← The Wall Street Skinny
The Wall Street Skinny
136. The Skinny On...AAPL Downside, $Trump Coin, and Credit Portfolio Trading
00:33:42
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- [00:00]
A
Guys, we are so excited to finally announce the launch of our long awaited talent accelerator, our exclusive live virtual training series. This is our chance to bring you our signature training to any company that wants their incoming talent trained by us, Kristen and Jen.
- [00:15]
B
We are running three live sessions over the next two months. First up, our Excel and Financial modeling bootcamp on May 8th through 9th, designed to get your new hires up the curve on Excel, accounting and integrated modeling fast. Then in June, we're running two intern focused sessions. Our investment banking and private equity accelerator from June 2nd to June 5th and our fixed income sales and trading accelerator from June 9th to 11th.
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A
These are perfect for firms who want their interns to hit the ground running this summer and actually understand what's happening on the desk.
- [00:49]
B
And for individuals. We've got you covered too. Our self paced investment banking and private equity fundamentals course is live and available now. These courses are nothing like the boring online classes you're used to. They're video driven, visual and totally bingeable, just like our Instagram content. And yes, fixed income, sales, trading and investing self study is still coming later this year.
- [01:12]
A
Check out the link in our show notes to register your firm and start learning today. Hi friends. Welcome back to the Skinny on Wall street with us. The Wall Street Skinny. Actually, is this a, this might be a actual episode, so.
- [01:24]
B
Well, this is airing on a Saturday because unfortunately our previously scheduled Saturday episode is trapped in the clutches of compliance. So we are a week behind. But it ended up working out because we, because of our master class, we're a day late in recording our midweek episode. Therefore you guys get the newsy stuff here on the weekends for a little bit of a change. So yeah, nice to shake things up. And we have some exciting episodes that are going, going to be freed from compliance hopefully after this week and we'll have for you next weekend.
- [01:52]
A
All right, so here's what we're going to do today. We want to talk about a couple of things. I mean, Jen and I, we haven't really discussed this, but I am excited. I want to talk about Apple's revisions downward in their earnings estimates because I can tell you that like I am part of the potential problem for them and I'll get into what that means. But we also wanted to talk about the Trump coin and Trump inomics and the impact on like the dollar strength and tariffs. And so Jen's going to get into some stuff there. And so I guess let's start Jen with the Apple news. And so if you want to just share kind of like what's, what is the update with Apple?
- [02:28]
B
Yeah, so I mean, if you guys have been following Apple stock, you know, Apple got unseated basically as the world's largest tech company and it's having a little suboptimal run here. And I think they are scheduled to announce earnings on January 30, so next Thursday. But several analysts across the street street have recently revised their earnings guidance lower. Now, the main reasons that they're citing and revising those forecasts lower are kind of lackluster sales of new iPhones and a lukewarm response to the rollout of the Apple AI. But again, this is not investment advice. Kristin and I just based on our personal experience, wonder if there's additional factors at play here. And so just a little story time. I was never that person who was like rushing out to get the next new iPhone. And if you recall, when the first iPhone actually came out, I was like, this is a stupid idea. No one's going to want this BlackBerry forever. So I am not the best predictor of technology to say the least. But for once I was like, ahead of the game. And I was like, okay, I know I'm not quite due for an upgrade, but it's close enough. I'm going to go out and get the new iPhone 16.
- [03:39]
A
Oh, no, no, no, no, no, no, no, no, no, no, no, no. That. Let's, let's, let's set the record straight here. Jen had like, has five, five gigabytes of freaking storage. Like she had the phone that had no storage and she was constantly getting problems because we obviously do a lot of camera footage. And so she would constantly be like, I have no, like room on my phone. I have to delete this app. I have to delete all these things. And so she had no room left. So it was less about the upgrade is the fact that like, you literally had max out on storage and your phone was non functional. So I just want to add that little data point.
- [04:09]
B
I completely forgot about that. Yeah, I had the 128 gigabytes. So I was like, oh, it's time for an upgrade and it's time to solve this problem. Because, yeah, I was having to delete like precious photos of my children to be like, here's another take of me dressed up as a man, like at a bar. And Kristin was like, oh, good call. I'll go and get one myself. So we both, on the same day went to the phone store, like Verizon for me, ATAT for you, whatever it is, to get new iPhones and they like didn't have them in stock, so we ordered them, whatever. Right. Mine came three days later and I did the switch that day. That was Wednesday, January something or other. Maybe like 15th. Right. And then you were like, oh, I'm going to wait until my cover comes. Like a case.
- [04:54]
A
Yeah, I know. Part of it is I was lazy. No, well, it was that. It was also I just lazy AF.
- [05:00]
B
Because it was shattered it. Because you were using it, you like wanted to whatever, have the app.
- [05:04]
A
I did, I did. I also, I'm going to be honest, they. The new 16 I got, I like my gold phone and it was white. I was not super excited about the trade. Well, no, because I wanted to order the gold and they said it wasn't in stock. So John, my husband, just got me the white one. And so I'm not that excited about it. I got a new case. I didn't love my case. Well, I'm just saying. Right. And my phone works great. And it's obviously, it's a kind of a huge pain in the butt to do the whole upgrade. You have to re log into everything, you know, you have to re download shit. You know, my Apple, watch my aura ring. It's a whole production. So. So I wasn't super psyched to do it. And that probably also tells you I didn't really need to do the upgrade. So anyway, I think that's how many.
- [05:43]
B
People feel, by the way, because they're like, why? What's so different about this phone? So like our experience was pretty representative. I needed it because I needed the 2 terabyte or 1 terabyte version versus Kristen, who already had the increased metric.
- [05:56]
A
Well, I have 500 gigabytes. But here's the reason I got it is my husband needed an upgrade, so he has to upgrade. And because he needs an upgrade, there was a deal. You get two phones and then you could also get an iPad. I mean, my daughter needs an iPad for like her math tutoring shit. And I don't know. So we were like, fine, we'll do this whole thing. We'll get new phones. Why not? I mean, I'll go from 500 gigabytes with whatever tetrabyte and everything will be great. Problem is I, like I said, I was lazy. I wasn't super excited about the new phone. And I already have the 16. I think you had what, like the 14 or something? So.
- [06:23]
B
No, no, I had the 14.
- [06:24]
A
Oh, you had a.
- [06:25]
B
No, we both have 15.
- [06:27]
A
I have 14.
- [06:28]
B
You have.
- [06:28]
A
Oh, you have 14 I think I have a 14. So anyway, so interesting, my husband has like a 12. But so I decided to do the whole transfer room on Monday on Martin Luther King Day. And I'm gone, I'm getting all my stuff upgraded, blah blah, blah blah. By the way, hang on.
- [06:45]
B
Yes, 48 hours after, if you recall, we did a skinny on about the potential TikTok ban or sale, right? So if you recall, the big news over MLK weekend was that the TikTok ban or sale ruling was upheld by the Supreme Court. So on Saturday TikTok went down and it was like every influencer from TikTok, it was TikTok Magedon, right? They were all on Instagram crying, showing them last moments, confessing their deepest darkest secrets and by the way getting fifty thousand or a hundred thousand or five million new followers on Instagram as all their followers just came to another platform. And then within 24 hours TikTok was restored. So for people like me, I'd already upgraded my phone like done all the thing, done all the transfer. I had fewer than 24 hours of disrupted service and frankly just a lot of nonsense and thought that was it. Right?
- [07:43]
A
So, yeah, well, so, and then finally whatever, so I do my upgrade and getting everything re logged in, blah blah blah blah blah and I go to try to you know, get TikTok because by the way it just transfers everything over and I guess like I need the Apple Store. I never thought of the fact that I would have to read out from the Apple Store because it's, it's on the cloud. Like I downloaded, I downloaded it, have to do it. So I didn't understand why I would need to like, you know, pull it from the App Store, but I guess you do. Yeah, I'm not buying it. And same with Cap Cut which by the way, I have a frickin, I mean we both pay for the pro version. I paid for my Cap Cut.
- [08:18]
B
So this was like a footnote in the entire TikTok issue. For those of you who are not content creators, TikTok, frankly, take it or leave it. Cap Cut, which is owned by ByteDance, is the go to editing software for everyone regardless of what social media platform you use. It is the most user friendly. It is, it is bite sized, it's on your phone, it's so easy to use, it's integrated with everything. It's, it's great for music, editing clips. You can do it in your sleep. We are both used to this platform. There are other competitors out there and Meta has just announced that they're launching a new competitor to it as well. But, like, it is the gold standard, bar none, for creators. And so Cap Cut is also owned by ByteDance. So when TikTok went down, yeah, Cap Cut went down. And that was the thing that was.
- [09:08]
A
We were freaking out about.
- [09:10]
B
We were freaking out. We were like, oh, no, we're never.
- [09:12]
A
Going to edit a video again or whatever. I mean, yeah, well, look, and I understand there's a ton of people out there who are creators who have way more followers than we do. We have 40,000, which again, we're like hard earned. And. But again, for us, like, to lose TikTok was like, okay, it's probably better for society as a whole if that happens. Fine. Cap Cut. Like, no. And so I said to my husband, I'm like, I cannot, I can't have this new phone if I can't get Cap Cut. So I'm going to wait 30 days, see if, you know, it's back in the App Store. I don't think it is. I don't think that they're going to just like, even though it's funny because I thought when Trump signed the executive order that it would have meant that it could be back in the App Store because I'm pretty sure that they've said that they won't go after Apple.
- [09:53]
B
He has said. Because that's what that executive order is. It's saying like, okay, I know this is the rule, but we're not going to enforce it.
- [09:58]
A
Right.
- [09:59]
B
Basically is how I interpreted it. But I guess Apple's like, I'm not taking your word for it.
- [10:03]
A
Right.
- [10:04]
B
I'm not risking putting this now banned or sell app in the App Store and facing potential legal.
- [10:14]
A
Yeah. And I think because that was the law all along, the fact that TikTok shut down service was never part of the law. That was just like them almost trying to be like, you want to play this game? Let's see how people react when you can't get it. But it was not part of the law. I think the law was just about the App Store, just that it has.
- [10:29]
B
To be taken out of the App Store.
- [10:31]
A
Yeah. So I think that that's why the current situation, I don't foresee that it's going to come back in the App Store barring a law being changed. I could be wrong. But anyway, so ordeal. Ordeal. But as of right now, I mean, I'm basically like, we are looking for the boxes to return our iPhone, but I also think, by the way, so this is going to impact verizon and like T Mobile and stuff because they have those contracts because we got this from Verizon, I didn't buy this from Apple. So it's Verizon and Sprint and whatever. They have contracts with Apple to buy X number of iPhones over some time period. So I mean it's actually them who's losing money, at least in my case. Now obviously a lot of people do go directly to Apple and they buy it directly from Apple themselves, but in my case it's going to be Verizon. So I mean, granted this is not investing advice and do not do anything I ever say because I always get things wrong. But like I would not be bullish on those.
- [11:22]
B
Yeah. So I mean, this raises a really interesting dilemma, right? Because when you think about like the reasons to Upgrade these phones, nine times out of 10 people, like, I want the new camera, right?
- [11:32]
A
Like, which is what I wanted too. And I don't even know if it's any better. And by the way, we use the back camera, I use I or the front camera, I use this camera more than I use the back one because I'm like, I don't need to see myself in 3D or so I will say this.
- [11:44]
B
So I had the 15 normie, whatever it is like, because I bought that phone right when we were first starting our business and I was like, I don't use the back camera or whatever. But now having done this long enough and knowing the difference of the up, I was like, I want the best camera, I must have it.
- [12:02]
A
Well, that was why I went to the pro and I did Pro Max.
- [12:05]
B
I want the option for the best regular camera if I can have it. So if you think about it, if everyone's using it for photos, photos are so deeply tied to social media. That's why people are getting new phones. It's for photos, photos that they can use and interact with people on social media. So if you can't use the social media either editing app or sharing and communicating app that so many people, so many young people too are using, right? Because let's face it, you know, my dad has an iPhone, but he's not rushing out to get the new iPhone every time, right? Like he doesn't feel the need to get some new upgrade. If anything, he's like, stay away from me, AI. So like there's really marketed at young people like with purchasing power and who give a shit about this stuff in the social media generation. So if all of a sudden you lose that. We saw articles and I don't know the validity of this, but we saw articles saying that all of a sudden, a secondary market has popped up for used iPhones with TikTok installed in it. Now, Kristen, you know more about this than I do, because I don't understand anything about, like, how the cloud works or whatever, but, like, how would it even work?
- [13:11]
A
Well, what confuses me about that is, like, so, okay, if I go to turn on my phone, right, I have to wipe my phone. So the fact that my phone had TikTok on it at some point is useless to the next person unless I, I mean, I guess delete everything. But they still have access to my login. Like, the only way for this to stay on my phone is for my login to still be in place.
- [13:35]
B
So, yeah, so you'd have to transfer access to, like, your Apple ID to someone and be like, I'm gonna make a new Apple ID for myself first. On another, I don't.
- [13:46]
A
Again, I'm sure there's some way to do it, because, by the way, I mean, you still have your old phone. Like, you. If you can sell it for $10,000, same thing here. I mean, I'm like, do I really? But no. Yeah, well, again, I'm. Obviously, I'm keeping mine, but it's. It literally doesn't make any sense. So I'm actually very curious. And there's people who are much more technologically savvy than I, so I'm sure there's possibly some workaround. But, like, to the average Joe or person like me, I mean, I'm like, that. How does that even work? Because again, it's downloaded, it's on my device, but it's like, under my icloud thing. And then ultimately, if I wipe it, everything is gone.
- [14:23]
B
So, I mean, this is not something I think that these analysts are talking about with respect to Apple's projected profits.
- [14:32]
A
That is going to have a big problem.
- [14:34]
B
And again, you know, we had a wonderful conversation with a very sophisticated investor on our podcast that we'll be releasing. Talking about his investment philosophy is basically buy what you know, right? But also don't buy what you know. If you are experiencing flaws with a product, that's the kind of insight that you want to be thoughtful about from an investing standpoint. Again, this is not investing advice. Like, we just philosophically how to approach things. So it's like, okay. And again, you're talking to the girl who was like, iPhone's a bad idea. Because, like, I think the screen's gonna get dirty. And I know I'm gonna drop it and break it. And that's I'm the 1%. And 99.9% of the rest of the population was like, what are you talking about? This is the best thing since sliced bread. But we are experiencing this hiccup. We are a two person team and half of our team doesn't have access to like critical software for doing our job as people who interact on social media and create content, like, that's a huge problem.
- [15:34]
A
When we worked at elite bulge bracket investment banks, having armies of compliance officers and cybersecurity teams meant we never paid attention to the nitty gritty of workflow, security and vendor risk mitigation. However, as entrepreneurs and small business owners, we get that nothing is more important and more complex than, than managing security risk. That's where Vanta comes in. Whether you're a startup founder navigating your first audit or a seasoned executive looking to automate your compliance, Vanta can help your business establish trust and proactively manage risk. Businesses use VANTA to automate compliance needs across over 35 different frameworks from SoC2 to ISO 27001 to HIPAA and save money in the process. Our listeners can get $1,000 off@vanta.com backslash Wall Street. That's Vanta V A N T A.com backslash Wall street for $1,000 off. Yeah, again, I actually, like, if my new phone didn't have TikTok, I could live with that. I can't live without cap cut. Again. I was actually like, this is exciting. Trump signing this executive order and then it did absolutely nothing for me. So I was like, well, that sucks. Speaking of Trump, so what do we want to talk about next? The Trump Coin or trumponomics?
- [16:48]
B
Well, I'd like to talk about the Trump Coin because, you know, it's funny, my, my dad was like, why don't you guys start a cryptocurrency, right? Like, isn't that what everyone's doing these days? And it's just so funny because we live in this strange world now where meme coins have just become like, it's just part ubiquitous culture that we live in. And it's ubiquitous.
- [17:13]
A
Just to clarify about your dad, your dad, by the way, is a really intelligent, I mean, former investment banker, lawyer, like, really bright, knows his stuff, watches CNBC all the time. And he was talking about, with respect to the Trump coin and everything. And also like us, he's like, you know, with respect to the Trump coin, there's cash flows behind that and you're like, no, no, it's a shit coin.
- [17:36]
B
He was like, it's got to be based in something is what he said. Like, he's like, all these meme coins, they're based in something, right? Like, that's the whole thing. That's, that's so interesting. And so I read a really interesting article in the Free Press that was kind of a point counterpoint about the Trump coin. Specifically for those of you who, who haven't been following this. In the days immediately leading up to the inauguration, there was a Trump coin and a Melania coin launched. And the kind of headline, stated purpose is kind of in support of the presidential regime or whatever, that it wasn't directly launched by them themselves, but by their companies, properties, whatever benefits them, though.
- [18:17]
A
It's basically money into their pocket, into their corporations.
- [18:20]
B
Yeah.
- [18:20]
A
Yes. Yeah.
- [18:21]
B
And so apparently this thing has just totally. Well, apparently the Trump coin is totally taken off the Melania coin, I guess, like spiked and then immediately crashed.
- [18:31]
A
Well, Trump. Trump came down when Melania issued hers, they.
- [18:34]
B
Okay, got it. But I mean, we're talking about millions, if not billions of dollars. No, it's valuations.
- [18:39]
A
Yeah, billions. Yeah, billions.
- [18:41]
B
So it's, it's not just some flash in the pan, like me starting a meme coin about, you know, my dog Renee coin. Right? Like, which.
- [18:49]
A
So it's not even, it's not even like hawk to it, which got up to 500 million. This is. I'm actually curious, with the market cap, I think it was like 5 to 9 billion.
- [18:57]
B
Trump's went somewhere from somewhere between 6 and 15 billion. Melania's somewhere in the 500 million range still.
- [19:04]
A
But. But it was up to something like 2 billion before it came down, actually. Could have been higher, by the way. This was. We are going to have edited out the shit show that was Jen and I trying to figure out the share prices and market caps of these things, which are like some, some sources have it in like a dollar amount, some have them in like a fraction of a penny. It's all over the place.
- [19:24]
B
So.
- [19:24]
A
So I don't know how the hell to find this shit. But yeah, basically tldr, both of them went up a lot. Both of them went down. Actually. Melania might have just gone down, but when Melania issued hers, I think it was the signal of like, you know, this thing is not like you. These things could be like issued all the time. But the problem with this is that first of all, this was issued going into a presidency, you know, and it's funny because, like, I know in that Free Press article, they were talking about how the Obamas, you know, signed the $65 million book deal. By the way, 65 million sounds like chump change right now, but $65 million, woo. But like after they left office and by the way, I mean, Ken, foreign actors, like, I mean, what are they going to do? Buy a lot of books? Like, whereas here, this is literally as you have the President going into office and it's one thing to have, you know, the foreign leader stay at Trump hotels and sort of put money his pocket that way, but to have the ability to, you know, have these like encrypted bank accounts where, you know, it's like crypto yuzu 5, 4, 3, which is like maybe a secret like Russian backed guy or like Iran or freaking, I mean, name your country like China. And they can basically now almost like be bribing Trump and like nobody knows. I, I just like this is wild to me. First of all, I mean it's so funny because when we were talking about Hawk Tua back a couple, maybe a month ago, we were like, it is wild that this is legal. Now what she did was not illegal. And there was all these finance memes that were like, she's gonna need a lawyer, like Hawk lawyer, blah, blah, blah. But like it wasn't illegal. Now it does seem like it should be. And we were saying.
- [20:56]
B
Hang on. Yeah, so, so certain types of crypto coin issuance are not legal. So you, when you like file for the crypto coin issuance, it has to be with a stated purpose. Like there has to be kind of like a mission statement, right. Of like what the coin's purpose is, what it is tied to and what the theoretical underlying value is. It could literally be. This is about a picture of a dog I love. Right, Right. But she had a mission statement that was like, this is about like supporting building this community of people and blah, blah, blah, blah, blah. And it gave the appearance at least of a pump and dump scheme to people who were like, no, no, no, she's artificially inflating the value of this thing, pulling all the money out, even though she had signed things saying that she wasn't going to pull money out for a specified period of time. And that's why people started lawsuits and tried to get the SEC involved. So like to be clear, like that was a very specific example of why people were like, oh, she might be in very big trouble. You can start like, it's like Steinfeld, but you can start a show about nothing.
- [21:55]
A
I don't Know if that's.
- [21:57]
B
You just can't.
- [21:57]
A
Yeah, I don't know if she actually. Yeah, I don't know if that's really.
- [22:01]
B
Whether she did or. But there are certainly.
- [22:03]
A
I don't think that she. I'm sure there is. But again, people can sue people about anything. I mean, the fact that someone's suing her because they probably lost money on it is like. To be. Again, to be like. I liked Matt Levine's take on this, which was basically. I mean, she basically started a crypto coin and it went up and it went down. Like, that's what you kind of expect.
- [22:21]
B
What do you expect?
- [22:22]
A
Yeah, what do you expect? And so I'm not sure that there was actually. She pulled money out when she. I don't know if there was.
- [22:29]
B
Either way. I simply don't know.
- [22:30]
A
Yeah, I don't think that she did. But again, I Happy to be proved wrong. The point was it felt scammy and it felt like it should be illegal. And that was the whole thing. Like, the whole thing felt gross and icky and it feels extra gross and icky on a massive scale that. Now this is someone who is a sitting President of the United States. And like. I don't know. I. This has been the theme of every. Including people who are on the more conservative side of her. Like, this seems really bad. Like, the grift is like, at the highest level here.
- [22:59]
B
Yeah. To be clear, I'm not expressing a political view here.
- [23:02]
A
No, this isn't political. This is like.
- [23:04]
B
Yeah. Like, just from a finance standpoint, I don't know why you would invest in any one of these meme coins. And this is a meme coin.
- [23:13]
A
Right.
- [23:13]
B
This is not.
- [23:14]
A
It's a shit coin. What. It is. Yeah, Shit coin.
- [23:17]
B
So another thing we had talked about was the fact that it is not illegal for. For a politician or the President of the United States.
- [23:23]
A
Only the president. Yeah.
- [23:24]
B
Well, it's. Sorry. To be clear, it is not illegal for politicians to invest in varying degrees. So we've talked about. There are actually a number of investment firms that literally offer, like the Pelosi trade, where you can track.
- [23:36]
A
Yeah, but this is an investment. This is very different. I understand. But yeah.
- [23:40]
B
I think that there are moral problems with the way in which politicians profit from the political offices that are legal. I find great problem with the idea that sitting lawmakers.
- [23:55]
A
Yes.
- [23:56]
B
Who have a hand in deciding what laws are enacted that may favor certain development of certain Drugs, certain companies, etc. Etc. Can then go trade in those stocks in their personal portfolio. I have always found flaw with that, regardless of whom the politician may be. Okay, yes. And so the fact that that is legal, I find problem with the fact that the president can have businesses that they are directly profiting from while they are in office, I similarly find flaw.
- [24:20]
A
So just sort of two different sides to this. The buying in of people, again, doing business and buying into stuff, whether it's true social, whether it is Trump Hotel, whether it is now this meme coin versus him being able to invest in, say, like bike Dance. And so I just wanted to make that distinction between, like, investments versus being an owner of something and having other people be able to buy in and benefit your business. And it's this. It's that ladder that I was saying, the people that work for the administration that they cannot have. Because I'm pretty sure it was one of those things where it was like this random loophole that people just thought, thought, oh, you know, if someone gets into office, they will do the right thing and they will divest from whatever ownership and things that they have going on. And then like, we basically now hit a place where it's like, no, no, that's not the way that that works. I feel like at some point we were talking about how with the Hawk to a thing like this feels like this should be illegal. And I have seen, and I'm actually curious, we're going down to the Iconnections conference in a few days and I'm actually excited. We had Steve Kurtz, who's the. One of the co founders of Galaxy, which is again, a big crypto firm, on the podcast. And I'm actually excited to ask just like, what is your take on this? Because I think that it does delegitimize a lot of, again, the legitimacy that had started to come from things like, you know, bitcoin becoming more mainstream. And again, there was obviously this whole. The impact of FTX was very negative. The legitimacy, like I said, had started to come back as this became more and more mainstream. And I think that this feels just so grifty. Like, there was literally a pastor at the inauguration who at the inauguration started talking up his coin and then put out his own freaking coin. A pastor. I had a very, like, I think similar to you. I just don't like it when people don't play by the rules and when shit doesn't feel like it's fair and I don't really care what side it's on. I. I just don't like it when people. It seems like someone's being taken Advantage of it seems like someone is doing something that is just so blatantly grifty. And again, that was my reaction when we were listening, talking about Haktua. I was like, it's not illegal. It feels like it should be. The fact you can literally just do this thing, watch the thing come up, pull the money out, and then all these other people, again, like, they're the idiot. Are you the idiot? Like, yes, you're the idiot. But also like, it feels like you can't just do this with like a fricking stock. You know, there needs to be cash flows, needs to be all this stuff and you have to have all this disclosure to people and it's like, but again, a shit coin, anyone can do it. You know, consequences to the investor be damned. I just don't understand, like, why there's different rules for different people and different types of assets.
- [26:51]
B
Because this is all happening while the rules are being written, right? Literally today there are new bills being proposed surrounding how the crypto industry is going to be regulated. So these regulations don't exist. But the whole reason that we're seeing the proliferation of the meme coins is the administration has said they are very pro crypto. I am not anti crypto. And maybe there is something that I just don't understand, and I'm fully willing to admit that because I just don't understand exactly how something like a trump coin or a hawk coin or a fart coin really deeply intrinsically works. I can get with Bitcoin, I can get with Ethereum and Solana. I think I understand enough to at least be conversant in those. I just feel like I must be missing something. Just like my data is with these things that, like, how can this be? How can there be this volume of interest in these things? And to your point, how can that be legal when all these other institutions, right, God forbid you say that trading is gambling and it's like, oh, my God, right, We have to regulate the investment banks. Okay, well, what are the guardrails around these meme coins? And how are we protecting, I think, some of the more vulnerable people who, you know, we talked about kind of gambling addictions and things like that, who maybe get attracted to these things, who aren't seeing them as like, I'll diversify my portfolio, right? If I'm invested in, you know, one of the crypto ETFs, it is part of a diversified portfolio. My diversified portfolio isn't a little bit of Pepe, a little bit of Doge, a little bit of Whatever. Right. Like, that's not, to me, a diversified portfolio. So I just, I don't fully understand it. And again, I, I'm fine with these politicians getting rich in office, but I want them to get rich because they served the interest of the American people, not because they.
- [28:50]
A
Well, it just goes to incentives. And I think that it also.
- [28:53]
B
From bad actors.
- [28:55]
A
Yeah. And I also think that, like, you don't want the appearance that someone can be bribed because they can be paid off. And it's like there is. This is the easiest way. It's like we, we had. You know, it's so funny, there was this article a couple months back about someone who paid $6 million for banana tape to a wall, and then he ate the banana. And it's like everyone was basically like, well, that's tax evasion. Which probably true, but if it's art, right. You can. Whatever. Don't understand why people value it. Whatever. It's art. It's the same idea, but, like, it's not the same. But. But it's also not like potentially foreign actors buying $6 million bananas from the president. What's going on with the tariffs?
- [29:36]
B
It's interesting, as the rest of Trump's policies start to evolve and we're learning more about them, they are starting to have an impact on the real markets versus the meme coin markets. So a lot of his tough talk about tariffs have started to, I think, lose some steam. And so what we're seeing is the initial strength in the dollar that we saw kind of in the early days of Trump leading up into his term in office. It feels like that trade maybe has. Has peaked a little bit. And he's coming off some of that tough talk. Although now apparently the talk has shifted to the Gulf of America, but which.
- [30:11]
A
By the way, my parents literally live on Gulf of Mexico Drive. So I'm so curious if they're going to have to get a new license, because I feel like of all the states, Florida probably will actually implement the, the name change. So.
- [30:23]
B
Yeah, but. So it'll be interesting to see how all these things shake out. And then one other article I did want to briefly touch on. We get asked a lot about compression within the financial services industry as things become more electronic and like, which roles are going to continue to be the best and optimized for, like, being less electronic, being stickier, having more bid offer, having more piano opportunity. You know, the more commodified the product, the less bid offer can generally be charged. And so we kind of always look to those Commodified products as like the, you know, canary in the coal mine for which roles will eventually diminish in terms of career earnings, potential, sexiness, all that fun thing. So one thing that's interesting that Bloomberg did point out is that last year we hit a record in terms of portfolio trades in credit trading. So what portfolio trades are. Our guest Carissa Jordan spoke about these. One of the Wall street skinny besties, our credit trading one on one episode, she talked about portfolio trades. So basically the way that corporate bonds can and have historically traded is, you know, you would call up a bank and say, hey, I've got a bunch of whatever it may be, Amazon bonds lying around. Where would you bid them? Or again, I want some, where would you offer them? But because of the explosion in ETFs and because of the massive bid for credit recently, with more people buying credit exposure vis a vis ETFs, the more and more portfolio managers and investors need to trade baskets of bonds as efficiently as possible. So instead of going and say where would you bid or offer this one individual bond? They're saying, here's 20 bonds, here's 100 bonds, here they all are in these little odd lot sizes, whatever it is, where would you be the whole package, right? And the more you do that, first of all, you're submitting electronically, so you're getting bids from a whole number of dealers across the street. And you're going to compress bid offer, right, because it's this slightly diversified package of bonds. And so you're going to get one price on the whole thing versus being able to take your vague on each individual little thing. So Bloomberg said, I believe I may be misquoting, but I think that the overall volume of portfolio trades done on trade what was something like 9% of the total corporate bond market last year, which is a. And it's only getting, it's only picking up steam. I think was 11% in December or this month alone or something like that. So it's definitely picking up steam. And that's just something to keep your eye on as you're thinking about. We always get asked, what desk do I choose? And I've always thought as someone coming from a predominantly rates background, that like credit is the sexier thing because it's, you know, more complex and the more complexity you add to an instrument, the more bit offer and the more specialization and whatever. And we've talked about how sexy private credit is and credit desks can be a great funnel into those private credit roles. That being said, just Something to note that with the explosion in these portfolio trading things, that may be something to think about as you consider a credit trading desk. Not necessarily thinking that it's a less favorable place to start, but that it just may shift your skillset a little from being more of a traditional, what we call voice, even if it is all over Bloomberg chats and things like that sales and trading role to one that is becoming a little bit more electronic. And again, when I was working in rates, everything in rates could be done effectively electronically, but it wasn't all mandated to be done electronically via swap execution platforms and things like that that came along later. So, you know, that all took 20 years to materialize. Credit, I think, is more at the early stages of that electronification. And again, you can still have a great career in rates, sales, and trading. Like, there's nothing, nothing against any of those careers. It's just something to be cognizant of that the more something becomes electronic, the more it becomes commoditized, it shifts.
- [33:53]
A
Mm. Yeah. And I mean, by the way, so if the voice electronic stuff also is confusing, I can't recommend the industry podcast enough because watching the show and then listening to the companion podcast, because I feel like between the two, it gives you just a really, really good understanding of, like, how voice is done, why it's done.
- [34:17]
B
Right?
- [34:17]
A
Because again, there's like, these salespeople, they have relationships with clients. The clients just want to call up. They want to be like, hey, just get this done for me. Like, they don't want to be going and doing electronically. They want to call up. I mean, I get that. I want to be like, hey, I just want someone to, like, execute this shit. I don't want to deal with it. So anyway, I really, really recommend that. We literally also had someone who's commented on our. On our YouTube. They go, I had no idea what Jen did until I actually started listening to you guys talk with the show. And I was like, neither did I. So I. That. Anyway, so I think that that's actually really helpful way to understand all that.
- [34:47]
B
Yeah, I know. I love that. Well, thank you guys so much. Sorry that we didn't have our regularly scheduled interview for you, but it's always great catching up, Kristen, and I guess I will see you in Miami.
- [34:58]
A
Awesome. All right, bye, guys.