at these multi strategy hedge funds, and one question I've asked is, like, if you're an index rebalanced trader, like there's some big indexes that rebalance, you know, quarterly, twice a year, whatever, do these people come to work every day? 00:12:13 Speaker 2: Yeah? 00:12:14 Speaker 1: When it shows me, yes, they worked very hard all year round, but like you know, their job is kind of focused on a couple of big dates. And while apparently they worked very hard all year around, like they clearly sometimes are doing huge trades and sometimes are not doing any trades because they just think they're thinking very hard. But in June. There were a lot of rebalancings. One of the things that you know, the Bloomberg article about this mentioned it's like five events there's but one of them is the space X training, the NASDAC and I think the foot see and. 00:12:43 Speaker 2: Yeah, you know things. I mean, Russell had its annual recal institution. 00:12:46 Speaker 1: There's a lot of stuff going on, and we were deploying a lot of capital and they made a boat load of money. 00:12:51 Speaker 2: Yeah, so there was a bunch. I mean, this story was so well read and also made the rounds on social media and as discussed, I booked mark a lot of tweets about this. 00:13:01 Speaker 1: A lot of people were calculating which the individual like people took home, which I would not work anymore if I had done one really good index rebalancing. 00:13:11 Speaker 2: I mean, god, bless you just got to get one home run. Front of the pod. Gappy pointed out that this is very cyclical, lot of boom and bust. Someone else tweeted out, yeah, like these. 00:13:22 Speaker 1: Same pods lost hundreds of millions of dollars a while back. 00:13:25 Speaker 2: Yeah. Specifically, there's a story from March of twenty twenty five talking about the uncharacteristic loss that this team lost in February, which was like nine hundred million dollars or something. 00:13:37 Speaker 1: Now they've had a more characteristic game, so they. 00:13:39 Speaker 2: Have to have a strong stomach, it seems like to be in the index rebalancing game. 00:13:44 Speaker 1: Yeah, strong stomach. So like the index rebalancing trade is like essentially liquidity proves in trade. Yes, index funds need to buy so much stock all at once, and that's terrible. People something to get mad at the index rebalancers because they think that they're front running the index ones because like they know, the index ones have to buy and so they're buying out of the index ones, which is kind of true. But if they didn't do that, the index ones would have to do all other buying at the clothes on like the one day, and they would have to pay up so much. Like the stock would spike up at the close as there was like tens of millions of shares of new orders from index ones and nobody to sell it to them. So what the rebalancing traders are doing is they're selling it to them, right. They're saying, okay, we know that you know, at the clothes on Monday, the index ones are gonna have to buy sixty million shares of SpaceX or whatever it is. We're going to buy some stocks so we can sell them sixty million shares at the clothes so this stock doesn't spike up at the clothes on the low rebalance day. And so it's probably helpful to index ones. And like they're studies showing that, like index ones have less slippage basically because like the existence of this trade, they get a fee for it. In expectation, Yeah, they get an atoriska for it. I tried to as my manager sometimes you're like, you know, if we didn't do this, like indexing wouldn't work, Like the rise of indexing is made possible by multi strategy hedge funds doing this trade. My assumption is that if the hedge ones just didn't do this trade anymore, like you could solve the problem with like averaging periods. Instead of the index provider saying, you know, as of Monday, this is entirely in the S ANDP, you could be like, we're going to average it in over thirty days, so the index will slowly adjust over time, so that the index funds could buy over time rather than buying on one day. But right now the index ones that buy on one day and they buy from hedgehnes. Yeah, and so the hedge ones make money by antsipating index fund demand. And I also the main thing you have to figure out. One thing you have to figure out is what company will be added to the index? 00:15:42 Speaker 2: I think is like that sounds like the fun part. 00:15:45 Speaker 1: Yeah, I think like some of its kind of mechanical, like some of these indexes is not that mechanical. But but another thing you have to figure out is like how much stock the index funds will buy, which is like, you know, fairly mechanical because you can kind of guess how much index funds I own and then then the percentage. But then another thing you have to figure out is how much you're you know, competitors will sell, right, Like you have to know who else is doing this trade, because if twice as many people as you think are doing this trade, then you're not going then like you're going to drive down the stock in the closing auction. But so yeah, it's like a trade with some risk. But the other risk is just like we own a couple of stocks, the stocks that you think will be added to the index, and like if you are just so you're just like long a lot of idiosyncratic risk on like huge positions in those stocks, and so that's how you can lose money, is if those stocks go down. It's also you can make money. Like one theory that a reader sent me about the three point seven billion dollars they made in the rebalancing trade last month is that two stocks were added I think to the S and P. One of those Marvel. 00:16:42 Speaker 2: Yeah, that sounds right, Marvel. 00:16:44 Speaker 1: It was announced they're being added on June and fifth, but you could probably have guessed so, like probably some of these funds were long Marvel before June started. Yeah, and on June second, Jensen Wang gave a talk where he said that Marvel is going to be a trie into our company, and the stuck went up like thirty three percent that day, adding seventy billion dollars of market cap. Like that could be the whole explanation for this, right, that you're just idiosyncratically long a lot of Marvel and then a Marvel goes up and then you've made three billion dollars, So that could be the whole story. 00:17:14 Speaker 2: Yeah, Well, I was thinking it sounds fun to be an index rebalancer because outside of like the Marvel Jensen Wong situation. Even if it is somewhat mechanical determining which stocks are going to be added, you still see big pops in those names after it's announced that they're going to add the index. 00:17:32 Speaker 1: Right, I mean that's right, that's the trade is like, yeah, he's like buying it before it's announce so that you get that pomp. 00:17:37 Speaker 2: Yeah, sounds fun. Something that I wanted to ask you about, and maybe this is a dumb question. So you talk about how when it comes to index funds needing to get these shares at the closing auction, they used to work with investment banks. Now it's these hedge funds that have sort of stepped into that role. You also point out that these hedge funds don't have customers or take orders. How they actually link up with the index funds. 00:18:02 Speaker 1: It's an auction. 00:18:03 Speaker 2: It's just an auction. 00:18:04 Speaker 1: It's just an as that closing auction. 00:18:06 Speaker 2: They don't know in advance the index funds that. 00:18:08 Speaker 1: I don't know if there's any sort of like block traded desks during stuff, but like me nervous, seventy eight million shares of space cleared in the closing auction on Monday, which is like ten x what it usually does. So, like indix sense have to buy at the closing price, right, they don't have to, like but you know, to track the index, they have to own it at the closing price. And so they put in big orders to buy the clothes and someone has to be on the other side of those orders and at Touch Funds knowing that there will be demand in the closing auction. 00:18:37 Speaker 2: So what do you think the market, What do you think happened this past week that you actually saw SpaceX shares finish the day lower? Did someone miscalculate what the closing price was going to be or how many shares would be needed. 00:18:52 Speaker 1: The way to make money on the index rebalancing trade is to buy low in the days leading up to. 00:18:59 Speaker 2: The rebounding event, right. 00:19:01 Speaker 1: And then selling the rebalancing and then keep buying low. Conceptually, you should sort of buy like half of the shares before the rebalance event and half the shares after the rebalance event. And like what should happen is that, like you'll buy kind of low prices, then we'll just kind of spike up into the clothes because like there'll be a lot of you know, you'll you'll be buying and then like inex onens will buy a ton and I'll spike up, and then you'll keep buying. Like you'll short some shares to the index funds in the closing auction on the one day, and then you'll cover your short over the next few days. Right, And that's like kind of what's happened, right, Like the index ones had to buy in the auction and then like their buying demand was done, and then like you know, the hedge funds have the opportunity to keep buying to close out their shorts if they were short. I don't know, but like that's what like Conceptually, you should buy half before and half after because you're sort of averaging them in and you don't have to average them in over the period leading up to their rebalance date. You can average them in over the period around the rebalancing bit. 00:19:54 Speaker 2: These are good notes for my next career as an index re balancer, because I love you. 00:19:58 Speaker 1: Should I'm not an index re balanc I'm not sure that I'm going to do this. We actually do it, are horrified by my naivey day. 00:20:04 Speaker 2: But hopefully they're listening and they're going to write. 00:20:06 Speaker 1: In but yeah, no, I mean, like the answer is, there was a big spike of demand in the auction, and now the stock is lower because that big speke of demand went away. And hopefully, if you're an index rebalancer, you're profiting from that by selling in the closing auction on Monday at like one sixty or whatever and then buying today at like one to fifty. 00:20:25 Speaker 2: It is going to be interesting also to as you point out, we have the start of the lockups expiring this month. 00:20:33 Speaker 1: This is like an I think I've said this on this podcast, Like what you want for like neatness is the lockups all expire on the same day. I thought it to the S and B five hundred, right, like you want to just like there's huge natural supply, there's huge natural demand. Sure, hedge funds can intermediate that, but like, why not just you know, have an auction where the lockup sellers sell to the index buyers. 00:20:56 Speaker 2: In a perfect world that would be the case. 00:20:57 Speaker 1: No one does that because it's like you can't like count on me, You can't count on S and P to include you at a particular time. But it just like it just it would be it's so convenient. 00:21:07 Speaker 3: Yeah, I just. 00:21:08 Speaker 2: Feel like SpaceX is such like an interesting little Petri dish of Okay, you have this index demand. Okay, it was one time. Now you have like this waterfall, right, I know, But what's going to happen because we're not. 00:21:20 Speaker 1: Yeah, I don't know. I mean, like, I don't know, like. 00:21:22 Speaker 2: You some analysts saying it's going to a ten trillion dollars in market cap. 00:21:27 Speaker 1: It's just I mean, like in general, the people with the lockups are people who are not the anti Elon must people. They're the opposite of that, right, So like a lot of them won't sell some of them, a lot of them sel right, Like a lot of them made a lot of money, and you know, we'll take some profits. But yeah, something like now I'm in this forever. Still ten trillion. 00:21:46 Speaker 2: They're true believers. 00:21:47 Speaker 1: Man, Yeah, I don't know. I mean, I'm sure that the lockup will you know, create a lot of supply. I mean definitely. The one theory is that the stock price is high because there is just not a lot of supply and there's a lot of force demand from index ones and a lot of demand from reaching well, and if instead of five percent of the stock being available to buy. You know, forty percent of the stock was available to buy, it would be lower, but depends on people are actually going. 00:22:09 Speaker 2: We'll just have to watch this space you want, you'll be gone. I will be watching fondly from afar very distantly. 00:22:34 Speaker 1: Should we talk about eggs, Yes. 00:22:36 Speaker 2: We should just started with eggs. It was a risky bet to start with ETFs because I feel like we lost a lot of the audience. 00:22:41 Speaker 1: I know, should we switch them around in post? 00:22:43 Speaker 2: Yeah, I don't care. 00:22:45 Speaker 1: You don't care if you started with elon. People love the amount of elon. 00:22:49 Speaker 2: That's true. That's true apple to everyone. Yes, they're a great source of protein and choline, which is very important for brain healthy. Only a few with the yolks. Eggs are super expensive. I love eggs. 00:23:04 Speaker 1: They were super expensive because of bird. 00:23:06 Speaker 2: Fluid, as it has since been revealed. 00:23:10 Speaker 1: Maybe I'm not totally convinced that the market manipulation actually raised the price of eggs that much, But like you know, the Justice Department is, and many states attorney general State attorneys general, that's my. 00:23:20 Speaker 2: Least favorite plural. Attorneys general get. 00:23:23 Speaker 1: Really into weird plurals. Anyway, The Justice department in several states sued a bunch of egg producers for manipulating the price of eggs, and they settled has to be for eggs. 00:23:36 Speaker 2: I love how you basically ask, like, why wouldn't you be rigging your version of libor if you were in kids? 00:23:43 Speaker 1: So I feel bad it's calling it libor because like libor was essentially a number that was self reported. The standards setter would call banks and say, hey, what price are you borring at? And they just make up a number what I've been calling egg libor, which is actually the Erner Barry and Express. It's now called it Expana. But like there's a market data service called the XPAN I used to be called Urner Barry that like reports the price of eggs, and it reports the price of eggs based on transactions on the egg clearing house. But the egg clearing house is not where most egg transactions take place. So like you have the egg clearing house basically for egg producers to trade surplus eggs. So sometimes an egg producer ows it's customers more eggs than it has. Sometimes an egg producer has extra eggs and so they like match off in the egg clearinghouse and that produces a price. But there are not that many transactions on the egg clearing house compared to just wholesale egg transactions, right, And so the egg producers are like, well, I mean allegedly, you know, settled law seed. But the egg producers are like, well, you know, if the price on the egg clearing house is high, that'll make the price on all of our contracts high, so we can overpay in the clearing house market to raise the price on all of our wholesale contracts that price buy reference to the earner barry price. And so allegedly they did that, and they have like you know, emails and communications being like, hey, let's push up the price really high. And they did some spoofing. They like would put high bids onto the clearinghouse so that the pricing service would use those high bids, and then they take them away before they got it, and the price of eggs allegedly went up again. The egg producers are like, nah, it didn't really affect the price of eggs, but the Justice Department things it did, and so they sued and they settled with a bunch of egg producers. And truly, my favorite part of the store is that the settlement was paid in eggs. Yeah, you never see that. You never see that. No, But like e companies were like, Okay, we're going to pay fifty million eggs for this market manipulation. 00:25:36 Speaker 2: Those food banks are going to have to take physical delivery of so many eggs. 00:25:40 Speaker 1: Yeah, they're going to food banks, which is beautiful. The New York press release was like a little ambiguous. It was like, the New York Attorney General has secured fifty million eggs, and five million of those eggs will go to New York frud banks. Like the actual explanation is that the other forty five million will go to food banks in other states, because it's like the total settlement and fifty million eggs or whatever. But I had a moment of thinking, like, well, the New York Attorney General eat forty five million eggs. 00:26:03 Speaker 2: I mean, don't threaten me with a good time. I love eggs, but I also loved some of the emails that were found. Hickman's, for example, was you know, conspiring with executives from other egg producers, and at one point emailed, hurry, there are only sixteen bids on ECI right now. That's the egg clearinghouse, and fifteen of them are ours meeting Hickman's, which that's like a that's I don't know, that's a bad email toscent. Even if they didn't really meaningfully manipulate the price, that's that's that's a hard one. 00:26:36 Speaker 1: Yeah. More than one person said if the bid like they vote in Texas early and often, which is like once is fine, but like, yeah, using that jag repeatedly. 00:26:45 Speaker 2: I'm glad you immediately brought up bird flu because that was my knee jerk reaction reading this, Like you think about the time period that we're talking about, like twenty twenty two, bird flu avian flu was devastating the nation's flocks. Chickens were dyed left and right, they were having to be cold on mass. They didn't need to do all of. 00:27:04 Speaker 1: This, Yeah, I mean I think that the costs swayed up, right, Yeah. Right, So, like one possibility is like they used bird flu as cover for market manipulation. That's clearly kind of like the vibe of the Justice Department complaint, which is like they saw prices going on anyway, they figured any price increase that they tried would be having them like op, it's bird flu, it's fine, and so they tried to push out the price a little bit extra to make extra profits. The other possibility is that, like their costs went up because of bird flu, and the market pricing service was slow to react to that, and so they manipulated the price on the clearing house to reflect the actual price of eggs. Like you know, they say, everything we did is legitimate, and it didn't push out the price, so they added, you have you can imagine a sympathetic explanation for this, but in any case, Yeah, the price went up mostly because of bird flu, and then a little bit maybe because of market manipulation around the edges. 00:27:56 Speaker 2: Yeah. 00:27:56 Speaker 1: The other thing that I like is that right around when this is happening, I think two weeks after the conspiracy allegedly ended in twenty twenty five, Calman, which is one of the big egg producers, they're like controlling family sold three hundred million dollars worth of stock. 00:28:11 Speaker 2: And the Adam's family actually. 00:28:13 Speaker 1: In an underwritten offering, and so they like put out a perspectus disclosing all of their risk factors, and one of the risk factors is like prices are temporarily high because of bird fluid. By the way we got to you got an investigative letter from the Justice Department trying to figure out why prices are high. 00:28:28 Speaker 2: Don't worry about that though. 00:28:29 Speaker 1: Yeah, I wrote, there's a that feels like in everything in security is for add lawsuit waiting to happen, right, Like you bought shares, you know it basically like near the all time high. You bought shares from the controlling family without knowing that they were about to settle a market manipulation case. No. 00:28:49 Speaker 2: Yeah, there's a lot of family drama involved in that. Maybe it's not drama, but the Adams family does control it through super voting class A shares held by a vehicle called Daughters, which is four of the daughters of the late founder. Like, I don't know, I just love the idea of like there's this egg dynasty. Sure, yeah, a number of egg dynasties I would imagine. So I wonder how many markets this sort of behavior is happening in. I wonder if it's happening in cattle right now. 00:29:17 Speaker 1: I talked about there's like a chicken live work inspiracy. 00:29:19 Speaker 2: Yeah, yeah, well in cattle. I don't know if you've been following screwworm. 00:29:25 Speaker 1: I'm moderately up to speed on. 00:29:27 Speaker 2: Screw worm ravaging, ravaging the nation's herds, So I don't know beef prices are going up. I wonder all those words bad news. Something else will be monitoring over the next six months. It's a situation I'll keep an eye on. 00:29:49 Speaker 1: And that was the Money Stuff Podcast. 00:29:51 Speaker 2: I'm Matt Levine and I'm Katie Greifeld. 00:29:53 Speaker 1: You can find my work by subscribing to The Money Stuff new Letter on Bloomberg dot com. 00:29:58 Speaker 2: And you can find me on Bloomberg TV every day on the close between three and five pm Eastern. 00:30:04 Speaker 1: We'd love to hear from you. You can send an email to Moneypod at Bloomberg dot net, ask us a question and we might answer it on the air. 00:30:11 Speaker 2: You can also subscribe to our show wherever you're listening right now and leave us a review. It helps more people find the show. 00:30:17 Speaker 1: The Money Stuff Podcast is produced by Anamazerakis, Moses Onam and Alexis HoTT Our. 00:30:24 Speaker 2: Theme music was composed by Blake Maples. 00:30:27 Speaker 1: Amy Keen is our executive producer. Thanks for listening to The Money Stuff Podcast. We'll be back next week with the More Stuff