One Big Blob of Elon

Summary

Money Stuff: The Podcast

Episode: One Big Blob of Elon
Date: June 26, 2026
Hosts: Matt Levine (Bloomberg Opinion, Money Stuff columnist), Katie Greifeld (Bloomberg News reporter & TV anchor)

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Episode Overview

This episode dives into the increasingly entangled world of Elon Musk’s companies, exploring rumors and likelihood of a major merger between SpaceX and Tesla, and what it means for markets, governance, and Musk himself. Matt and Katie also pivot to Meta's plans with prediction markets, digress into the psychology and practicalities of private credit fund liquidity, and touch on much-memed topics like “treasury companies” holding unusual assets. The conversation is full of wit, skepticism, and sharp observations about the blurring lines between tech, finance, and entertainment.

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Key Discussion Points & Insights

1. School’s Out: Personal Updates and Setting the Mood

• [01:39]–[03:51]
  • Matt and Katie share light banter about summer, kids, and Katie’s upcoming parental leave.
  • “I can do a small animal.” – Katie Greifeld [03:05]
  • Sets the casual, inside-jokey tone for the rest of the episode.

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2. SpaceX, Tesla, and The Musk Conglomerate

• [04:22]–[11:46]

A “Blob” of Elon: Merger Rumors

• They discuss the accelerating speculation about a SpaceX/Tesla merger, noting how quickly what was “joke” conversation has become serious market chatter.
  • “It feels like it’s gonna happen. I feel like six months ago people were talking about this as a joke and now it’s like, yep, that’ll be next week.” – Matt Levine [06:19]

Musk Priorities and Valuation Dynamics

• Matt explains why Musk might prefer to wait until SpaceX’s valuation is much higher, since he owns more of SpaceX and gains more from a favorable merger ratio.
  • “From Elon Musk's perspective, the more SpaceX is worth relative to Tesla, the better...SpaceX is kind of the new baby.” – Matt Levine [07:18]

Synergies or Just Ego?

• The discussion covers synergy hype (“there’s a convergence...of what we’re all trying to accomplish” – Katie, paraphrasing Gwynne Shotwell [05:36]) and the Musk-centric nature of decision making.
  • “That’s the Elon Musk perspective. – Katie Greifeld [07:44]
    – Oh, which is the only perspective.” – Matt Levine [07:45]

What Would Change?

• A merger would be a real switch from Musk running disparate firms to one big conglomerate:
  • “Now they're all one company. And then, you know, you combine that with his car company...then basically all of his scaled commercial stuff would be in one giant company, which is a real change from how he's been operating.” – Matt Levine [10:07]
  • They speculate on whether Neuralink or Boring Company might eventually be part of the megafirm, too.

Corporate Governance and “Blobbing”

• Matt wryly observes that if everything is merged, moving resources between them is suddenly good governance:
  • “If they’re all one company, it’s great corporate governance for him to move one big blob of Elon.” – Matt Levine [11:30]

Regulatory and Antitrust Hurdles

• [11:46]–[13:37]
  • They consider whether a merger could be blocked. Traditional antitrust logic likely doesn’t apply since there’s little direct overlap in business lines, but “if Donald Trump is mad at Elon Musk that week, will there be an antitrust problem? Like, maybe. And then like European antitrust…” – Matt Levine [13:15]

AI Chip Factories and “Macro Hard”

• [13:37]–[14:12]
  • New joint projects between SpaceX and Tesla include chip manufacturing (Terrafab) and tongue-in-cheek AI software (“Macro Hard”).
  • “I think he’s been making that joke for years.” – Matt Levine [14:00]
  • “So stupid. I mean, it’s funny. It is funny.” – Katie Greifeld [14:03]

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3. Triller: From Social Media to Treasury Company

• [14:22]–[16:24]

What is Triller Doing?

• Matt explains the bizarre move of Triller (a small-cap social/media company) acquiring $400 million in pre-IPO SpaceX stock via SPVs, positing this as the latest iteration of “treasury asset” companies (previously, dinosaur bones or bitcoin).

The Pointlessness of Access

• Buying SpaceX stock this way is arguably pointless since, with the IPO, “anyone who can buy Triller can buy SpaceX, because they're on the same stock exchange.” – Matt Levine [16:24]
• “They're a year late to the dinosaur Bone treasury company trade.” – Matt Levine [16:12]

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4. Meta, AI, and Prediction Markets

• [19:16]–[26:44]

Meta’s “Arena” and Behavioral Finance

• Meta’s new internal moves to launch prediction markets (called Arena) are dissected, with Matt and Katie noting the juxtaposition of lofty rhetoric vs. the reality of engagement-seeking addictive apps.
  • “Facebook are really good at harnessing human behavior to give people dopamine hits in exchange for spending all of their time on Facebook's apps. And that's what this is, right?” – Matt Levine [21:01]
• “It is a smart move by Meta.” – Katie Greifeld [21:18]
• “It's quite grim in some ways.” – Matt Levine [21:21]

Truth-Seeking vs. Gambling

• They distinguish between the ideal (prediction markets finding “truth”) and the reality (addictive, possibly moneyless engagement), referencing both Polymarket and Kalshi.

AI Training Angle

• Matt speculates that data from these markets could be valuable for AI training:
  • “Meta is one, an addictive phone app company and two an AI company. Prediction markets and AI are pretty interesting.” – Matt Levine [23:08]
  • He references Bern Hobart’s work and the idea that integrating massive user predictions as training data could serve dual purposes.

Meta’s Long Game and Failure to Innovate?

• Discussion of Meta’s previous attempts, like Forkast, and whether this time will be different.
• The power of sports betting as the gateway to these platforms is highlighted.
  • “Do you know how they cracked that code? ... Sports.” – Matt Levine + Katie Greifeld [26:33]

The Zuckerberg Engagement Machine

• Mark Zuckerberg’s skill at monetizing rage and dopamine is lampooned:
  • “There’s the gap between what you want to want and your base revealed preferences. And he’s the world’s greatest exploiter of that gap.” – Matt Levine [27:06]

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5. Private Credit: Liquidity Innovations and Arbitrage

• [29:56]–[36:23]

Ongoing Redemptions: How the System Works

• Funds are capping withdrawal requests, creating backlogs (“snowballing from there” – Matt Levine [30:34]), with no short-term solution in sight.

J.P. Morgan’s Monthly Liquidity Move

• JP Morgan gains approval for monthly (vs. quarterly) withdrawals, which Matt finds paradoxically stabilizing:
  • “What I love about it is...one reason to do this is to give people more liquidity. But...if you offered, like, real time liquidity, then no one has any incentive to take money out now because in five seconds they can take money out, right?” – Matt Levine [31:13]

Retail vs. Institutional Focus

• Noting JP Morgan’s continued wooing of retail despite recent industry narrative shifts.

Arbitrage Trade: Private Credit Discounts

• The phenomenon where private BDC fund shares can be redeemed at full value, while public versions of the same assets trade at a discount.
  • “That's not a philosophical debate, that's a math problem.” – Matt Levine, quoting John Scott [34:19]
  • Raises the irony of financial advisors encouraging clients to exploit this, after years of funneling people into less-transparent products.

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Notable Quotes & Moments

• On the coming Musk conglomerate:
  “You know, like every time he's like moving GPUs from Tesla to Xai or whatever, dopes like me are writing columns being like, you shouldn't be doing that...if they're all one company, it's great corporate governance for him to move one big blob of Elon.” – Matt Levine [11:30]
• On Meta’s user engagement model:
  “Kalshi and Polymarket will tell you with a straight face that, you know, we’re creating or we’re helping to find true economic information here. But it does feel like a sort of emperor has no clothes moment if Facebook is creating a prediction markets app.” – Katie Greifeld [21:39]
• On Zuck and “Threads”:
  "Where do I want to be looking at stuff on threads that makes me angry but just because it’s stupid? No. Do I want that? No. Do I do it? Yes." – Matt Levine [27:06]
• On retail investor arbitrage:
  “At some point in the cycle you’re like, wait a minute, I’m going to give people good advice.” – Matt Levine [36:11]

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Timestamps for Key Segments

• Summer banter, parental leave talk: [01:39]–[03:51]
• SpaceX/Tesla merger potential, valuation dynamics, Musk “blob”: [04:22]–[14:12]
• Triller treasury company — SpaceX stock as meme asset: [14:22]–[16:24]
• Meta’s prediction market plans, AI synergies, engagement psychology: [19:16]–[27:17]
• Private credit liquidity crunch and innovations, BDC arbitrage trade: [29:56]–[36:23]

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Tone & Language

• Wry, self-aware, skeptical, but approachable and witty.
• Frequent self-deprecation, pop culture and tech sarcasm, use of “blobbing” as running Musk theme.
• Attribute all speculation, asides, and judgmental comments to speakers; dialogue is conversational and fast-moving.

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Summary for the Uninitiated

This episode takes listeners on a whirlwind of today’s weirdest financial stories: from the likely convergence of Elon Musk’s empire into a single mega-conglomerate, to the logic (or lack thereof) behind “treasury companies” that hold oddball assets, to Meta’s new attempts at harnessing prediction markets both as engagement tools and AI training fodder. Along the way, the hosts skewer the logic of perpetual financial innovation, question whether market structures really serve their purported purposes, and always keep an eye on the distinctly human animal behaviors lurking beneath market mechanics.

Listeners leave with:

• A clear view of Musk-world's gravitational pull and potential direction.
• A skeptical, but insightful, understanding of how tech and financial giants are converging in both form and business models.
• A reminder that, despite new technology, many trends (engagement, arbitrage, regulatory whack-a-mole) echo old Wall Street rhythms—just with more meme potential and better AI.

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Transcript

[Katie Greifeld]

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[Katie Greifeld]

Bloomberg Audio Studios podcasts Radio News Katie, it's the

[Matt Levine]

last day of school.

[Katie Greifeld]

I know. I saw on your Instagram.

[Matt Levine]

Yes. I was just.

[Katie Greifeld]

I hearted your story.

[Matt Levine]

I want to make sure that you hearted my story.

[Katie Greifeld]

Of course.

[Matt Levine]

It's the last day of school for my children.

[Katie Greifeld]

Yeah.

[Matt Levine]

And yeah, I've lived, you know, much of my adult life no longer in like the rhythms of the school year. But like, then you have kids and you're like, why am I not on summer vacation? It just feels like it's summer vacation now.

[Katie Greifeld]

They're gonna wake up tomorrow and what are they gonna do?

[Matt Levine]

Go to the pool, Hang out? Watch tv? Watch the World Cup. I'm watching so much World Cup.

[Katie Greifeld]

God, that sounds so fun. But yeah, I haven't watched any World Cup.

[Matt Levine]

Oh my gosh, it's so good.

[Katie Greifeld]

Apparently the ratings are pretty good.

[Matt Levine]

It's great. Like it's, it's been a good World cup and dang, I think I complained to you last week that like, the USA plays tonight at 10 o'. Clock.

[Katie Greifeld]

No chance. That's too late. Yeah, that's not happening.

[Matt Levine]

I prefer like a European World cup where I can watch all the games during the day.

[Katie Greifeld]

Yeah.

[Matt Levine]

But it's been really good. It's been really fun to watch with the kids, and I really feel like it is time for my summer vacation. And I'll see you in. Well, I'll see you in.

[Katie Greifeld]

Yeah.

[Matt Levine]

I mean, I'll see you next week.

[Katie Greifeld]

Yeah.

[Matt Levine]

But if I were taking a summer vacation, I'd see you in a long time. Cause you're.

[Katie Greifeld]

That's true. A sabbatical of sorts. A childbearing sabbatical, to be clear.

[Matt Levine]

Not really a sabbatical, more of a parental.

[Katie Greifeld]

I plan to have a great time. You do?

[Matt Levine]

Everyone plans that.

[Katie Greifeld]

Yeah, I know. As someone who's never had a baby before, I think I'm going to have a fantastic.

[Matt Levine]

How hard can it be?

[Katie Greifeld]

Time. It seems easy. I mean, one seems easy. Yeah, sure, right. As a parent of multiples, I don't know if I've talked about it on this podcast, but I really have just been approaching it. Like, I'm getting a new puppy. I don't know how to take care of a human, but I can do a small animal.

[Matt Levine]

I mean, look, obviously it's not like getting a new puppy, but there's some continuum.

[Katie Greifeld]

Yeah. I mean, she can't talk. She can't really do much. She's like a little forest creature. Yeah, right, right.

[Matt Levine]

I feel like it's very possible that your child would turn into a little forest creature.

[Katie Greifeld]

I hope so. I'm really excited.

[Matt Levine]

In a month or so, you'll no longer be pregnant, but, like, yeah, won't be like, oh, that was a weird dream.

[Katie Greifeld]

Then the party really starts. Anyway, I guess we should do the podcast.

[Matt Levine]

Hello and welcome to the Money Stuff Podcast, your weekly podcast where we talk about stuff related to money. I'm Matt Levine and I write the Money Stuff column for Bloomberg Opinion.

[Katie Greifeld]

And I'm Katie Greifeld, a reporter for Bloomberg News and an anchor for Bloomberg Television.

[Matt Levine]

We almost had a vacation from SpaceX last week. I feel like we snuck in a little SpaceX.

[Katie Greifeld]

Yeah. I mean, you have to, right?

[Matt Levine]

Hardly a noticeable amount of SpaceX.

[Katie Greifeld]

And now we're going to talk about SpaceX a lot.

[Matt Levine]

Well, a medium amount, not too much.

[Katie Greifeld]

A good amount.

[Matt Levine]

Yeah. Like a segment of the show. Did you know it's below $2 trillion today? Or it was as of like 1:30 or something.

[Katie Greifeld]

Yeah. It's been interesting to see the back and forth in these shares. I mean, who knows?

[Matt Levine]

Not that interesting.

[Katie Greifeld]

I mean, as someone who watches lines all day talks about them for a living.

[Matt Levine]

Right. I just sort of like, you know, you have an ipo then like it's supposed to go up from there and like this one has gone up a little and now it's kind of down. It's not below the IPO price, but it's below like the first day, you know, closing price.

[Katie Greifeld]

Yeah, big time. I mean the IPO price is like $135.

[Matt Levine]

Yeah, it's like at one point, 50ish as of Thursday afternoon.

[Katie Greifeld]

Yeah. Who knows what'll be when we publish this podcast. But there was a good thought experiment in the New York Times this week

[Matt Levine]

about SpaceX and Tesla merging big time. I don't think that's a New York Times thought experiment.

[Katie Greifeld]

No.

[Matt Levine]

I feel like I've seen that everywhere and I don't want to say that it was planted by SpaceX, but I do feel a little bit like they are testing the waters for like that's the next thing that's going to happen.

[Katie Greifeld]

The President, she's not the CEO.

[Matt Levine]

Yeah.

[Katie Greifeld]

Glenn Shotwell, she was on CNBC on IPO day talking about it. So there's no question that there's synergies between Tesla and Space X and our futures. Definitely there's a convergence of kind of what we're all trying to accomplish in the future.

[Matt Levine]

That's our next project.

[Katie Greifeld]

Yeah, pretty much.

[Matt Levine]

Pretty crazy.

[Katie Greifeld]

It is really crazy. What are they waiting for?

[Matt Levine]

I think in general, if you work for Elon Musk, the need to like sleep and live a nice life is not, you know, no one cares. But they did just do an ibo. That's true, but just a minute ago.

[Katie Greifeld]

It's just funny because we're gonna talk about this until it happens and it feels inevitable.

[Matt Levine]

It feels like it's gonna happen. I feel like 6 months ago people were talking about this as a joke and now it's like, yep, that'll be next week.

[Katie Greifeld]

Well, I feel like six months ago, I mean, who knows how fuzzy my timeline is. But the idea of them IPOing was still a who knows?

[Matt Levine]

I guess that's right.

[Katie Greifeld]

It moved fast.

[Matt Levine]

Yeah, they moved fast. The merger thing, I mean, one answer to the question what are they waiting for? Is like, presumably a merger means an all stock merger because no one's going to buy Tesla for cash. But one answer to that question might be that if SpaceX went public and its valuation quickly rose to $4 trillion, then I think that would be more convenient for Elon Musk. I think from Elon Musk's perspective, the more SpaceX is worth relative to Tesla, the better. This is because he owns more of SpaceX and SpaceX is kind of the new baby. And so the more that SpaceX is represented in the combined company, probably that's more convenient for him. I don't know how much that matters because he has supervoting stock of SpaceX and he doesn't necessarily care that much about the shareholders. So it's probably fine to merge them. Right now SpaceX is worth $2 trillion and Tesla's worth like $1.4 trillion. So almost a merger of equals. That's fine for him, but it would have been probably a little bit nicer if it was three to one or something.

[Katie Greifeld]

So that's the Elon Musk perspective.

[Matt Levine]

Oh, which is the only perspective.

[Katie Greifeld]

Well, the New York Times did include some quotes from Tasha Keaney. She's at Ark Investment Management, which obviously really likes Elon Musk. She made the point that Ark would prefer if the merger took place after Tesla had become the dominant company in self driving taxis. She said it would be good for shareholders to see that take off before the merger. Theoretically, because I. And she didn't say this, but I'm assuming because Tesla shares would be worth more.

[Matt Levine]

Yeah, I mean like one thing that's going to happen is SpaceX will do its business, Tesla will do its business. Ideally they would both go up, but one question you might have is in the next few months, few years, whatever, will SpaceX go up more than Tesla? Will it become more valuable faster or slower than Tesla? And I don't know the answer, but doesn't it feel like Elon Musk's attention and the world's attention and is on SpaceX and data centers and AI and whatever, and not so much on the cars. Now there's AI stuff at Tesla. They're making the robots, they're making the cars, all sorts of stuff. Right. And so in a year, could this have reversed and could Tesla be the hot company because it's the humanoid robots? Maybe. But doesn't it kind of feel like his attention on SpaceX now and the longer you wait, the worse it is for Tesla? I don't know. This is just the guess, man.

[Katie Greifeld]

Yeah, no, it's a good point. He's always been the CEO of multiple companies, et cetera, et cetera, but it does feel like there's a clear favorite in his mind right now.

[Matt Levine]

Yeah, the other thing I was thinking

[Katie Greifeld]

that and like Grok, but Grok is that's also. Yes, how do I keep forgetting that?

[Matt Levine]

That it's understandable.

[Katie Greifeld]

X is Xai, which is Twitter, SpaceX.

[Matt Levine]

The other thing I was thinking is like, I've gotten used for a long time to this model of Elon Musk of like, he has a bunch of different companies and a bunch of different independent vets and he's somehow multitasking between all of them. But like, that is changing, right? I mean, like he had Twitter and an AI company and a space company and now they're all one company. And then, you know, you combine that with his car company, which is also like a separate solar company that he mushed into Tesla years ago, then like, basically all of his scaled commercial stuff would be in one giant company, which is a real change from how he's been operating his business. And also it makes me wonder about like Neuralink and the Boring company, which I think would be the only ones left. I'm probably missing one. But like, I think those are the only big Elon Musk companies that would not be rolled up into this. And so how long before Neuralink gets folded into the AI behemoth? It's a real change from back in the day. I had a whole spiel about how Elon Musk, by keeping all of his businesses in separate bets, was somehow doing this seven dimensional chess, mastermind, fundraising thing where he could tap the same investors for every company and shift resources around without the constraints of running a public company. But now it's just like, yeah, he's going to run a giant company and that giant company will be a conglomerate and he will allocate capital to whatever he thinks is the best business to have that capital, whether it's cars or humanoid robots or space data centers or social media, like 9,000 other things.

[Katie Greifeld]

When you put it like that, it is a sea change.

[Matt Levine]

Yeah, it's just like in many ways more normal. Right.

[Katie Greifeld]

Maybe he got tired. I don't know.

[Matt Levine]

That doesn't sound right, given my general theory that sleep is not an impediment to doing anything in SpaceX. But yeah, it is more sensible to have one guy running one company rather than seven different companies.

[Katie Greifeld]

One guy, seven companies.

[Matt Levine]

You know, like every time he's like moving GPUs from Tesla to Xai or whatever dopes like me are writing columns being like, you shouldn't be doing that. Like, it's not very good corporate governance. Like now it's fixed, right? If they're all one company, it's great corporate governance for him to move one big blob of.

[Katie Greifeld]

Elon, I want to talk a little bit about what could stop this merger. It's not going to be a shareholder lawsuit.

[Matt Levine]

Although I've written about, like, there's like a slim outside path to maybe a

[Katie Greifeld]

shareholder loss of maybe Vanguard, maybe Fidelity. No, probably not. But the New York Times did raise the question, which it then batted down. But couldn't there be some sort of antitrust concern here that could be raised? They're both AI companies, right?

[Matt Levine]

I feel like in traditional antitrust you would say, not really. I don't think that SpaceX is exactly in a real market power position in the sort of broad AI lab business. And it has very leading position in launching rockets into space, for sure. And Tesla arguably has something in electric cars in the U.S. it's not a monopolist in electric cars, but those are not overlapping businesses. The question is, are you combining two overlapping businesses in the same area? And I don't really think that's true. I think there's beginning to be some rumblings of worry about SpaceX's position in AI infrastructure, especially if they put the data centers in space. But that doesn't really seem like an antitrust concern for combining the companies. But I think if this were a Democratic administration, the combination of two giant tech companies merging and it being Elon Musk might raise antitrust concerns. But guess what?

[Katie Greifeld]

It's not.

[Matt Levine]

So I don't see it. But if Donald Trump is mad at Elon Musk that week, will there be an antitrust problem? Like, maybe, and then like European antitrust, you know?

[Katie Greifeld]

Yeah, they're going to be all over it.

[Matt Levine]

They'll be all over it. He's not winning any friends there. And again, like in traditional antitrust analysis, like, it doesn't seem like they're really merging competing businesses, but who knows?

[Katie Greifeld]

I did want to also call out this nugget from the New York Times report because I didn't appreciate this. I knew about Terrafab. So SpaceX and Tesla plan to jointly produce AI chips at a proposed factory called Terrafab, also develop AI software through another project called Macro Hard, which is obviously the opposite of Microsoft.

[Matt Levine]

I think he's been making that joke for years.

[Katie Greifeld]

So stupid. I mean, it's funny. It is funny.

[Matt Levine]

Macro Hard.

[Katie Greifeld]

I didn't know about. I didn't know about Macro Hard.

[Matt Levine]

I hate to give him one, but yeah, Macro Hard. Kid.

[Katie Greifeld]

NODDING wistfully oh, do you want to talk about Triller?

[Matt Levine]

Triller.

[Sponsor/Advertiser]

Yeah.

[Matt Levine]

Yeah, I do kind of want to talk about Triller.

[Katie Greifeld]

So I went to your bio just before this podcast because I was like, all right, I have all my notes.

[Matt Levine]

Who's this guy again?

[Katie Greifeld]

Matt Levine. No, I Was like, I have all my notes, I just want to check one more thing. And then I saw you published about the SpaceX Treasury Company.

[Matt Levine]

SpaceX Treasury Company, baby.

[Katie Greifeld]

I audibly groaned because I had completely forgotten about it. Yeah, but tell me about triller.

[Matt Levine]

There's a SpaceX treasury company, of course, it's called Triller.

[Katie Greifeld]

Yeah.

[Matt Levine]

As of yesterday it was a $15 million market cap. It's like one of these things where they're like, we provide social media stuff for such celebrities as. And then it names three people who I'm like, yes, these people are all actually famous, but I don't know anything about them, nor do I remember their names. No, they do like some. Something in social media. And also they sell insurance in Hong Kong. Why? Who knows? Natural but so teeny company. Teeny public listening. And they announced that they are acquiring a $400 million slug of SpaceX through like three layers of SPVs. So like they're acquiring shares in an SPV that owns shares in an SPV that owns some like pre IPO locked up SpaceX stock.

[Katie Greifeld]

Excellent.

[Matt Levine]

Yes. And they're like, this will be a fun new treasury asset for us. Okay. It's like the digital asset treasury trade, which at its peak last year. I was like, I think we talked about this.

[Katie Greifeld]

Definitely.

[Matt Levine]

I was like, sure, you can sell some stock to buy Bitcoin, but there's so many other things in the world besides bitcoin. Someone did a GameStop treasury coin. We talked about an art market treasury coin, all sorts of stuff.

[Katie Greifeld]

Dinosaur bones.

[Matt Levine]

Dinosaur Bone treasury company. I think that was the title of an episode. Right. So instead of a Dinosaur Bone treasury company, they're doing a SpaceX stock treasury company. I love it.

[Katie Greifeld]

As you've already pointed out, they're at least a year late here.

[Matt Levine]

They're a year late to the dinosaur Bone treasury company trade. And also they're late to. Ooh, would you like access to SpaceX stock? Because you can just buy SpaceX stock.

[Katie Greifeld]

Seems easy.

[Matt Levine]

It's like not a very good reason. But a reason to have a bitcoin treasury company is that it is somewhat more difficult for a normal person to buy bitcoin than it is for a normal person to. To buy stock of strategy. Not really. You can buy Bitcoin in your Robinhood app, but maybe you don't have Robinhood. Maybe you are in an old timey brokerage where you can only buy stock and you're like, oh, strategy, that's a good way to get Bitcoin. But anyone who can buy triller can buy SpaceX because they're on the same stock exchange.

[Katie Greifeld]

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[Katie Greifeld]

All right, did we get the SpaceX out of our system?

[Matt Levine]

Now it's turned to Meta.

[Katie Greifeld]

Meta. Another New York Times article Mark Zuckerberg. Now he's looking at prediction markets specifically in app there wouldn't be real money involved, right?

[Matt Levine]

I think it's called arena is the name that has been reported from Meta Slash Facebook that allows you to do prediction markets and I think the way it's supposed to work, this is like from NPR reporting is that AI would come up with the markets and then also resolve the markets. Some meta AI model would be like, you know, what we need is a prediction market on when will Taylor Swift get married? And then here are the options. And then it'll take bets and then it'll notice when she gets married and resolve the bets or something like that.

[Katie Greifeld]

Fun.

[Matt Levine]

Yeah. So when you think about Calsher, Polymarket, they're like, we're building truth machines. We're building a financial market that real world companies can use to hedge their risk of things like the Knicks winning a playoff game.

[Katie Greifeld]

All of this said with a very straight face.

[Matt Levine]

Very straight face. But then like, the alternative model is like, you have built a gambling platform. What is gambling? Gambling is providing entertainment for money, right? It's like, yeah, it's like giving people like, the rush of excitement from betting on a game and like an expectation they lose money. But like, I've gone to Vegas and gambled and felt and lost money and felt fine because I was like, I'm spending this money on entertainment, right? And that's like, that's the good case for gambling, right? And if that's your model, then it's like, well, yeah, if it's entertaining, maybe you can do it without the money. And Facebook are really good at harnessing human behavior to give people dopamine hits in exchange for spending all of their time on Facebook's apps. And that's what this is, right? Kalshi and Polymarket have proved out a new form of human social behavior that keeps them glued to their apps all the time. And we want them to be glued to our apps. So we're going to launch an app that they'll be glued to, making predictions.

[Katie Greifeld]

It is a smart move by meta.

[Matt Levine]

It's quite grim in some ways.

[Katie Greifeld]

I mean, for sure.

[Matt Levine]

I mean, like, it's better to have fake money gambling than real money gambling, but I don't know.

[Katie Greifeld]

They. The company has not ruled out eventual use of money, according to the New York Times. So that could be coming. I do like how you wrote that. Zuckerberg's point that this could be all thought of as addictive phone apps rather than financial instruments is true. Like, again, like, Kelshi and polymarket will tell you with a straight face that, you know, we're creating or we're helping to find true economic information here. But it does feel like a sort of emperor has no close moment if Facebook is creating a prediction markets app.

[Matt Levine]

Yeah. A couple of things. One, everything's on a continuum, right? I mean Robinhood. Their essential insight is stock trading is also like an addictive phone behavior and so we can make it more addictive and more on your phone.

[Katie Greifeld]

True.

[Matt Levine]

Everything is both. Right. The other thing I'll say is like the fact that Meta is in essentially the addictive phone apps business and looks at this and has big dollar signs in its eyes of like, ooh, this is an addictive phone app. That doesn't mean that it's not also serving some truth seeking function.

[Katie Greifeld]

Maybe, maybe just think about farmville, which was another Facebook app that I loved.

[Matt Levine]

Right. And farmville.

[Katie Greifeld]

I don't know if there was any truth seeking going on in the hours I spent on farmville.

[Matt Levine]

Well, I hear you, but also I'm reading the Sebastian Mallaby biography of Demet Hassab. The Google DeepMind fighter and DeepMind spent a lot of time trying to solve games like early Atari arcade games and Starcraft. All these like video games because and the reason they were doing that is partly because like they're gamers and they like video games, but partly it was like the way to develop and also like prove the concept of like reinforcement learning machine artificial intelligence is to have it learn to play games at better than human standard. And so there's like real lessons to be learned from those games games. That's probably not true of farmville, but I do think that one thing that is probably going on, and Bern Hobart has a good newsletter about it on Thursday this week, is Meta is one, an addictive phone app company and two an AI company. And prediction markets in AI are pretty interesting. Bernhardt writes, Prediction markets try to quantify the magnitude of interesting uncertainty. That means they're implicitly taking the same form as the input to an AI model. Given some information, make a prediction about what comes next. And so other people have talked to me about this. Using prediction markets to train AI is just sort of like an interesting corner of the world. It's like we want to make computers that are good at understanding the world. We want to make computers that can buy stocks that'll go up. We want to make computers that can cure cancer, whatever. Like if the computers get better at predicting the future based on the current data that is good for artificial intelligence. And maybe one way to give them training data is to have a bunch of Facebook people on their phone saying this is where I think Taylor Schultz will get married and the computers will learn from that. So one possibility is that this is not so much engagement bait play from meta and more AI training play. But it's probably both.

[Katie Greifeld]

Yeah.

[Matt Levine]

OpenAI four years ago. Like, their rhetoric was so utopian and ambitious and then they're like, we're going to do ads and we're going to turn the dial on ChatGPT to make it more engaging so that people spend more time with ChatGPT. It's like everything is a social media company. Everything is an addictive phone app company. And so like, you know, yeah, you make your AI better so that you can keep people engaged with your app for longer so you can serve them more ads.

[Katie Greifeld]

Yeah.

[Matt Levine]

That's also modern capitalism.

[Katie Greifeld]

It's also grim. Even more grim than arena, potentially. The New York Times reporting that arena is just one of a handful of apps that Meta is currently trying out.

[Matt Levine]

Another one is Macro hard.

[Katie Greifeld]

Macro hard. Also Metaphotos.

[Matt Levine]

Metaphotos, yeah. Is that like Instagram?

[Katie Greifeld]

It would create new types of media using AI according to people familiar? I don't think so.

[Matt Levine]

Great. It's like Sora. No, it's not. I don't care.

[Katie Greifeld]

Yeah, no, I think Sora is a thing, but I don't care.

[Matt Levine]

Sora was the OpenAI version of you look at AI videos that we made for you.

[Katie Greifeld]

Similar to Macrohard. Something that I didn't appreciate until the New York Times told me about. It was Meta has tried prediction market before. They were so early 2020 they released Forkast, which was a crowdsource prediction market app. It prompted people to guesses about the world in the early days of COVID It eventually shut down in 2022. But man, this could have been Meta's market.

[Matt Levine]

Yeah, that wasn't even that early. I mean, people have been playing around with money prediction markets for a long time, but nobody really.

[Katie Greifeld]

It's similar to AI. We've been talking about AI forever, but it feels like it only really exploded in the last couple of years.

[Matt Levine]

Yeah, I do think that Calcium Polymarket did crack the code of making it more exciting. And do you know how they crack that code?

[Katie Greifeld]

Tell me.

[Sponsor/Advertiser]

Sports.

[Katie Greifeld]

Sports. There you go. I do just think it makes sense for Meta. Good on you, Mark Zuckerberg. Maybe it'll work out better than threads.

[Matt Levine]

I still look at threads a lot.

[Katie Greifeld]

Really?

[Matt Levine]

Instagram is constantly trying to push you to it and then like it's like

[Katie Greifeld]

you click on it by accident.

[Matt Levine]

You click on accident and then it just serves you a series of rage bait. And it's just like it's Mark Zuckerberg. There's the gap between what you want to want and your base revealed preferences. And he's the world's greatest exploiter of that gap. Where do I want to be looking at stuff on threads that makes me angry but just because it's stupid? No. Do I want that? No. Do I do it? Yes.

[Katie Greifeld]

And yet.

[Matt Levine]

And is he making billions off of that? Probably. Foreign.

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[Matt Levine]

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[Matt Levine]

Investing Brokerage Services by Open to the Public Investing Inc Member FINRA and SIPC advisory services by Public Advisors, LLC. SEC registered advisor. Complete disclosures [e-mail] disclosures. Private credit is still a thing.

[Katie Greifeld]

Yeah, there's been a ton of redemption requests.

[Matt Levine]

There is Morgan Stanley, all above 10%.

[Katie Greifeld]

Yeah. They're all getting capped at 5%. It seems like that was.

[Matt Levine]

The system is working as designed.

[Katie Greifeld]

Yeah, as designed.

[Matt Levine]

It's like what we talked about with Buzz, which is that when you gate these or when you get redemptions at 5%, you create a backlog. And then next quarter, people are like, you have all the redemptions from that quarter plus all the leftover ones from the previous quarter, and it keeps snowballing from there. So that's kind of happening.

[Katie Greifeld]

Yeah. So this will be a story that's with us for some time.

[Matt Levine]

Yeah. Unless people start being more confident about private credit or. I don't know, man.

[Katie Greifeld]

I don't know. But JP Morgan says, hey, so you don't like the whole quarterly redemption schedule? How about monthly liquidity?

[Sponsor/Advertiser]

I love it.

[Matt Levine]

First of all, love is a strong word. This is boring, technical.

[Katie Greifeld]

No, you love it.

[Matt Levine]

I do love it.

[Katie Greifeld]

The SEC also, I mean, maybe they don't love it, but they're okay with it.

[Matt Levine]

Of course they're okay with it. The point is, there's a rule that says you have to offer quarterly liquidity. J.P. morgan is like, well, monthly liquidity is not quarterly liquidity, but it is strictly better than quarterly liquidity. And the SEC is like, yes, that's true. It's strictly better. And so they, like, waived the rule to say you can have monthly liquidity.

[Katie Greifeld]

Yeah.

[Matt Levine]

What I love about it is one reason to do this is to give people more liquidity. But I think another reason to do it is to actually have people demand less liquidity. And so one thing I was thinking is if you offer quarterly redemptions, like, that's like a big decision, Right. If you don't get your money out this quarter, you have to wait a whole quarter for, like, things to get worse before you can get your money out again. But if you offered, like, real time liquidity, then no one has any incentive to take money out now, because in five seconds they can take money out, right?

[Katie Greifeld]

Yeah.

[Matt Levine]

It's like monthly is somewhere in between.

[Katie Greifeld]

Yeah. Perhaps I'm comfortable waiting a month to get my money, but I'm not comfortable waiting three months.

[Matt Levine]

It sounds less dire. You know, there's all this worry. There's for years been worried about mutual funds, which have daily liquidity, and about the idea that if stocks go down or bonds go down or whatever, then mutual fund investors will demand all their money back. And I was writing for years, people are worried about bond market liquidity. And someone pointed to me, John brooks in the 60s was writing about there was a stock market crash and everyone's like, oh, no. Mutual funds which were newly invented will sell other stock if there's a crash. And then it was fine.

[Katie Greifeld]

Yeah.

[Matt Levine]

And I think that, like, some of that is like, people who know they can get daily liquidity are not, you know, they're not rushing for the exits. Whereas, like, people in these private credit funds were rushing for the exits. So maybe, maybe monthly liquidity will solve that problem.

[Katie Greifeld]

I mean, they're all tailored towards retail investors, but this specific one is tailored towards retail investors. There was this shift after what happened in the first quarter. You saw a lot of firms talking up institutional investors. Like, that's where the focus is. But JP Morgan still seems interested in courting that retail investor.

[Matt Levine]

Right. I mean, you have to court the retail investor.

[Katie Greifeld]

Right.

[Matt Levine]

Like, the long game has to be, we're going to sell privates to people with trillions of dollars in their 401k. That has to be the long game of everything. Oh, God. And so right now that retail capital seems flighty and you're like, yeah, institutions still love us, it's great. But like, you still have to be thinking about that long game.

[Katie Greifeld]

Mm.

[Matt Levine]

Also, there's an article this week in Bloomberg about the private credit arbitrage trade getting momentum from advisors. Did you see this?

[Katie Greifeld]

No.

[Matt Levine]

So the arbitrage trade, which I don't love that phrase, but whatever the trade is, like if you are in a private, non traded business development company credit fund, you can ask for your money back. And if you get it, which, you know, there's caps on redemptions or whatever, but any money you do get back, you get back at 100 cents on the dollar. You get it back at net asset value. That's the rule of how these things work. Meanwhile, there are publicly traded BDCs, many of which are essentially the same assets, the same fund as the private BDCs, or they're at least run by the same managers and have overlapping assets, and Those trade at 80, 75 cents on the dollar. A lot of people think, well, I should take my money out from the public one at 100 cents on the dollar and then put it back into the same assets at 75 cents on the dollar because that just saves me 25 cents. That's a trade that was Weinstein talked up on this podcast that people have talked about and written about. But the Bloomberg article this week is about financial advisors telling their clients to do that, which is fascinating to me because on the one hand, I don't want to give investment advice. I don't want to say that's good investing advice. There are pluses and minuses. The discount might get wider. You can't know that. This is not really an arbitrage. The Bloomberg article quotes a guy named John Scott at CEF Advisor saying, when the same credit manager is running a non traded BDC at its net asset value and a listed sibling fund at a 24 to 7, 27% discount, that's not a philosophical debate, that's a math problem. That's kind of. Right, right. Like it's kind of a good trade. And so as a financial advisor, it kind of behooves you to tell people to do this trade. But also the whole non traded BDC product is kind of like financial advisors putting people into it. Right?

[Katie Greifeld]

Yeah.

[Matt Levine]

My financial advisor putting me into one, et cetera. And you might ask, why can non traded BDCs sell shares at $0.100 on the dollar? When traded ones sell shares they trade at 80 cents on the dollar. The answer is because your advisor is putting you into it. Why is your advisor putting into it? Why do advisors do anything?

[Katie Greifeld]

Fees.

[Matt Levine]

Right. And so it is funny to see this, like the advisors shifting their clients out of the advisor product and into the like publicly available product. It's just like, yeah, at some point in the cycle you're like, wait a minute, I'm going to give people good advice.

[Katie Greifeld]

Yeah, right. Oh God. Well that's cool.

[Matt Levine]

It's not investing advice. I'm not saying it's good advice. I'm just saying a lot of people,

[Katie Greifeld]

it's not investing advice.

[Matt Levine]

It's just a math problem.

[Katie Greifeld]

Until a financial advisor tells you so. Not this podcast.

[Matt Levine]

That's right. That's right. That's right.

[Katie Greifeld]

Run it by your finances financial advisor.

[Matt Levine]

See what he says. See what she says. 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 TV 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 Haut.

[Katie Greifeld]

Our theme music was composed by Blake Maples.

[Matt Levine]

Amy Kean 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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