Money Stuff: The Podcast – Episode Summary
Title: What Growing Starlings Need: USCIT, GSEs, SBET
Host: Matt Levine & Katie Greifeld
Release Date: May 30, 2025
1. Legal Challenges to Trump’s Tariffs
Timestamp: [05:30–10:16]
The episode kicks off with Matt Levine and Katie Greifeld delving into the recent legal upheavals surrounding former President Donald Trump's tariff policies. They discuss the landmark decision by the U.S. Court of International Trade (USCIT), which has blocked several of Trump's tariffs, including those on Canada, China, opioids, and fentanyl.
Notable Quote:
Matt Levine [06:43]: "The Court for International Trade said these tariffs are illegal."
They further explain that the Federal Circuit Appeals Court has placed a temporary stay on these tariffs, indicating that the situation remains fluid and is likely headed for a Supreme Court review. The hosts emphasize the uncertainty this creates in the markets, highlighting the initial positive reaction in the S&P 500 futures—which fell as the trade war fears persisted.
Market Impact: Levine remarks on the unpredictability of Trump's trade maneuvers, noting,
Matt Levine [07:17]: "The US Negotiating stance is so mercurial and so unreliable..."
2. Trump's Negotiating Tactics and Rule of Law
Timestamp: [10:16–17:13]
Levine and Greifeld explore how Trump's inconsistent approach to tariffs affects international negotiations. They discuss the non-delegation doctrine, which limits the executive's power to impose tariffs without congressional approval.
Notable Quote:
Matt Levine [09:27]: "The Constitution just says the Congress has the power to impose tariffs and the president doesn't."
The conversation touches on the broader implications for the rule of law in the U.S., with Levine expressing cautious optimism that the Constitution remains a grounding document despite executive overreach.
3. Privatization of Fannie Mae and Freddie Mac
Timestamp: [19:55–31:04]
A significant portion of the discussion centers on the potential privatization of Fannie Mae and Freddie Mac, government-sponsored enterprises (GSEs) that play a crucial role in the U.S. mortgage market. The hosts outline the history of these entities, their implicit government guarantees, and the 2008 financial crisis bailout that led to their conservatorship.
Notable Quote:
Matt Levine [22:10]: "Fannie and Freddie... had a long prehistory as being implicitly guaranteed by the US Government."
They examine the current push, led by influential investors like Bill Ackman, to return Fannie and Freddie to private ownership. Levine explains the complexities involved, including how shareholders who bought Fannie and Freddie stock at pennies are now reaping significant gains due to stock price increases anticipating privatization.
Potential Outcomes:
- Scenario 1: If privatized without compensating existing shareholders, it could involve raising substantial capital, potentially diluting shareholder value to near zero.
- Scenario 2: Alternatively, the government might cancel existing debts, allowing shareholders to retain significant equity.
Greifeld raises concerns about the timeline and its potential impact on mortgage rates, referencing Bill Pulte’s assurance that any privatization efforts will safeguard the housing market.
Notable Quote:
Matt Levine [28:24]: "Who knows what a re privatized Fannie and Freddie looks like?"
4. Emergence of Bitcoin Treasury Companies
Timestamp: [32:57–44:16]
The hosts shift focus to the burgeoning trend of Bitcoin Treasury Companies, highlighting how firms like MicroStrategy have popularized the strategy of holding substantial Bitcoin reserves on corporate balance sheets. They discuss the market phenomenon where companies announcing significant Bitcoin purchases often see their stock prices surge, a trend recently amplified by Sharplink Gaming's Ethereum infusion.
Notable Quote:
Matt Levine [34:02]: "Bitcoin treasury companies yeah, when."
Levine critiques this trend, questioning the intrinsic value added by merely holding cryptocurrencies and pointing out the speculative nature of these moves. He also touches upon other companies like GameStop and AMC, noting their mixed successes with cryptocurrency investments.
Market Implications: The conversation covers the risks of valuing companies based solely on their cryptocurrency holdings, potentially creating market distortions where stock prices don't accurately reflect underlying business fundamentals.
Notable Quote:
Matt Levine [40:57]: "They're just random tiny companies... they're going to do marketing, media, investor education... to make the price of bitcoin go up."
5. Portfolio Diversification and Bitcoin
Timestamp: [43:02–44:37]
In a brief personal exchange, Matt discusses his views on portfolio diversification, advocating for holding a proportionate amount of Bitcoin as part of a global financial asset portfolio.
Notable Quote:
Matt Levine [44:02]: "If 1% of the global financial portfolio is Bitcoin, why shouldn't I own that 1% of my assets in Bitcoin?"
Greifeld affirms this stance, emphasizing the alignment with a market cap-weighted total asset portfolio approach.
6. Conclusion
Timestamp: [44:41–45:41]
The episode wraps up with standard podcast fare, including calls to action for listeners to subscribe, review, and engage with the hosts via email or social media.
Key Takeaways:
- Legal Repercussions on Tariffs: The USCIT ruling against Trump’s tariffs introduces significant uncertainty in U.S. trade policies and market reactions.
- Privatization of GSEs: Potential privatization of Fannie Mae and Freddie Mac presents complex scenarios with varying impacts on shareholders and mortgage rates.
- Cryptocurrency in Corporate Strategy: The rise of Bitcoin Treasury Companies reflects a speculative trend that may not align with traditional business valuation principles.
- Portfolio Diversification: Integrating Bitcoin into investment portfolios is advocated as a method to mirror the global financial asset landscape.
Notable Quotes for Quick Reference:
- Matt Levine [06:43]: "The Court for International Trade said these tariffs are illegal."
- Matt Levine [09:27]: "The Constitution just says the Congress has the power to impose tariffs and the president doesn't."
- Matt Levine [22:10]: "Fannie and Freddie... had a long prehistory as being implicitly guaranteed by the US Government."
- Matt Levine [44:02]: "If 1% of the global financial portfolio is Bitcoin, why shouldn't I own that 1% of my assets in Bitcoin?"
This summary encapsulates the episode's critical discussions on trade policy legalities, the future of pivotal financial institutions, and the speculative integration of cryptocurrencies in corporate strategies, providing a comprehensive overview for those who haven't tuned in.