What Growing Starlings Need: USCIT, GSEs, SBET

How many vendors does it take to meet all your organization's food needs?

Just one: Easy Cater, the workplace food platform that lets teams order from a huge variety of restaurants, over a hundred thousand nationwide, all through a single vendor.

In addition to all that variety, Easy Cater also gives you full visibility of your organization's food spend with invoicing, centralized reporting, and seamless integration with expense management systems, all on one platform: Easy Cater, your business tool for food to learn more visit easycator.com slash podcast these days ai can help you adopt better time management but it can't stop colleagues booking meetings during lunch but how about being able to easily adopt industrial ai to streamline your business Siemens Accelerator helps you find the right AI providers and easily understand what they offer so you can use modular solutions to quickly scale up and grow your business.

That's AI for real from the global market leader in industrial AI, Siemens.

Learn more on usa.seemens.com/slash AI.

Your next product launch is coming fast.

Don't let billing slow you down.

Legacy systems can't handle usage-based billing.

That means your team is stuck gluing code together, piecing through spreadsheets, and running ad hoc queries just to figure out what to bill.

With Metronome, you can roll out new pricing in minutes instead of months, whether it's usage-based, seat-based, or a hybrid model.

Visit metronome.com to see how companies like OpenAI and Anthropic launch billing as fast as they launch products.

That's metronome.com.

Bloomberg Audio Studios.

Podcasts, radio, news.

How's your body battery?

Oh my God.

I slept terribly last night.

I'm so glad you asked.

This is bad.

I'm at 17.

I woke up and my body battery was at 51.

Usually I wake up in the 80s or the low 90s.

What was wearing on you?

I'm moving tomorrow.

I'm psyched.

I'm going back to New Jersey.

It's where I belong.

I thought you were going to say you were stressed about your bird.

Oh, God.

I'm so glad you brought up the bird.

So Katie has a bird.

I have a bird.

This is like the Katie's exotic pet hour.

Yeah.

I have a lot to say about this bird.

So he's a European starling.

Sure.

By the way, one of my proudest moments, I'm like, you didn't really notice this, but you showed me like two pictures of this bird on your phone.

Yeah.

He's like pretty small in this picture, so it was on your phone.

And I was like, oh, a starling?

Yeah.

You're like, yes, it's a starling.

I was like, yes.

Yeah, you clock that.

That's a baby bird identifier.

Yeah.

Well, they're super common around these parts because they're an invasive species, which explains why now we're in possession of the bird.

My dad actually found him at my parents' house, like as a creepy, crawly little, like, no-feathers alien baby thing.

And I called the Raptor Trust, and they said, you know, because it's a non-native species, we can't help it.

They said, try to return it to the nest.

I tried that.

I couldn't find the nest.

And I said, hypothetically speaking, how hard would it be to raise this bird?

And they said, actually, it's really easy to hand-raise European starlings.

So that's what we've done.

He's sitting here at the podcast right now.

My parents are taking care of him at my direction.

It's kind of fun because it feels like they're my employees.

How many video calls are you doing a day with your parents?

Many.

Actually, I have a new photo to show you.

Now he's about three to four weeks old.

I'm really proud of this photo.

Not that anyone listening can see it.

Hold on.

Put it it in the shout outs.

My dad texted it to me this morning.

You know, we can put it in my email.

Oh, my God.

Yeah, well, we'll put this photo in.

Look at him.

Oh, he's a bird.

Yeah, he's a real bird now.

So we want to release him.

So, no, not yet.

There's three important milestones that this bird needs to pass before we can think about releasing him to the wild.

He needs to be able to perch.

He's getting better.

My mom has been putting him on a stick, and he will perch on the stick.

He needs to be able to fly, obviously.

He's flapping around.

He's not flying yet.

Is your mom like flapping her arms to demonstrate to him?

That's what the conversation we keep having: we're not birds.

So it's hard.

It's really hard.

And the third thing he needs to be able to do is feed himself.

The hand of God has been feeding him mush

for weeks now.

So he needs to, you know.

What's your mush recipe?

Oh, I'm so glad you asked.

So high-protein dry cat food.

You soak it for, you know, a while.

I've been doing a hard-boiled egg and then you mash it up.

Yeah, it's kind of feels bad feeding egg to a bird, but he doesn't know.

And then I have this like egg shell mix.

It's made for chickens to try to give them more calcium so they lay better eggs.

But basically what starling, baby starling, growing starlings need is a lot of protein and a lot of calcium.

So this mix seems to be working pretty well.

I've adjusted it as he's gotten a little bit older.

As the photo shows, he looks like a real bird.

So we'll see if his bones will support himself as he continues to learn how to perch and fly.

Well, I hope you'll bring him into the podcast before you

check him off the balcony.

The thing is, and I promise we'll move on soon, is that if he's not able to be released and we're not going to release him to a certain death if he isn't meeting these milestones, then we just have a bird now.

Yeah.

Which isn't the worst thing.

No, it's clearly the outcome you're rooting for.

All right.

I think we're done.

We'll see you next week.

Yeah, no, I think that that was a good update.

And yeah.

Hello, and welcome to the Money Stuff Podcast, your weekly podcast where we talk about stuff related to money.

I'm Matt Levine, and I write the Money Stuff column for Bloomberg Opinion.

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

Katie, there's been some tariff news.

Yeah, I feel like we have to timestamp this conversation because everything is changing very rapidly.

We're recording this at 4 o'clock on Thursday, May 29th.

Yeah.

And about 24 hours ago or less than that, a court which I learned existed.

So U.S.

Court for International Trade.

Yeah, based in Manhattan.

Sure.

Yeah, so it blocked the

tariffs that Trump put on on Liberation Day.

Yeah, most of his tariffs are the Liberation Day tariffs, and actually the pre-Liberation Day, like Canada and China tariffs, the opioid tariffs, the Central Tariffs.

Those were all blocked by the court.

As of like Thursday afternoon, the appeals court for the Federal Circuit, which is like the appeals court that handles, that you also just learned exists, that handles the appeals from the Court for International Trade, that court put a temporary stay so it could consider whether to put a longer stay.

So everything's very much in flux.

But yeah, the Court for International Trade said these tariffs are illegal.

Yeah, and it seems like we're heading to the Supreme Court.

I mean, certainly.

Yeah.

Yeah.

Probably won't be at the Supreme Court by the time this podcast airs on Friday.

Probably not, but you know, crazier things have happened.

I mean, coming into this morning, futures were up a ton on the SP 500 because it was like, okay, the trade war's over.

It's not.

It seems like the consensus that has emerged is that Trump has plenty of other tools to put on tariffs somehow.

And I don't know what this does to the U.S.

negotiating stance.

It feels like it lessens it by quite a bit.

I guess that's right.

I don't know.

It's just like, it feels like the U.S.

negotiating stance is so mercurial and

so unreliable that I'm not sure how much it affects the negotiating stance.

Because on the one hand, as you said, he has a lot of tools to put on tariffs.

And if you are a trade partner in negotiations with him, the threat has gone from, I will put on whatever tariffs I like pursuant to my unlimited authority to put on tariffs, to I will find some stuff to do and it'll be super annoying and confusing.

It's like, that's not that much better, right?

That's still a pretty bad threat.

And in some ways, I feel like a lot of what I read about people who are in the posture of negotiating with Trump, like you read about this in like the situation with Harvard.

Right.

People worry about making deals because he is not a reliable interlocutor and can always just change the deal and there's not a lot you can do about it.

In some ways, like, you having a little court supervision might be kind of good for the negotiating posture.

I don't know if that's true, but like, it just seems like it's nice that there's like just a soup song of like law here.

Yeah.

And like procedures.

Because, you know, I wrote about this today.

There's a, in some ways, this is a complicated case.

There's all these statutes.

There's all these questions of like what things should be left to the executive's discretion.

But in many ways, it's a very, very simple case, which is that the Constitution of the United States, which is like a real document.

You can read it.

It's a real thing that exists, right?

Like, not everyone involved in the government has read it, but there's a real document that people at least say they care about.

The Constitution just says the Congress has the power to impose tariffs and the President doesn't.

So all this stuff of executive orders imposing tariffs is really,

on a first-order analysis, just not what the Constitution says.

And I think that's kind of the court's starting point here.

It seems like kind of simple stuff, and there's more complicated stuff, but it is in some ways a relief to see that the Constitution still has some controlling power.

Yeah, that does seem like something

that you would root for.

I do.

I'm weird like that.

Yeah.

When it comes to the negotiating stance, the standpoint that I've seen bandied about is basically if you're another country negotiating with the U.S., like this kind of removes the urgency or the incentive to make a deal with the U.S.

because now it's in flux, you know, how much power Trump actually has to enact these tariffs.

Yeah, that's right.

But you wouldn't bet against him having a lot of power to do whatever he wants.

Maybe you would.

I don't know.

Yeah.

Yeah.

I don't know.

The one consensus.

Maybe we'll see when he goes to the Supreme Court tomorrow, but I don't know.

Yeah, at least on this Thursday, the consensus that has seemed to emerge throughout the day, and you've seen this in the slow bleed of the SP 500 from our pre-market euphoria, was this just turns up the volume so much on the trade policy noise because who knows what's going to happen.

And then other noise, right?

I mean, like one overhang to financial markets is how much rule of law is there.

And every time a court says Trump can't do something, you have

wider variance in the outcome of how much rule of law is there.

Because like maybe you'll be like, oh yeah, Constitution does say that.

Never mind.

Or maybe like Peter Navarro said nothing has changed after a court said the tariffs are unconstitutional.

Like, I don't know.

That's like a threatening posture.

Aaron Powell, it was kind of funny that this all happened within hours of Trump being told about the taco trade.

The taco trade.

I'm always talking about the taco trade.

The taco trade being Trump always chickens out.

It was coined by an FT columnist.

Rob Armstrong at the FT, yeah.

Yeah.

Basically, that, okay, Trump comes out with this big

announcement, you know, we're going to slap a gazillion percent tariff on so-and-so.

And then, you know, inevitably it's walked back.

And that's the taco trade.

You bet on this is going to be walked back.

And Trump was told about that in the Oval Office, and he was upset, as you would imagine, and said, No, this is negotiating.

This is how it's done.

Which, you know, maybe there's some truth to that.

But, you know, as an investor, I can see how you could also turn that into a trade, even though it feels like, you know, in the last couple of weeks or so, it's become less profitable because it feels like the shock value is fading.

Right, right, right, right.

So, a couple of things.

One, like Trump always chickens out is the insulting to him phrasing of it.

Yeah.

But the trade is when a drastic tariff announcement comes out, the actual result will be less than that, either because of negotiation or because he's chicken.

Like, you can be agnostic about the cause, or you can just say, like, this isn't as bad as it sounds.

The second thing I want to say is that Lewis Ashworth at FC Alphaville, like, apparently got jealous of his colleague's ability to coin a term that became so famous.

So he wrote a bunch of other potential acronyms, like Mexican food-themed acronyms.

And the one I liked was Taquito, which is Trump Always Quickly Undoes Initial Trade Offensive.

Just like a little thing that's a little bit more specific about the thing that's happening.

The other thing I want to say is that a reader emailed me to be like, would it be a good trade if you were a journalist to short the market and then ask Trump about the taco trade?

Because like the mechanism there is like you ask Trump about the taco trade and he gets really mad and then he says, I'll never chicken out again and tariffs get higher and the market drops.

I think you could have imagined for a second that Trump getting mad about the phrase taco trade could have been bad for stock prices.

But of course, it was quickly followed by the trade court ruling, which is good for stock prices.

So it's a little hard to isolate the impact of getting Trump mad about the taco trade.

Yeah, that's pretty funny.

It could work if he had explicitly said, I'm going to tariff even harder right now.

I think that it would have been reasonable to think that he might have thought that.

But then, you know, events moved on.

Yeah.

That's what happens a lot.

That's kind of the real core of the taco trade, which is events just keep moving on.

Yeah.

Well, it'll be interesting to see what happens to the taco trade as we continue to muddle through

whether or not these tariffs are illegal and what other types of tariffs we're going to get.

There's all these different tariffs that this ruling doesn't cover.

When you think about steel and aluminum, for example.

Well, so the Liberation Day tariffs are

10%

to, you know, 150% tariffs on everything, right?

Baseline.

It's 10% baseline, but then every country had like quote-unquote reciprocal tariffs that were much higher

calculation of the trade deficits.

It's like a whole thing.

And it was like truly universal.

And it was basically...

You talk about like steel tariffs.

There's like you have like a sort of national security justification or whatever, right?

You have some theory behind steel tariffs.

But like this, the Liberation Day tariffs were the U.S.

runs a trade deficit and we want to stop that.

And so we're going to have tariffs that are calculated through some formula designed to zero the trade deficit, essentially, right?

And

the court said, you can't do that.

The law that he used, AIPA, AIPA, International Emergency Economic Powers Act of 1977, the AIPA, allows you to respond to an emergency.

And if you have tariffs that are responsive to an emergency, that's fine.

But like, it can't be the case that all international trade for the last 30 years is an emergency.

Like, this is like too much.

It's like too much power to the executive.

So you can't do that.

But can you find specific goods to tariff and use other laws that say you have like specific economic tariffing powers?

Like maybe, probably.

Often there are more limits in those laws.

You have to like do fact-finding and like put out a report and they're time limited, right?

So it's not as completely broad as the powers that they claimed under AIPA, which is why they did the AIPA stuff.

They're like, we're going to do everything all at once with no you know, review, no fact-finding.

So IPA was the law they thought they could use for that.

If they can't use that, then they have to find

other laws, which will be a little bit more narrow.

But you can still do a lot of tariffing.

Yeah, I mean, there's Section 232, for example.

That's what's being used on steel, aluminum, vehicle, and auto parts.

There's other laws as well, but usually there's some investigation associated with it.

So it takes months versus President Trump is sitting in the Oval Office and he signs something.

Trevor Burrus, Jr.: Because again, like

the Constitution says that Congress can make tariffs.

And so Congress has, in the past, passed laws saying, here are some tariffs that the President can impose, right?

But ultimately, it's the Congress's tariff power.

And the Congress doesn't say in any of those laws, the President can make any tariffs he wants.

It says, you know, he does an investigation, these particular things, for these particular reasons, you can make tariffs, but it's not an open-ended grant of power.

And one thing that the court said yesterday is that if it were an open-ended grant of power and one way to read AIPA is it's an open-ended grant to make whatever tariffs you want I don't think it's a good reading, but it's like the Trump administration reading.

The court said if you read it that way, then it would be unconstitutional for the Congress to give all of its tariff power to the president with no limitations whatsoever.

And I

think that's right.

I have a personal interest in this.

I don't know if I've talked about this on the podcast, but I've talked about that column, but like that idea that Congress can't just give its power to the executive with no constraints is called the non-delegation doctrine.

And

it has

had a controversial career in the Supreme Court, but one of the important cases in the recent Supreme Court about the non-delegation doctrine was argued by my wife,

who's a criminal defense lawyer.

And so I was in the audience for that.

And so, you know, I have like a little rooting interest in the non-delegation doctrine.

I get it.

Even though to oversimplify and dumb it down, it seems like that is what has happened here.

And it doesn't seem like Congress is too upset about it.

So the potted history of the non-delegation doctrine is that it's never had any effect whatsoever.

There is lip service paid to the idea that Congress can't delegate all of its legislative powers to the president, but that lip service is always paid in cases saying, but this delegation is fine, right?

Including my wife's case.

But

there is this notion that interest in it has been revived.

And one day they're going to find a delegation that is too broad.

Maybe it's AIPA.

I don't know.

Yeah.

I don't know.

I don't know.

Again, timestamp.

This is on Thursday.

It'll be fun to see how this shakes out.

I don't know.

I would love to be a fly on the wall in some of these negotiations because I don't know if you're Japan negotiating with the U.S.

right now or India.

Do you just wait and see?

I don't understand why this would really change it that much.

I just think that the thing that you know as the Japan trade negotiator or whatever is that Trump really wants to make deals.

He really wants to have wins.

He really doesn't trust free trade.

He's really willing to push the boundaries of the law as much as possible.

He's not really aware of what those boundaries are.

To think like

I'm going to tell him to stop it because a court struck him down seems crazy.

Like now more than ever you make a deal.

Maybe

look, this court was wrong.

We understand.

Here's our tariff concessions.

Like maybe you get a better deal now.

Like you're rushing to make a deal.

I don't know.

I don't understand the argument, the idea that like now you're like, oh, it's fine.

Like no more tariffs.

Like I'll just walk away from the negotiating table.

Seems crazy.

I don't know.

Maybe you you don't walk away but maybe you say why don't we break for lunch for a little bit why don't we i think now is the opportunity to make a big deal i don't know i don't listen to me i don't i don't know anything but like to me like calling him up and being like i'm in your camp buddy i want to make a deal i know that you have the constitutional power to impose these tariffs let's make a deal to me this is the opportunity you don't break for lunch that's true you cut the deal now yeah no i'm exaggerating because like if the deal involves like him imposing lower ipa tariffs on you you, like those are illegal, maybe.

Maybe.

So I don't know.

It's harder to know what the deal is, but I don't know how it changes the posture that much.

For enterprise organizations, managing all your food needs is a tall order.

But with Easy Cater, you get a single workplace food vendor with the tools and resources to make it easy, giving teams across your organization an easy way to order from a huge variety of restaurants, all on one platform, all All while consolidating your corporate food spend so you can control costs, streamline billing and payment, and simplify reporting.

EasyCater, your business tool for food.

To learn more, visit easycater.com slash podcast.

These days, AI can help you write emails, summarize long meetings, and even create presentations that impress your most demanding customer.

But how about industrial AI that uses data and simulation to boost productivity on the shop floor?

AI tools that help you understand machine language.

AI that helps you grow your business.

With Siemens Accelerator, you can use AI services, software, and consulting from a single trusted digital business platform.

Plus, you can find the right AI partner without having to search through hundreds of providers.

That's AI for Real from the global market leader in industrial AI.

Siemens Accelerator.

Learn more at Siemens.us/slash accelerator.

Your next product launch is coming fast.

Don't let billing slow you down.

Legacy systems can't handle usage-based billing.

That means your team is stuck gluing code together, piecing through spreadsheets, and running ad hoc queries just to figure out what to bill.

With Metronome, you can roll out new pricing in minutes instead of months, whether it's usage-based, seat-based, or a hybrid model.

Visit metronome.com to see how companies like OpenAI and Anthropic launch billing as fast as they launch products.

That's metronome.com.

Most of our topics today are vaguely and in some cases explicitly Donald Trump related.

Fannie and Freddie, for example.

Fanny and Freddie.

Back in the news.

Another bit of unilateral policymaking.

An explicit, implicit guarantee.

Yeah.

Donald Trump, the verb is so hard.

I want to say he tweeted, but in fact, he posted on Truth Social, which you can say he truthed.

Yeah.

He truthed.

I am working on all caps, taking these amazing companies public.

But I want to be clear, the U.S.

government will keep its implicit all caps guarantees, and I will stay strong in my position on overseeing them as president.

So Fannie and Freddie, the government-sponsored enterprises, had a long prehistory of being implicitly guaranteed by the U.S.

government.

So like they explicitly said, So they guarantee mortgages, right?

So they have trillions of dollars of mortgages, and they issued mortgage-backed securities that are guaranteed by them.

And those securities always said, these securities are not guaranteed by the U.S.

government.

And they said that because otherwise you'd be confused because everyone thought they were guaranteed by the U.S.

government.

That's what's called an implicit guarantee.

Right, for sure.

They say it's not guaranteed, but everyone thinks it's guaranteed.

And then in 2008, they went bust, and they turned out to be guaranteed by the U.S.

government, effectively, because the government stepped in and took them over, bailed them out, and made sure that creditors were made whole.

And that was roughly 16 years ago.

And ever since, people have said, this can't continue forever.

They have to return to private hands.

And I've always said, why?

It's fine.

Like, no one.

Yeah, calm down.

Yeah.

But so now, once again, because Trump is in office

and because there's a lot of money to be made, there's talk of returning Fannie and Freddie to private hands.

And the mechanics of that are

really complicated.

And there is opportunity for people

to get.

hundreds of billions of dollars of value.

Yeah.

And so that's of great interest to a lot of investors.

Yeah, there's bags to be made.

There's bags to be made.

Yeah.

Which could bring us to Bill Ackman, but we don't have to talk about that.

We don't have to.

But Bill Ackman is one of the big investors in that trade.

And when Fannie and Freddie were put into conservatorship by the government in the financial crisis,

their stock became like, you know, in the ballpark of worthless, but never stopped trading.

And at some point in like 2012, I think the government changed the deal from the bailout to say from now on, all of the profits of Fannie and Freddie forever will go to the government and shareholders will never get anything ever again,

which you might think would make the stock worthless and like made it almost worthless.

But some people thought, that can't be true.

Like that'll change.

And so they bought the stock and

now they own stock.

And

it is unclear from first principles how you would reprivatize Fannie and Freddie.

But it seems likely that whatever happens, the current shareholders of Fannie and Freddie, who bought the stock at Penny's when it was declared to be worthless for all time,

it seems like that the current shareholders will get a bag.

Yeah.

Haven't they already though?

Well like in market prices, yes.

Yeah.

Yeah.

Like the stock has gone up because people are anticipating that Fannie and Freddie will be returned to private hands and specifically their private hands.

Like specifically the existing shareholders of Fannie and Freddie will not in fact be zeroed, but will end up being shareholders of Fannie Freddie and will get a lot of value.

Yeah.

It would be kind of funny if some of these big vocal investors who are calling for the reprivatization, who have bought the stock when it was pretty much worthless, sold now in this insane run-up that it's seen.

Yeah, why not?

Yeah, this is good news.

This is good chance of return.

Yeah, stocks of both companies are trading at their highest level since 2008.

But you look at the long-term chart, like going back to the 1980s, and it's still nowhere close to where it was.

Yes, because right now they're controlled by the federal government, and their charters say that their shareholders can never get any money ever.

Yeah.

So that's worse than the old business model.

Yeah, for sure.

I don't know.

This timeline, even though Trump is posting on Truth Social about it, it seems like this has picked up in urgency.

Like this process would take years and years.

I want to just be clear.

Like there's two things.

There's like you can return fanny and predate to private hands.

And then there's the specific question of like, how much of it do you give to the existing shareholders?

Yeah.

You can do zero.

You can say, okay, the deal is the deal.

And by the way, the deal is hotly controversial.

People think it's really unfair.

There have been a lot of lawsuits.

I want to respect their feelings that, like, in fact, the 2012 deal to zero the shareholders,

there's a good case that it's pretty unfair, but whatever.

Given that it exists, you could reprivatize them without giving existing shareholders anything.

You could just raise new money to capitalize them.

You can say,

I mean, there's like some corporate complexities to doing that, but like, you know, you could raise a lot of new money and essentially dilute dilute the existing shareholders down to zero.

And you could do that by saying,

you know, the government has, I think when I last read about this in January, in the accounting of Fannie and Freddie, they owe the government $340 billion before the shareholders can get anything, right?

And so you could say, well, okay, we're going to go out and raise $340 billion of new capital to repay the government.

And after we raise that $340 billion,

then like, you know,

the existing shareholders will have, you know, 0.0001% of the companies or whatever.

And so like their shares will be worthless.

Not worthless, but not worth very much.

But the other extreme is you can say,

you know what, that $340 billion that Fannie and Freddie owe the government, that was a mistake.

They don't really owe it that.

So we'll just cancel that debt, right?

And then the existing shareholders are sitting on shares worth hundreds of billions of dollars, or like more than $100 billion.

And those are kind of the two poles, right?

Existing shareholders have nothing or they have like more than $100 billion of equity.

Two scenarios.

Two scenarios.

I don't think it's like a priori necessary to choose the second one.

I think there's reasons to choose the second one.

You might think it's fairer to the shareholders.

You might think the shareholders got a raw deal in 2012.

I think it's a reasonable thing to think.

And you might think that giving the shareholders a good deal is a good way to, you know, you'll need to raise money for Fannie and Freddie.

You'll have better capital markets access if you treat the shareholders nicely.

But it's also the case that like giving $100 billion of value to these existing shareholders is like, it's like a little bit of an optically strange move.

Yeah.

Yeah.

I don't know.

It feels like any scenario is just going to be messy and optically strange.

So what I care about, circling back to I'm moving, is what this could mean for mortgage rates.

Yeah.

Yeah.

Like, so Bill Pulsey, he's the head of the FHFA, which oversees Fannie and Freddie.

He had said back in February that any effort to reprivatize the two must be carefully planned to make sure that the housing market remains safe without pressure on mortgage rates.

So the explicit, implicit guarantee, even though there's a lot of question marks and details to be worked out there, at least that seemed to remove some of the risk that mortgage rates would spike here.

Right.

Like, who knows what a reprivatized Fannie and Freddie looks like.

But like, here are some possibilities.

One is like there's an explicit government guarantee that they pay for.

So there's like a fee that would be incorporated into your mortgage rate.

So it might raise rates.

Because right now, Fannie and Freddie kind of have an implicit, somewhat more than implicit, but less than explicit guarantee because they're in conservatorship and they have a line of credit with the federal government.

And they don't pay for that.

They pay a lot for it, but the accounting is somewhat complicated.

But in a world where the government charged a 50 basis point fee for a mortgage guarantee, then that's 50 basis points on your mortgage, right?

You could have a fully private Fannie and Freddie

where either they are

Fortress balance sheet, triple-A, super safe, and raise a lot of capital, and that raises their costs and thus raises mortgage rates, or they're like, yeah,

double A, yeah, pretty good, and like raise less capital, and then like possibly their mortgage-backed securities trade wider, and that raises your mortgage rates, right?

The implicit guarantee is essentially they're backed by the government, but they don't pay for that backing.

That's probably the cheapest for your mortgage, right?

Let's go with that one then.

Seems to be what they're going with.

That's good.

I know there's other stuff too.

Like, I was reading a paper today, like a privatized Fannie and Freddie, like right now they're arms of the government.

They kind of have always been arms of the government.

You could imagine them being like more kind of free marketsy, right?

Like one thing that Fannie and Freddie do is there's like a thing called a conforming mortgage.

And if you meet the requirements of a conforming mortgage, which are not that low, but not that high, then you kind of get the same rate.

The rate for a conforming mortgage is the rate for a conforming mortgage.

But like you can imagine a fully private Fannie and Freddie having more discrimination among borrowers where there's less cross-subsidization and very credit-worthy borrowers get lower rates than medium credit-worthy borrowers.

So it could have the effect of not raising or lowering mortgage rates, but just increasing the dispersion of mortgage rates.

That would probably be fine for you.

You don't know that.

I have a guess.

Maybe I have a horrible credit score.

You don't know.

I don't know.

I looked up your credit score.

So yeah.

Well,

it seems like we're going to be talking about this for years.

I know.

I know.

I've read about it a lot.

You You know,

it's heated up and cooled down over the years.

And I used to write about it a lot, and then I didn't for a long time because, like, in the Biden administration, everybody talked about this.

And I had to write about it again in January because people started tweeting about it.

And now it's like, it feels like it's kind of coming back.

I feel like the shares are just a good metric of how much this is being tweeted about.

The shares suggest

the market expects some real action.

Yeah, there's a lot of social media activity.

For enterprise organizations, managing all your food needs is a tall order.

But with Easy Cater, you get a single workplace food vendor with the tools and resources to make it easy, giving teams across your organization an easy way to order from a huge variety of restaurants, all on one platform.

All while consolidating your corporate food spend so you can control costs, streamline billing and payment, and simplify reporting.

Easy Cater, your business tool for food.

To learn more, visit easycater.com/slash podcast.

These days, AI can help you write emails, summarize long meetings, and even create presentations that impress your most demanding customer.

But how about industrial AI that uses data and simulation to boost productivity on the shop floor?

AI tools that help you understand machine language.

AI that helps you grow your business.

With Siemens Accelerator, you can use AI services, software, and consulting from a single trusted digital business platform.

Plus, you can find the right AI partner without having to search through hundreds of providers.

That's AI for Real from the global market leader in industrial AI.

Siemens Accelerator.

Learn more at siemens.us slash accelerator.

Your next product launch is coming fast.

Don't let billing slow you down.

Legacy systems can't handle usage-based billing.

That means your team is stuck gluing code together, piecing through spreadsheets, and running ad hoc queries just to figure out what to bill.

With Metronome, you can roll out new pricing in minutes instead of months, whether it's usage-based, seat-based, or a hybrid model.

Visit metronome.com to see how companies like OpenAI and Anthropic launch billing as fast as they launch products.

That's metronome.com.

Bitcoin Treasury companies?

Yeah, when did did that phrase become real?

I guess MicroStrategy.

I think MicroStrategy probably came out years ago, but like it's become

everywhere in the last few months.

Yeah, especially everywhere.

Just in the last few months.

Because MicroStrategy started doing this in 2020.

I think that when MicroStrategy started doing this, first of all, MicroStrategy was kind of a real company.

Yeah.

They are a software company.

Right.

And like, they sort of started slow.

They bought some Bitcoin.

It got kind of meme-y.

And so like early in in the days of MicroStrategy buying Bitcoin, you could say, and I probably did say, that it looks like every time they spent $1 buying Bitcoin, it increased their market cap by $2.

And that's a good trade.

But it wasn't like super, super, super obvious, right?

Like they would say things or levered Bitcoin.

It was like, they had a business.

Who knows how you value the business?

You know, all this stuff.

You could look at that and be like, well,

I can't just copy that.

I can't just like put Bitcoins in a public company and have them be worth twice what they're worth as Bitcoins.

And so I think it was a little bit slow adoption.

People copied them, but like it was, you know, not everyone covered them.

And then in the last few months, like people have realized that you can take any random public company and just stuff it full of Bitcoins and like it'll double the value of the Bitcoins.

And so that just feels like a great trade.

There are a lot of people who own a lot of Bitcoins, right?

And if you own $200 million worth of Bitcoin, you can sell them for $200 million.

But if you stuff them into a public company, they'll be worth a billion dollars.

And that's more.

Yeah.

So everyone's doing it.

Everyone's doing it.

and especially this week it feels like everyone is doing this so you know you kicked off the week by talking about sharplink gaming i guess they did it no they did it this they did it monday yeah or you know time

they did it this week whatever is a flat circle so sharp link is great like sharp link is the purest form of this because they were a sports betting marketing company or something yeah they had a two million dollar market cap as of like mid last week someone pumped them full of 425 million dollars of ethereum right or eth and so now they're trading at like a $2 plus billion dollar pro forma market cap.

I want to be clear, like I wrote about this and I said market cap, but it's not, they don't have a $2.4 billion market cap.

They have a $2.4 billion pro forma market cap.

Right now, they have some shares outstanding, not very many of them, and the shares trade at a high price.

And they have like a, whatever, like Bloomberg will tell you, $80 million market cap, something like that.

But they've also agreed to issue all these shares to these investors who want to pump them full of Ethereum.

And if you count those shares, the market cap is like two and a half billion dollars.

And this is important because, like, you know, we talked about QXO a few times.

It's the same deal where you have a company with like very few shares outstanding

and a huge pot of money coming in.

And like the retail investors are like, oh, look, this company has $400 million of Ethereum and its market cap is $80 million.

I should buy some more stock, right?

That's wrong, right?

Because the 80 million doesn't count the 425 million of Ethereum.

But

the stock is like the publicly traded stub is small enough and like the market cap is confusing enough that people are buying it at a five or ten times premium to the value of the Ethereum in the pot.

And like there's nothing else, right?

It's a $2 million company, right?

But there's Ethereum in a pot and it trades at a large multiple of the value of the Ethereum.

It is somewhat interesting that they went with Ethereum versus Bitcoin.

Oh, I just think that people need to pick a lane and Bitcoin is so saturated that people are doing Solana, they're doing Ethereum, they're doing

Popcoin, they're doing Dogecoin, they're doing everything.

A lot of them are in Bitcoin, but it's not only Bitcoin anymore.

I wrote about two other big ones this week, household name meme companies are, you know, DJT, Trump Media and Technology Group, and GameStop both announced Bitcoin Treasury buys, and their stocks both went down, which is like, that's the end of it.

Okay, the trade's over.

I don't think the trade is literally over because I think those are special cases of companies that were kind of already meme stocks.

But it's definitely the case that any random company for at least several weeks that announced it had bought a lot of Bitcoin, like the stock would go way up and people are like, oh, we should do that.

And then these two big name-ish meme companies announced it, and their stocks went down.

It's like, yep, trade's over.

For GameStop, so they announced in March that they planned to

bought Bitcoin this week and it went down, but like.

In some ways, it's amazing that it took this long for them to come up with the plan that we're going to do this for GameStop.

I feel like, I I don't know, I would have expected it a couple years ago, but here we are.

Okay, first of all, I would expect it from AMC, who does everything.

AMC bought a gold mine because that was funny, right?

Yeah.

Like, AMC should have.

You know, somehow I had forgotten about that.

I filled my head.

Sometimes I remember,

God, they bought a gold mine.

Maybe we should talk about that more.

I would like to get a status report on that.

I know.

Every so often I'm like, oh, yeah, they bought a gold mine and I read about it, but I never

checked on the gold.

I have no idea.

I'm not even sure that they literally bought it.

I think they did some sort of merger with a gold cut.

I don't know.

Anyway, but no, GameStop has always been a little bit less doing every meme, but they do a lot of memes.

They've done some crypto stuff.

But yeah, I think that if you want to do a Bitcoin treasury strategy, you kind of have to be all in on it.

And GameStop, I think, still want to sell video games at the mall.

And I think it was reasonable for a long time to think that if you're just GameStop, you don't really have an advantage in doing that strategy.

MicroStrategy was there to at first.

It's not clear why a copycat would be particularly valuable.

So

you might have tried to do something else before getting into the Bitcoin strategy.

So you wrote that

you compare maybe Michael Saylor will do something cooler with its Bitcoin than the CEO of DJT, but it doesn't seem like there's anything to do with it that's cool other than just buy more of it.

Okay, I hear you.

I don't really.

They're not going to do it.

They're not going to sell it.

I was being intentionally vague about doing cool stuff.

Okay.

One view of these Bitcoin Treasury companies is that they're sort of like a like meta pump for Bitcoin, right?

The idea is they will buy all the Bitcoin and not sell it and that will cause the price of Bitcoin to go up and they'll all be rich.

It's just like a diamond hands like theory of Bitcoin, like abstracted back one level to these treasury companies.

But another theory and a related theory, I guess, is like a lot of them, including MicroStrategy, will talk about like investor education efforts, right?

Right.

We talked about this with like with 21, which like another big

jack muller's yeah, like big Bitcoin treasury company with like tether's bitcoins and you know they're like we're gonna do investor education or like nakamoto holdings like merged with an opioid company like a tiny drug company that one i haven't heard of it's called kindly md it's just like it's just random you know like all these like random like tiny companies like you can pump them full of bitcoins and like they all talk about like we're gonna do marketing media investor education.

It's all like, you know, we're gonna make the price of Bitcoin go up, right?

Yeah.

And so like your theory is not only will they own Bitcoin, but they'll do stuff to make the price of Bitcoin go go up

i don't know why that would make you buy them rather than bitcoin but whatever but like i will say like micro strategy

i have like a really interesting capital market strategy where they're like we're gonna use every part of our cap structure to raise more money to buy bitcoin and you can imagine being like i'll buy the equity because like they will get more attractive funding to buy bitcoin by like selling converts at a high volatility i don't know that's not a crazy position but like most of these companies are so yeah we're gonna buy bitcoin and we're gonna talk about buying bitcoin

like why would you pay a premium for that Yeah.

I don't know.

This is a tangent, but I just want to talk to the average employee at MicroStrategy, which is now just strategy, by the way.

We've been calling it MicroStrategy.

It's still official, whatever.

Nothing matters.

Because they employ thousands of people.

I want to talk to an average employee there who isn't involved with the Bitcoin strategy at all.

It is a little perplexing.

But, you know, like

if they get paid in stock, they're pretty happy.

I don't know.

But I agree, obviously.

But, you know, do they just think of it like I work at a conglomerate?

Like there's part of the business that is just so totally disconnected to what I do.

Right.

It's funny.

I've always said that like the software company really matters because like, I don't know, like some part, I don't know what part, at least some small part of the micro strategy thesis is like they could get in the S P one day.

Yeah.

And then like, you know.

They're in the Nasdaq 100.

Yeah, yeah, right.

Yeah.

Because they're a real company, right?

Yeah.

And like, if you're just a Bitcoin ETF, you can't get into these indexes.

It's like a little bit harder for an active equity manager to buy an ETF share than it is to buy a share of an operating company.

So I think there's something very important about what the software employees do at MicroStrategy.

That's a little bit undermined by

kindly MD and

Sharplink, where

the operating business is so small, so small compared to the pot of Bitcoin or Ethereum.

Just to your point that perhaps we could see MicroStrategy enter enter the S ⁇ P 500.

It is amusing how much crypto exposure there is in the S ⁇ P 500 right now, especially with Coinbase being added.

These are our, I assume that your 401k is in the S ⁇ P 500.

But I don't own any crypto because, in part, because like there's a notion of journalistic outlooks that you're not supposed to own crypto.

You write about it.

And like to me, I'm like, I don't own shares of Tesla.

but I own mostly index funds, which owns Tesla, right?

So yes, you do.

Yeah.

And like, to me, like, the neutral portfolio is not owning nothing.

The neutral portfolio is owning all of the financial assets in the world in proportion to their like, you know, value.

And so if you own zero Bitcoin, you're like structurally biased against Bitcoin because Bitcoin is a trillion dollars of value.

So you should own like a little bit of Bitcoin to like fully reflect the global financial portfolio.

And now I do through that.

Yes, you do.

Yeah.

And, you know, like, why am I so smart?

Right.

Like, why are you so smart?

If 1% of like the global financial portfolio is Bitcoin, like, why shouldn't I own that 1% of my assets in Bitcoin?

I think that's a pretty reasonable take.

And they don't have to like it, but they don't have to like a lot of companies, right?

Like, I'm not right.

Yeah.

So you just want a market cap-weighted total asset portfolio.

You're looking at me like that's a weird thing to want.

That's like the most normal possible thing to want.

Everyone wants that.

Just you can't get it, but you can get closer to it by like having Bitcoin treasury companies in the S ⁇ P.

Maybe I sound skeptical, but I'm not.

I think that's great.

I'm a simple man.

I just want the global financial asset portfolio.

Simple man.

I just want to go home and see my bird.

And that was the Money Stuff Podcast.

I'm Matt Livian.

And I'm Katie Greifeld.

You can find my work by subscribing to the Money Stuff newsletter on Bloomberg.com.

And you can find me on Bloomberg TV every day on Open Interest between 9 to 11 a.m.

Eastern.

We'd love to hear from you.

You can send an email to moneypot at bloomberg.net.

Ask us a question and we might answer it on air.

You can also subscribe to our show wherever you're listening right now and leave us a review.

It helps more people find the show.

The Money Stuff Podcast is produced by Anna Mazarakis and Moses Andam.

Our theme music was composed by Blake Naples.

Brendan Francis Newham is our executive producer.

And Sage Fauman is Bloomberg's head of podcasts.

Thanks for listening to the Money Stuff Podcast.

We'll be back next week with more stuff.

On September 25th, Bloomberg Green returns to New York to bring together leaders from business, finance, and government during Climate Week NYC.

Join us for a half day of timely insights and high-impact networking backed by Bloomberg's global journalism and data expertise.

Together, we'll explore strategies for future-proofing business and communities from the planet's most pressing climate challenges.

Learn more at BloombergLive.com slash green and y

The Mercedes-Benz Dream Days are back with offers on vehicles like the 2025 E-Class, CLE Coupe, C-Class, and EQE sedan.

Hurry in now through July 31st.

Visit your local authorized dealer or learn more at mbusa.com slash dream.

Ready to take advantage of an incredible deal at Mazda?

September is the final month of eligibility for federal $7,500 electric vehicle lease cash on the new Mazda CX70 and CX90 plug-in hybrid.

All Mazda current inventory is unaffected by new tariffs.

See your local Mazda dealer for details.

$7,500 electric vehicle lease cash offer expires at the end of September.

Don't miss out.

$7,500 lease customer cash good toward 2025 CX70 PHEV and CX90 PHEV when leasing through Mazda Financial Services.

Lease customer cash can be combined with other public offers, including lease incentive offers.

Lease customer cash cannot be combined with APR or other customer cash offers.

Lease customer cash is not redeemable as cash or cash back option.

Lease customer cash is only available on approved credit.

Not all customers will qualify for credit approval or offer.

Limit 1 discount per customer per vehicle.

Lease customer cash offer only available in the United States regardless of buyer's residency.

Void were prohibited.

Apply within the lease structure as a capital cost reduction.

Lease customer cash is only available on participating Mazda dealer's current inventory, which is subject to availability.

Off rents 930-2025, and you must take delivery prior to expiration of offer.

See Participating Mazda dealer for complete details.