WEBVTT - Chaos Factor: ARKF, 10Q, 10% 0:00:02.720 --> 0:00:10.800 Bloomberg Audio Studios, podcasts, radio news. So you're on vacation 0:00:10.920 --> 0:00:11.400 next week. 0:00:11.360 --> 0:00:17.880 I am. I'll be in the mountains of Colorado. Yeah, 0:00:18.160 --> 0:00:19.800 you know, the snow isn't great this time of year, 0:00:21.320 --> 0:00:23.040 but you know, love of the game. 0:00:23.360 --> 0:00:24.759 What are you going to do for money stuff? 0:00:24.920 --> 0:00:26.000 We should do something? 0:00:26.120 --> 0:00:29.000 Should we should have some mail bags. 0:00:29.160 --> 0:00:33.600 We should have some mail bags. I will log onto 0:00:33.640 --> 0:00:37.879 zoom for an hour and we'll take questions from the audience. Okay, 0:00:38.360 --> 0:00:41.200 not live, not live, but that would be fun maybe 0:00:41.240 --> 0:00:41.640 one day. 0:00:42.080 --> 0:00:45.360 Right, So, if you want Katie to answer questions with 0:00:45.760 --> 0:00:48.720 Colorado with me, send them to us now. 0:00:48.960 --> 0:00:51.639 We need them. Should we tell them where to send questions? 0:00:52.040 --> 0:00:54.600 I believe it's money pot at Bloomberg dot Net. 0:00:55.320 --> 0:00:59.200 That sounds right it, Yeah, just yell them into the 0:00:59.240 --> 0:01:01.120 sky and it'll get to us. 0:01:01.440 --> 0:01:03.160 Definitely, don't have me on Twitter. 0:01:04.560 --> 0:01:05.520 Do you still go on Twitter? 0:01:06.280 --> 0:01:08.960 Not never, but I don't look at my notifications or 0:01:09.040 --> 0:01:11.240 dms anymore. Yeah, I'm pretty much. 0:01:11.800 --> 0:01:12.720 It's kind of sad. 0:01:12.920 --> 0:01:17.560 It's really sad. This is like, you know, especially life. 0:01:17.680 --> 0:01:21.800 That's the thing, Like the pandemic, it scratched so many 0:01:21.840 --> 0:01:24.039 social issues. I don't know. I still go on all 0:01:24.080 --> 0:01:26.360 the time. But I don't tweet as much anymore. 0:01:26.560 --> 0:01:29.520 I don't. I'm not like performatively quitting. But I still 0:01:29.600 --> 0:01:31.840 like tweet my columns when I remember too. 0:01:31.959 --> 0:01:36.120 But yeah, I used to tweet a cat, like my 0:01:36.200 --> 0:01:36.800 Friday cat. 0:01:36.880 --> 0:01:38.680 I remember some of your Twitter sticks. I feel like 0:01:38.720 --> 0:01:39.360 you had good Twitter. 0:01:39.520 --> 0:01:43.240 I did have good sticks. No, And like yesterday on 0:01:43.280 --> 0:01:45.200 FED Day, usually I tweet time for the best day 0:01:45.200 --> 0:01:48.120 of our lives. I haven't done that in a while. 0:01:48.640 --> 0:01:50.960 I feel like, you know, no longer the best day everlast. 0:01:51.520 --> 0:01:55.920 No, Yesterday, Yeah, yesterday was the best day of your life. 0:01:56.120 --> 0:01:59.320 No, it was fine. I mean they cut they cut 0:01:59.320 --> 0:02:01.720 twenty five base points, which is pretty cool. Would have 0:02:01.760 --> 0:02:05.280 been awesome for the chaos factor if they either held 0:02:05.360 --> 0:02:07.040 rates or cut fifty basis points. 0:02:07.160 --> 0:02:10.520 Yeah. Yeah, you want to just like, yeah, expectations. 0:02:09.960 --> 0:02:11.080 Want to burn the world down. 0:02:11.240 --> 0:02:13.160 Yeah yeah yeah. 0:02:13.200 --> 0:02:15.680 But I really just want to talk about. 0:02:15.919 --> 0:02:18.880 This is going to be that's the first thing, clanging, transition, 0:02:20.360 --> 0:02:23.360 whatever is on paper in front of me. 0:02:23.919 --> 0:02:27.200 I really want to talk about the arc innovation, ETF 0:02:27.280 --> 0:02:29.880 and whatever the heck is going on with these IPO trades. 0:02:30.919 --> 0:02:32.720 That was pretty good. 0:02:32.880 --> 0:02:35.040 It has been every day I wake. 0:02:34.960 --> 0:02:38.440 Up none of that. Hello, and welcome to The Money 0:02:38.480 --> 0:02:41.360 Stuff Podcast, your weekly podcast where we talk about stuff 0:02:41.360 --> 0:02:45.960 related to money. I'm Matt Levien and I wrte the 0:02:45.960 --> 0:02:47.760 Money Stuff column for Bloomberg Opinion. 0:02:48.480 --> 0:02:51.120 And I'm Katie Greifeld, a reporter for Bloomberg News and 0:02:51.160 --> 0:02:52.920 an anchor for Bloomberg Television. 0:02:54.200 --> 0:02:57.679 Katie, I gather that you're fascinated by r gtfs. 0:02:57.880 --> 0:03:01.320 I opened my eyes in the morning horizontal in debt, 0:03:01.320 --> 0:03:05.120 and I just think about heartbeat trades. Yeah, but this 0:03:05.200 --> 0:03:06.520 isn't strictly a heartbeat. 0:03:10.880 --> 0:03:12.760 I don't know exactly what the qualification. 0:03:12.800 --> 0:03:15.320 If you take a look at the chart of inflows 0:03:15.360 --> 0:03:17.480 and outflows, it looks like a heartbeat, but I don't 0:03:17.480 --> 0:03:18.960 think that there are taxes involved. 0:03:19.200 --> 0:03:21.000 It's not a tax heart beat, but is a different 0:03:21.040 --> 0:03:25.519 kind of heartbeat. Yeah, right, So runs some ETFs. Kathy 0:03:25.520 --> 0:03:30.639 would famous part of her ETF active manager and because 0:03:30.639 --> 0:03:33.160 they're like active dfs, and because she's like a celebrity 0:03:33.200 --> 0:03:36.960 tech investor, they get to invest in hot tech IPOs, 0:03:37.120 --> 0:03:38.800 which hasn't been a thing for a long time, but 0:03:38.840 --> 0:03:41.080 it's coming back, right, There's been some hot tech ips 0:03:41.480 --> 0:03:44.920 so much have gone up a lot and so this 0:03:45.080 --> 0:03:50.680 RTF gets to get small ish allocations in some hot 0:03:50.760 --> 0:03:54.960 tech IPOs, and if you think those IPOs will go up, 0:03:54.960 --> 0:03:57.680 you'll be like, oh, I'd like to invest in this 0:03:57.880 --> 0:04:00.920 RKTF to get my tiny se life exposure to that. 0:04:01.680 --> 0:04:03.880 But if you're really tidy minded about it, you're like, well, 0:04:04.200 --> 0:04:06.640 I don't want all the other stuff in the CTF. 0:04:06.760 --> 0:04:10.280 I just want this IPO exposure. I can't get the 0:04:10.280 --> 0:04:12.600 IPO exposure myself because I am not on the list 0:04:12.640 --> 0:04:16.440 of people who get allocated shares on these IPOs. But 0:04:16.680 --> 0:04:20.760 I can get exposure to the ETF because anyone can 0:04:20.800 --> 0:04:23.360 get exposure to the EDF. And then the further thought 0:04:23.440 --> 0:04:25.880 you could have is I could hedge my exposure to 0:04:25.920 --> 0:04:28.960 everything else on the ETF by, you know, for instance, 0:04:29.080 --> 0:04:31.479 shorting all of the stocks that are currently in the ETF, 0:04:31.520 --> 0:04:33.919 which it discloses, so that i'd be left with you know, 0:04:33.920 --> 0:04:35.680 if you're long the ETF and short all of the 0:04:35.680 --> 0:04:38.440 stocks in the ETF, you're left only with like the 0:04:38.520 --> 0:04:41.320 possibility of it getting an IPO allocation and the IPO 0:04:41.400 --> 0:04:44.000 going up. And so it seems like people are doing 0:04:44.040 --> 0:04:47.120 some sort of trade like that, and the best way 0:04:47.160 --> 0:04:50.719 to operationalize that trade is not to buy the ETF 0:04:50.839 --> 0:04:52.840 and short the stocks. The best way to do it 0:04:52.880 --> 0:04:55.200 is to borrow all of the stocks that are in 0:04:55.240 --> 0:04:59.359 the ETF, deliver them to ARC, to the ETF to 0:04:59.520 --> 0:05:03.240 create the ETF, get back shares of the ETF. Now 0:05:03.279 --> 0:05:05.839 you have the ETF and you're effectively short the underlying 0:05:05.839 --> 0:05:08.080 slides because you bar them and gave them to ARC. 0:05:08.839 --> 0:05:10.840 And then when the IPEA happens, you reverse the trade. 0:05:10.839 --> 0:05:13.960 You deliver back the shares, get back the underlying stuff, 0:05:14.320 --> 0:05:16.719 You deliver the underlying stuff back to your share lender, 0:05:17.080 --> 0:05:19.279 and you're left with only the popped IPO. 0:05:19.560 --> 0:05:23.200 Yeah. I guess what I don't understand about this is 0:05:23.880 --> 0:05:25.680 how big of a gamble is it to do this 0:05:25.960 --> 0:05:29.159 in the ARC Innovation ETF. Like, I wonder if the 0:05:29.200 --> 0:05:32.200 person or whoever was behind this trade knew for sure 0:05:32.680 --> 0:05:36.040 that they're getting allocated some of Klarna or some of Bullish. 0:05:36.839 --> 0:05:39.040 My impression is that in Bullish it was pretty telegraphed 0:05:39.040 --> 0:05:41.000 that ARC was getting some of it. But I'm not sure. 0:05:41.279 --> 0:05:42.960 These are trades that have been going on, and like 0:05:43.040 --> 0:05:45.600 they went on with the ipea of Bullish a while back, 0:05:45.640 --> 0:05:49.359 and then Klarina last week and Robin Wiggils at the 0:05:49.440 --> 0:05:53.440 ft has been reporting about it. But like my impression 0:05:53.520 --> 0:05:56.760 is that the main the flagship Arc Innovation ETF got 0:05:56.800 --> 0:06:00.719 an allocation in Bullish and not in Klarina. R ETF 0:06:00.800 --> 0:06:04.400 got an allegation in Klina like f. Yeah, so like 0:06:05.520 --> 0:06:08.800 people did this. I mean, no one really knows, but 0:06:08.839 --> 0:06:10.479 it looks like this trade, right, it looks like the 0:06:10.480 --> 0:06:14.159 trade is you heart beat in you like borrow the 0:06:14.240 --> 0:06:16.360 underlying shows you heart beat into the ETF, you take 0:06:16.400 --> 0:06:18.679 your stuff out the next day to capture the IPO. 0:06:18.880 --> 0:06:21.880 It looks like people did that with our innovation around 0:06:21.880 --> 0:06:24.240 the Clarina IPO and there was no allegation, And so 0:06:24.279 --> 0:06:28.200 I just like missed. It's not a huge risk yause 0:06:28.360 --> 0:06:30.080 you know, you're long in short the same thing. 0:06:30.120 --> 0:06:33.320 Basically, I'm just wondering, like I wonder if we'll start 0:06:33.360 --> 0:06:38.040 to see this pop up in other sort of shiny 0:06:38.080 --> 0:06:39.400 active ETFs. 0:06:39.800 --> 0:06:41.920 Sure, I don't know how many shiny active ETFs there. 0:06:41.960 --> 0:06:44.159 There's not a ton, but there's definitely some that you 0:06:44.240 --> 0:06:46.440 might think would get allocated. 0:06:46.560 --> 0:06:48.920 Yeah, Like in general, you know, index ones don't buy 0:06:48.960 --> 0:06:51.479 IPOs because they're not in the index, and so you 0:06:51.520 --> 0:06:54.920 don't see you know, the traditional ETFs, you don't see 0:06:54.920 --> 0:06:57.480 this as a big thing. But like someone like Kathy 0:06:57.520 --> 0:07:00.960 Wood who is an investor and yeah stive tech companies, 0:07:01.320 --> 0:07:03.520 it does make sense that she would be interested in 0:07:03.520 --> 0:07:06.400 buying an IPOs. And it does make sense that someone 0:07:06.480 --> 0:07:08.520 would notice that and be like, I can create my 0:07:08.560 --> 0:07:13.560 own IPR allocation by engineering the r ETFs. 0:07:13.760 --> 0:07:17.480 Yeah, because, for example, there's an ETF dedicated just to 0:07:17.520 --> 0:07:21.080 buying IPO stocks, like recent IPO stocks. 0:07:21.600 --> 0:07:25.360 Which accomplishes nothing whatsoever. I know, the trade here is 0:07:26.000 --> 0:07:26.760 the IPO pop. 0:07:26.920 --> 0:07:27.120 Yeah. 0:07:27.160 --> 0:07:30.280 Trade here is not Klarna, it's the IPO pop. 0:07:30.400 --> 0:07:32.800 Yeah, it's the one day Yeah. I don't think they're 0:07:32.800 --> 0:07:34.240 getting allocated IPOs. 0:07:34.320 --> 0:07:36.000 Yeah. I mean, like maybe that's the next step. Right, 0:07:36.040 --> 0:07:38.720 you're like, hey, guys, I buy all the IPOs, want 0:07:38.720 --> 0:07:41.960 to allocate be an IPO. But then, you know, traditionally 0:07:42.000 --> 0:07:44.200 the way you get allocated an IPI is like one, 0:07:44.400 --> 0:07:46.160 you are a big investor who pays a lot of 0:07:46.200 --> 0:07:50.400 commissions to a bank, and two you are a long 0:07:50.480 --> 0:07:53.520 term investor who creates a good relationship with the management 0:07:53.520 --> 0:07:55.520 of the company. So the company is like I want 0:07:55.560 --> 0:07:57.960 those people to own seven percent of my stock, so 0:07:57.960 --> 0:08:00.240 I'm going to allocate them in the IPO and then 0:08:00.240 --> 0:08:03.080 like you have like a nice relationship where you are 0:08:03.120 --> 0:08:05.080 a long term holder you on the stock. You have 0:08:05.120 --> 0:08:07.280 a nice marked market gain because they sold you the 0:08:07.320 --> 0:08:09.400 stock of the IPI price. Those are the people that 0:08:09.520 --> 0:08:13.160 the banks and the companies want to allocate at the IPO. 0:08:13.600 --> 0:08:17.200 Someone whose businesses I buy recent IPOs and then sell 0:08:17.240 --> 0:08:18.400 them when they're no longer recent. 0:08:18.800 --> 0:08:22.480 It's not that good, yeah, And it's also a smaller 0:08:22.600 --> 0:08:24.720 funds of millions. 0:08:24.840 --> 0:08:28.160 Right. Like when you're a bank and a company and 0:08:28.200 --> 0:08:31.239 you're allocating the IPO, you're in many cases literally sitting 0:08:31.280 --> 0:08:33.360 down with a list and going through it and being 0:08:33.400 --> 0:08:34.800 like these guys are good to give it, you know, 0:08:35.280 --> 0:08:39.200 and you don't want to have a thousand names on 0:08:39.240 --> 0:08:41.880 that list and get to like, we're gonna give this 0:08:41.960 --> 0:08:45.240 guy fifty shares, right, Yeah, you want to be efficient, right, 0:08:45.280 --> 0:08:46.720 So if you have a big investor, you get them 0:08:46.720 --> 0:08:49.559 a big, big slug of shares. So right, because Kathywood 0:08:49.559 --> 0:08:51.600 is a celebrity because of the argannivation ATF is pretty 0:08:51.640 --> 0:08:56.240 big because she is a long term supporter of like some. 0:08:56.240 --> 0:08:58.360 Of the company take her five year time for him, 0:08:58.440 --> 0:08:59.160 Like she's a. 0:08:59.080 --> 0:09:01.000 Good institution and that to have in your stock, and 0:09:01.040 --> 0:09:03.040 so it makes sense that she gets alecated ips. Yeah, 0:09:03.080 --> 0:09:06.960 but it's not obvious that every IVTF but also would 0:09:07.000 --> 0:09:07.760 have the same benefit. 0:09:07.840 --> 0:09:11.280 This isn't something that I've sawt comment on, but I 0:09:11.320 --> 0:09:14.600 do wonder how Kathy would and the ARC team feel 0:09:14.760 --> 0:09:15.640 about this trade. 0:09:16.200 --> 0:09:18.600 Oh yeah, like assuming this trade is what it seems like, 0:09:18.640 --> 0:09:24.280 which is someone massively inflating the assets of. 0:09:24.160 --> 0:09:26.679 These ETFs by billions of dollars. 0:09:26.400 --> 0:09:29.440 Billions of dollars for like a week in order to 0:09:29.600 --> 0:09:35.120 extract a large chunk of the IPO pop. Right, Like 0:09:35.840 --> 0:09:38.439 the RCF trade was like on the order of like 0:09:38.960 --> 0:09:41.440 you know, it's like a one ish billion dollar ETF 0:09:41.480 --> 0:09:43.360 and someone pumped in on the order of like seven 0:09:43.400 --> 0:09:46.120 hundred million dollars. I might be a little wrong about that, Billy. 0:09:46.200 --> 0:09:48.400 It's like that kind of thing. It's like basically doubling 0:09:48.400 --> 0:09:52.080 the size of the ETF. When you do that, you 0:09:52.200 --> 0:09:54.040 now own half of the ETF and then you take 0:09:54.080 --> 0:09:56.120 your money out, So you take out half of the ETF. 0:09:56.200 --> 0:09:58.320 It also means you take out half of essentially the 0:09:58.320 --> 0:10:01.960 IPO shows, right, So the person doing this or the 0:10:01.960 --> 0:10:04.840 people doing this are extracting kind of half of that 0:10:04.880 --> 0:10:10.040 IPO pop for themselves, meaning that the long term retail 0:10:10.080 --> 0:10:13.160 investors who love Kathy Wood and are you know, invested 0:10:13.200 --> 0:10:15.920 in the ETF don't get that half of the ip 0:10:16.120 --> 0:10:19.080 but that just goes to someone who is just doing 0:10:19.120 --> 0:10:21.880 this arbitrage. So they must feel bad about it. Yeah, 0:10:22.040 --> 0:10:24.560 it's not good. It's not like what they want. Yeah, 0:10:25.080 --> 0:10:27.480 they do extract like an extra two days of management vice. 0:10:27.600 --> 0:10:29.080 But can they stop it? Though? 0:10:29.400 --> 0:10:30.640 You know, when I read about it, I was like, 0:10:30.880 --> 0:10:33.079 you call them up and you say, I'd like to 0:10:33.120 --> 0:10:35.640 pump a billion dollars in and you say yes, because 0:10:35.640 --> 0:10:37.599 that's life in the ETF business, like it is the 0:10:38.240 --> 0:10:40.720 point of an ETF is like people can create and redeem. 0:10:41.400 --> 0:10:43.760 There is like there are ways to I believe, you know, 0:10:43.800 --> 0:10:46.560 most ttfs like have ways to limit, you know, creations 0:10:46.559 --> 0:10:47.400 and redemptions. 0:10:47.600 --> 0:10:51.760 I don't know. I mean, you can't stop money flowing 0:10:51.800 --> 0:10:54.040 in or out, but not every inflow or outflow has 0:10:54.080 --> 0:10:55.800 to result in the creation or redemption. 0:10:56.600 --> 0:10:58.280 That's what an inflow is. 0:10:58.440 --> 0:11:00.920 No, but people always say that it does isn't necessarily 0:11:00.920 --> 0:11:05.439 always created creation or redemption. They give enough. People are 0:11:05.840 --> 0:11:06.840 letting each other out. 0:11:07.520 --> 0:11:09.520 Yeah, but like net inflows create creations. 0:11:10.360 --> 0:11:11.640 Yeah, net inflows. 0:11:11.679 --> 0:11:14.760 But I'm saying they can't sell people trading on the exchange. 0:11:14.760 --> 0:11:16.200 But this is not a trade on the exchange. This 0:11:16.280 --> 0:11:18.960 is a creation. Yeah, okay, it creates to make sense, 0:11:18.960 --> 0:11:21.040 it's a creation. It does to make sense. Someone has 0:11:21.080 --> 0:11:23.120 borrowed a big package of the underlying, delivered it to 0:11:23.160 --> 0:11:25.880 the ETF and gotten out these shares, which is why 0:11:26.120 --> 0:11:29.560 you see this heartbeat. Look where the assets of the 0:11:29.559 --> 0:11:30.920 ETF increase. 0:11:30.960 --> 0:11:34.679 All yeah, okay, fair, okay, Then how would they limit that? 0:11:35.600 --> 0:11:38.000 One answer is like the person doing this is either 0:11:38.120 --> 0:11:40.679 an authorized participant in the ETF, like someone who has 0:11:40.720 --> 0:11:43.440 a relationship with ARC. Yeah, you can create and redeem shares, 0:11:43.800 --> 0:11:46.920 or they're like some hedge fund working through an authorised participant, 0:11:46.960 --> 0:11:48.720 because again you have to do a creation. So like 0:11:49.000 --> 0:11:52.120 these assets are coming into the ETF from someone and 0:11:52.160 --> 0:11:56.440 the ETF can say, hey, knock that off, yeah, or 0:11:56.600 --> 0:11:58.920 you'll stop being an authorised participant. Right, Yeah, it's one 0:11:59.000 --> 0:12:02.480 fairly STRAIGHTFORARDA. I assume most ttfs have some other way 0:12:02.520 --> 0:12:06.600 to like limit creations to avoid getting too big or 0:12:06.720 --> 0:12:07.199 you know. 0:12:07.400 --> 0:12:08.320 I don't know if they do. 0:12:08.559 --> 0:12:09.200 I don't know either. 0:12:09.320 --> 0:12:11.520 There was a recent example of this. You had this 0:12:11.840 --> 0:12:16.200 one very popular small cap funds ticker CALF, which ended 0:12:16.280 --> 0:12:20.360 up switching indexes because I think at one point, like 0:12:20.440 --> 0:12:24.280 for its holdings, it held like more than twenty percent 0:12:24.360 --> 0:12:25.880 of the outstanding shares. 0:12:25.920 --> 0:12:27.240 And you should be able to stop that. 0:12:27.800 --> 0:12:29.600 Yeah, but you can't, like you have to like switch 0:12:29.640 --> 0:12:30.400 your strategy. 0:12:31.480 --> 0:12:32.880 Yeah, I don't know if they can stop it and 0:12:33.040 --> 0:12:33.520 haven't yet. 0:12:33.679 --> 0:12:35.840 I don't know either. But you do touch on the 0:12:35.840 --> 0:12:36.480 fact that this. 0:12:36.400 --> 0:12:41.840 Is the thing, like the rketfs are like a modern 0:12:41.960 --> 0:12:45.040 rapper for like Cathy would running an investment fund. But like, 0:12:45.160 --> 0:12:48.360 also ETFs are plumbing, right, And we've talked about like 0:12:48.640 --> 0:12:51.000 portfolio trades in the bond market, Right, Like an ETF 0:12:51.080 --> 0:12:53.800 is like a piece of plumbing that allows people to 0:12:53.840 --> 0:12:56.400 do bond trades. Right. This is like a portfolio trade, right. 0:12:56.640 --> 0:12:58.880 This is like it's a widget that you can take 0:12:58.920 --> 0:13:01.120 down and be like, I'm going to distract the IPO 0:13:01.240 --> 0:13:03.560 value out of this ETF, and so you can just 0:13:03.640 --> 0:13:07.320 do it. And it just operates independently in the stock 0:13:07.360 --> 0:13:09.120 market and has its own set of rules, and like 0:13:09.200 --> 0:13:12.280 you know, Kathy would is actively managing it, but it's 0:13:12.320 --> 0:13:14.800 like it's not purely her investment vehicle. It's also this 0:13:15.040 --> 0:13:18.360 like you know, pre property. 0:13:17.800 --> 0:13:20.720 Of the market. Yeah, that's an interesting way to look 0:13:20.720 --> 0:13:24.360 at it, that it's basically just a portfolio trade, but inequities. 0:13:24.559 --> 0:13:26.600 It's almost the reverse of a portfolio trade, right. A 0:13:26.600 --> 0:13:29.000 portfolio trade is like you have a bunch of bonds 0:13:29.440 --> 0:13:31.280 and you go to a market maker and you're like, 0:13:31.280 --> 0:13:32.720 I want to sell this bunch of bonds and the 0:13:32.720 --> 0:13:35.520 market maker is like, wow, you can probably squeeze most 0:13:35.520 --> 0:13:37.560 of them into an ETF and I'll take the rest, 0:13:37.640 --> 0:13:39.720 and you can sort of like squeeze your stuff into 0:13:39.720 --> 0:13:41.880 these you have here. It's like, I'm going to extract 0:13:41.920 --> 0:13:46.160 exactly one security from the ETF. And it's the reverse 0:13:46.200 --> 0:13:46.439 of the. 0:13:46.360 --> 0:13:48.760 Portfolio Ty, I want the needle, forget about all the 0:13:48.800 --> 0:13:51.600 hay and you can just do it. Yeah, I was 0:13:51.640 --> 0:13:53.360 gonna say, you do touch on the fact that this 0:13:53.440 --> 0:13:56.840 is a fun who done it? Like, who is doing this? 0:13:57.120 --> 0:14:00.320 And it has to be a fairly small universe of 0:14:00.480 --> 0:14:01.760 potential suspects. 0:14:02.200 --> 0:14:04.280 It seems to me that the most logical person to 0:14:04.280 --> 0:14:06.679 do it would be one of the authorized participants who 0:14:06.720 --> 0:14:09.120 can trade directly with the fund. Yeah, but maybe that's 0:14:09.120 --> 0:14:12.600 like a little too confrontational and it's like someone trading 0:14:12.600 --> 0:14:13.720 through an authorised participant. 0:14:13.920 --> 0:14:17.080 Yeah, let's see. I don't want to name names necessarily, 0:14:17.559 --> 0:14:20.600 but I mean, you look at some of ARC's filings, 0:14:20.680 --> 0:14:22.880 it looks like they're aps, or at least the busiest 0:14:22.920 --> 0:14:28.080 aps are Hudson River, Jane Street, Avian Amro, Bank of America, 0:14:28.280 --> 0:14:29.600 Bnpever two, et cetera. 0:14:29.800 --> 0:14:32.520 So right, the normal people. 0:14:32.640 --> 0:14:36.200 Anyway, if you're the one behind the ARC trade right 0:14:36.400 --> 0:14:38.280 some money pod at Bloomberg dot net. 0:14:38.480 --> 0:14:40.800 I feel like at this point, like this has been 0:14:40.840 --> 0:14:44.440 pretty widely rumbored and like praised, and if someone's going 0:14:44.440 --> 0:14:46.200 to claim credit for that, they would have been like, yeah, 0:14:46.280 --> 0:14:48.400 we did that. I feel like there's probably some reason 0:14:48.440 --> 0:14:51.560 not to claim credit for it. Also, it's like imitatable, right, 0:14:51.640 --> 0:14:54.520 like now anyone can do it, that's true. I don't 0:14:54.560 --> 0:14:56.800 know how many opportunities there will be to do it. 0:14:56.720 --> 0:15:00.640 It seems like a lot of squeezing for not like 0:15:00.960 --> 0:15:01.640 enough juice. 0:15:01.680 --> 0:15:05.360 But I don't know, you know, it's like a few 0:15:05.440 --> 0:15:11.600 days of Stockboro cost Yeah, for potentially like low tens 0:15:11.600 --> 0:15:12.840 of millions of dollars of games. 0:15:12.880 --> 0:15:16.520 It's like it's it's real. I will say though that like, 0:15:16.520 --> 0:15:18.080 like if I had the guess, I would say that, 0:15:18.120 --> 0:15:22.760 like this trade became exciting when there was that rash 0:15:22.760 --> 0:15:25.160 of IPOs that like went up one hundred percent. Yeah, 0:15:25.240 --> 0:15:28.120 and then like they actually did it and like bullish 0:15:28.160 --> 0:15:31.480 IPOs did well and Clarina which did fine, and then 0:15:33.000 --> 0:15:35.720 I think we talked about this, like the IPOs earlier 0:15:35.800 --> 0:15:37.880 this year had the huge pops because no one had 0:15:37.880 --> 0:15:40.880 seen an ipo in years, and now it's like, yeah, 0:15:41.000 --> 0:15:42.760 you know, like stuff had went public this week and 0:15:42.800 --> 0:15:45.760 went down right, So it's not as exciting a trade now. 0:15:45.840 --> 0:15:47.720 I like, you're not expecting one hundred percent pop in 0:15:47.760 --> 0:15:48.280 every APA. 0:15:48.440 --> 0:15:51.440 That's true. So maybe it was just a brief, sweet 0:15:52.000 --> 0:15:54.400 moment in time. But it'll be fun to see if 0:15:54.400 --> 0:16:11.360 this continues and if it's sprints. So you know how 0:16:11.400 --> 0:16:18.120 I anchor a financial news TV show. Okay, well, surprise, 0:16:18.360 --> 0:16:21.080 That's what I do when I leave this room. It's 0:16:21.120 --> 0:16:23.760 called the Clothes. It's from three to five pm daily. 0:16:24.240 --> 0:16:26.640 This isn't just a plug. I bring it up because 0:16:27.000 --> 0:16:31.080 after the closing bell usually companies report their earnings and 0:16:31.120 --> 0:16:35.480 because the US follows a quarterly earning schedule, that means 0:16:35.480 --> 0:16:39.640 that there's almost always earnings to break on air, which 0:16:39.680 --> 0:16:44.120 is exciting and I look forward to it. But maybe 0:16:44.160 --> 0:16:47.040 now instead of doing that four times a year, I'll 0:16:47.040 --> 0:16:48.000 only do it twice a year. 0:16:53.880 --> 0:16:55.120 Yeah, I'm like, now. 0:16:56.560 --> 0:16:57.360 I bring this up. 0:16:57.720 --> 0:17:01.000 Yeah, you bring it up because present Trump is just 0:17:01.120 --> 0:17:04.399 randomly out there being like, yeah, hey, if the SEC 0:17:04.520 --> 0:17:07.560 wants to, we could move to six month reporting for 0:17:07.640 --> 0:17:10.080 companies instead of reporting every three months. 0:17:10.080 --> 0:17:11.560 I'm surprised he cares. 0:17:12.080 --> 0:17:16.239 You know, someone mentioned it to him, so it just 0:17:16.240 --> 0:17:17.760 as Sabody cares cares. 0:17:17.880 --> 0:17:21.480 It seems like a off the beaten track issue for him. 0:17:21.560 --> 0:17:24.159 He tried it last time, he did back before the 0:17:24.240 --> 0:17:27.160 unitary executive It is an odd thing to care about 0:17:27.240 --> 0:17:31.359 in the scheme of things. Yeah, but it marginally increases 0:17:32.119 --> 0:17:36.639 the power and reduces the oversight over corporate executives, right, Like, 0:17:36.680 --> 0:17:38.600 if you only have to report every six months, then 0:17:39.760 --> 0:17:42.560 you have more time to do stuff without anyone paying 0:17:42.600 --> 0:17:45.680 attention to it. That's probably good for like the lifestyle 0:17:45.720 --> 0:17:46.720 of corporate executives. 0:17:46.760 --> 0:17:49.000 Well, I was going to say I love this topic 0:17:49.080 --> 0:17:52.840 because I can honestly see both sides of the argument, 0:17:53.359 --> 0:17:59.480 one being Okay, the quarterly reporting schedule investors like transparency. 0:17:59.680 --> 0:18:02.760 That's proven, we should have as much information as we 0:18:02.800 --> 0:18:06.199 possibly can. But then on the other side, three months 0:18:06.400 --> 0:18:09.880 is arbitrary, and I could be persuaded that it does 0:18:10.000 --> 0:18:13.000 incentivize shorter term thinking on some level. 0:18:13.280 --> 0:18:15.600 Yeah, I think a lot about this, Like there's no 0:18:15.760 --> 0:18:19.240 like necessary reason that reporting every three months should encourage 0:18:19.280 --> 0:18:21.800 shorter term thinking. Like it's just like a mistake to 0:18:21.840 --> 0:18:25.119 think that investors only care about next quarter's earnings, right, 0:18:25.160 --> 0:18:28.399 and like the shorter the reporting cycle than like the 0:18:28.520 --> 0:18:31.080 less long term they'll care about. Like that can't be true, right, 0:18:31.119 --> 0:18:33.440 Like companies report every three months and they report guidance 0:18:33.440 --> 0:18:35.680 and they report like, you know, their investments for the 0:18:35.720 --> 0:18:37.520 long term, and like people understand that. 0:18:38.119 --> 0:18:39.760 I think you're being really generous. 0:18:40.160 --> 0:18:42.320 Like everyone loves to say that the US stock market 0:18:42.359 --> 0:18:44.560 only rewards short term thinking, and like, you know who 0:18:44.560 --> 0:18:46.639 really loves to say that is Elon Musk. Yeah, who's 0:18:46.680 --> 0:18:49.680 like got a you know, trillion dollar company and did 0:18:49.680 --> 0:18:51.360 for a long time before it made money, right, and 0:18:51.400 --> 0:18:53.840 like even now its valuation is entirely based on like ooh, 0:18:54.080 --> 0:18:56.399 robots in the future. Yeah, it's just like false to 0:18:56.440 --> 0:18:58.880 think that the US stock market only cares about next 0:18:58.960 --> 0:19:01.679 quarters earnings, right, Yeah, there's just like no reason to 0:19:01.720 --> 0:19:04.000 think that. Now. Yeah, it is the case that, like 0:19:04.560 --> 0:19:08.120 there is volatility around quarterly earnings, right, Like people do 0:19:08.640 --> 0:19:12.080 look at quarterly earnings and use them as a data 0:19:12.119 --> 0:19:15.080 point to extrapolate future earnings. And if you have bad 0:19:15.119 --> 0:19:17.800 earnings this quarter, people are like, oh, maybe they're not 0:19:17.840 --> 0:19:19.679 gonna have good earnings in the long run, right, and 0:19:19.720 --> 0:19:22.159 so like there are like high frequency data points, but 0:19:22.640 --> 0:19:25.000 it's not logically entailed that, like if you report every 0:19:25.000 --> 0:19:27.919