Loading summary
Transcript165 lines
- [00:04]
A
Every small business owner has that one moment that could have broken them. But remarkably, it didn't. Hi, I'm Ben Walter, CEO of Chase for Business. And on season three of the Unshakeables, my co host Kathleen Griffith and I are bringing you more incredible stories of overcoming the impossible. We're really proud to share that the Unshakeables is nominated for Best branded podcast at the 2026 iHeart Podcast Awards. Listen to the Unshakeables wherever you get your podcasts and learn more@chase.com podcast JPMorgan Chase bank and a member FDIC Copyright 2026 JP Morgan Chase Co. The thing about AI for business, it may not automatically fit the way your business works. At IBM, we've seen this firsthand. But by embedding AI across hr, IT and procurement processes, we've reduced cost by millions, slash repetitive tasks and freed thousands of hours for strategic work. Now we're helping companies get smarter by putting AI where it actually pays off. Deep in the work that moves the business. Let's create smarter business. IBM.
- [01:10]
B
Lately, my friends keep asking what I'm doing to my skin. Honestly, I didn't change my makeup. I changed my skincare. It's called Farmhouse Fresh. This award winning fresh grown brand is a 14 year favorite of us. Spas and beauty magazines and celebrities. Agree. If you're over 40 and feel like nothing really makes a difference in anymore, this does. My skin looks brighter, smoother and yes, people notice. Get the Farmhouse Fresh Skin Care glow. Go to farmhousefreshskincare.com Bloomberg Audio Studios podcasts
- [01:46]
A
Radio News we talked last week about getting ready.
- [01:50]
B
I know, we're so excited.
- [01:51]
A
I know, we're so excited. I don't get out of the house much.
- [01:53]
B
Oh my God. The weather in Vegas though, it's going to be like high 80s.
- [01:56]
A
I don't know what the weather in New Orleans is going to be.
- [01:59]
B
It's gonna be great.
- [01:59]
A
It's gonna be great. Whatever.
- [02:01]
B
Yeah, it will be good.
- [02:02]
A
Hot and humid.
- [02:02]
B
Drink a hurricane.
- [02:04]
A
I feel like I'm gonna drink a hurricane.
- [02:06]
B
It's not good. It won't make you feel good.
- [02:08]
A
No. I think the last time I was in New Orleans, I was
- [02:13]
B
also in a market.
- [02:14]
A
I was in high school.
- [02:15]
B
Okay.
- [02:15]
A
And in high school I was on the Quiz bowl team.
- [02:19]
B
Oh, right.
- [02:19]
A
Which is like surely no surprise to any of our listeners.
- [02:23]
B
No.
- [02:24]
A
And we qualified for some sort of national championship tournament in New, of course. And I was, you know, 17 and we definitely drank hurricanes.
- [02:34]
B
That's pretty cool.
- [02:35]
A
Actually, our like teacher Chaperones were like, took us to Bourbon street and we're like, we're going to walk this way. Wow.
- [02:42]
B
Did anyone have a fake id or was it just like, as I recall.
- [02:46]
A
No.
- [02:47]
B
Or was it like one kid and he was like, 15?
- [02:50]
A
This is a simpler time in New Orleans. God.
- [02:53]
B
Yeah.
- [02:54]
A
He just walked up to a bar when you were 16, 17 years old and you said, I'd like a hurricane. And the bartender was like, nobody who's not underage wants a hurricane.
- [03:04]
B
So here you go, man. Well, you can recreate that experience.
- [03:08]
A
I'm going to recreate that experience.
- [03:10]
B
It's beautiful.
- [03:10]
A
Like, honestly, like the M and A Conference and the Quiz Bowl National Championship. Very similar, probably overlapping people. Yes.
- [03:18]
B
That's cute.
- [03:20]
A
Hello and welcome to the Money Stuff podcast, your weekly podcast where we talk about stuff related to money. Matt Levine and I write the Money Stuff column for Bloomberg Opinion.
- [03:32]
B
And I'm Katie Greifeld, a reporter for Bloomberg News and an anchor for Bloomberg Television.
- [03:44]
A
Friend of the POD Bill Ackman is
- [03:46]
B
doing friend of the show Bill Ackman returning not as a bird, but as the man himself.
- [03:51]
A
I forgot that was a sensitive subject. Friend of the SHOW Bill Ackman, man, not bird is.
- [03:56]
B
He's bad.
- [03:57]
A
A thing that he likes to do. Launch large glass dun funds or try. Or try. He's going to get it one of these days. He filed for the IPO of, well, the IPOs of Pershing Square USA, which is the closed end fund that he tried to launch in 2024 and then pulled because he didn't raise very much money. But also Pershing Square Inc. Which is the new form of the Pershing Square hedge fund management company. So his actual hedge fund firm is going to go public simultaneously with his closed end fund. For the simple reason that if you buy shares of the closed end fund, you're going to get shares of the management company as a sweetener to induce you to buy shares of the closed end fund.
- [04:39]
B
20 shares of the management company, Right.
- [04:41]
A
Everyone reported this and I'm like, you can't be like 20 shares. If you buy 100 shares of the Pershing Square USA, you get 20 shares of the management company. So you get one fifth as many shares of the management company. But like, shares are a meaningless concept. You can divide a company into as many shares as you want.
- [04:56]
B
This is true.
- [04:56]
A
And so I went and looked at it and there are going to be 400 million shares of Pershing Square Inc. The management company. So basically, if you buy a $50 share of Pershing Square USA, the clothesline fund. You get $50 worth, give or take of the clothesline fund plus 0.2 shares of the management company, which is 1,2 billionth of the management company, which, you know, what's the management company worth? 2 years ago or a year and a half ago they did offering, they raised money at about a $10 billion valuation and they would argue that it's more now. So you know, if the management company is worth 10 or 20 billion dollars, then your bonus as a investor in the closed end fund is worth $5 or $10 or so. So that is, I think they hope, enough of a bonus to overcome the tradition that closed end funds trade at a discount. And in fact.
- [05:48]
B
But there's a rich history of closed end funds trading at a discount.
- [05:52]
A
The rich history includes Bill Ackman's closed end fund in Europe which is part of 25% discount. Their discount is very complicated because there's this thing coming. But if you started from that as a starting point, you'd be like, well, 25% discount means if I put $50 into Pershing Square USA, I'm going to get back 3750 worth of stock. And then you need enough of the management company stock to make it worth it, which maybe this does.
- [06:17]
B
Yeah. So we were talking a little bit about this earlier and then we quickly stopped ourselves because we should save it for the pod. But it's interesting, when it comes to IPOs of companies, there's this stigma around trading below your IPO price. Does the same stigma exist if you IPO close and fund and immediately trade at a discount?
- [06:38]
A
Well, two things. One, it's not a stigma, it's a total impediment. Like Bill Ackman, last time he tried to take Pershing Square USA public, he just didn't. And the reason he didn't is because a lot of investors were like, look, this sounds great, but we think it'll trade at a discount and we'd rather buy it at a discount on day two than buy it from you at par in the ipo. And if everyone says that, then you don't sell any shares in the IPO and you just don't go public. Right. With a company stuff is different. Right. Like a company like you set the IPO price at the price the market is willing to bear. With a closed end fund, if you don't raise money at nav, like you kind of can't raise money. So they pulled the IPO and so now they're coming back with this thing. Which, you know, you ask, is there a stigma if it trades down? Well, maybe I'm wrong, but it's going to trade down. The way you way, you know that is because they're giving this bonus. The management company shares and the closed end fund shares are going to trade separately day one. Right. They're two separate companies. And if you buy shares of the closed end fund in the ipo, you get closed end fund shares and separate management company shares.
- [07:41]
B
Yeah.
- [07:41]
A
And then day one they trade separately. And you hope the package will trade at above $50 so that you've made money on the IPO. But if the package trades above $50, like the close end fund is going to trade down. It's just going to trade down and it's, you know, it's not going to be that much think about because everyone's like anticipating it. But whatever.
- [07:58]
B
I'm glad you said it's going to trade down because maybe I'm wrong. I mean, maybe I'm wrong too, but that was my knee jerk reaction. Like, oh, every close.
- [08:06]
A
That's why there's. That's why there's a bonus because it's going to. So you get these extra shares and you hope the package trades up. But the package trades up. It's a win. It's a good ipo.
- [08:13]
B
Yeah.
- [08:14]
A
Maybe over time. Like Bill Ackman has always made the case that if he compounds the closed end fund at an above market rate, then you should be willing to pay more than nav to buy into the closed end fund. And maybe over time that argument wins for not day one.
- [08:34]
B
Yeah. It's kind of interesting that Robinhood also just set sail on a close end fund. A venture fund that holds private companies that IPO'd last week. I believe it also it opened at a discount or something like that. And I guess that sort of feeds into my long term thinking that. Okay, package aside, it feels like this close end fund is going to trade at a discount. Given that we've talked about how there is all this demand out there for private companies from retail investors, you would expect that they would be drawn to this Robinhood venture fund. And then you compare that to the portfolio and Bill Ackman's closed end funds, which it's not.
- [09:16]
A
Not large cap stocks.
- [09:18]
B
What are you talking about?
- [09:20]
A
I said it's not. Not large cap stocks. Right.
- [09:22]
B
In Bill Ackman's. Yeah, no, I'm not saying that it's not. I'm saying it's all public large cap stocks. It's not like the Shiny pre IPO ones.
- [09:29]
A
True. There's a reason for selling it this way.
- [09:35]
B
Yeah, I know. I'm just saying the portfolio, like if you're looking at this like shiny package of like data bricks ramp, like a lot of companies that are expected to go public in the near future versus, you know, a closed and fund of large cap, perhaps the right public stocks, but still public stocks that might not like appeal to people in the open market who might want to buy this.
- [10:00]
A
Oh yeah. The thing you're selling in the closed end fund is not like the underlying investments, which are kind of vanilla. The thing you're selling is one, Bill Ackman's future ability to pick good investments and then two, just like his Persona. Right. I mean like this is a, like to some extent he's a public figure. He tweets a lot. Like, if you're interested in that, like this is the way that Tesla is the way to access Elon Musk. This is a way to access like his brand. And maybe some people will buy that. Yeah, I should say, like, that a lot of this is spoken for. Like they have $2.8 billion of like
- [10:35]
B
pre IPO commitments and those people got 30 shares.
- [10:39]
A
Yeah, 30. Yeah. So yeah, a little extra bonus. But those people are like institutions and family offices and stuff. I do want to tell you a little bit about like the management company is going public, right? So it seems like the management company is going public sort of out of necessity to do the closed end fund deal. But it's also like they're always talking about taking it public. They're not raising money for the management company, they're just taking it public to give to the closed end fund shareholders. But they have to do a prospectus for the management company. And so you can see things about like comp. Including Ekman got $143 million last year.
- [11:09]
B
It's a lot of birds.
- [11:11]
A
And Brian Israel, who is the actual chief investment officer, got 44 million. I also, I want to quote one of the great sentences.
- [11:19]
B
Go on.
- [11:20]
A
And this is actually from Ekman's letter, I think to shareholders. It's not from the actual perspectives, but he writes with one of the highest ratios of fee paying assets to investment professionals in our industry. Pershing Square is also an economically attractive place to work.
- [11:34]
B
Oh.
- [11:35]
A
Which is like we're going to pay you like a great flex. Like it's like they have like whatever. They have like 12 employees and they run $30 billion and they all get paid. It gets a great business. And managing company is also Interesting. They do a really interesting thing where they have, like most other hedge fund managers, they charge performance fees and they have what they call the preferred performance fee, which basically means the performance fee that they get on the first 5% of returns in their funds goes to the management company, to the shareholders, basically. And everything over that goes to employees. So one, that incentivizes employees because they can get real, real rich. And two, they think, they argue that it makes the management company a better investment because the theory is that people don't like to buy shares of hedge fund companies because their returns are so variable. Because they have a good year, they make a lot of money. If they have a bad year, they don't make any money. And so stereotypically, investors do not place a high multiple on performance fees. And Pershing Squares theory is like, well, the first 5%, we'll get that every year. And so that's almost like a management fee. It's just like a guaranteed fee. And so investors should place a high multiple on that. So they're like carving up the fees in a nice way where shareholders place a high value on the low part of the fees, like the very predictable stuff, and employees place a high value on the upside lottery tickets. And so we're going to carve it up so that everyone gets the piece they value. So we'll see if that works, but it's a good idea.
- [12:58]
B
I feel like we're going to be talking about this more as we get closer, maybe. Yeah.
- [13:04]
A
Or never again.
- [13:05]
B
Or never again. Something we've been talking about a lot, which we're going to talk about more right now. Private credit. She's Louise. Vibes are atrocious.
- [13:27]
A
Are they? Yes, I guess they're bad. Yeah, I guess they're bad.
- [13:32]
B
I guess they're bad. Well, if you have an optimistic take.
- [13:35]
A
The FC had a story about a Goldman executive who said at a conference that the private credit clients were enjoying the war in Iran because at least it distracts from questions about Gates.
- [13:45]
B
And that's an inside thought.
- [13:47]
A
Yeah, you really don't want to say that.
- [13:49]
B
Yeah, keep that. I feel like that also points to the vibes being atrocious. The war is a nice change.
- [13:57]
A
Little refresher, I guess. Actually, after we recorded last week H Land, the HPS slash BlackRock Big Private, BDC gated itself. Investors requested to redeem about 9% of their shares. And HBS says, Nope, our cap is 5%, so we're not giving you back the rest of your money.
- [14:17]
B
They didn't have their employees Pitch in.
- [14:19]
A
They didn't have their employees pitch in. And they basically said the correct things, which are the point of private credit is that you accept some illiquidity in exchange for expected higher returns. And because we own illiquid stuff, we can't just cash you out whenever you want. And so we set a limit of 5% so you can get some money out if you need it. But, like, we're keeping the limit of 5%.
- [14:41]
B
Tough cookies.
- [14:42]
A
And it's funny, you say the vibes are bad, the vibes are not good. But a lot of people in the private credit industry are like, they did the right thing. The gates are to protect the clients, and you want to not have a run on the bank. And if you just say, nope, the bank is closed, then you do prevent that at the cost of getting awkward questions and getting bad headlines and having bad vibes. But I think it is like, people in private credit that's the right thing to do.
- [15:03]
B
Was it Blackstone that the employees positioned. Yeah, maybe the employees at Blackstone forked over some cash to meet the XX redemptions were like, God, I wish that BlackRock had done that a week earlier so we wouldn't have had to pay up very possibly.
- [15:16]
A
There are, like, differences in numbers that are kind of. Kind of matter a little. Like, Blackstone got 7.9% redemptions, which, like, you can kind of do 7% in your tender offer. Then it's like 0.9. We'll find the money somewhere. Whereas, like, HP has got 9.3, where it's like 9.3. Really got to do something. And there's been. Since then, there's like, Cliff Water had a. That was a big 14%.
- [15:39]
B
Yeah. And then you got a Morgan Stanley as well.
- [15:42]
A
Yeah.
- [15:43]
B
Just feels like if you haven't.
- [15:44]
A
The whole thing has been kind of like the numbers have been creeping up because this is all kind of cumulative. Right. Like, you go out and you say, how many people would like to redeem? And like, 7% say, we'd like to redeem. And then you announce that and they're bad headlines. And then like, the next fund that does it, it's like 8%, you know, and so it keeps getting worse.
- [15:59]
B
Kind of like a vicious cycle or feedback loop.
- [16:02]
A
Yeah. It's just people get nervouser and nervouser, and these redemption numbers are an index of nervousness. I don't know how much this has to do with fund by fund performance or trust in the managers, and how much of it is just each fund gets a little bit more redemption. Requests than the fund before.
- [16:17]
B
Well, the private credit titans would tell you that this is totally disconnected from fundamentals of the portfolios. Apollo trying to maybe combat that by offering more frequent marks.
- [16:30]
A
More frequent marks.
- [16:31]
B
That was one of the stories out this week.
- [16:33]
A
Yeah. No, they're going to mark their stuff
- [16:34]
B
more frequently, monthly, with ambition to get to. Daily.
- [16:37]
A
Yeah. And also with ambition to get third party marks, which I think is interesting. Right?
- [16:40]
B
Yeah.
- [16:40]
A
Like if you're a hedge fund and you're just like, well, we think all our stuff is worth 100 cents on the dollar, like, that's bad. You can't do that. Like someone's like, you're supposed to have like some sort of third party justifiable marks. If you're a private credit fund, you're like, it's our loans. We think it's good. And I think that Apollo certainly sees it shifting to a world where you have third party valuations and you can say, these marks are right. The value of that is, why are people redeeming? One reason might be they want liquidity. Another reason is they think things would get worse. But it does sort of seem like part of it is that people don't trust the marks. You see stories about private credit funds carrying a loan at 100 cents on the dollar and then marking it down to zero.
- [17:26]
B
That's like kind of like no interim step.
- [17:28]
A
That's kind of like. That kind of makes sense in terms of like, yeah, you're a lender. Either they're paying the loan or they're not. If they're paying it, it's worth 100. If they're not, it's maybe worth zero. But like, that's not how people in public markets think. And so you kind of want the intermediate moves. And so if you have some person, some outside person saying, yeah, today it's worth 97, that might inspire some confidence among your investors.
- [17:50]
B
Well, that's what I was wondering. The hope from Apollo that we show you your marks more frequently. You can see that this portfolio isn't actually going down the tube. So you'll be less likely to redeem.
- [18:01]
A
Yeah. And also, just like redemptions are like a nav arbitrage. If you think the fund is worth 95 and the fund says it's worth 100, then you should redeem because they'll give you 100 for something you think is worth 95. And if you're right, that's really bad for the investors who stay in because they're giving you 100 for something that's worth 95. And so everyone else has less. And so it's a run on the bank. Right. And if Apollo is really confident in its marks, then doesn't have to worry about a run on the bank because it can pay people at it, what it thinks is at the right value. And if you believe that as an investor, then you won't redeem because you're like, well, if it's worth 95, they'll give me 95. And so there's no point in me redeeming. And so, so it's that it's to avoid the run on the bank problem. If you and all of your investors are confident in the marks, then you're less likely to have a run. The other thing, it's just weird. Apollo has a trading desk. They just have a different vision of what private credit will be than other people. And they're trying to make their vision come true. And some of that is if they can move the world to a mark to market world, then their trading desk is going to have more business. They're going to be providing the third party markets to other firms. So it's a differentiated business decision.
- [19:10]
B
Have we talked about the push to put private assets in retirement ETFs? Have we ever talked about that? Well, it's. Apollo famously has an ETF with State street that has daily marks.
- [19:26]
A
Right. All right. Put private credit in retirement funds. Have we? Probably, probably. I read about it a lot.
- [19:31]
B
I was thinking about it yesterday because there was a comment from Elizabeth Warren saying that, you know, we need to stop this push right now.
- [19:38]
A
It's just incredibly awkward timing.
- [19:40]
B
We also heard from the Treasury Secretary, Scott Besant, say we need to double down. No, saying, actually agreeing, saying that we need to not.
- [19:49]
A
No one's going around right this minute being like, you know, what we need is to put more private credit into retirement funds. Two weeks ago they were sure.
- [19:56]
B
But it's like, it's kind of beautiful. It's like a bipartisan moment among our government. Two leading figures in the US Government uniting on this issue in this fraught time.
- [20:09]
A
And I've written this, structurally, it actually makes a lot of sense to put private credit and retirement funds because your money in your retirement fund you shouldn't need until you retire. So you can lock it up for a long time. And it pays 10% interest or whatever. So it's nice to have it in a tax deferred retirement account.
- [20:24]
B
I hope Elizabeth Warren is listening right now.
- [20:26]
A
But nobody believes that. And I do think that like the last couple of weeks Demonstrate why no one believes that because, like, in fact, retail investors do not want to lock up their money for 20 years. And you have real structural problems giving even a little bit of liquidity to individual investors and private credit funds. Right? I mean, like, part of what, like, what's happening here is like, structurally these funds are fine. Like, they don't need to give money back because they're set up in a way where they can keep the money and only return 5% per quarter and so forth. But the vibes of doing it that way are bad.
- [21:00]
B
So do you want to mention J.P. morgan as well?
- [21:02]
A
Oh, yeah. J.P. morgan is like, allegedly marking down some private credit loans because they're like, they provide back leverage to these private credit funds and they lend money against private credit loans at some loan to value ratio. And when I say some loan to value ratio, like, private credit firms can tell their retail customers these are what the loans are worth, but when they go to J.P. morgan, J.P. morgan tells them what the loans are worth. And so JP Morgan told them the loans are worth less than they thought.
- [21:27]
B
Funny, because we heard from Jamie Dimon, famously the CEO of JP Morgan, saying that there's probably more cockroaches around if you see one. And turns out he was right.
- [21:38]
A
JP Morgan marking down these loans doesn't prove that JP Morgan is right. It just proves that JP Morgan is marking down the loans. The FC article about the JP Morgan markdown quoted some private credit people anonymously being like, yeah, they're more nervous than everyone else. It's always a valuation dispute. But when you're getting your leverage from JP Morgan, they kind of win the valuation disputes.
- [21:56]
B
Yeah, this one was interesting because again, when we're talking about redemptions, it's mostly psychological. Again, we're not really talking about the fundamentals.
- [22:05]
A
Whereas maybe you say that, like, it's possible that all the retail private credit investors who are like, I would like my money back are just like looking around at the macro environment and being like, these companies are going to get destroyed by AI. Like, maybe they're right. Like, maybe they are the people running the prior credit firms who are like, there is no fundamental problem here. Like, they have. They have money on the line. On that view, the people taking their money out, they have their own potentially valid opinions.
- [22:31]
B
What I'm saying is like, we don't know that. Whereas JP Morgan. It gets back to the software sort of apocalypse story that we were talking about a couple of weeks ago.
- [22:40]
A
Everyone's looking out for themselves.
- [22:43]
B
Guess that's what you do.
- [22:44]
A
That's definitely what you do. I wrote this week about Kalshi is getting sued for not paying out bets on Ali Khamenei leaving office as Supreme Leader of Iran. Kalshi had markets on Khomeini leaving office as of certain dates, including as of April 1st. And as it became clear that he was going to leave leave office, those prices spiked because people were betting on him leaving office. And then he left office. But Akalshi said those bets will not pay off at 100 cents on the dollar because there's an exception if he leaves office due to death, which is why he left office, then you don't get paid the full amount. You get paid just the last trading price before his death, which is very hard to measure because these markets are trading minute by minute as the US is conducting military operations. So I don't even know what the last trade was. I mean the trade before they paused it was like in the 40s, but it got up to the 60s so we don't really know what the last trade was. But yeah, so they're not paying those bets at 100 cents on the dollar. And the reason for that I think is that the US Commodities rules for prediction markets specifically do say you can't have bets on war or assassination fair for pretty good reasons about not wanting to encourage assassinations.
- [24:16]
B
Yeah, there's an easy but extreme way to manipulate that market.
- [24:20]
A
So it is not technically allowed. And so the way Kalshi deals with that is by having pets on people leaving office but specifically excluding leaving office by death. And they apparently didn't exclude it clearly enough because there's like a lawsuit filed against them saying no, we should get our whole money back. Which you know, the lawsuit is basically like, sure, it was in the fine print, but it wasn't on the front page. And the way I think about it, it's like as a matter of consumer protection and the user interface on your consumer facing financial site, that's kind of a reasonable claim. Right. Should be on the front page. And then as a matter of this is a commodity derivatives exchange. You should be reading the whole contract when you trade a commodity futures contract. And if you don't, that's kind of on you. So I'm unsympathetic to both sides here.
- [25:10]
B
Yeah, I wonder if you're Kalshi, what you're going to do.
- [25:14]
A
They've done their best to be like we refunded everyone, nobody lost money, it was just whatever. They're going to pay out some amount of money to make everyone as whole as possible. But they can't really go to we'll pay 100 cents on the dollar because that would probably violate their rules, the CFTC rules. So they're. And presumably these people want 100 cents on the dollar.
- [25:34]
B
You also wrote that polymarket doesn't care, just paid $1.
- [25:37]
A
It's weird. Polymarket is like creeping into being a US regulated commodities exchange, but it's not like all the way there yet. Yeah, I think they have like a US site that is only sports betting, but I could be wrong with that. But yeah, like they're Khomeini Le that's paid out, no problem because they are not subject to the same rules.
- [25:56]
B
I don't want to talk about ETFs, but.
- [25:58]
A
No, you want to talk about ETF.
- [26:00]
B
I'm thinking about ETFs because this was a hullabaloo over the concept of complex ETFs where it's really easy to lose your money. But we live in a disclosure based system and on all of these funds prospectuses that risk is spelled out that there's a big chance of losing your money here. So the idea that this was in the fine print, but the print was too fine, I don't know.
- [26:25]
A
Yeah, you're right. Part of it is you're right and they probably won't win this lawsuit. Not legal advice, but part of it is this is a new thing. There is widespread acceptance of the disclosure rules in the stock market. And if you're like, oh, I didn't read the prospectus and I lost money, a lawyer's not going to take that case. It's like, yeah, you're supposed to read the perspectives, right? And even though we know no one
- [26:45]
B
reads those perspectives, we all just scroll past it.
- [26:48]
A
But with a consumer gambling site, it feels more reasonable to make complaints about the user interface. I mean, part of it is like the SEC really regulates the user interface for things like ETFs. Right? Like your prospectus is not designed by the world's best user interface engineers to be attractive and informative. Your prospectus is designed by decades of accretion of like SEC lawyers. And so your prospectus works the way it works. And if it's not readable, that's not your fault, that's the law's fault. But with the consumer gambling side, everyone's kind of making it up as they go along. And so maybe they should make it up better.
- [27:28]
B
I really want to talk about this quote that you included from Shane Copeland, the founder of Polymarket, from a conference in 2026. I don't know why I thought this would have been a couple years ago, but it's right now not necessarily about the Iran war, obviously that timestamps it, but just the concept of war bets, given that it is a top of mind. Yeah. A touchy topic. So he said there's still a lot of resistance to innovation. That kind of also seems jarring to begin with.
- [27:57]
A
I love when people are, like, selling the worst possible products. They're like, people are so resistant to innovation. Like, when you say, when you hear innovation, that means, like, scam. Like, if you have something good, you're like, this is good, here's why it's good. But if you have something bad, you're like, it's innovative.
- [28:12]
B
Yeah.
- [28:13]
A
You're just like, I'm exaggerating, but only a little amount.
- [28:15]
B
Resisting innovation, man. But he also said, when I get
- [28:18]
A
hit up by people, nobody wakes up in the morning. Like, I want to resist innovation. The thing I don't like is innovation. So I'm gonna stop innovation. What they say is I'm gonna stop people from betting on assassinations, which is a different thing from resisting innovation.
- [28:30]
B
It's different. Okay. This quote, though, it's so amazing.
- [28:33]
A
Sorry, go on.
- [28:34]
B
When I get hit up by people in the Middle east who are saying, hey, we're looking at polymarket to decide whether we sleep near the bomb shelter. We look at it every day and I'm like, oh, it's really that popular over there? That's his first reaction. That's very powerful. That's an undeniable value proposition that did not exist before.
- [28:53]
A
Yeah. I mean, what I wrote about that is like the other value proposition that didn't exist before is right now, if you are launching a missile strike, you can make money on it by betting on polymarkers.
- [29:01]
B
That's the thing. If you see those values, a different
- [29:03]
A
value proposition going up.
- [29:05]
B
One of the questions I have is, why are they going up? Who is bidding this up?
- [29:09]
A
If you're like in the Middle east debating whether to sleep near a bomb shelter and you see the odds going up and you think, well, that's probably an insider trader, then you should sleep in the bomb shelter.
- [29:16]
B
Yeah, right. Yeah.
- [29:17]
A
It is more informative if there's insider trading, which has always been the taboo thing that real prediction markets heads will say is like, yeah, it should be insider trading. That makes it more informative. On the other hand, if it's insider trading, you're making money by dropping moms.
- [29:30]
B
Maybe the US Military is also watching these odds on Paul Market?
- [29:34]
A
Yeah, I would hope so. And if the odds of a like Iranian action go up, then they should prepare for that action. And if the odds of a US action go up too much, they should like check to see who's insider trading. Yeah, yeah, pretty grim. And that was the Money Stuff Podcast. I'm Matt Levine.
- [29:59]
B
And I'm Katie Greifeld.
- [30:00]
A
You can find my work by subscribing to the Money stuff newsletter on bloomberg.com
- [30:05]
B
and you can find me on Bloomberg TV every day on the close between 3 and 5pm Eastern.
- [30:11]
A
We'd love to hear from you. You can send an email to moneypodloomburg.net Ask us a question and we might answer it on the air.
- [30:18]
B
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.
- [30:25]
A
The Money Stuff podcast is produced by Moses Andam and Alexis Haut.
- [30:29]
B
Our theme music was composed by Blake Maples.
- [30:32]
A
Amy Keen is our executive producer. Thanks for listening to the Money Stuff podcast. We'll be back next week with more stuff.