0:03

Bloomberg Audio Studios, Podcasts,

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Radio News.

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Hello and welcome to The Money Stuff Podcast,

0:12

your weekly podcast where we talk about

0:14

stuff related to money.

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I'm Matt Levine, I'm the Money Stuff columnist

0:19

at Bloomberg Opinion.

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And I'm Katie Greifeld. I'm a reporter for Bloomberg

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News and an anchor for Bloomberg Television.

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Katie, Welcome to the Best Day of Our

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Lives, the very first Money Stuff

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Podcast.

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It is the best day of our lives,

0:33

and every Friday will be the best day of our

0:35

lives because that's only go up from here, only

0:37

going up. We're going to talk about some stuff

0:39

from your columns every single Friday, and

0:41

it's going to be fun.

0:43

You made that sound like a threat in.

0:44

Many ways, it is. Those are our marching

0:46

orders, and we're going to have fun.

0:48

What are you talking about this week, Katie, What a great

0:50

question.

0:51

We actually have a really strong first

0:53

episode because we're going to be talking about the Destiny

0:56

Tech one hundred fund close

0:58

stend fund publicly listed.

1:00

The stock has been going nuts and there's

1:03

a lot to say here. Yes, and

1:05

then we're going to go from Destiny to Mango,

1:07

specifically Mango markets and we're going to talk

1:09

about whether code actually is law

1:12

or is law law, a lot

1:14

of big existential questions there, and then we're

1:16

going to talk about super users, this

1:19

time related to inflation and

1:21

also the nature of insider

1:23

trading and the Bureau of

1:25

Labor Statistics. Indeed, Matt,

1:32

what is Destiny The.

1:34

Destiny Tech one hundred is a publicly

1:36

traded fund that invests in private

1:38

tech companies. So right now, as

1:40

of their last disclosure, they have about a fifty million

1:43

dollar portfolio of steaks in like twenty three private

1:45

companies. A lot of it is SpaceX, some of it is like

1:47

you know, plaid and stripe and all the other

1:49

patterns that are also FinTechs. So they have this

1:52

pot of stock and they sold shares

1:54

in the fund to the public. They

1:56

like did a direct listing last month, and

1:59

since then the stock has just only gone off.

2:01

It's not even been very volatile, but it's way above

2:03

where they listed it at. And so right

2:06

now that fifty million dollar

2:08

pot of private stocks has

2:10

a market value of something like five hundred million dollars,

2:13

which is one thousand percent

2:15

premium to the net

2:17

asset value of the fund, which seems real high.

2:20

And you and I have both spoken to the CEO.

2:22

His name is Sohail Prisad. What's

2:25

remarkable is that he doesn't seem super stressed

2:27

about the premium or the volatility

2:29

of the stock. I mean I spoke to him on Thursday

2:32

morning on TV and his

2:34

explanation was there in a discovery phase. Have

2:36

only been public for about two weeks, which

2:38

is fair, but I might

2:41

be a little bit stressed out.

2:42

To me, it just seems like a disaster to do this

2:44

thing and have it traded one thousand percent

2:46

premium. But others would disagree, apparently including

2:48

him, because to me, like the

2:51

thing you're marketing is like you can buy

2:53

exposure to these private tech companies.

2:55

Never before have you been able to buy shares

2:57

of SpaceX and Stripe, And we are giving you

3:00

that exposure, which

3:02

is a great pitch, which is not true if

3:04

you're trading at one thousand percent pew. If you're trading a

3:06

one thousand percent premium, retail investors can

3:08

only buy the premium, right Like when

3:10

they put their money in, they're getting like five dollars

3:12

worth of private tech stocks and like fifty dollars

3:15

worth of public market volatile

3:17

frothy enthusiasm for the stock. The product

3:19

that he's saying is only that product if

3:21

it trades like at a round the net asset value.

3:24

Well, you had a suggested solution for

3:26

him in the form of issuing more shares,

3:28

which I don't know if it would help the retail traders

3:31

who are buying in right now at one thousand percent premium,

3:33

but it would theoretically if they sold

3:35

enough, help to collapse the premium

3:37

a little bit.

3:38

Right. You suggested that solution to him, didn't you.

3:40

Yeah, And he can't really talk about that, especially

3:42

not on live television, and we

3:45

can we can theorize about

3:47

it.

3:47

One way to think about what he has is he's got

3:49

a fifty million dollar venture fund and

3:51

there's like a two billion dollar waiting

3:53

list for that fund or whatever I made that number up. But like

3:56

the market cap of the fund is so far

3:58

above the acid value of the fund

4:00

that like a lot of people clearly want to put their money into a thing

4:03

that gives them exposure to private textlocks. So

4:05

what he can do is he can like take names

4:07

off the waiting list. He can sell a bunch of stock

4:10

to the public app a huge premium to the

4:12

current net asset value, and he can take that

4:14

money and invest it into private

4:16

tech startups. And if you do that over time, probably

4:19

the premium compresses because you're selling a lot of stock,

4:21

you're buying a lot of the underlying portfolio, and

4:24

you end up with a fund that

4:26

is much bigger by net asset

4:28

value than it is today, probably

4:31

bigger by market cap. But like instead

4:33

of trading at one thousand percent premium, it trades

4:35

it's something that sort of reflects the value of the underlying

4:37

private companies.

4:39

The question of him deploying capital is

4:41

also really interesting one, and

4:43

first of all, how he's actually getting these

4:46

shares in private companies. He said

4:48

that it's through a combination of private stakes,

4:50

trading platforms, and investing directly.

4:53

But one of the interesting nuggets

4:55

from the interview that I had with him was that he

4:58

has these private companies calling him

5:00

now, which is probably a result of the fact that we all keep

5:02

talking about it.

5:03

It's brilliant. I mean you look at the disclosure

5:06

of their portfolio and also like what he said about it, like

5:08

it really like he's like scraping sticks

5:10

together to find private company stakes, right, He's like calling

5:12

employees and being like, hey, could you do a forward contract

5:15

and they're like, no, we're not allowed to. Our company will let us,

5:17

and oh, you know, maybe we can do it under the table,

5:19

right. You know, he's finding things in the secondary market. It's like

5:21

piecing together this portfolio because he's

5:23

just like a guy, you know, like that. It's not true. He's the founder

5:26

of forts, like, he's got some experience

5:28

in private markets, but these big

5:30

tech companies can kind of choose their investors and it's

5:32

not necessarily easy to get in. But now he's

5:34

a much higher profile because he's got this huge

5:36

you know, market cap to his fund. There's like clear

5:39

pent up demand from retail investors. He's

5:41

getting a lot of press coverage and so yeah,

5:43

this is a marketing tool not

5:46

only to retail investors, but also to companies

5:48

who might you know, want to sell him some stuck.

5:50

It's just really interesting that this is happening this week.

5:52

I'm really grateful because this is the first week

5:54

that we're recording the money Soff podcasts. But also

5:57

I feel like we're

5:59

just at the moment in public equity markets

6:01

where the public equity market has been

6:04

shrinking. You hear about all these hot,

6:06

shiny startups that the average person

6:09

can't get exposure to. And

6:11

again, an interesting week to be having this conversation

6:14

because I actually also spoke to Kristen Olsen

6:16

from Goldman Sachs this week.

6:18

She is the global head of Alternative Capital Markets

6:21

and her pitch for why people

6:23

should invest in private markets is because

6:26

companies are saying private so much longer,

6:28

you're missing out on all that growth.

6:31

You know, the company that goes public, you've

6:33

already missed out on a ton of that growth,

6:35

which makes sense if you're pitching private

6:38

markets. But I feel like all of this sort of ties

6:40

into a general theme of there's been a dearth

6:42

of IPOs, the public market is shrinking,

6:45

and it feels like all the exciting stuff is happening

6:47

outside of public markets.

6:49

Yeah, I mean that's what everyone thinks, which is

6:51

why this thing is so popular. But of course it undermines

6:54

the mechanics of this thing, because if you're like, oh,

6:56

private companies grow so fast, so we should get

6:58

in before they go public, you get in at twenty

7:00

times their valuation, then it doesn't work

7:03

anymore. Right. It's funy to like imagine the

7:05

sort of end case for this. What if like everyone agrees

7:07

with the thesis that you should get into private

7:09

companies and they should do it through this fund,

7:12

then that's going to bid up private valuations.

7:14

Right. Yeah, we talked earlier about how he

7:17

is getting calls from companies, right because like, one,

7:19

he's like in the news companies who want to raise money, Like,

7:21

oh, here's a guy who has money. But also

7:24

he has a lot of flexibility to

7:27

pay up on valuations, right because

7:29

like people are already buying into his fund

7:31

at ten times in that asset value. Like if

7:33

he pays twice the last funding round

7:35

for a company, like that's fine, that's easy. Like that's

7:38

a that's a good trade for him. I mean, the one reason that private

7:40

companies are cheap is that they're young, and that one

7:42

grown yet. But another reason is, like, you know, you don't have liquidity,

7:44

you don't have the same number of investors

7:46

that have access to private markets as you have

7:48

in the public markets. In one sense, it's a

7:50

way to like democratize private companies, but another

7:52

way, that's a way for private companies to access all

7:54

those public investors and bid

7:57

up their price.

7:58

It's interesting that he's in this position because

8:00

this isn't a new pitch

8:03

the Destiny Tech one hundred funds. This

8:05

idea has been brought forward by ARC

8:08

before they have the ARC Venture Fund, and it

8:10

hasn't created this moment

8:12

that this fund has. And I find it interesting

8:14

that again he is in this position.

8:16

Well, I think they all have different structures, and I think the

8:18

ARC Venture Fund is not as exchange traded.

8:21

Yes, that really matters, right. The weird

8:23

thing about this fund is not that it's

8:25

a way for public investors to put

8:28

money into a fund that invests in produate companies.

8:30

It's that it's a publicly traded way for them to do

8:32

it. So it has a market price, and it turns

8:34

out the market clearing price for that product, like

8:37

at this point where the product is so small, is

8:39

much much higher than the amount of money

8:41

though to put. And that's kind of wild. We

8:43

live in a memestock world. Things like that just build

8:46

on themselves because you attract attention to us thought because

8:48

it's like gone way up and it's trading way over

8:51

acid value, and that just attracts attention and more people

8:53

get into it.

8:53

Well, I feel like we're going to be talking about this again because

8:56

in declining to answer one of the questions

8:58

I asked him, which is has your net

9:00

acid value changed materially since

9:02

the end of twenty twenty three when they last

9:05

provided it. He said, can't

9:07

say anything about that. Obviously, they calculate it

9:09

on a quarterly basis, but they report earnings

9:11

I believe at the end of April or the beginning of

9:13

May. So it's gonna be really fun to see

9:16

if it's changed from that four dollars and eighty

9:18

four cents net acid value that they had.

9:20

Yeah, but you know, I mean they owned steaks

9:22

and big private tech companies. Rights

9:25

that market doubled in the last you know it

9:27

has has it ten times?

9:30

We're going to find out. Stay tuned. I

9:32

think I have a guess.

9:43

Mangoes, what is Mango markets?

9:46

Mango Markets is a

9:49

decentralized finance trading platform.

9:51

I haven't thought about one of those in a while.

9:53

I know, right, But this guy

9:55

blew it up in twenty twenty two, and

9:57

he was arrested and he's going

9:59

on trial this week. And the

10:02

question is is it legal to blow

10:05

up a DeFi trading market?

10:07

That's not really the question. The question is is code

10:09

law or is law law?

10:11

Those are just some big heavy questions because crypto

10:13

obviously would say code is law, and

10:17

I mean.

10:17

You say that until you're a trading platform gets blown

10:19

up and then you're like, wait a minute, that was fraud. Right,

10:22

This is not how it always works.

10:23

Right.

10:23

You're like, as long as you're the smart one, you're

10:25

like, yeah, anything goes, you don't need regulators.

10:27

But then you get blown up and you're like, ah, where there were regulators?

10:30

Well, explain to me briefly, what is

10:32

the part of the code that he

10:34

exploited.

10:35

Okay, So Mango Markets is like a decentralized

10:38

finance trading platform. You can trade perpetual

10:40

features like sort of derivatives on crypto tokens.

10:43

Right, people love this. There's all sorts of crypto

10:45

trading platforms that allow you to speculate on other cryptotokens.

10:48

Mango Markets, as a DeFi trading platform,

10:50

also had its own token called Mango

10:53

or ngo like mngo and so

10:55

I thin guy did so he set up two accounts

10:57

on Mango Markets. Because everything's anonymous, you

10:59

know, it's not like the way DeFi works, Like

11:01

you're not like putting down your credit card and your driver's

11:04

license like you just set up a wallet, right for

11:06

sure. So he set in two accounts on Mago markets. In

11:08

one of those accounts, he offered to sell a

11:10

ton of futures on the Mango token,

11:12

and the other account he offered to buy a ton

11:14

of futures on the Mago token. And like, no one else was

11:16

trading in that minute, so they crossed, and so he

11:18

ended up long a bunch of futures in one

11:20

account, short a bunch of futures in the other account.

11:22

And for these days, you have to put up some collateral, right, so

11:25

he had like he had some exposure to the Mango token,

11:27

and he had to put up collateral on both sides

11:29

of the trade. And then he went out in a third market

11:31

elsewhere and he just bought the Mango token.

11:34

So not future is not a weird drove as trade.

11:36

He just bought the Mango token. And like it turns

11:38

out, there's not that many people want to buy that many Mango tokens,

11:41

and so he really drove out the price

11:43

a lot, but like one thousand percent

11:45

or more. And what

11:47

this meant was that his derivatives

11:50

contracts. His two accounts on the Mango trading

11:52

platform, one of them had a huge profit,

11:55

you know, one hundreds of millions of dollars, and the other one had a huge

11:57

loss, hundreds of millions of dollars. And

12:00

what happened is that he took the one with the profit

12:02

and he went to like the Mango you know, exchange

12:05

platform, and he said, I want to borrow against

12:07

all this profit. Basically, I want to withdraw

12:09

some of my winnings. And so he

12:11

withdrew like one hundred million dollars of winnings. Meanwhile,

12:14

on the other side, he had hundred million dollars of losses

12:16

and he didn't post any collateral

12:18

for those. But like there's a there's like the moment in time

12:21

where he could withdraw on the winning side and

12:23

ignore the losing side, and

12:25

then you know, everything collapses because he like walks away

12:27

with this hundred million dollars. The price of the token

12:29

goes back down, and Mango

12:32

Markets has lost one hundred million dollars

12:34

of customer money and basically is blown

12:36

up. And then he like calls them up

12:38

and says, I'll give you back some of the money, and like they

12:40

negotiate a sort of return of some of the money

12:43

in exchange for them not pressing charges. By the way,

12:45

pressing charges is not really a thing if

12:48

you commit a federal crime and like your victims

12:50

like I don't want press charges, like the federal government can still

12:52

go ahead and prosecute you. And that's what happened.

12:55

But anyway, it's great because like one, it's like it's just very

12:58

like simple trade and it's like people things

13:00

that are sort of rhyme with this in like

13:02

real financial markets. This manipulation

13:05

is like way too simple to do in the real financial markets.

13:07

But like he managed it in a

13:10

DeFi market where basically they were

13:12

not careful about structuring how

13:14

people could withdraw money and like how

13:16

they're token pricing worked. Just like the

13:19

mechanics of how they did this allowed him

13:22

to do this exploit. And when he

13:24

was doing it, he was posting through it. He was posting

13:26

on Discord. Actually I think this

13:28

is before he did it. He posted on Discord being like I've

13:30

discovered and exploit and

13:32

people were like, what is it? Is it? And

13:35

then they sort of described this and he's like yes, he

13:37

said, you take a long position and

13:39

then you make number go up numbers

13:42

and umba, of course you make number

13:44

go up and like, that's what he did. He took a long position,

13:46

he made the number go up, and then he'd, you know, cash that

13:48

before anyone noticed that it was all kind of fake.

13:50

I love that because it sort of gets back to the

13:52

code's law versus laws law. Like he

13:55

wasn't secret about it. He was very open

13:57

and kind of proud about it, which really speaks

13:59

to the fact that, like in his circles,

14:02

in his discords, code is law.

14:04

I mean he went on Twitter after doing it. People

14:06

are like, oh my god, there's a there's a hack of a

14:09

lot of hackets. A better word is like exploit

14:11

or manipulation, because he didn't like break into the computers.

14:14

He just did the thing that

14:16

the market allowed that was bad. But

14:18

after he did it, he went on Twitter and under his

14:21

own name and said I was involved

14:23

with a team that operated a highly profitable

14:25

trading strategy.

14:26

Last Night Strategy.

14:27

I believe all of our actions were legal, open

14:29

market actions using the protocol as designed,

14:32

even if the development team did not fully anticipate

14:34

all the consequences of setting parameters the

14:37

way they are. Unfortunately, the

14:39

exchanges took place on Mengo markets became

14:41

insolvent as a result with the insurance

14:43

fund being insufficient to cover all equidations. And

14:46

he's not wrong about any of that. Like he used

14:48

the protocol the way it was designed. It was designed badly,

14:50

and he excited a lot of money for himself.

14:52

So that's what I was thinking about when I was reading

14:55

this. If he had been like a little

14:57

less ambitious, what if

14:59

instead of what it was, like one hundred and ten million dollars,

15:02

it had been ten million dollars, which

15:04

is still a lot of money, but not collapsible

15:07

money, maybe this wouldn't have happened.

15:09

Yeah, there's an assumption that, like a lot

15:11

of markets, like people are leaning a little

15:14

bit into trades and like you know, doing like

15:16

a little bit of manipulation around the edges in

15:18

a way that doesn't get them caught. The problem

15:20

is you can't like repeatedly do that here.

15:23

You know, you're taking risk of both of going to prison

15:25

and of losing money each time you do this

15:27

trade. So it kind of makes sense that if you're going

15:29

to do this trade, you're going to do it for a big score, and he did

15:31

it for a big score. I agree with you that it probably attracted

15:33

him more attention than was good

15:36

for him, yeah, or.

15:37

I don't know. Obviously, the he wanted attention,

15:39

which is why he was posting vall.

15:41

I think he probably wanted the money, but yeah, the

15:43

attention of the money. He was not averse to the attention.

15:45

I mean, attention is definitely a commodity.

15:47

Yeah, but a one hundred million dollars podcast,

15:50

I think is better than the kind

15:52

of attention that lends you're in jail. Right, Yeah,

15:54

perhaps he should have had less, Like ordinarily,

15:57

when you manipulate a market for one hundred million dollars,

15:59

it's nice to not mentioned that on Twitter. I don't

16:01

know.

16:01

I don't know. Maybe I would have tweeted about it

16:03

once done it for one hundred and ten million dollars

16:06

and just walked away. But we didn't get into your

16:08

dream dichotomy world of nice versus

16:10

fun markets.

16:11

I really like that, Yeah, I mean

16:13

I just think that. Like we talked about crypto people

16:16

saying code is law, Like that's not true, Like that's

16:18

kind of true. But a lot of crypto projects

16:20

are about building some sort of future of

16:23

finance or decentralized ownership or something,

16:25

and the people working on that are not necessarily

16:28

like also anarchists. Right, some

16:30

of them might be, but they have nothing to do with

16:32

each other. Right, Like you can believe that crypto

16:35

enables something special

16:37

and new in like the economic

16:39

world, and also that it should be sobjet

16:42

to regulation, you shouldn't be able to like do fraud

16:44

in it, right, And a lot of people in crypto,

16:46

I think, believe that. And then a lot of people don't. And a lot of people in

16:48

crypto really believe code is law.

16:51

Regulatory interventions are generally

16:53

bad and make things worse,

16:55

and you should just be careful and you should

16:58

design your protocol directly.

17:00

And by the way, if you design it poorly and someone

17:03

exploits it for one hundred million dollars and you go bankrupt,

17:06

then like there's an evolutionary

17:08

process whereby everyone learns that lesson and

17:10

the next protocol is more robust. Whereas

17:12

like regulation makes things worse because

17:15

it makes people less careful, you know, And

17:17

I think, like you see that playing out here, where like it's

17:19

not like everyone in crypto thinks this is great, right, Like a

17:21

lot of people are like this is bad. Like he's manipulating a market.

17:23

He wouldn't say this, but like other people would say, he's

17:25

stealing money from other investors on that platform,

17:27

and it's a bad outcome

17:29

that makes crypto less attractive to

17:32

ordinary people and therefore makes

17:34

crypto adoption harder.

17:37

Right, Like, I think a lot of people in crypto find

17:39

all this anarchist stuff kind of distasteful.

17:41

But then a lot of people are like, look like, we're

17:44

trying to build a system

17:46

that works on its own, or trying to build a system of smart

17:48

contracts, where like you don't need to go to the court to enforce

17:51

your contract, you can just have the computer enforce

17:53

your contract. And we're undermining that when

17:55

the Justice Department comes in to bail people out of badly

17:57

designed protocols.

17:58

Yeah. And then again, the people who would

18:01

like to operate in the fun markets would probably say, we're finding

18:03

bugs in the code.

18:04

Yeah, yeah, right, there are white hat hackers.

18:06

Yeah, they're getting a bug bounty.

18:08

I just liked those categories because I think

18:10

all the time, and I joke with my family that

18:12

there should be like the Dope versus

18:14

the Clean Olympics, where you have all the athletes

18:16

taking drugs and they all race each other and it'd be

18:18

really interesting to see who wins.

18:21

But then you should also have the clean Olympics

18:23

where all the athletes actually don't

18:26

drug themselves.

18:27

Right, And the reason you don't have the dope Olympics.

18:29

I think, well, probably a lot of reasons.

18:31

Is it's probably like not that healthy people

18:34

to take a lot of dope. But the nice thing about

18:36

crypto is, like Mango was

18:38

just the marketplace for speculating our crypto

18:41

teconds. No one will die if Mango

18:43

is a lawless market where you can manipulate

18:45

it to your heart's content. Right. The problem here is that

18:47

like some people on Mango thought it was like not manipulated,

18:50

and other people are like, oh, what a fun place to manipulate. But

18:52

like if everyone had known going in, like hey, if

18:54

there's any problem with this protocol that allows

18:56

someone to take all of the money out of it, good

18:59

for him. That's you're a problem. No guarantees

19:01

of anything working, No one will rescue you.

19:03

If everyone had had that expectation going in, and if

19:05

you could sort of prove that everyone had that expectation, then

19:08

like, yeah, it's fine, Yeah, who's it

19:10

like external harm?

19:11

No one died, all

19:17

right? So were two thirds done?

19:19

Ye?

19:19

Just gotta know we just got to bring it home.

19:21

You know.

19:21

The third act is the hardest, is

19:24

what they say in playwriting.

19:26

I don't know, Okay, super

19:29

users, super us of inflation.

19:31

Yeah. I feel like that's a bad headline.

19:33

That's what the list was.

19:34

I know that's what it's called. Right, It's a bad headline

19:37

for the people who read it.

19:38

I think they have other worries right now, like

19:40

what inflation.

19:42

No. So, the Viereau of Labor Statistics,

19:44

which releases inflation

19:47

data, released inflation data a while

19:49

back and there was like a surprising change that was methodological.

19:52

Right.

19:52

It was a big deal.

19:53

Yeah, but it's like nothing changed, like our

19:55

calculations have changed and this is why. Right. And

19:58

so a person at the bl US emailed

20:01

a bunch of people not at the PLS

20:04

to explain this change that they didn't freak

20:06

out and so that they could understand what was going on. And

20:09

the email, unfortunately began super

20:12

users Yeah, And then it got forwarded around

20:14

Wall Street because like, people are very interested in the inflation

20:16

numbers, and then it got forwarded

20:18

to reporters and people are like, wait, there are super

20:20

users of the Bureau Labor. Just looks like,

20:23

is there a higher tier of customer where

20:26

the government tells them information

20:28

about inflation that everyone else doesn't

20:30

get. How do I then it became a scandal. How do I subcress?

20:33

They became a scandal?

20:34

Great reporting from the New York Times. And

20:37

when you think about who was actually on the list,

20:39

because.

20:39

The scandal came out a while ago, and like the Times

20:42

last week Breakfast story that this

20:44

not I went off, there really was a group of super

20:46

users. There were people emailing the guy being like,

20:48

hey, how do I get on the super users list? It

20:50

was a real thing.

20:51

Yeah, it seemed like there was a lot of engagement on

20:53

that particular distribution list. Yeah,

20:55

so the New York Times submitted a Foyer request

20:58

and now we ended up with a

21:00

good idea of who was on the list. It was

21:03

you know, GP Morgan, black Rock, and then he had a bunch

21:05

of hedge funds on the list as

21:07

well. And in your column

21:09

you ask the question of how

21:11

bad is this, like is this insider

21:14

trading? I don't know. Probably when

21:16

it comes to what is material information,

21:18

the bar has come way down.

21:20

If the story was that there's

21:22

a list of super users, and before

21:25

every like CPI data release, like

21:28

the day before the BLS sends

21:30

the super users the release to be like, hey,

21:32

here's a preview. That would be really

21:34

bad and people would be going to jail, right, But

21:36

that's not at all what happened, right. Like what happened

21:38

is that, as far as I can tell, they

21:41

put out the data every you know, periodically,

21:43

and people from all over the place

21:45

email or call the people in

21:47

charge of the data at the government saying hey,

21:49

can you explain this thing? And these

21:53

people who work at the BLS work

21:55

for the people, right like their government employees,

21:57

Like, their job is to help people understand

22:00

on these statistics, and so when people call them and say,

22:02

hey, can you explain what's happening here, they try to explain

22:04

it. And so there's this range of things where

22:06

like giving people the data early would be really

22:08

bad. Yeah, Like answering their legitimate questions

22:10

seems very legitimate. And when I wrote about this the other day,

22:13

like, I got a lot of reader email being like this

22:15

is fine and exactly what they

22:17

should be doing. Yeah, someone wrote to me saying

22:19

this is very strange. The BLS has people who

22:21

are supposed to answer questions from the outside.

22:24

Literally, anyone can email or call them and get

22:26

answers. It's not a scandal but a public

22:28

service, right, which I think is right.

22:30

Yeah, No, there's definitely a sympathetic reading

22:32

here. And I mean, if you look at the statement that

22:34

the BLS has given to different

22:37

media organizations, I believe they gave this one to

22:39

Bloomberg. Was that to your point,

22:42

the BLS it encourages people to ask questions

22:44

and makes it staff available to engage with the public,

22:47

but they start to create equal access to

22:49

the information for everyone, of course. But also in

22:51

the New York Times reporting, they spoke to someone who

22:53

was actually on the Super Super

22:55

Loser super User list,

22:58

Omerisha Reef. He is the founder of Inflation Insights.

23:00

He also is a recipient. He said

23:02

that this was relatively new and

23:04

his best guess for why the super

23:06

user list was created was just

23:09

because they're getting so many more questions

23:11

than they were previously about inflation,

23:14

and with the volumes of questions increasing

23:17

so much, the staffing has not, so maybe

23:19

they just created a master list.

23:21

Let's just answer everyone's questions at once

23:23

and put them all on this list.

23:25

Which, when you think about it, is like the better way to do

23:27

it. Right. The thing you might worry about is that analysts

23:29

at hedge funds. One

23:32

can call the number at the BLS that anyone can

23:34

call, but two have better questions, right. They can

23:36

ask really pointed questions about things

23:38

that will move the market, then get specific answers,

23:40

and then they can go trade on it with everyone else not knowing

23:43

it. If you do it on an email list, it's a

23:45

little bit fairer, right, So, like, you

23:47

know, the HEADEPHNT analyst emails the BLS and says,

23:50

can you explain this data point? And instead of writing

23:52

back and saying, yeah, sure, here you go, they can

23:54

send up to the whole list that

23:56

wants the same explanation, and

24:00

you know, arguably can get on the list. It's probably

24:02

better than like the alternative of having

24:04

one on one conversations, yeah, about

24:06

stuff that might be market moving. But the whole

24:08

problem here is if you're having any form of conversations

24:11

about stuff that might be market moving and you're doing

24:13

it in any way that is not public, people are going to

24:15

get upset about that, right because, like it just

24:17

is the case that some of these hedge

24:19

FOIND analysts got information that was not

24:21

broadly disseminated to the public, and that they found

24:24

useful. Right, that's why we're there.

24:25

I have a few silly thoughts. The

24:28

first thing that's thrown into my minds as

24:30

you were talking was they should have an earnings call. That

24:32

doesn't quite work because we're talking about a company.

24:34

No, but that's right, I mean, like right, That's what

24:36

companies do to partially address this problem.

24:39

Is like they put out the press release and their earnings

24:41

release, and then they have a call where analysts

24:43

can ask questions. But you can hear. Everyone can hear the

24:45

questions, everyone can hear the answers, and so it's

24:47

a little bit more you know, open

24:50

access than the system of

24:52

doing it by private emails.

24:53

Perhaps they could have a subreddit. A subreddit,

24:56

yeah, and this guy could be the moderator,

24:58

this BLS economist who was described

25:00

as not super high ranking, but

25:02

he had been there for I know.

25:04

It was like a really mean nag in the time. I know. Someone

25:07

suggested an other approach that a lot of government agencies

25:10

g used for other things, which is anyone

25:12

can ask questions, but instead

25:15

of just answering the questions, they like collate the questions,

25:19

write the answers, and then put all of that out

25:21

publicly at the same time, so everyone gets the answers

25:23

to everyone's questions, and everyone gets to see the questions

25:25

at once, which is sort of like using the super

25:27

user list, only instead of just doing it in like a

25:30

reply, I'll email you do it online or something so

25:32

everyone can see it.

25:32

Did you have any more reader comments? I feel like you had a lot.

25:35

Oh yeah, no, A bunch of people were all sort of in

25:37

the camp of this is

25:39

all fun. Yeah, I'm going to read you another one.

25:41

Okay.

25:41

Why in the world can't anyone ask a question of their

25:43

government about technical aspects of the report the

25:45

government produced with their taxes. Granted,

25:48

there won't be many people with the ability to frame

25:50

such questions, much less profit from the answers,

25:53

but the technique should be freely available

25:55

to anyone, even big hedge funds.

25:57

Seems invisible.

25:58

Yeah, I mean it's it's good government service.

26:00

By the way I think about this, I'm like more of

26:03

a stocks guy, and I think about this

26:05

by analogy to public company insider

26:07

trading all the time, right, I mean, like, if you're a

26:09

public company and someone calls you up and it's like I'm

26:11

a big investor in your company, I'm a shareholder in your company,

26:13

you work for me, I want you to

26:15

explain something about your business, Like

26:19

your instinct is going to be to explain

26:21

your business to them, right, Like your instinct is going

26:23

to be I work for you. This is information

26:26

that you legitimately want, I'm going to tell it

26:28

to you. But you know, there's also

26:30

rules against insider trading, and there's rules against

26:32

selectively disclosing material and public

26:34

information, and so companies are constantly

26:37

walking this tightrope between like we

26:39

don't want to like be dismissive through our shaholders

26:41

and not tell them anything, but we also don't want to tell them anything

26:44

that will get user them in trouble. And there's

26:46

a lot of thinking about that and a lot of people trying

26:49

to get that right. But it's just always strikes

26:51

me as kind of a weird balance, where like people

26:53

who know they're insider trading rules are sometimes shocked

26:55

to find out that companies talk to their investors

26:58

all the time and try to explain their companies to them. The Bureau

27:00

Labor said has the same problems.

27:02

They could also be like the FED. I mean, maybe

27:04

that's a better analogy than a

27:06

corporate earnings call. The FED releases

27:10

their decision at two pm, and then two thirty

27:12

Jerome pal starts speaking and the

27:15

entire knee jerk reaction unravels.

27:17

Matter. Are you on the super User's list? It

27:20

sounds like you could have just emailed them and asked to

27:22

be added to the list, and you could be on the list.

27:25

I guess one question is does it still Is

27:27

that still a possibility? Like I feel like it's kind

27:29

of fraught now, And if I were to email the BLS today

27:31

and say, hey, guys, I'd love to be on the super

27:34

User List, I feel like that would be awkward.

27:35

But maybe I feel like you'd only do that

27:37

if you want to detrol them.

27:39

That's true of me. But

27:41

the reasons for the super User list haven't really

27:44

gone away, right, They still have to explain this stuff,

27:46

And so now that it's so well known, why shouldn't

27:48

people be able to add themselves to it.

27:50

It's a fair question.

27:55

I do want to talk about one

27:57

reader email I got this week.

27:59

Oh my god, great, this is.

28:00

Like the Money Stuff podcast nail bag

28:02

section.

28:03

Oh my gosh, let me bring it up.

28:05

So there's this great story in the FT about

28:07

renewable investors and

28:09

like d Shaw hiring sheep

28:11

to mow the lawns around their solar panels.

28:14

And it's great because it's just like it's this

28:17

image of like these hedgehood investors and

28:19

like the way they hire the sheep. Apparently

28:22

is often that a solar array is being built

28:24

in some rural area and a farmer,

28:26

a neighboring farmer, kind of wanders over and says,

28:28

hey, could you use any sheep? And

28:30

I thought that was so funny, and I wrote that the first

28:33

scene of my Cormick McCarthy influenced

28:35

finance novel would involve a hedge fund manager

28:37

leaning against the fence, chewing on a piece of straw, and

28:40

a neighboring farmer wandering over to talk

28:42

about sheep. So a reader

28:44

asked the Gemini AI

28:47

model to write that scene and

28:49

sent it to me, and I'm going to read it to you.

28:58

He shimmered off the desolate, distorting

29:01

the rows of glass panels into an alien

29:03

mirage. Matt Levine,

29:05

a hedge fund refugee transplanted to this

29:07

forgotten corner of North Carolina, leaned

29:10

against the rusting perimeter fence. His

29:12

city suit, once a symbol of power

29:14

and prestige now hung on him

29:16

like a molting carapace, ill suited

29:19

to the unforgiving sun. A

29:22

plume of dust announced the arrival of

29:24

Silas, the neighboring farmer. His weathered

29:26

face etched with the harsh lines of a

29:28

life spent wrestling with the land, held

29:30

a deep well of suspicion. Silas

29:32

stopped a good distance away, the silence

29:34

thick between them. Finally

29:37

he spoke. His voice, a dry rasp

29:39

carried on the hot wind. Heard

29:41

you needed your fancy heater contraptions mode.

29:44

Silas gestured towards the panels with a gnarled

29:46

hand. Sheep got restless with

29:48

all that shade blocking their usual path. It

29:53

ends there, but I feel like you get the sense of it.

29:54

Oh my god, I was hoping he was getting going.

29:56

Yeah, yeah, Well someone's got to write it. This

29:59

person told me that he didn't ask Gemini

30:02

to name the headphone character Matt Levine,

30:04

not.

30:04

Just it just it felt right. Yeah,

30:08

I love it. I feel like we should keep going on this. I

30:10

think there's a lot of the.

30:11

Podcast doesn't work out, then then we'll collaborate

30:14

on the novel. Maybe.

30:15

God, your readers are fun. That is

30:17

a lot, and that was unprompted.

30:19

I mean he prompted Gemini.

30:20

I know he didn't write

30:22

all of them. You didn't say, hey, intrepid reader, do

30:25

this for me. No, Yeah,

30:27

that's what I'm saying.

30:28

No, I've got a lot of like people

30:31

being like I asked GPT to

30:33

write like you, and this is what it produced.

30:36

And I'm always like, still

30:38

safe. But one day like

30:40

GPP seven will just you know, just

30:43

do the job.

30:43

But they can't do a.

30:44

Podcast, I'll be reduced to podcasting. There we

30:46

go, And

30:53

that was the Money Stuff Podcast.

30:54

I'm Matt Levin and I'm Katie Greifeld.

30:56

You can find my work by subscribing to the Money Stuff

30:58

newsletter.

30:59

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31:23

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31:25

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31:26

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31:28

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31:29

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31:31

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