Frisky Dentists

Summary

Money Stuff: The Podcast

Episode Title: Frisky Dentists
Date: May 15, 2026
Hosts: Matt Levine (Bloomberg Opinion columnist), Katie Greifeld (Bloomberg News reporter & anchor)

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Episode Overview

In this week’s episode, Matt Levine and Katie Greifeld bring their trademark dry wit and insider smarts to a series of topics at the juncture of finance, markets, and “other stuff.” The lively conversation covers Ryan Cohen’s stunt-laden “takeover” of eBay by GameStop, the resurgence of structured credit products, legal landmines in secondary AI stock markets, and automation at Wall Street banks. Plus: a digression on Swedish Fish, book recommendations, and why it’s not so easy being a meme stock CEO.

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Key Topics and Discussion Points

1. Snack Talk and Real Estate Woes (01:45-03:55)

• Lighthearted banter over Bloomberg office snacks—chocolate-covered Swedish Fish and Starbursts—sets the tone.
• Katie vents about stress in her personal real estate dealings:
  “This past week has been pretty harrowing in terms of... the tightrope we’re walking when it comes to our real estate dealings. Right now, I can’t care about anything... if it’s not interrupting the flow of nutrients to my placenta.” —Katie (02:59)

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2. GameStop’s Bizarre eBay Takeover Bid (03:55-13:33)

• GameStop submits a bid to acquire eBay for $28 billion in cash and stock—a bid widely seen as unserious and structurally impossible.
• Ryan Cohen’s grand stunt:
  • Highly Confident Letter revived—a Milken-era merger tactic, now essentially a “trust me, bro” note without actual financing.
  • GameStop does not have the cash, nor enough authorized shares to issue the needed stock.
  • Cohen, GameStop’s CEO, lists his personal possessions (notably, used socks) on eBay, possibly as “research or financing” for the offer.
• Underlying motivation:
  • Matt speculates the bid is a complicated job application for Cohen to run eBay, not a genuine merger attempt.
  • Cohen openly admits he never wanted to be GameStop’s CEO:
    “I have always long admired eBay's business, and I didn’t want to be the CEO of GameStop.” —Quoted by Katie (09:27)
• Shareholder reactions:
  • The offer is so structurally weak that eBay easily rebuffs it.
  • Discussion of meme stock dynamics and shareholder psychology:
    “I don’t know what sort of psychological experiment is going on with GameStop shareholders, but it’s fascinating.” —Katie (09:50)
• Matt’s financial analysis:
  • The real issue isn’t GameStop’s market cap vs. the offer, but whether eBay shareholders would want Cohen as CEO.
  • Takeover maneuvers stalled by lack of proper legal set-up (proxy deadlines missed, not enough shares authorized).
  • Likely outcome: fizzles, with the awkwardness of GameStop having to sell eBay stock it acquired.

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3. Structured Credit: CDOs, CLOs, and “AMAPS” (15:15-24:06)

• Return of structured finance:
  • Apollo launches a new securitization product, dubbed “AMAPS,” which some are calling CDOs reborn.
  • Matt clarifies: structurally, they are CLOs (Collateralized Loan Obligations)—a current, robust credit product—just repackaged with private credit.
• Debate over labels:
  • CDO (collateralized debt obligation) is an umbrella term; CLOs are more specific, and the stigma of CDOs from the 2008 crisis persists.
  • Apollo wants daily pricing and increased trading liquidity for private credit, blurring the lines between private and public markets.
• Why Apollo is innovating:
  • (1) Move private credit toward a publicly traded, syndicated model.
  • (2) As insurer-owned, Apollo wants to securitize and hold high-rated tranches for capital efficiency.
  • Matt:
    “Private credit is ultimately going to be... a broadly syndicated, liquidly traded asset class, just like bank loans are now.” (17:53)
• Industry reactions:
  • Some skepticism (e.g., PIMCO) that daily pricing improves actual pricing accuracy.
  • Underlying goal: more frequent pricing nudges private credit toward more active trading, with pricing aligning to public market moves.

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4. Legal Perils in Secondary Markets for Big AI Stock (25:59-30:10)

• Fraught trading in pre-IPO AI giants (Anthropic, OpenAI):
  • Both companies publish warnings: their stock is transfer-restricted. Buying via SPVs or forward contracts may be invalid or unenforceable.
  • Anthropic goes so far as to instruct potential buyers to “get in contact with your securities regulator,” notably naming transaction platforms like Forge and Hive.
  • The norm (especially among dentists and other retail types): buying restricted stocks via creative structures—potentially risking clawbacks or lawsuits.
  • Matt points out the tension: “If there’s tens of billions of dollars of stock that was invalidly transferred, then it’s, oh yeah, we’ll take back tens of billions of dollars of dilution for our shareholders by suing these dentists who bought in an SPV.” (28:38)
• Will AI companies actually sue? Debate unresolved.

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5. Banks as “Human Assembly Lines” & Automation in Finance (30:22-32:44)

• Goldman Sachs President John Waldron describes his company as a "human assembly line,” now facing automation.
• Katie riffs:
  “I often describe Goldman Sachs as a human assembly line, which is amazing.” (30:47)
• Discussion:
  • What does “assembly line” mean in a finance context? Does it describe deals assembled by analysts, or analysts themselves as products of bank culture?
  • Matt’s take:
    “There’s a lot of like kind of robotic stuff that gets done by 23-year-olds with Ivy League degrees... robots doing some of that is probably both efficient and a win for society.” (32:23)
  • The future: More automation may not mean fewer jobs overall—historically, technology (like Excel) has allowed banks to do more, sometimes even increasing hiring.

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Notable Quotes & Memorable Moments

• Matt on meme stock offers:
  “This is like a joke. This is a fake takeover. This is poorly thought out. But the more I think about it... he wants to be CEO of eBay. And this is a convoluted, poorly thought out way for him to say, make me CEO of eBay.” (06:15)
• Katie on shareholder psychology:
  "I don’t know what sort of psychological experiment is going on with GameStop shareholders, but it’s fascinating." (09:50)
• Matt on private credit evolution:
  “Private credit is ultimately going to be... a broadly syndicated, liquidly traded asset class, just like bank loans are now.” (17:53) “Sliced up and securitized... it’s the future of everything.” (20:18)
• On AI secondary shares:
  “If someone is coming to you and saying that they’ll sell you stock... call the police. Call the police because that’s all fake and void.” —Matt, paraphrasing Anthropic’s warning (26:14)
• On automation in banks:
  “There’s a lot of like kind of robotic stuff that gets done by 23-year-olds with Ivy League degrees... robots doing some of that is probably both efficient and a win for society.” (32:23)

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Timestamps for Key Segments

• 01:45-03:55: Snack talk; Katie describes her apathy amid real estate stress.
• 03:55-13:33: Deep dive on GameStop’s “takeover” bid for eBay, meme maneuvers, CEO motivations.
• 15:15-24:06: Structured finance debate—Apollo’s AMAPS product, the CLO/CDO distinction, and the future of private credit markets.
• 25:59-30:10: Legal minefields in secondary markets for AI unicorn shares (Anthropic, OpenAI), how restrictions may (or may not) be enforced.
• 30:22-32:44: Banks as “human assembly lines,” AI/automation in financial services, and employment outcomes.
• 32:44-end: Book recommendations, sign-off, theme music (no major content past here).

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Final Thoughts

This episode is a quintessential Money Stuff romp—exposing the absurdities of meme-stock era dealmaking, demystifying jargon-heavy innovations in credit markets, and poking fun at the breathless adoption of automation on Wall Street. Matt and Katie’s chemistry keeps the tone clever and irreverent (“human assembly lines”), while still providing nuanced market analysis—leaving listeners more entertained and more informed.

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For More:

• Matt Levine’s Money Stuff newsletter (Bloomberg)
• Katie Greifeld on Bloomberg Television’s “The Close”

Transcript

[Kelly Cavagnaro]

Hi, I'm Kelly Cavagnaro, Managing Director, Head of North America Institutional Distribution at Janice Henderson Investors we believe working together is the way to work better. Like combining your portfolio plans and our in depth strategy, your valued assets and our valuable insights. Your mission and our vision working in harmony to seek the right investment opportunities. Janice Henderson Investors Investing in a brighter

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future together Amazon Health AI presents Painful

[Matt Levine]

Thoughts I I can't stop scratching my downtown.

[Katie Greifeld]

Yeah, but I'm not itching to go downtown and tell a receptionist I'm here

[The Hartford Announcer]

to talk about my downtown.

[Matt Levine]

Some things you'd rather type than say out loud.

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[Matt Levine]

Bloomberg

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Audio Studios Podcasts Radio News I am

[Katie Greifeld]

so tickled that Bloomberg just has like loose Starbursts as a snack option. At least for this week.

[Matt Levine]

I'm most tickled by the chocolate covered Swedish fish. Yeah, my children are occasionally Swedish fish eaters. Katie's going to unwrap and chew a Starburst on this podcast, which is a

[Katie Greifeld]

really amazingly bold move. I'm gonna tilt the mic away as I chew it.

[Matt Levine]

I haven't had lunch and I have a bucket of Starbursts.

[Katie Greifeld]

I'm hoping you're gonna talk for like at least 15 seconds so I can eat this.

[Matt Levine]

15 seconds. I feel like a Starburst is like a two minute proposition anyway. Swedish fish. Chocolate covered Swedish fish. I'm killing time now with Katie. Choose chocolate covered Swedish fish. Just loose in a big tank. My children are sort of Swedish fish eaters and I want to bring to them the amphibious pleasures of chocolate covered Swedish fish. But I can't just take a handful

[Katie Greifeld]

of no, you got to wrap it in a napkin or something.

[Matt Levine]

I haven't yet figured out transporting the chocolate covered Swedish fish to your point

[Katie Greifeld]

on time about Starbursts. I eat a lot of Starbursts. I keep a bag of Starbursts swallow them whole. Yeah, pretty much in my car. So I've pretty much optimized my process.

[The Hartford Announcer]

All right.

[Matt Levine]

All right, good. I have not. I'm. I'm not going to attempt to Starburst during this podcast.

[Katie Greifeld]

Yeah, that's going to take you a while. You've got a lot of Starburst there.

[Matt Levine]

So, do you want to talk about real estate? Is it boring?

[Katie Greifeld]

No, it's been pretty cutthroat. This past week has been pretty harrowing in terms of, you know, the tightrope we're walking when it comes to our real estate dealings. Right now, I can't care about anything. I don't know, like, if it's not interrupting the flow of nutrients to my placenta. Like, I just. I can't make myself care about anything.

[Matt Levine]

Hello, and welcome to the Money's podcast.

[Katie Greifeld]

I think that works. Listen, I'm here. It's amazing that I'm here.

[Matt Levine]

We're not going to call the episode the Flow of Nutrients to My Full sent over it.

[Katie Greifeld]

It's pretty good, though, right?

[Matt Levine]

All right. Hello and welcome to the Money Stuff podcast. Your weekly podcast where we talk about stuff that Katie doesn't care about, where we talk about stuff related to money. I'm Matt Levine and I write the Money Stuff column for Bloomberg Opinion.

[Katie Greifeld]

Okay. I definitely care about money. My name is Katie Greifeld. I'm a reporter for Bloomberg News and an anchor for Bloomberg Television.

[Matt Levine]

Should I read my favorite news story of the week, which is really a news story of last week, but we didn't get to it because you were out. Yeah, GameStop is buying eBay.

[Katie Greifeld]

Amazingly, this wasn't a huge topic of conversation at Milken, but I would have liked it to be.

[Matt Levine]

It should have been.

[Katie Greifeld]

Yeah.

[Matt Levine]

Michael Milken, he invented the Highly Confident Letter, which in my time as a mergers and acquisitions lawyer, he did not see a lot of Highly confident letters because they were replaced by commitment letters. But GameStop has brought back the Highly Confident Letter. But, yeah, so GameStop, I guess, last week put in a bid to buy ebay for half cash, half stock. GameStop has neither the cash nor the stock, which is funny. People are like, well, GameStop doesn't have enough stock because eBay is so much bigger. That's not a real thing. You can issue as much stock as you want in the general case, but GameStop can't because it doesn't have enough authorized shares. No, it's trying to authorize more shares, but, yeah, so it's going to pay 28 billion in cash for eBay, which requires borrowing $20 billion from TD Bank.

[Katie Greifeld]

Yeah.

[Matt Levine]

Gave it a highly confident letter saying that we could probably raise that money, no problem, no commitments. And then it was going to issue stock for the rest and they lobbed in that bid. Last week. Everyone scratched their heads. This week, ebay said, no, thank you.

[Katie Greifeld]

Yeah.

[Matt Levine]

The latest news is that ryan Cohen, the CEO of GameStop, is going around giving interviews and sending letters to ebay saying, no, no, no, you should take my bid seriously.

[Katie Greifeld]

So Matt and I aren't allowed to talk unless we're in this room with microphones in front of us. So it's been interesting through your columns, watching your sort of like wrestling with the idea of was this a fake takeover offer too? Maybe this was a job application all along.

[Matt Levine]

Yeah. My thinking has evolved because obviously I know and love GameStop as a meme stock, and this feels very stunty in a lot of ways.

[Katie Greifeld]

Yeah.

[Matt Levine]

One of which is that they don't have the money. In other words, they don't have the stock, which is hard to do. You have to, like, work hard to not have the ability to issue stock for a takeover that you're planning to do. Another is that Ryan Cohen has did a little stunt where he listed some of his personal possessions, including his socks, on ebay as like, research slash financing for the takeover.

[Katie Greifeld]

I feel like you're maybe going to bid on those socks. You've mentioned them so many times.

[Matt Levine]

The socks are.

[Katie Greifeld]

Are they used?

[Matt Levine]

I think they are, but I'm trying not to think about that now. I'm not going to bet on the socks in any case, but. So I was like, this is like a joke. This is a fake takeover. This is poorly thought out. But the more I think about it, and this is based in part on interviews that Cohen has given. He wants to be CEO of eBay. And this is a convoluted, poorly thought out way for him to say, make me CEO of eBay. His case for being CEO of eBay is not crazy. Right. He ran well. Okay. Katie's rolling her eyes and it's crazy,

[Katie Greifeld]

but it's a little crazy.

[Matt Levine]

But, like, he ran a big. He, like, found and ran a big E commerce company. Chewy.

[Katie Greifeld]

True.

[Matt Levine]

I don't think that you would say that he has succeeded in his dreams of making GameStop a serious competitor to Amazon. But he's cut costs at GameStop, he's turned around the business a little bit. He's had a good run at running GameStop, and now he wants to run ebay. And this is his application to run ebay. The crazy thing about it is if you offer to buy a company for cash, it doesn't matter what your plans for the company are. You might say them because, you know, might appeal to someone. But ultimately, if you're like, I'm going to pay you cash, then the shareholders are like, okay, I'll take cash, and then I'll be out of the company. And whatever you do with the company is your problem, not mine. Right. If you're like Meta, and you're offering to buy a small startup for stock, it's almost the same thing. What Meta does with that startup sort of doesn't matter to the startup's owners because they're just getting stock in this giant entity. But when you are GameStop offering to buy ebay for stock, and ebay is really quite a lot bigger than GameStop, yes, Cohen's math is like, ebay would own twice as much of the company as GameStop, but it's really more than that. But so in that scenario, the only thing that matters to ebay shareholders is, what are your plans for ebay? Would you do a better job of running ebay than ebay's current management would? And, you know, Cohen is making that case. He's like, yeah, I've presided over a value decline, and I will do jazzy meme stock stuff. So that's where we are. He's making the case that he could run it better than ebay does. And all this stuff about half cash, Half stock takeovers, $125 takeover per share of takeover price, all that is kind of fake. It's really. Do you want him to be your CEO? And I don't get the sense that ebay shareholders are clamoring for him to be their CEO. That's more of a GameStop shareholder thing, but you never know.

[Katie Greifeld]

First of all, I have to commend you for watching the Ryan Cohen interview with.

[Matt Levine]

I read it.

[Katie Greifeld]

Oh, you did? You didn't watch the Pomp video?

[Matt Levine]

No, I didn't do that.

[Katie Greifeld]

No. Well, okay.

[Matt Levine]

I read it because he filed it with the sec, not Cohen did, because that's, you know, proxy soliciting materials.

[Katie Greifeld]

I did think it's interesting in that interview. First of all, he was appealing that he should be CEO of eBay, that he gives a hoot, basically.

[Matt Levine]

Yeah, I had to bathorize that in my column today. But it's fine.

[Katie Greifeld]

He said a bad word. But basically, he'd put his money where his mouth is. He'd own a lot of ebay shares, et cetera.

[Matt Levine]

This is such standard activist playbook. Right? This is what activists always say. I own 5% of the stock. The CEO doesn't own 5% of the stocks.

[Katie Greifeld]

Yeah. But he also said that he doesn't really want to be GameStop's CEO. That's crazy.

[Matt Levine]

He did say that.

[Katie Greifeld]

Yeah, I read that a few times. Because that is crazy work. This is what he said. I have always long admired ebay's business, and I didn't want to be the CEO of GameStop.

[Matt Levine]

Springboard. Yeah, GameStop to take over eBay.

[Katie Greifeld]

But I looked at GameStop's share price because I naively thought it was like, does anyone care that the CEO said that? That they don't want to be the CEO? And it seems like they don't.

[Matt Levine]

They enjoy being nagged.

[Katie Greifeld]

Yeah. Apparently. I don't know what sort of psychological experiment is going on with GameStop shareholders, but it's fascinating. Yeah.

[Matt Levine]

I'm sure you didn't mean it like that. I mean, I don't know how I

[Katie Greifeld]

meant it, but, I mean, neither of us watch the video, so all we're doing is reading the naked words. But the naked words say, I didn't want to be the CEO of GameStop. So it's wild. I do find.

[Matt Levine]

I think it was like he, you know, took over. Like, he bought a big position in GameStop and gave them some suggestions and then ultimately was like, I need to be running this company.

[Katie Greifeld]

Yeah.

[Matt Levine]

It was not like he started an activist campaign to put himself in charge in the beginning. It was more like he liked the

[Katie Greifeld]

stock, as they say.

[Matt Levine]

And then he's, now I need to fix it.

[Katie Greifeld]

Yeah.

[Matt Levine]

Also just like, he's like, retired after Chewie. And then he was like, no, I need to shake stuff up some more.

[Katie Greifeld]

Yeah, well, we'll see if it works. It doesn't seem like it's going to.

[Matt Levine]

No. The next thing he'd do is run a proxy fight. But part of what's happened here is this is so disorganized and not real. Like, you know, he offered to do a takeover with had enough authorized shares. Their annual meeting is coming up. The deadline for nominations is long past. They can't actually do a proxy fight for months now, at least. So it's not a real activist. It's more just sort of poking around, seeing what will happen.

[Katie Greifeld]

Yeah. And just stirring it up. I do find it interesting that he's so enamored with ebay. This is his white whale. He just wants ebay, which is fine.

[Matt Levine]

Started An e commerce company.

[Katie Greifeld]

Yeah.

[Matt Levine]

Also he now runs a. I don't know what these companies are. He runs a collectibles company.

[Katie Greifeld]

Sure.

[Matt Levine]

Ebay is like the white whale of online collectibles sales.

[Katie Greifeld]

That's where you go for collectibles. That's true.

[Matt Levine]

And there's huge synergies. You can both go to ebay's website or walk into your local GameStop and get your collectibles created and auctioned. I watch the space. I'm hoping he continues to do nonsense. This is the case where even if it just fizzles, it's still interesting because GameStop owns 5% of eBay stock and if it fizzles, they're going to have to sell that. That's going to be kind of awkward. If they have to a FA takeover and then sell the stock. You're not really supposed to do that.

[Katie Greifeld]

Yeah, it's kind of a.

[Matt Levine]

No, no. Last week he gave an interview on CNBC that was like super, super, super awkward. Although honestly, it wasn't entirely like I

[Katie Greifeld]

had to take breaks as I was watching it.

[Matt Levine]

Yeah. One thing that I've written is people's initial reaction to this was like, how could GameStop pay $28 billion of stock for eBay if it only has $12 billion of stock? And I think that's the wrong way to look at it. You can issue as much stock as you want and $28 billion of stock for ebay would just be stock of ebay. It would just be like ebay. Shareholders would be given ownership interest in their own company. And the thing that would change was it would be one, it would be smushed together with GameStop. And two, more importantly, Rhine Cohn would run the whole thing. So if you think Ryan Cohen running it is a good thing, then you'll think, oh, great, $28 billion of stock in this acquisition is valuable. It doesn't have anything to do with how much GameStop is currently worth. It only has to do with what you think the future combined company is worth. I watched that interview and I was like, why are people giving him a hard time about not having enough stock? He can issue as much stock as he wants. Then I went and read their certificate of incorporation and I realized he can't actually issue any stock. And in fact, no one had thought this through at all.

[Katie Greifeld]

It was so good.

[Matt Levine]

It definitely made me think more. That in the socks thing made me think, ah, a fake takeover

[Katie Greifeld]

game. BAE Estop game's not bad. Thank you.

[Kelly Cavagnaro]

Hi, I'm Kelly Cavagnaro. Managing Director Head of North America Institutional Distribution at Janice Henderson Investors we believe working together is the way to work better. Like combining your portfolio plans and our in depth strategy. Your valued assets and our valuable insights. Your mission and our vision working in harmony to seek the right investment opportunities. Janice Henderson Investors Investing in a brighter

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[Katie Greifeld]

Speaking of Michael Milken. Yeah, yeah, CDOs making a comeback.

[Matt Levine]

No, they're not CLOs. A slightly different thing. No, I know there's a Bloomberg article that's like, Apollo is bringing back a thing that looks like CDOS.

[Katie Greifeld]

Apollo says there's like CLOs, but better.

[Matt Levine]

Yeah, but they're CLOs in the simple sense of we live in a world where there is a giant market where companies take out syndicated loans, floating rate secured loans, and those loans get packaged into a pool and the pool sells rated debt securities on them. And that thing is called the clo.

[Katie Greifeld]

Right.

[Matt Levine]

And Apollo is like, let's do that. But instead of with proudly syndicated loans, we're going to do it with private credit loans. Like this is a clo. Yeah, it's a CDO in the sense that CDO collateralized debt obligation is the sort of umbrella term for all.

[Katie Greifeld]

Yes.

[Matt Levine]

That you put in a pool. But like there's a big existing market right now of a thing called clos, which is floating. Right. Loan securitizations. And there's not such a big existing market of things called CDOs because those went out of favor in 2008.

[Katie Greifeld]

Yeah. They led to an even scarier acronym or were a starring character in the GFC.

[Matt Levine]

The GFC. But these are clearly CLOs. These are clearly like if you're a company and you want to borrow money, you can borrow in the broadly syndicated loan market, in which case ultimately your loans will end up in a clo, or you can borrow from Apollo and a direct loan, in which case your loan will end up in a. It's called an A Maps Apollo Multi Asset Prime Securities. I guess once it becomes genericized, you just call it Maps Multi Asset prime securities, but probably you just call it a private credit clo, which is what it is.

[Katie Greifeld]

Right.

[Matt Levine]

And if you borrow from Apollo, your loan will end up in an amaps, which is like a clo. And in either case there will be like a highly rated investment grade tranche that is most of the pool and that is sold to insurance companies. And in Apollo's case, the insurance company will be athene, which is the insurance company it owns very well. So it's just the clo.

[Katie Greifeld]

You're not fussed about this?

[Matt Levine]

How would anyone be?

[Katie Greifeld]

People are certainly fussed about this. No, there's a little bit of fussing going on.

[Matt Levine]

Who name names?

[Katie Greifeld]

Okay, I'm going to name the name of Michael Hislop. I hope I'm saying it right. He's an analyst over at Curacid Capital Management. These are words that I like to read, not say out loud. But basically he's saying that it's inevitable. He thinks it's a cdo, saying that it's inevitable that this would make a comeback. And structured finance innovations tend to arise when there is an issuer need for rather than just investor appetite. So basically saying this is Apollo doing this for Apollo's needs.

[Matt Levine]

Like when I think about Apollo's needs here, I think there are two things going on. One is that I have written for years that private credit is ultimately going to be. It'll be quaint to talk about private credit. It's going to be a broadly syndicated, liquidly traded asset class, just like bank loans are. Now. Not everyone agrees with that. Right. Some people are like, no, no, it's very important that it be relationship driven. Not trading is a big part of the appeal of the product. But you see from Apollo's actions that they're like, no, no, we want to trade it. Right. They've set up a trading desk.

[Katie Greifeld]

They're talking about daily pricing.

[Matt Levine]

Daily pricing, which only really makes sense if you think there's going to be a trading market.

[Katie Greifeld]

Yes.

[Matt Levine]

And so how does the bank syndicated loan market work? How does that trading work? Well, part of it is that clos buy this stuff. So setting up a CLO product for private Credit makes total sense if you are someone like Apollo who really wants to trade private credit and have it be liquid and broadly distributed in all the things that the bank loan market is. The other reason I think that Apollo is interested in this sort of thing is that Apollo owns a big insurer. A lot of Apollo's private credit origination is to put stuff into the insurer. Insurers are not huge consumers of junk rated direct loans to LBO companies because they have, you know, capital requirements and ratings requirements. And so if you can smush a bunch of loans into a pool and issue a rated securities on the top 85% of that pool, you can sell those to your insurance company at a good spread and at a good rating and get good capital treatment for your insurance company. This is not like a CLO manager where they want the equity for the upside and they're selling all of the highly rated tranches to outside insurance companies. Insurance companies. This is like Apollo's an insurance company. They want the highly rated tranches because that's how they get yield with good capital treatment. So it's a CLO. Well, whatever. I mean CDOs were driven by investor demand for yieldy AAA paper. And so that is a portion of what's going on here. So sure. Look, any securitization is driven by investor demand for yieldy AAA paper. You can't get around that.

[Katie Greifeld]

Yeah, well, Paul has cast this as the future of securitization.

[Matt Levine]

So it is the idea that private credit would just sleepily sit on the balance sheets of funds forever is clearly falling apart.

[Katie Greifeld]

Right.

[Matt Levine]

I mean it's like sitting in the balance sheets of PDCs that are getting redemption requests and now it's sitting on the balance sheets of securitizations that get sold to insurance companies. And yeah, it's the future of everything. Yeah, sliced up and securitized.

[Katie Greifeld]

So not a cdo, a different type of clo. Well, Mark Rowan said that basically the idea that they have behind amaps is that it takes the benefits of clos and adds greater numbers of issuances issuers, less leverage, a better structure for investors. So they prefer the CLO comparison.

[Matt Levine]

It's a clo. Yeah, yeah. I mean the thing is, is it the future of private credit? Yes. I feel like people in the credit world would have some complaints about the effect of clos on the credit. You know, like in the olden days, banks made loans and they held the loans to maturity and you had a relationship with your bank and if you needed to restructure the loan you went to the bank and talked about was all very sort of sleepy. And now the thing that is called a bank loan or broadly syndicated loan is mostly owned by clos and it trades more liquidly and you have less of a relationship. And the CLOs are not the same sort of credit analysts as the banks and all this stuff. And private credit two years ago would be like we're long term relationship holders and people making the loan are going to hold the loan and if you need to restructure, you'll come to talk to one person. And now we're going to CLO's a private credit and that market will evolve the way the bank loan market does.

[Katie Greifeld]

Yeah, I mean it feels like Apollo in particular is driving a lot of this shift in conversation.

[Matt Levine]

They want to trade it.

[Katie Greifeld]

Yeah. Daily pricing. It's coming by September, end of September. According to Apollo.

[Matt Levine]

Yeah. You sent me an article about pimco.

[Katie Greifeld]

I did.

[Matt Levine]

Criticizing this.

[Katie Greifeld]

Yeah. Pimco took some umbrage with that. Basically an analyst over there said that more frequent pricing is not more accurate pricing. So some skepticism there over, okay, there's daily prices, but are they accurate?

[Matt Levine]

Okay, I don't know. But like two points. One point is if you are in the business of providing daily pricing, then you have a model, I think you have to have a model that updates daily based on something. So one possibility is that your model updates daily based on public market data. Right. Like if you know, public market BB spreads move out by 5 basis points, then you move your spreads out by 5 basis points. Otherwise if you're not actually changing things day to day, then you're not providing real daily pricing. And so if you're doing that, that's something, it's introducing some public market volatility comps to private credit. And so you're getting some possible indication because there is a link between these markets, you're getting some possible indication of what is actually happening in your portfolio. But also, I think this is all fake. And the reason Apollo wants to do daily pricing is because they want to set up a trading desk where they actually trade the stuff and get real daily marks. I think that's the future of this. I think daily pricing is a way to nudge everyone in the direction of daily trading. And if you're doing that, then the prices are more or less real.

[Katie Greifeld]

Yeah. Well, Pimco gets there in this note and first of all, they never say Apollo by name, but it came out in reaction to that news. There's an incremental fix that PIMCO proposes, which is to rely more on third party validation of that valuations. The second more ambitious way to address this is basically to have a more functional and transparent secondary market for private credit assets, which is. Yeah, so Apollo would agree with that.

[Matt Levine]

So they're not going to provide daily marks for like 10 years without ever trading it. Yeah, they're going to trade it.

[Katie Greifeld]

Yeah, the hope so Apollo and Pimco, they can live in harmony here.

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[Katie Greifeld]

You know what isn't harmonious?

[Matt Levine]

The big AI companies and the people selling shares of their stock on the secondary market.

[Katie Greifeld]

Yeah, Anthropic in particular, Anthropic named names in their blog post which I thought was cool.

[Matt Levine]

The actual update histories of these web pages is a little bit obscure to me, but I think the point is that now both Anthropic and OpenAI have websites saying basically our stock has transfer restrictions. If someone is coming to you and saying that they'll sell you stock or that they own our stock in an SPV or that they'll sell you a stock in a forward agreement, call the police. Call the police because that's all fake and void. And that caused a bit of a stir because everybody on earth owns some anthropic stock through an spv. Absolutely and if they're serious about those all being void, then that is going to create some drama.

[Katie Greifeld]

Yeah, it did say on Anthropic's blog post that literally get in contact with your securities regulator if someone approaches you and trying to call the sec.

[Matt Levine]

Yeah, right. This is a long running thing. We've talked about DXYZ, the Destiny Tech 100, who caught the ire of Stripe a couple years ago for this sort of thing. Basically, like I said, most of the big tech companies have transfer restrictions on their stock, saying if you are an employee or an investor and you own stock, you can't sell it without telling the company, maybe giving the company a right of first refusal, getting permission from the company. My guess is that all of these transfer restrictions say you also can't sell it in a forward contract. Where a forward contract is you give me money now, I promise that when the company goes public, I'll deliver you the stock. Which seems to get around the transfer restrictions. No company believes that. The companies all say you can't sell the stock even in a forward contract. But then people do sell it in the forward contract thinking, well, when the company goes public, I'll deliver the stock. There won't be transfer restricted then, so who's harmed by it? And these companies assert that if you do that then the transfer is invalid and the company can take the stock back. And I'm not aware of high profile examples of this ever being actually fought over. Yeah, because the goal is to stop them from doing it now. But once they go public, what, they're going to sue to take the stock back? Yeah, but they'll say they will.

[Katie Greifeld]

Yeah. Also, I mean we've talked a lot about like SpaceX in SPVs, but you know, there's a lot of purported exposure to OpenAI, et cetera in SPV's. So I mean there would be a lot of cleaning up to do.

[Matt Levine]

And I don't know, on the one hand it is probably not like super in the best interests of OpenAI or anthropic to go around suing to take back stock from shareholders once they go public. They'll have bigger fish to fry once they go public. On the other hand, if there's tens of billions of dollars of stock that was invalidly transferred, then it's oh yeah, we'll take back tens of billions of dollars of dilution for our shareholders by suing these dentists who bought in an spv. Like, I don't know, I don't know. You might be tempted.

[Katie Greifeld]

Those frisky Den do you think this is the end of it? That they just make scary blog posts and sort of hope that they're discouraging?

[Matt Levine]

Yeah.

[Katie Greifeld]

That this is it. This is it.

[Matt Levine]

Right. I don't think they're going to sue, but they might. This is not legal advice. Not investing advice.

[Katie Greifeld]

I don't know. Again, Anthropic did name names in their blog posts.

[Matt Levine]

Right. Some of which are like, you know, kind of big secondary.

[Katie Greifeld]

Yeah. Forge, for example. Hive was also their open door. The list goes on.

[Matt Levine]

So one thing they're saying is if someone writes a forward contract on Anthropic or OpenAI shares that they own, that might be invalid and we might take it back from you, and so you shouldn't buy that forward. But another thing they're saying is they might be lying. And those things do go together. If you're trying to get around the transfer restrictions, you might also be lying about owning the stock in the first place, which I think is not quite right because, in fact, there seems to be a norm of trying to get around the transfer restrictions. But, yeah, you can see why someone willing to violate their contract might also be willing to lie about owning the shares.

[Katie Greifeld]

I could see the spiritual similarities between those two urges. I haven't checked the price of our friend Destiny Tech.

[Matt Levine]

I haven't either. It continues to, last I checked, trade it well above net asset value.

[Katie Greifeld]

Do you want to talk about human assembly lines? Yeah, I just wanted to give a shout out. Probably the best headline I saw this week. Goldman says banks quote, human assembly lines face automation. That was a real thing that John Walter Waldron said. He is the president and chief operating officer over at Goldman, giving an interview on cnbc, saying, I often describe Goldman Sachs as a human assembly line, which is amazing.

[Matt Levine]

Right. So like Henry Ford had an assembly line where cars were assembled by humans.

[Katie Greifeld]

Yeah.

[Matt Levine]

Does John Waldron mean M and A deals are assembled by humans on an assembly line or.

[Katie Greifeld]

Yeah.

[Matt Levine]

Does he mean humans are assembled at Goldman, which, as a Goldman alum, I felt a little bit like I was being assembled on an assembly line.

[Katie Greifeld]

Right. They were building your personality.

[Matt Levine]

But mostly I think he means deals were being assembled on the assembly line and some of that assembly line will now be taken over by robots.

[Katie Greifeld]

It's pretty great. This is another interview where I didn't watch it. I just read it without any context.

[Matt Levine]

Right. I don't think he meant human assembly lines in the dystopian.

[Katie Greifeld]

Yeah. Like, here's a leg, we're going to connect it to a pelvis a little

[Matt Levine]

bit how we can.

[Katie Greifeld]

But even in the more sane reading where it's humans working in an assembly line, it's pretty grim. No, it isn't. Yes, it is. We're going to replace all these humans with AI too.

[Matt Levine]

No, it's going to be like a car assembly line. They'll still be like humans with specialized technical skills who now have a relatively physically undemanding job because the robots are welding the car together and the humans are doing complex programming to make the robots work.

[Katie Greifeld]

They're putting the computer in the car.

[Matt Levine]

Yeah. I mean, right. Not definitely implies that some jobs will be lost on the assembly line. Let's be clear.

[Katie Greifeld]

Yeah. Let me read the rest of the quote. Okay. He says if you think about what's happened in manufacturing, it's become much more robotic. It's become much more automated. The banks really haven't been on that journey to the same extent.

[Matt Levine]

Yeah. I do think that when you think about the activities of an investment bank, there's a lot of like kind of robotic stuff that gets done by 23 year olds with Ivy League degrees. And having robots do some of that is probably both efficient and a win for society. And also probably nice for those 23 year olds who don't have to do the robotic stuff.

[Katie Greifeld]

But what are they going to do?

[Matt Levine]

But sure, some of them are going to not be hired to do robotic stuff.

[Katie Greifeld]

Well, Waldron also did say I'm not sure dynamically how the overall headcount will change.

[Matt Levine]

No one's ever sure because this is the whole thing. Right. A lot of of technological innovations have the effect of increasing the amount of work that the firm can do and so you actually end up hiring more people. That's the story of Excel in investment banking. Will it be the story of AI? I don't know. It's reasonably to be pessimistic, but I don't know. They might just do many more deals on their roboticized assembly line.

[Katie Greifeld]

That's true.

[Matt Levine]

The 23 year old analysts will be providing high powered oversight of 20 robots and it'll all be wonderful.

[Katie Greifeld]

Yeah, the robot overlord or the robots

[Matt Levine]

will be the overlords.

[Katie Greifeld]

Yeah, it's the same. I could see it both ways. Well, to that point, thank you for all the book recommendations we did get.

[Matt Levine]

Oh yeah, we got some book recommendations.

[Katie Greifeld]

Yeah.

[Matt Levine]

Katie has an economist fantasy novel.

[Katie Greifeld]

Yeah.

[Matt Levine]

So probably not what it sounds.

[Katie Greifeld]

Someone sent that over. I am going on a flight because I'm off next week, so. By the way, if you're still listening, there won't be a podcast next week there is darkness. Thanks for yeah, great, right? I think.

[Matt Levine]

Terrific. I have no no one tells me anything man. And that was the Money Stuff Podcast. I'm Matt Levine.

[Katie Greifeld]

And I'm Katie Greifeld.

[Matt Levine]

You can find my work by subscribing to the Money stuff newsletter on bloomberg.com

[Katie Greifeld]

and you can find me on Bloomberg every day on the close between 3 and 5pm Eastern.

[Matt Levine]

We'd love to hear from you. You can send an email to moneypodlumberg.net Ask us a question and we might answer it on the air.

[Katie Greifeld]

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.

[Matt Levine]

The Money Stuff podcast is produced by Anna Mazarakis, Moses Andam, and Alexis Haught.

[Katie Greifeld]

Our theme music was composed by Blake Maple.

[Matt Levine]

Amy Keen is our executive producer. Thanks for listening to the Money Stuff podcast. We'll be back next week with more stuff.

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