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- [00:00]
Joe Weisenthal
Markets move fast.
- [00:02]
Tracy Alloway
Get the insights you need in 10 minutes with Barclays Brief, a podcast from Barclays Investment Bank. Each week our experts analyze market themes, helping you anticipate what's next. Listen to Barclays Brief wherever you get your podcasts.
- [00:15]
Joe Weisenthal
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- [00:47]
Tracy Alloway
Show that 100% of everybody in the world wants to curl up indoors and do nothing because it's so darn cold out there. That's why many people are turning to Bombas, whose pillowy plush slippers and warm merino wool socks have been said to be the most comfortable in the history of feedback. Bomba's products have been found to boost coziness by up to 1 million percent. Okay, enough fake statistics, but could Bomba socks and slippers really be the Cure? Go to bombas.comaudio and use code audio for 20% off your first purchase. That's B O M B A S.com and use code audio. You can get the news whenever you want it with Bloomberg News Now. I'm Amy Morris. And I'm Karen Moscow here to tell you about our new On Demand news report delivered right to your podcast feed. Bloomberg News now is a short 5 minute audio report on the day's top stories. Episodes are published throughout the day with the latest information and data to keep you informed. Yes, there are other products like this.
- [01:41]
Joe Weisenthal
From a variety of news organizations, but.
- [01:44]
Tracy Alloway
They usually rerun their radio newscasts throughout the day.
- [01:47]
Joe Weisenthal
That's not what we do.
- [01:49]
Tracy Alloway
We create customized episodes that can only be heard on Bloomberg News now. And we don't wait an hour to publish breaking news. When news breaks, we'll have an episode up in your podcast feed within minutes, so you're always getting the latest stories and developments. Get the reporting and the context from.
- [02:05]
Joe Weisenthal
Bloomberg's 3,000 journalists and analysts.
- [02:08]
Tracy Alloway
We're all over the world. Listen to the latest from Bloomberg News now on Apple, Spotify or anywhere you listen.
- [02:18]
Joe Weisenthal
Bloomberg Audio Studios Podcasts Radio News.
- [02:33]
Tracy Alloway
Hello and welcome to another episode of the Odd Lots Podcast. I'm Tracy Alloway. And I'm Joe Weisenthal Jo, it is the holiday season. I am very much looking forward to it. One reason I'm looking forward to it is because we always do an annual ask us anything show.
- [02:51]
Joe Weisenthal
Yeah, you know, I think I like that in the podcast. You know, it's really not about us. I mean, the show is about what we're interested in, but really is about the perfect guests. But every once in a while I suppose it's nice to sort of have the microphone turned in the other direction, so to speak. Yeah.
- [03:06]
Tracy Alloway
The other thing I would say is we're already pretty accessible. Like there's a whole all thoughts discord that we're on. There's Twitter, obviously, there's instant messages on ib and mostly we respond depending on how busy we are. So feel free to contact us there too. But we did get some pretty interesting questions from a bunch of listeners.
- [03:29]
Joe Weisenthal
Yeah. And I like the fact that we can put, in many cases, listeners voices on the air. Bring back some of the old time radio call in shows, the likes of which I used to listen to when I was a young kid riding in the car with my dad.
- [03:42]
Tracy Alloway
Call in shows are Lindy.
- [03:43]
Joe Weisenthal
The call in shows are definitely Lindy.
- [03:45]
Tracy Alloway
All right, shall we start?
- [03:46]
Joe Weisenthal
Yeah, let's take a listen to some. John Lizaro, age 63 Berkeley, California Sometimes when you finish recording an episode, do you look at each other and say, this doesn't meet our standards and kill the episode. Or is it more like skiing? Once you commit to riding the chairlift, you commit to skiing down the mountain.
- [04:07]
Tracy Alloway
Well, I can't ski. I'm the only Austrian in the world possibly who cannot ski. So we have killed episodes in the past. In fact, there's kind of a funny story where we did an episode. It really wasn't going very well. The guests seemed very nervous and just sort of like not at his top performance. And in the end, after we recorded, we told him we're just gonna kill this episode. And he was actually really happy about that. Cause he felt he hadn't done his best work either. And then the other thing I would say is I actually think journalists should kill a lot more stories. We should be more select. And if you think about the German word for redaktor, it sounds a lot like redact. Right. Which gives you some sense of what editors are supposed to be doing, which is taking away as opposed to adding.
- [05:05]
Joe Weisenthal
Yeah, it is very rare. I mean, the number of episodes that we've fully recorded that we actually did not release, I think it's less than you could count on one Hand. Right. It's not that many, but there have been a few, which is, for whatever reason, the guest was not on their game or whatever, it didn't work. And I agree. I agree with Tracy. I think we should do more in general. I mean, I think journalists as a whole should do more. It's like, just release the good stuff, you know, just release ones you're. You're genuinely proud of. I don't want to release anything anywhere when I can't say I'm really proud of this work. And normally we are proud, but occasionally it's like, no, this is. This is not awesome. All right, let's go on to the next one. Thanks, Joe. Thanks, Tracy. I was really inspired by Joe's tweets on Moby Dick, so this question is for him. What did you read after Moby Dick? Thanks, guys. Thanks for listening. That's a very easy one. Because I was in such a mood to keep after reading Moby Dick, I didn't want to read anything besides Moby Dick. I sort of just thought about rereading it again, and I probably will sometime in the next year or two. But because I was in that mood, I read a book by the historian writer C.L.R. james, who wrote a book about Moby Dick. It was a book called Mariners Renegades and castaways by C.L.R. james. And it basically made the argument that Herman Melville, with the Ahab character, specifically anticipated many of the pathologies of the 20th century. The rise of fascism, dictators, and so forth, all of the crises of sort of Western civilization that we experienced in the 20th century. Fantastic book. Almost as good as Moby Dick itself.
- [06:44]
Tracy Alloway
Also, I've been recommending two books to you. One of them is the Heart of the Sea, which is about the whale ship Essex, which is the ship that actually inspired Moby Dick. And then there's another one I'm reading just now called A Marriage at Sea, and it's about a couple who are out, you know, sailing around the world, and their ship gets destroyed by a whale, and they have to survive on, like, a little raft. I actually don't know if they survive yet, so I guess we'll find out.
- [07:15]
Joe Weisenthal
I promise I will read both of those.
- [07:17]
Tracy Alloway
Both of them are excellent.
- [07:18]
Joe Weisenthal
I promise I'll read both. Let's hear the next question.
- [07:22]
Tracy Alloway
Hi, gang. Longtime listener here.
- [07:24]
Joe Weisenthal
My name is Sturm. I'm 32, and I live in Puerto Rico. And I have a question for Joe. I know you're an efficient markets guy, but if EMH is true, how have portfolio managers accumulated such vast wealth. That's a really good question. I wonder about why the financial system overall exists. Why are people putting targets on prices? And why are there pundits on TV and why is there financial TV and why is there trading and so forth. I still don't really know why the answer of why anyone has made any money. But my guess is that there are other services that people on finance provide other than high quality security selection. That whether it's like, okay, I don't really know how to manage risk or whatever it is, or I'm anxious about the thought of investing all kinds of things. I guess there probably are people who are able to obtain information that maybe counts as alpha. Probably exists. I don't know. I remain unsatisfied. I've asked this question myself. I don't fully know the answer, but my best guess intuitively is that within this world that we call finance, there are things that produce value other than sort of, you know, making good trades and so forth that maybe are harder to articulate and so forth. And thus they are providing a valuable service on that front. But I agree.
- [08:48]
Tracy Alloway
Counseling your customers.
- [08:49]
Joe Weisenthal
Yeah, counseling something. I don't know.
- [08:52]
Tracy Alloway
But, I mean, I was.
- [08:52]
Joe Weisenthal
What do you think, Tracy?
- [08:53]
Tracy Alloway
I would just add on to that. Like, it. It seems just on the EMH stuff, it seems on a simplistic level, if EMH was real, you would never get a bubble. Right.
- [09:05]
Joe Weisenthal
This is what. Yeah.
- [09:06]
Tracy Alloway
And in fact, one of my favorite moments on the podcast was when we interviewed Eugene Fama, the. The father of the EMH idea. And I think I got him to say that, like, bubbles exist. Right. Which I was surprised.
- [09:21]
Joe Weisenthal
Yeah, I know. They really. They hate, like, they really wrestle with, like, this is their one thing. They hate this phenomenon, so they come up with all this stuff. But, yeah. We will continue asking the question of why. Why do we exist? Why does financial media and coverage and pundits and all this stuff exist? We'll continue answering this question in 2026. Maybe we'll have an answer only the big questions.
- [09:43]
Tracy Alloway
Why are we here?
- [09:44]
Joe Weisenthal
Why are we here?
- [09:46]
Tracy Alloway
All right, let's listen to the next question.
- [09:50]
Joe Weisenthal
Hi, I'm Max Niederman. I'm 19 and I live in San Francisco. Supposing that AI does end up being as transformative as people claim, where do you think the value that that creates will accrue from their valuations and how people talk about it? At least in sf, it seems people expect the labs to capture a massive chunk of that value. On the other hand, the labs have never been profitable. And even then, hardware companies like Nvidia and TSMC seem to trade at lower multiples, despite being near monopolies with very good margins. So my question is this. When all things are said and done, which parts of the supply chain will be commoditized and which will capture all the value?
- [10:36]
Tracy Alloway
Yeah, I think that's a very fair question. And I think it's difficult to predict if tech at some point is going to produce or invent the proverbial AI God, like this thing that solves all of our problems. I would be a little bit skeptical of that. It seems to me like it's going to be a productivity improvement kind of at the margin for now. So maybe you use it instead of Google Search. You can use it to explain certain terms much more quickly. Some industries are probably going to use it to design new products. I know there's a lot of excitement around medicine, but where the value will accrue. I mean, some of the big tech companies are so expensive right now in the US I keep describing this as the coffee pod theory of AI, which is some tech companies are choosing to basically produce the world's most expensive, sophisticated cappuccino machine. And they're saying that, you know, it produces the best, best coffee that you've ever had. And crucially, what they're doing is targeting a market for this machine. Let's say it costs like $2,000. That's basically the entire world. And I'm not sure that approach works. And then, you know, some other companies are taking a very different strategy and they're producing something that's relatively cheap and standardized, sort of like a coffee pod coffee maker, and it's much cheaper and again, targeting the total market of the world. And you know, if you think about it that way, I kind of have a sense of, of where it's going.
- [12:22]
Joe Weisenthal
I really have no idea. You know, the one thing I'll say is I think there is this view that, okay, I can replace human labor and therefore lots of workers are very vulnerable. And therefore there is going to be this tremendous. Like it'll be this very. A force of inequality, so to speak. Right. So there's going to be the model makers. And I think in this vision that you're asking about these model makers, and they're going to make a fortune and the rest of us are going to have to get by on UBI or whatever because they've put us all, the models have put us all out of work. And look, I think that's possible. The one thing I'll say, though, is that tech as a force for financial inequality, that's already been the story. We don't even need to talk about AI with the existing tech giants that we've seen that build over the last 15, 20 years out of San Francisco. We've already seen this incredible rush of wealth and income, et cetera, to this fairly small, this one industry, fairly small concentration of software engineers and executives and VCs and so forth. And as such, I do wonder, could it be that somehow it's totally the opposite, that it goes in the other trajectory and that really it's sort of like a force for equality or something, and that it ends up being a situation in which people, or like capital itself is not as valuable as it used to be? I don't know, I just think we should possibly consider the idea that what people are predicting that will happen with AI is that what is literally just an extension of what we've already seen, and that to the extent that AI is something new, maybe that'll put us on a new trajectory.
- [14:21]
Tracy Alloway
Today's markets move fast. Get the insights you need in 10 minutes with the Barclays Brief, a new podcast from Barclays Investment Bank. Through sharp dialogue and scenario based analysis, our leading experts analyze key market themes each week. So whether you're managing a portfolio or leading a business, the Barclays Brief podcast can help you make smarter decisions today.
- [14:43]
Joe Weisenthal
Stay sharp, stay briefed. Find Barclays Brief.
- [14:47]
Tracy Alloway
Wherever you get your podcasts, Bloomberg Daybreak is your best way to get informed first thing in the morning, right in your podcast feed. Hi, I'm Karen Moscow.
- [14:58]
Joe Weisenthal
And I'm Nathan Hager. Each morning we're up early putting together the latest episode of Bloomberg Daybreak US Edition. It's your daily 15 minute podcast on the latest in global news, politics and international relations.
- [15:11]
Tracy Alloway
Listen to the Bloomberg Daybreak US Edition podcast each morning for the stories that matter with the context you need.
- [15:18]
Joe Weisenthal
Find us on Apple, Spotify or anywhere you listen. All right, let's take another question. Hi Tracy and Joe, this is Jennifer.
- [15:27]
Tracy Alloway
30, calling from Seattle. Long time, first time. This question is for Joe.
- [15:33]
Joe Weisenthal
Joe, what drew you to your interest.
- [15:34]
Tracy Alloway
In Chinese history, particularly its modern era? Have you ever considered going more back in time? I asked because I'm Chinese American with parents who've said very little about their.
- [15:44]
Joe Weisenthal
Lives during the Cultural revolution and the.
- [15:46]
Tracy Alloway
80S when the country started opening up. So I often learned through Zhou's tweets and book recommendations. But I had also noticed in my last trip to China that the one historical figure cities pay the Most homage to is not Mao or Deng Xiaoping, but actually Sun Yat Sen, who was the precursor to these leaders. Thanks. Love the show as always.
- [16:07]
Joe Weisenthal
So obviously we do a lot of contemporary China episodes and it sort of seemed like, you know, I should probably understand a little bit more about the history. I started with the ancient stuff. I was like, oh, I'm just going to go back and I'm going to read about the old dynasties and then I'll get to the present. And I sort of like, I found it a little bit hard. It wasn't grabbing my attention to ancient stuff. But then I remembered a couple years ago, we did an episode with Adam Posen at the Peterson Institute a couple years ago at Jackson Hole, and he had just sort of mentioned offhand that he had read Ezra Vogel's biography of Deng Xiaoping. And I was like, oh, maybe I'll just start there. That seems like more recent and tractable. And I could sort of slot that into my head into something. And I read that and I found it very, very compelling, as Adam suggested. And I think that sort of set off, like, it. I think reading 20th century Chinese history helps me to some extent understand the present day. I've never read a Sun Yat Sen biography, but I'm very interested in him, one of the rare figures who is sort of revered in both Taiwan and mainland, and so therefore someone who is an inspiration to both the Nationalists and the Communists, which is kind of weird. And he was like sort of a. An early pioneer of land reform and so forth. So I think maybe that'll be another thing I aim to read in 2026, a good sun Yat Sen biography.
- [17:27]
Tracy Alloway
I really like the older Chinese history. I read a really good book. I can't remember the title now, but it was all about the Chinese bureaucracy and government system, how it used to be and, you know, one of. One of the most rigorous systems in the world. Arguably you had to take this insane test to get the position. And I remember I also did a bunch of research around the sort of late 1800s, early 1900s, the fall of the imperial family and what it means for debt markets. That was a really fun story.
- [18:02]
Joe Weisenthal
Yeah, I should go back and read. Read the ancient stuff as well. I'm going to add that to the 2026 list.
- [18:09]
Tracy Alloway
Okay, let's take another question.
- [18:11]
Joe Weisenthal
Hi, Joe and Tracy. My name is Dani Bestov. I'm 26 years old and currently based in New York, where I'm doing my master's at Columbia in Financial Economics. I'm a Huge fan of the POD and Spotify told me in the last year I was in the top half percent of listeners and maybe now a first time caller as well. My question is, have such a wide range of guests with very different backgrounds and you cover an enormous amount of information. How much of that are you able to retain and naturally call back in everyday conversations or when you do follow up episodes? And how much you rely on note taking or revisiting past episodes to connect your ideas over time?
- [18:49]
Tracy Alloway
This is a really good question. This is a sort of journalistic process question. By the way, thank you for being in the top top percentage of odd lots listeners. We appreciate that.
- [18:58]
Joe Weisenthal
Let's get coffee sometime.
- [19:00]
Tracy Alloway
But going back to the question, you know, this is obvious, but it kind of depends on the guest and if the guest says something memorable or something that you really think is insightful. I think we do retain some of that information. I used to retain a lot more when we were editing our own transcripts and publishing them. I really value transcripts, but it was just so much work and took forever. So we stopped doing it. We're hoping to come up with some sort of solution soon. And the biggest compliment I can pay a guest is saying that, like, I'm gonna go back and read the transcript because there's so much knowledge, so much information I just have to absorb.
- [19:45]
Joe Weisenthal
All of was funny. I was at dinner the other night with someone and I said to them, have you ever actually learned anything from listening to a podcast? Because I do sometimes wonder if I ever remember anything. No, that's not totally true. I do. But I also sometimes wonder, setting aside podcasts and recall specific facts. I also have the same thing with books. You know, we were just talking about that Deng Xiaoping biography. And if someone's like, oh, Joe, you just spent three weeks of your life reading a biography of Deng Xiaoping. What did you learn? And I'd be like, he sort of opened up and for a while he was sent down to work on a tractor factory. And then he opened up. And I'd be like, you know, there's like. I was like, oh, did I really need to spend three weeks of my life to be able to recall three or four basic facts? I suppose that there are things that I don't know that I remember in, like my deep storage part of my memory that would be, you know, that would come out in a conversation. But I do, going back to questions of like, why are we all here? And so forth, I do sometimes have these thoughts of like, do you know how much. How much do we really learn and internalize and how much is it just fun to have these conversations?
- [20:56]
Tracy Alloway
Sometimes we surprise ourselves. Yeah, right. Like sometimes we come up with some random fact that's kind of interesting that we learned from somewhere. Just on the note taking part of the question. We generally don't take notes in the interview. We might jot down like a word or two just to remember to come back and ask a follow up question. But yeah, mostly it's a genuine conversation between three people and we try to keep it as natural as possible.
- [21:25]
Joe Weisenthal
Hey, Joe and Tracy, AJ toss here. I'm 37 years old and I'm from Lafayette, Louisiana. Go Cajuns. I have a question for you about bitcoin. You guys have spoken about how the narrative around bitcoin changes every cycle. And so I'd actually like to ask you to make a prediction whether you think there will be another cycle for bitcoin where it way outperforms everything else. And assuming that it does, what would the narrative be this time? Thanks guys.
- [21:58]
Tracy Alloway
That is a really good question. So the narrative theory of bitcoin is this idea that because bitcoin is essentially nothing, it is able to transform itself into anything. So we've seen it go through these various cycles of transformation, reinventing itself. You know, in the beginning it was supposed to be just a digital payment system. And there's the famous incident of the guy that bought a pizza and lost a lot of money that he otherwise would have gained. And then it kind of, you know, it turned into an inflation hedge. More recently, it's turned into a trump vehicle. I actually had it. I had an idea for a narrative that comes next, but I'm blanking out on it totally. I feel really bad.
- [22:47]
Joe Weisenthal
You'll tweet it if you want to.
- [22:49]
Tracy Alloway
Yeah, I'll tweet it. It was like two days ago and I had this idea and. Sorry, I'm very tired.
- [22:54]
Joe Weisenthal
It'll come back to it.
- [22:54]
Tracy Alloway
It's the end of a busy season.
- [22:57]
Joe Weisenthal
It's been a busy season. Busy year. Look, I have no, you know, I was like, oh, now I'm going to give the official odd lots for bitcoin price target for 2026. No, I really have no idea. I don't have any idea if it'll outperform again. You know, of course, it has been pronounced dead several times, many times over the years. So perhaps that's always a reason to discount the idea of, okay, this time it's dead. That being said, look, I thought one of the most compelling arguments. Of the various narratives over time, I thought one of the most compelling ones had been that it would be sort of this post sovereign money and therefore kind of like a digital gold safe haven. It has not been behaving like 1 in 20. I mean, this is one of the most volatile years on memory from like a de globalization and geopolitical standpoint. If you'd think there'd be one year where it's like, okay, people want some sort of money that is disconnected from governments, maybe this would be the year. Maybe they do, but they're choosing for gold. They're choosing the actual safe haven. Bitcoin, meanwhile, has underperformed U.S. treasuries. So the U.S. treasury is yet another safe haven that is outperforming Bitcoin in 2025. So I really don't know. But I do think that the poor performance in 2025 should be something of a concern. Again, people have always said, oh, it's a tech stock hedge. Well, tech stocks have had or a tech stock proxy. Tech stocks have done great this year. So it hasn't even satisfied that requirement. And then the last thing I'll say is that there is a lot of, I think, legitimate enthusiasm about crypto, particularly in the realm of stablecoins. Getting back to maybe the original ideas Tracy mentioned of a payments platform, but all of that is happening on other chains besides bitcoin. And so even if crypto becomes more of a thing in the financial system, it's not obvious possible, but it's certainly not obvious that bitcoin would see any benefit from it.
- [24:56]
Tracy Alloway
I do think though, we shouldn't underestimate bitcoin's ability to reinvent itself. And this actually took me a long time to realize. And you know, he mentioned the obituaries for crypto. I wrote some of those. Like, I think in 2012 I wrote one.
- [25:13]
Joe Weisenthal
So we've all learned our lesson.
- [25:15]
Tracy Alloway
Mea culpa on that. We'll see what happens. This is Scarlet Fu and I'm Paul Sweeney inviting you to join us for.
- [25:36]
Joe Weisenthal
The Bloomberg Intelligence podcast.
- [25:38]
Tracy Alloway
Every day we harness the power of Bloomberg Intelligence to bring you deep, deep dives into the companies that are moving markets from publicly traded companies like Apple to those that are privately owned but known by everyone on Earth like OpenAI.
- [25:49]
Joe Weisenthal
Now, I helped to build Bloomberg Intelligence to what it is today, Scarlett. And now our analysts are the best in the world, covering more than 2,000 global companies.
- [25:57]
Tracy Alloway
That is your legacy, Paul. And we speak to those in house experts every day. They are Bloomberg's go to authorities on sectors, companies and legal processes.
- [26:05]
Joe Weisenthal
We do it all live each weekday, then bring you the best conversations in our daily podcast.
- [26:10]
Tracy Alloway
So be sure to search for Bloomberg Intelligence on YouTube, Apple, Spotify or anywhere else you listen.
- [26:15]
Joe Weisenthal
Listen in the afternoons on your way.
- [26:17]
Tracy Alloway
Home from work to catch up on.
- [26:18]
Joe Weisenthal
The market news you missed during the.
- [26:19]
Tracy Alloway
Business day that is the Bloomberg Intelligence Podcast. I'm Scarlet Fu.
- [26:23]
Joe Weisenthal
And I'm Paul Sweeney. Subscribe today wherever you get your podcasts. All right, let's take another question. Hello Joe and Tracy, this is Cynthia from Vancouver, Canada. What is something the market seems really.
- [26:36]
Tracy Alloway
Confident about that you think deserves more questioning or more nuanced discussion?
- [26:42]
Joe Weisenthal
You know, first of all, thanks Cynthia for calling in. The first thing that comes to my mind is I wrote about this recently in the Odd Lots newsletter. I am kind of surprised about how well anchored market based expectations for inflation have been because there is, I think, pretty legitimate there's two things going on. One is, you know, the Fed hasn't missed its inflation target for years and so there's perhaps reasons to think that just already that the Fed hasn't been as serious about 2% as it had been before. But then also I do think there are good reasons to think that in the future the Fed will not have the same capacity to target stable prices the way it used to due to politicization, due to the general sort of like populist trend in politics, which is not something distinct to the Trump administration, though certainly I think the Trump administration has accelerated that process with a lot of the criticism of the chairman and so forth. And so I am a bit surprised that if you look at various market based measures of future inflation, 5 year, 5 year break evens and so forth, that it has been pretty stable because that feels disconnected from the way that we have basically talk about this topic.
- [28:02]
Tracy Alloway
Mine is also related to inflation. I think far more people need to figure out how these CPI official numbers for inflation are actually calculated and produced. And you know, ultimately a lot of it is a series of numbers that are estimated. Those are called imputed numbers and a lot of them are actual observations of prices which Bureau of Labor Services people go out and collect. It's actually a really labor intensive thing to do and most people, you know, they treat them like as a simplistic number and I think it's much more important to look at the different components. And actually we're recording this on December 18th and we're seeing a really good example of why it's important to know how CPI is actually calculated because you know, the number just came out much lower than expected. And it's interesting if you start to break it down to see what a assumptions were made and what's actually moving.
- [29:06]
Joe Weisenthal
All right, for the next question. This one was just written as opposed to an audio note, but it's a really fun one where Tracy and I kind of see the world a little bit differently. So we have a chance to get into that. This question comes from Diego Aguilar Canabel. He asks where did my intellectual beef with the idea of the term premium start? And look. So this is something that's come up. People talk about the term premium in the yield curve and I'm always like, what exactly does that mean? So you know the way, like I guess. Tracy, let's start with you. What is the term premium? Don't ask me, I'm not going to define it. How do you. What is the term premium?
- [29:42]
Tracy Alloway
It is basically the extra compensation or premium that investors demand to hold debt out longer term.
- [29:50]
Joe Weisenthal
Okay, so here's what I don't get. Why do they deserve extra compensation? Why don't they just deserve the appropriate compensation? Like I buy stock. Do I, oh, I deserve extra compensation because they're risky. No, I deserve appropriate compensation. I deserve to be compensated, I suppose. But I hate this idea of like extra compensation. We always want extra compensation. But then also, I guess my other issue is that like I think if you knew, if you had a crystal ball and you knew for sure what the Fed was going to do in every policy meeting, it would make for the next 10 years. There's 80 years. So the next 80 meetings, if you knew what that was going to be, I think you would know the exact price that 10 year yields should trade at. And so I don't really understand why we can't just say that the yield curve is the market's expectation of overnight rates for the next 10 years.
- [30:44]
Tracy Alloway
Well, it's in comparison. So the extra premium is in comparison to shorter term bonds. And there are some calculations that go into that. I think it's, it's not the be all and end all of the market, but it's certainly an interesting thing to look at. And when we get big moments in the term premiums movement, if it flips from positive to negative, it kind of tells you a lot about where the market's going.
- [31:12]
Joe Weisenthal
Okay, on this point though, just to press further there, I think there's really key, which is so they're right, everyone admits these are unobservable. Right. These are models, these are models that indicate what this notional term premium is. The fact that it can flip to negative and it was negative for much of the 2010s suggests to me like that's another reason. Like I don't understand how this idea that there is holders of long term debt per se need extra because of extra protection or whatever because apparently they were actually getting a discount on it. If we go by what the model said in the 2010s. So I just find the whole thing, I just find it all very unsatisfying.
- [31:53]
Tracy Alloway
I would also say the term premium beef. We play it up a little bit for the show. So we hope you enjoy. All right, this is going to be our final question. Again, this one was written in rather than a voice note. So here we go. It is from Michael Kahn. He asks a non markets question more specifically for me. Tracy, what was your favorite Magic the Gathering card and what critical function did it serve in your deck? Bonus question. If you and Joe were a magic card, which ones would you be? That's a very fun question. Okay, so my favorite was probably my Siobhan Dragon. I like the idea of dragons and it had really nice art and at the time it was a really valuable and powerful card. By the way, I don't know if I'm pronouncing Siobhan right, whether it's Siobhan or Shyvon. Like we, we didn't have a lot of pronunciation. Gu was in middle school and I also just don't remember how people were saying these things. It was like 30 years ago. And I say that just because someone, someone on Twitter or Reddit was criticizing me for not knowing that a card that Joe mentioned was an actual card. Yeah, I didn't know that. I thought you were making it up. I mean, it sounds like, you know, an obvious magic card.
- [33:17]
Joe Weisenthal
I know nothing at all about magic. I've never played it. I really, I just, I don't know how the game works, et cetera. I only remember one fact, which is that one of my good friend's younger brother in high school had a call called Wall of Brambles. Actually this gets to like the question about memorization. Who the heck knows how that random fact got stuck in my head or what's. But this is. I hear magic. I just remember this card. I just looked it up. It looks like this card would cost somewhere between 25 and 30 cents. So I'm certainly not memorizing it because it is a particularly valuable or important card card.
- [33:52]
Tracy Alloway
And then what role did the dragon play in my deck? I Think I said this on the podcast. I. I really enjoyed the collecting side of Magic the Gathering more than I enjoyed actually playing it. You know, there was some gender imbalance at the time, and it, like, sometimes felt weird to, you know, go to war with a bunch of guys. But I really enjoyed putting together the decks and sort of strategizing, and I guess I didn't enjoy testing them out that much. What would we be if we were.
- [34:28]
Joe Weisenthal
Odd lots or a card? Tracy, you got to answer this one.
- [34:30]
Tracy Alloway
If odd lots or if us. It says if you and Joe were a magic card. So give me a second. Okay, Full disclosure, I just asked ChatGPT because this seems like a kind of fun question, and the AI generated answ. We would be a blue, red legendary creature that rewards drawing cards, talking about weird market mechanics, and turning every small data point into a big compounding advantage. I'm not sure how you would incorporate discussions about markets into a Magic the Gathering game, but, you know, it's nice to hear. We could be a dragon. I would say, like, maybe we would be a Vesuvan doppelganger. And I say that partly because I'm sort of biased to the older cards, the Ice Age cards that came out in the mid-90s for obvious reasons. And I think the doppelganger, you know, they obviously complement each other and their actual power in the game, from what I remember, is they can take on the characteristics of any creature that's actually in play or most of the characteristics. And I think that's, you know, that's kind of what we do. We try to adapt to every conversation to get the best result.
- [35:55]
Joe Weisenthal
That's right. I also, as ChatGPT, this, I don't really understand. I don't even understand its result. But then it said why this works to Joe generates flow, motion, liquidity, and Tracy imposes structure, friction, and narrative discipline, which I think many listeners would actually sort of agree with. It's sort of. It doesn't sound totally off, so I'm.
- [36:16]
Tracy Alloway
That's not bad, but it's not a Magic the Gathering.
- [36:18]
Joe Weisenthal
No, no, no. I. I didn't even understand, like, all this. I can't even. I don't. Two, you are legend. I don't know what any of this stuff is.
- [36:26]
Tracy Alloway
Oh, I do have some good news, which is. Remember I said that I had lost all my the Gathering cards, and I didn't know where they were? My mom actually found them in her basement. They were sort of hidden away. The bad news is I really don't have any valuable ones. Siobhan Dragon and I have one that was signed by the artist, but that's about it.
- [36:50]
Joe Weisenthal
I'm surprised there's not one in there, is there like an Antiques Roadshow style show for Magic the Gathering cards? Maybe we could do an episode at some guy in here, some dealer and talk through the cards or something like that. I would do that.
- [37:03]
Tracy Alloway
Yeah, that would be really fun.
- [37:04]
Joe Weisenthal
Let's do that episode.
- [37:05]
Tracy Alloway
So this is the end of the ama. Thank you everyone for sending in all these great questions. We had a lot of fun answering them.
- [37:14]
Joe Weisenthal
Yeah, and thank you everyone. Just for, I mean end of the year, crazy year, great year. So really thank you to everyone who, everyone who's listened.
- [37:22]
Tracy Alloway
And yeah, we definitely hope you listen in 2026 because we have some excellent episodes coming up. So shall we leave it there?
- [37:30]
Joe Weisenthal
Let's leave it there.
- [37:31]
Tracy Alloway
This has been another episode of the Odd Lots Podcast. I'm Tracy Alloway. You can follow me Tracee Alloway and I'm Jill Wiesenthal.
- [37:39]
Joe Weisenthal
You can follow me at the Stalwart. Definitely. Follow our producers Carmen Rodriguez at CarmenArmond, Dashiell, Bennet Bot and KalebrookSalebrooks. For more Odd Lots content, go to bloomberg.comoddlots for the daily newsletter and all of our episodes and you can chat about all of these topics 24. 7 in our Discord, Discord, GG Oddlauts.
- [37:59]
Tracy Alloway
And if you enjoy Odd Lots. If you want us to go on a Antiques Roadshow for Magic the Gathering cards, then please leave us a positive review on your favorite podcast platform. And remember, if you are a blue Bloomberg subscriber, you can listen to all of our episodes absolutely ad free. All you need to do is find the Bloomberg Channel on Apple Podcasts and follow the instructions there. Thanks for listening.
- [38:54]
Joe Weisenthal
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