Odd Lots

This year's stock market boom has coincided with a boom in new listings. There have been plenty of IPOs, numerous SPACs, and an uptick in companies doing direct listings on the exchange. That third category has gotten relatively less attention, but it potentially represents a powerful offering from the NYSE, which unlike many other financial companies, has performed quite well. On this episode, we speak with John Tuttle, Vice Chairman and Chief Commercial Officer at NYSE about how direct listings work, and why the NYSE sees them becoming a much bigger vehicle for going public in the future.

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Measuring a company's book value is a classic practice among investors seeking to understand how much a firm's actual assets are worth. But what happens when a firm's assets are not things like buildings, factories, and land, but intangible assets, such as intellectual property and brand value? How does that change the task of analyzing a company's intrinsic worth? On this episode, we speak with Michael Mauboussin, Head of Consilient Research at Counterpoint Global (part of Morgan Stanley) about valuing these assets, and how investors can use this information to get a better read on their investments.

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The IPO of Ant Financial will go down as one of the most extraordinary deals of all time. And in general, Chinese internet companies have been huge winners in the post-crisis period. But what does it take to really analyze the quality of their businesses? On this episode, we speak with Stephen Clapham, a forensic accountant, and the founder of Behind The Balance Sheet, who explains why understanding what's really going on with these companies is so tricky.

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The COVID-19 crisis has pushed central banks around the world into uncharted territory. Typically when we talk about this, it's from the perspective of the Fed or the ECB. But this has also been an extraordinary period for emerging market central banks. On this episode, we speak with Ruth Krivoy who ran the Venezuelan central bank in the early 1990s. She discusses the lessons she learned during that period and how they apply now.

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For months now, traders have been positioning for a major volatility spike around the November election. But what are markets really expecting, and how are investors hedging? On this episode, we speak with Josh Younger, a rate derivatives strategist at JPMorgan to discuss how he goes about finding signal in the market's noise, how traders are positioning, and what could be a shock to the market on election day.

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Central banks around the world are increasingly launching pilot projects to explore the possibility of issuing digital currencies. But how would they work and what would they accomplish? On this episode, we speak with Benoît Cœuré, the head of the BIS Innovation Hub and a former member of the ECB Executive Board. We discuss CBDCs as well as the future of monetary policy more broadly.

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With just two weeks until the election, talks over a stimulus deal remain ongoing, with negotiations having picked up between House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin. Many of the disagreements haven't been about the price tag per se, but around language on such things as a national testing strategy and workplace liability. One of the most outspoken voices on the Democrat side, urging a deal, has been California Congressman Ro Khanna whose district encompasses much of Silicon Valley. He explains why, from his perspective, it's so important to get a deal done now. We also discuss the fiscal policy priorities of a theoretical Biden administration.

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It's been an extraordinary year for traders of volatility. We had the crisis, we had this incredible surge in retail call options buying, and we have the election coming up. On this episode, we speak with Kris Sidial, a co-founder and vice president at The Ambrus Group, to discuss volatility arbitrage trading in this extraordinary environment.

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For over a century, tobacco stocks have been among the greatest investments in history, consistently outperforming other sectors decade after decade. But what is it about tobacco companies specifically that has led to this incredible performance? On this episode, we speak with financial advisor Lawrence Hamtil along with Gene Hoots, a financial advisor and the author of “Going Down Tobacco Road”, to discuss the extraordinary performance of this sector.

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In the wake of the Great Financial Crisis, you heard a lot of talk about the US becoming like Greece unless the budget deficit were brought under control. However, these warnings proved to be unfounded. That being said, there are risks of a different variety. On the latest Odd Lots, we speak with the economist Michael Hudson on the risk of too much private sector debt, which could lead to permanently degraded consumption and investment.

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Interest in quantitative investing strategies continues to grow; however, as the space gets more competitive, making money and winning gets harder and harder. Computation costs alone can be prohibitive. On the latest episode, we speak with Columbia Business School professor Ciamac Moallemi about how the world's best quant funds thrive.

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One of the guiding lights of Fed policy over the years has been the so-called Neutral Rate of Interest or R*. It's at this rate, theoretically, where the economy comes into balance, with full employment and stable prices. Yet, not only has discovering that level become challenging, but the premise itself has been called into question. On this episode, we speak with Peter Williams, an analyst and economist at the IMF, on what it takes to find the right level, and how the concept itself can be salvaged.

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In a carry trade, an investor borrows money cheaply to buy an asset that yields more. As long as nothing changes overall, the investors get to pocket the spread. In our latest episode, our guests argue that more and more aspects of the economy resemble this trade, and that the culprit is the policymaker suppression of volatility. We speak with Tim Lee, Jamie Lee, and Kevin Coldiron, the authors of the new book “The Rise Of Carry: The Dangerous Consequences of Volatility Suppression and the New Financial Order of Decaying Growth and Recurring Crisis”.

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These days it seems like all financial markets are the same big trade. A gold chart looks like a Tesla chart, which looks like an Ethereum chart, which looks like a chart of a basket of cloud computing stocks. So why is this? And what could cause that to change? On this episode, we speak with Jared Woodard, the head of the Research Investment Committee at Bank of America, who recently published a report on exactly this. As Woodard explains it, the question starts with low growth and inequality, and the premium that investors will pay for certain types of securities in such an environment. He walked us through how that might change, and what investors can do in the meantime to discover under-appreciated values in the market.

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Back in 2017, during the Bitcoin boom, there were a number of different attempts to use blockchain technology to improve a host of businesses and industries. Many of those were cynical attempts to cash in on the bubble, but some did have loftier ambitions. On this episode of Odd Lots, we speak with Maria Bustillos, who was the co-founder of a project called Civil, which aimed to fund a series of newsrooms, backed by their own Ethereum-based token. Maria talked about what the vision was, why it didn't work, and the lessons learned for journalism business models and new endeavors.

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Crypto is hot this year again. In 2020, we've not only seen a substantial rally across a lot of different coins, there's been an emergency of new experiments, categories, and protocols. Is it more sustainable this time around, or is it going to fizzle like it did last time? On this episode, we speak with Catherine Coley, the CEO of Binance US about trends in this market, why she left the traditional finance world to go crypto, and where all of this new activity is actually going. 

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The use of so-called "alternative data" has been gathering attention for some time. Investors have been looking at things like credit cards or satellite photos of Walmart parking lots for insights into businesses before earnings or official government numbers come out. But during this crisis, alternative data has really come into its own. The speed of the crash and recovery happened so fast, it was clear that traditional numbers weren’t timely enough to get a read on what was going on. On this week's episode, we speak with Ben Breitholtz of Arbor Data Science, who explains how he's been able to monitor thousands of different categories of Google Search queries to know instantly when the recovery started to happen and what sectors of the economy were leading the way. 

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One of the most intriguing subplots to the 2020 stock market boom has been the speculative fervor with which investors have dived into this market. And it's not just that participants have bought a lot of stock, but that they've been using aggressive options strategies to do so. What's more, it's a range of players doing it, from retail traders on Robinhood (and other platforms) to large institutions like SoftBank. On this episode, we speak with Benn Eifert of QVR Advisors, who breaks it all down.

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SPACs have been around a long time. The basic premise is that a group of people raise a bunch of money from public market investors, with the premise of then going out to buy a specific, individual company. They're seen as an alternative to IPOs. While historically they've had a reputation for some questionable deals, this year they've been booming. All kinds of big names like Bill Ackman and Paul Ryan (yes, that one) are getting in on the action. On this episode, we speak with Kelly Driscoll, one of the founders of the SPAC Fusion Acquisition Corp, who explains why these entities are so hot right now.

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It's fun to talk about what money is, but often it's hard to connect the dots and make it actually relevant to the discussion of the economy and markets. But, in this episode, we do just that. Our guest is Jacob Goldstein, a co-host of Planet Money and the author of the new book, “Money: The True Story Of A Made-Up Thing”. He explains the story of money market mutual funds, how they constituted a new form of money, and how they contributed to the Great Financial Crisis. 

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Paul McCulley is a former Managing Director at PIMCO and a legend of the industry, having helped coin phrases such as "shadow banking" and the "Minsky moment." On this episode, we discuss the history of economic policy ideas, starting with the monetary and supply side revolutions roughly forty years ago, and how they've dominated thinking until today. But the break is coming. He says that we are "unambiguously" on the verge of a profound change to a more democratically managed economy (one more driven by fiscal policy), a change that will have significant changes for the real economy as well as markets and portfolio management.

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The Fed is facing historic challenges for two reasons. The first is the coronavirus and the task of facilitating the economic recovery. The second challenge is one that precedes the crisis, and it has to do with how the Fed operates generally as well as the limits of effective monetary policy. How can the Fed better achieve its goals? Can monetary policy spread the benefits of growth more broadly? How can it avoid snuffing out growth prematurely? On this week’s episode, we’re joined by Minneapolis Fed President Neel Kashkari, who is thinking about all of these things and more.

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There are some sectors of the real estate market, such as suburban residential housing, that are doing just fine throughout this crisis. However, other areas are facing true existential risk. The value of commercial real estate in big cities is extremely uncertain due to the combination of the virus itself, potential migration out of cities, and the fact that so many people can work from home. On this episode, we speak with Mosaic Real Estate Partners Managing Partner Ethan Penner, who has been described as the father of Commercial Mortgage-Backed Securities, on real estate market structure and what it means for the billions of dollars worth of assets that are on the line.

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When COVID hit, people had visions of a plunge in home prices and a massive wave of evictions. So far, that largely hasn’t played out. On this episode, we speak with Ivan Kaufman, the CEO of Arbor Realty Trust, a $1.4 billion player in the real estate finance market, about what’s going on, and how the industry has weathered the storm.

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In the United States, Black Americans have experienced persistently higher levels of unemployment than their White counterparts. While the Fed has focused on aggregate unemployment levels, racial disparities has historically not been a major focus. On this episode, our guest says it should be. Massachusetts Representative Ayanna Pressley argues that monetary policy can and should be a tool of ending racial inequality. She discusses the history of this idea, and how it can work in practice. Pressley also talked to us about progressive economic policies for the future.

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The pandemic has been brutal for restaurants and other indoor entertainment venues. So imagine running a space that's a restaurant, a bowling alley, an arcade, and bar all in one. Our guest on this episode does just that. Adam Ozimek is the co-founder of Decades in Lancaster, Pennsylvania. He's also the chief economist at online freelance marketplace UpWork. We talked about the crisis from the micro-perspective (running the space) and the macro-perspective (what he sees in the broader economy right now). He also explained what we need from a policy perspective to save the restaurant industry right now.

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For years, people have identified the lack of fiscal transfers and fiscal burden sharing as one of the glaring architectural flaws of the European economy (particularly within the eurozone). One positive that may result from this crisis is the potential for that to change. Last month, EU governments made an agreement to establish a recovery fund that would see wealthy, thriving countries (like Germany) directly aid in the economic recovery of countries that are struggling (such as Italy). It’s something people hoped to see during the eurozone crisis of nearly a decade ago, but which never quite panned out. On this episode, we speak with former ECB Vice-President Vítor Constâncio about the historic step, and the future for central banking at a time when fiscal firepower is becoming even more important.

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In light of the massive disruption to the economy, there’s a widespread view that things have been permanently altered, that fiscal policy must take a more active role in economic stabilization, and that the job of central banks will inevitably change. While this is a trendy thing to say now, the guest on this episode has been anticipating it for a while. Viktor Shvets is a Managing Director at the investment bank Macquarie Group Limited and the author of the new book, The Great Rupture: Three Empires, Four Turning Points, and the Future of Humanity. He explains how the old model of economic growth, which he argues widened inequality by being dependent on the growth in asset values, must give way, and that an attempt to return to to the pre-crisis model will be a disaster.

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For years, macro hedge fund managers have been stalking the Hong Kong Dollar. Since 1983, the currency has been pegged at around 7.75 per US dollar, and it basically has never budged from that. But that hasn’t stopped investors from taking big bets, with potentially major payoffs, that the Hong Kong Monetary Authority would sever the peg in some way. So why do traders keep making this bet, and is now the moment when it finally pays off? On this episode, we speak with Christopher Wiegand, the Chief Investment Officer and Co-Founder of Royal Bridge Capital, about the history of the Hong Kong Dollar, and the factors that have made betting against it such a loser over the years.

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With so many people working at home, bored, and with no sports to bet on, there’s been an incredible explosion of retail stock market trading. One service, Robinhood, in particular has gotten a lot of attention due to its free trading, and videogame-like appeal to young users. But how are they really making money on those free trades, and how does the economics of the business work these days? On this episode, we speak with Larry Tabb, the Head of Market Structure Research at Bloomberg Intelligence, who explains how it all works.

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The killers of Berta Caceres had every reason to believe they’d get away with murder. More than 100 other environmental activists in Honduras had been killed in the previous five years, yet almost no one had been punished for the crimes. Bloomberg’s Blood River follows a four-year quest to find her killers – a twisting trail that leads into the country’s circles of power.

Blood River is out now.

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Switching careers is always difficult. But former New Yorker staff writer Maria Konnikova did it in dramatic fashion. Konnikova decided that the best way to learn about the role of skill and luck in life is through poker, and so she decided to become a great poker player. And she made it happen, winning just over $300,000 in tournament play in a couple of years. On this episode, we speak with her about how she did it, and her new book, "The Biggest Bluff: How I Learned To Pay Attention, Master Myself, and Win”.

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With the virus crushing economic activity, local governments have had to cut spending and rely on Federal support in order to maintain basic services. But one town in Washington is also trying something else. Tenino, Washington has printed its own wooden currency to stimulate activity, and help out its residents and businesses that have been hit by the crisis. On this episode, we speak with Mayor Wayne Fournier about how he got the idea, how it’s going, and what he plans to do next.

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In response to the economic crisis, governments around the world have engaged in stimulative policies that might be characterized as “Keynesian” in nature. But what did Keynes really believe, and how did he form his own ideas? On this episode we speak with Zach Carter, an editor at Huffington Post, and the author of the new book The Price of Peace: Money, Democracy and the Life of John Maynard Keynes. We discussed Keynes the individual as well as his ideas and their importance today.

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Officially, the US unemployment rate stands at 11%. This is higher than the worst levels of the financial crisis. And there are reasons to think that the actual state of unemployment is even worse. There’s a wide variety of views on how to address this, but what about the government simply guaranteeing everyone a right to a job? On this episode of the Odd Lots podcast, we speak to Pavlina R. Tcherneva, an economist at Bard College, and the author of The Case for a Job Guarantee about what the government can do right now to end the crisis.

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The world has gotten angrier in recent years, and the coronavirus crisis seems likely to have accelerated the trend. So what does this say about the economy, and what does it mean for policy going forward? On this episode, we speak with Eric Lonergan, a macro hedge fund manager, and the co-author of the new book “Angrynomics" about his study of the emotion of anger -- why it exists, what purpose it serves, and what it can tell us about the future of economic policy. 

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Central banks and fiscal authorities around the world have taken extraordinary measures to stem the economic fallout from the coronavirus crisis. But what’s proven most effective, and what have central banks learned over the last several months? On this episode, we speak with Hyun Song Shin, economic adviser and head of research at the Bank for International Settlements, about the new policymaker toolbox that has emerged and what more needs to be done.

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For years and years, the Chinese economy has been characterized as a bubble, with too much debt, and a history of badly thought out, state-directed investment. Yet, for all of the dire warnings, the economy has continued to grow, and there hasn’t been a reckoning. So why is this? Is it only a matter of time before things all fall apart? Such questions are even more urgent in the wake of the COVID crisis, and questions the stability of the Chinese growth model during a time of weakened demand for Chinese-made goods. On this week’s episode, we speak with Tom Orlik, the Chief Economist at Bloomberg, and the author of the new book "China: The Bubble That Never Pops." He explains China’s resilience, and what could ultimately come back to haunt the Chinese economy.

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Adam Neumann had a vision: to make his startup WeWork a wildly successful company that would change the world. He convinced thousands of other people -- customers, employees, investors -- that he could make that dream a reality. And for a while, he did. He was one of the most successful startup founders in the world. But then, in the span of just a few months, everything changed.

Foundering is a new serialized podcast from the journalists at Bloomberg Technology. This season, we’ll tell you the story of WeWork, a company that captured the startup boom of the 2010s and also may be remembered as a spectacular bust that marked the end of an era.

Foundering premieres June 25, 2020. Subscribe on Apple Podcasts, Spotify, or wherever you listen.

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Nobody knows what the post-COVID future looks like. But there are some lessons to be learned from previous pandemics. On today’s episode we speak with Jamie Catherwood of O’Shaughnessy Asset Management, aka the “Finance History Guy.” Jamie talks to us about what he’s learned from studying both the Spanish Flu and the Black Death about what this crisis means for markets and the economy.

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Chamath Palihapitiya is the CEO of Social Capital, the Chairman of Virgin Galactic and a partial owner of the Golden State Warriors basketball team. He’s also been an outspoken critic of the way the crisis and economic recovery have been handled. In April, he famously railed against the airline bailouts in a CNBC clip that went viral. On today’s podcast, he talks to us about how he would have handled the bailout differently, and why he sees a reckoning coming for powerful tech companies in the near future.

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In the summer of 2004, Google went public and, as everyone knows, it’s done phenomenally well. What’s less known is that a few weeks later, Domino’s Pizza also went public. What’s crazy is that the stock has performed almost identically since then. On this episode, we speak with Jonathan Maze, the Editor-in-Chief of Restaurant Business Magazine about how they delivered this incredible performance.

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One of the characteristics of the pre-crisis (and perhaps also the post-crisis) economy is the presence of very low interest rates, and financial asset prices that are expensive by historical standards. Of course, a lot of people are inclined to blame the Fed for this. But the real issue precedes the Fed, and in fact the Fed (and other central banks) are only responding to political decisions that depress consumption, investment and inflation. On this episode, we speak with Jon Turek, the author of the Cheap Convexity Blog, about how policies all around the world that suppress consumption and encourage exports are the real policy choices that lead to low rates and expensive financial assets.

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As many active fund managers have discovered in recent years, it’s extremely hard to find a sustainable edge in investing. But for people who put in hard work to discover opportunities off the beaten track, it may still be possible to find undiscovered value. On this episode, we speak with Burton Flynn and Ivan Nechunaev of Terra Nova Capital Advisors about their highly unusual approach to doing research. The two of them, along with their families, traveled the globe, spending a month at a time in different countries to find places to put their money. They explained to us why this approach was important, what they learned, which countries excite them the most, and how these markets are dealing with the COVID crisis. 

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Welcome to Part V of the Odd Lots LIBOR series, in which Tracy Alloway and Joe Weisenthal take a look at life after LIBOR, the interest rate tied to more than $350 trillion worth of financial assets.

For our final episode in our series on LIBOR, we look at what this particular crisis has meant for LIBOR and the transition process. We speak with Josh Younger, a managing director at JPMorgan, who looks at what LIBOR itself did during the worst of the market stress. He also identified specific ways that the market volatility may impede some of the target dates for moving off the benchmark index.

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Welcome to Part IV of the Odd Lots LIBOR series, in which Tracy Alloway and Joe Weisenthal take a look at life after LIBOR, the interest rate tied to more than $350 trillion worth of financial assets.

It's one thing to talk about transitioning away from LIBOR, but it's another thing to actually do it. On the fourth episode of the series, we speak with Tom Wipf, Vice Chairman of Institutional Securities at Morgan Stanley, and the chair of the committee charged with sunsetting the rate. He takes us inside the effort to replace an interest rate that is entrenched in millions of financial contracts and tells us how it’s going.

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Welcome to Part III of the Odd Lots LIBOR series, in which Tracy Alloway and Joe Weisenthal take a look at life after LIBOR, the interest rate tied to more than $350 trillion worth of financial assets.

SOFR is the Federal Reserve’s preferred replacement for LIBOR, but it’s not the only alternative reference rate around. On the third episode of the series, we speak with Richard Sandor, a serial innovator in financial markets, and the CEO at American Financial Exchange. He explains why he thinks his own proposed rate, called AMERIBOR, could be a suitable benchmark and replacement for Libor.

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Welcome to Part II of the Odd Lots LIBOR series, in which Tracy Alloway and Joe Weisenthal take a look at life after LIBOR, the interest rate tied to more than $350 trillion worth of financial assets.

Troubles with LIBOR have kickstarted a massive project to transition to a new benchmark interest rate for financial markets. On the second episode of our series, we speak with Joe Abate, money market strategist at Barclays, about the proposed replacement known as the Secured Overnight Financing Rate, or SOFR. How is it different to LIBOR and what are the downsides of having an interest rate tied to actual marketplace transactions?

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Welcome to the Odd Lots LIBOR series, in which Tracy Alloway and Joe Weisenthal take a look at life after LIBOR, the interest rate tied to more than $350 trillion worth of financial assets.

On the first episode in our LIBOR series, we speak with Richard Robb, a former interest rate trader who was one of the first to warn about potential manipulation of the Libor rate to which trillions of dollars worth of financial assets are tied. Robb, who’s now CEO of the hedge fund Christofferson, Robb & Company and teaches at Columbia University, warned of problems in the interest rate as early as the mid-1990s. He also had a front-row seat to witness the benchmark’s downfall after the 2008 financial crisis. He talks about what went wrong.

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When people talk about the dominance of the U.S. dollar in global commerce, they often refer to it as a unique privilege of the United States that its currency is the world’s safe haven. But it’s not so clear who really benefits from the unique role played by the greenback. For one thing, there are wide swathes of U.S. workers whose industries are hurt by its strength. On this episode, we speak with Yakov Feygin, the Assistant Director of the Future of Capitalism project at the Berggruen Institute about the global winners and losers of the dollar system.

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