Fruitcakes and Nutcases: ETF, ATIC, DJT

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Podcasts, radio, news.

I'm so tired.

My body battery is 21 out of 100.

Is this a thing that I should know what it is?

Well, if you have a Garmin, you would know what yours is.

So that is a yes, I should know what it is, but I don't.

I don't know what's going to happen when i hit zero during this podcast

the whole time

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 moneystuffcom for bloomberg opinion and i'm katie greifeld a reporter for bloomberg news and an anchor for bloomberg television short week this week katie short week Short, tough week.

It's not as bad when we're off on Fridays.

I love those four-day weeks.

When you're off on a Monday, it just feels like the rest of the week you're just sliding rapidly down a mountain.

And here we have reached the bottom of the mountain.

We're about to crash.

Yeah.

What have we scraped up for today?

Jack Vogel's nightmares.

Because we have like a synergy where you wrote about a thing and then I wrote about the thing you wrote about.

Yeah.

Yeah.

I guess the challenge for us is finding things to say beyond that.

But we're going to tackle that in a minute.

We're also going to talk about taxicabs and New York's all-important industry.

And then we're going to talk about Truth Social.

Truth Social.

Leverage DTFs.

Jack Bogle's nightmare.

Yeah.

So

you know Jack Bogle.

Yeah, we're buddies.

Yeah.

I actually did meet him once.

Yeah, I wish I had met him.

I mean, I work closely with Eric Balchunis from Bloomberg Intelligence, who literally wrote the book about Bogle and Vanguard.

And he sounds like he was a real hoot to interview and talk to up until the end.

But he founded Vanguard.

He's the father of the index fund.

He hated ETFs, which is really funny since they're sort of the offspring of index funds.

He said that ETFs, they only incentivize trading among, this is a quote, fruitcakes, nut cases, and the lunatic fringe.

And it's funny that in 2024, some ETFs are being designed to do exactly that, just incentivize trading among that cohort of traders.

He's kind of wrong that an S ⁇ P 500 ETF is a perfectly good buy and hold product.

That's actually slightly better than an index fund because it has tax advantages if you are going to buy and hold it.

But it is also the case that you can put lots of things into an ETF wrapper, and some of those things are high-octane gambling products.

I feel like I've ETF-pilled you over the course of this podcast, which is great.

It's nice to hear like a full-throated defense.

You know, I was for a long time an investor in Vanguard index mutual funds, and I would imagine then I was like, I know enough about the tax advantages of ETFs that I'm going to start being an investor in index ETFs.

I get it.

But I don't like day trade them, you know.

No.

And I mean, Jack Bogle, he was a principled guy.

So he didn't like literally the exchange traded portion.

Like, why do you need that?

He also famously didn't want any commodity funds or anything like that.

He was just stocks, bonds, plain vanilla.

That was his whole thing.

And now

you look at this ETF market that we exist in, and the subject of my story specifically was was these leverage single stock ETFs, leveraged and inverse, 1.25 all the way up to three if you include Europe as well.

Europe has higher leverage than we do.

And I've been calling them one-day only funds because you're not supposed to hold them for more than a single day.

In some cases, not more than a couple hours.

Right.

There's a lot there.

One thing is that

this is not a fund, right?

If you're getting a levered three times return on an NVIDIA or whatever, like it's not in any meaningful sense an exchange-traded product.

It's a retail leverage product, right?

It's a way to get three times the returns of a stock without borrowing money from your broker.

Yeah.

And if you talk to the CEOs of these firms, that's exactly what they say.

I've interviewed Will Rind of Granite Shares for this article, and that's exactly that.

They're offering institutional-grade leverage without the expenses of opening a traditional margin account.

Right.

I mean, they probably do get better at leverage terms than a retail investor.

But it does come at the cost, as you and I both wrote about, of like they rebalance every day.

Yes.

So if you borrow money to buy a stock, you decide when you want to close out that position.

I mean, unless you get a margin call, but like, you know, ideally, you decide when to close out that position.

And if you take out a 50% margin loan and buy, you know, twice as much stock, you have like two times leverage, you'll get two times the return of the stock stock for whatever period you hold it for.

With the leveraged ETFs, it doesn't work that way.

They rebalance every day.

So you get two times the daily returns or three times the daily returns each day.

And

as you and I both wrote about, that has like sort of arithmetically paradoxical results where like you wrote about there's a micro strategy.

So micro strategy is like insanely volatile sort of Bitcoin proxy stock.

And there's a micro strategy three times ETF.

MicroStrategy is up like 110% this year and then ETF is down 80%, right?

Yeah.

Because three times 110 is negative 80, which is not normally how things work.

And it's so interesting.

And you know the math so much better than me.

So that's the micro strategy dynamic and you're seeing that play out with NVIDIA and a lot of these single stock funds are based on NVIDIA.

That is the most popular stock to launch a single stock fund on.

Understandably.

It's not as bad.

You're doing negative, right?

lower than three times, but it's not negative.

Yeah, you're doing pretty okay up to this point.

We'll see, you know, what the next few weeks hold for NVIDIA, but you're doing pretty okay if you're in a leveraged long NVIDIA product.

Yeah.

It's like the math has to do with basically like

the comparison between the sort of returns of the stock and the volatility of the stock.

So MicroStrategy is incredibly volatile and is up a lot, but like NVIDIA is less volatile and is up more.

So that effect sort of swamps the volatility effect.

But basically, like the intuition is, you know, if a stock goes up 10% and then down 10%,

you're subtracting the losses from a bigger number.

So when it goes up 10%, you have a bigger number, and then down 10% is like 10% of a bigger number than you started with, and vice versa.

If it goes down 10% and up 10%, you're getting like 10% return on a smaller number.

When you multiply things, that effect gets amplified.

And so you're making the downswings worse.

Yeah.

And therefore, you can turn the long-term returns returns negative, even if the unmultiplied returns are positive.

So not to toot my own horn,

but this article was much more widely shared than I anticipated it to be, partly because you wrote about it in Money Stuff.

And it feels like the probability of getting your face ripped off is what a lot of people focused on.

But the surprising thing that I found while looking at this was actually that these funds are being broadly used as intended, which is interesting.

There's a really rough napkin math way to take a look at the average daily holding period.

And again, this is very rough, but basically, if you divide the average trading volume by the average market cap of one of these funds, you should get a pretty rough answer there.

So if you take a look at the largest single-stock ETFs, it's also from Granite Shares.

It's two times long.

On NVIDIA, it's almost $5 billion.

It takes under three days.

for the entirety of its shares to flip over, which is not bad, you know?

Yeah, they do a good job of warning people about stuff.

And probably, if you're finding this sort of thing, you know what you're doing.

But that average probably conceals some number of people who buy it and forget it and then end up down 80% or whatever.

Yeah.

It's inevitable that someone's having a really painful time and maybe doesn't even know.

Most likely doesn't even know, right?

Yeah, I know it three times in the video.

I'm doing great.

Yeah, I think that like they are probably mostly being used for speculative day trading by people who know what they're doing.

Yeah.

But that's Jack Bogle's nightmare, right?

Exactly.

And also, I mean, in addition to my sharing your piece, I don't know if you saw you were Cliff Asnas put out this paper this week on

market inefficiency.

The old man whining is he is what he called himself.

He said something like, I'm going to sound like a grumpy old man because he's like sort of known as a like quantitative value investor.

And essentially the point of the paper is like it's hard to be a quant value investor these days because like value keeps underperforming, which he argues is because markets are inefficient.

And one reason markets are inefficient is because people are crazy.

Like retail investors are like crazily chasing speculative highs.

And he does cite one day only ETFs with a little parenthetical Greifel 2024

footnote saying, what fresh hell is this?

So he tweeted that on Friday.

like 3 p.m.

on a Friday, I am fried.

You know, there's nothing left.

My body battery is negative.

I saw that he tweeted that and i was so scared because all he said was what fresh hell is this with no follow-up and i was like is he gonna rip me like what's going on but i'm glad that he said it is he's mad not at you yeah but at the thing you wrote about hate the game not the player one quick fun fact on the average holding period so less than three days is really short eric baltunis was telling me that remember those vicks etfs that blew up in balmageddon sure at one point one of the biggest ones had an average holding period of literally less than one day.

The average holding period was less than one day, which is amazing.

So people were holding it for like during the blow up or like weeks before the blow up?

Going into it when they still existed.

Yeah.

Now there are

X ETFs again.

That does suggest professional usage, right?

Yeah.

Or there are crazy day trading.

I don't know.

The one other thing I wanted to mention is

that the day after I wrote about this, the trader launched a set of products that are like week long with DTF or month long leverage.

That was such funny timing.

Yes.

And funny timing is kind of what we're talking about with these ETFs.

So they're trying to solve this problem of volatility, drag, or decay.

I know you don't like those terms, but that's what they're trying to do with these.

I actually spoke to the guy behind it.

His name is Matt Markowicz.

And he said that I know we were just talking about how less than three days is pretty good.

He was saying, and they have single-stock daily ETFs, that it's clear people are holding these for more than one day, which is not using them as intended.

So he's not happy with that stat.

So the idea behind this with a weekly reset is that you don't have to babysit the funds and your position as closely as you would have to with a daily reset.

But even still, it does introduce risk.

Like you have to

leverage ETFs.

I know, but you have to time when you buy it to get the full effect.

Right.

The reason the one-day funds work the way they do, even though people get mad about it, because they're giving you exactly the same experience every day.

They're like, you're getting the one, the three times daily return no matter what day you buy it.

With a weekly fund, if you buy it on a Tuesday, you're getting slightly different.

Yeah.

More or less.

You're getting a slightly different than the advertised return.

But if you then hold it for four days, you get something closer to what you expected.

Whereas if you hold the single-day ETF, the daily rebalance ETF for four days, you get something very different than three times the four-day return.

Yeah.

If people hold things for more than a day, that doesn't necessarily mean they're wrong or not using it as intended.

It's just they are making a series of bets that are like, this is going to go up each of these days, right?

If it goes up all of the days, then holding the daily rebalancing ETF is better than holding

the weekly ETF.

It's just like it has to go up every day.

Yeah.

Maybe it will.

I feel like that's a...

in some cases, generous interpretation of holding the daily one for more than one day, that you are choosing every day.

That means clearly in some cases Janner.

Clearly, in some cases, people just buy it for a year and forget about it.

Probably someone is like at the end of the day, like ah, this is getting up again tomorrow.

I don't know.

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Taxicabs and the American Transit Insurance Company.

Boy, are they in trouble?

Yeah, so this is a Bloomberg News article about the American Transit Insurance Company, which apparently insures most 60%.

Uber drivers, taxi drivers.

If you get in a car in New York, it's probably insured by them.

Yeah.

And there's a reason for that, which is that they offer cheap rates.

Super cheap.

And there's a reason for that, which is that they were under-reserving for their risk, and now they are apparently insolvent.

So this is amazing because if Bloomberg News has done a great great job covering this, and I was reading one of the pieces out today that, okay, so this company was founded in 1972, and in 1986, state regulators were already describing the company as insolvent by $6 million.

That is according to a state examination report that was obtained by Bloomberg.

They've been insolvent for decades.

It was $6 million in 1986.

And I believe in the second quarter, it posted more than $700 million in net losses.

That's according to a filing with the National Association of Insurance Commissioners.

It's amazing how long this has been going on.

Right.

I mean, for years, people have been saying they're charging too little and they're under-reserving.

And, you know, it's a great illustration of like a lot of financial services.

It's very easy to win market share.

by being wrong.

Yeah.

So the classic is like consumer like lending fintechs will be like, we have this new algorithm to like evaluate people's credit.

It's better than regular credit scores.

And we're going to like do such a great job and make so many loans.

And if they make so many loans, that just means they're like mispricing the risk and their algorithm is wrong.

And then they, you know, and like the way it works is that if you do that, then you get a lot of business and book a lot of profits early on.

And then later you go insolvent when the loans like don't get paid back.

It is weirder here just because this is a decades-long

process where like they keep apparently undercharging.

Yeah, this is pretty bad.

This is according to Bloomberg News Reporting again, that New York's insurance regulator issued a report on Thursday that shows that state regulators under both Governor Kathy Hochl and Andrew Cuomo have been aware for at least half a decade about just how bad things were.

So this has just been festering in plain sight for a while.

Right.

But it's like the fix is

you raise rates.

Yeah.

And, you know, that's hard to do.

It's politically unpopular to be like, we're going to double the price of insurance for Ubers, which means we're going to push up the price of taxis and Ubers.

And I don't know.

Yeah.

Maybe you sort of hope that, like, this is the thing, like, this model of like undercharging for insurance to win market share and then like getting out of town when the, when the, when the claims come due.

Goodbye.

It's like so obvious, right?

Like, there's lots and lots of insurance companies in history that have kind of done this.

And the point of insurance regulation is just to prevent that.

Right.

But in a important,

salient industry like New York City taxicabs, it can be hard for the regulators to say we have to double rates because the insurance is being underpriced.

And so you get this weird dynamic where it's like the short-term benefit of everyone to undercharge.

And then it's like, you know, you kick the can down the road and eventually there's not enough money to pay claims.

Yeah, according to Bloomberg reporting, drivers insured by

the American Transit Insurance Company typically pay annual premiums of $4,000 to $6,000, depending on experience, accident claims, different calculations.

So, I mean, jacking that up to $8,000, a lot, I mean, I assume a lot of drivers just wouldn't be able to do that.

I just think about that's a lot higher than my current insurance, but I'm not

driving

12 hours a day.

So, what happens now, according to Bloomberg Reporting, I wonder how many times I'm going to say that, the New York regulator has ordered this company to weigh a sale.

I don't know what happens here.

It seems that a lot of people are saying, a lot of analysts are saying that if they can't keep insuring drivers, it's going to be massively painful for people moving around New York, drivers included.

Because some drivers will be forced out of the market because they won't be able to get insurance.

Yeah.

And then like...

prices of Ubers will go up.

Yeah.

Because they've been underpriced for years and now they'll go up.

I don't know.

It's horrible.

And maybe it's going to happen.

You did compare this to that working paper that you referenced in Money Stuff about when insurers exit.

It was a case study looking at Florida.

It's an incredible paper.

I haven't read it.

It's so good because it's like half of it is this, is just this classic insurance story, which is, you know, a lot of houses in Florida.

are risky, right?

They're like near the beach and there's hurricanes.

I'm well acquainted with Florida real estate.

Sure, sure, sure.

Yeah.

Leave that one hanging out there.

And so,

you know, a lot of insurance companies don't want to insure them or would charge very high rates.

And so there's this like class of newish insurance companies in Florida that will insure,

you know, houses in risky areas.

Vibrant startup ecosystem.

And they'll do it at like reasonable seeming rates, which are probably underpriced.

And this paper argues that these insurers are undercapitalized and risky.

Insurers have to be rated by ratings agencies.

These insurers tend to be rated by like new startup ratings agencies.

Another vibrant ecosystem.

Just like slightly different criteria from the regular, more traditional ratings agencies.

And so you have these insurers that are like, according to the authors of this paper, undercapitalized, that get good enough ratings to be like sort of in good standing with regulators.

So that's like kind of normal.

And then like, you know, some of these insurers go bankrupt when

a lot of clamps hit.

And that's like, well, you know, they're not really providing insurance.

Yeah.

But the fascinating thing is like, so it's homeowners insurance, right?

So like New York City taxis, it's like this politically salient industry.

It would like be bad for the government if you couldn't insure your home.

And so the regulators have an incentive to be okay with these companies.

But there's another party, which is, you know, these homes tend to have mortgages.

And the mortgage lender doesn't want them to be uninsured or, you know, have insolvent insurers.

And what the authors find is that when these

insurers insure the homes, the mortgage lenders are more likely to sell their mortgages to Fannie Mae and Freddie Mac, the government-backed

mortgage kind of guarantee firms.

And the way it works is just like there's a market signal that these insurance companies aren't that good.

And the market signal is the banks don't want to hold mortgages that are insured by them or where the houses are insured by them.

But the banks will sell the mortgages to Fannie and Freddie, which like are kind of like unthinking.

Like they don't, they don't like send a market signal.

They just like look at at the rating and like there's a rating from like this arguably bad rating agency.

And they say, oh, you meet the ratings criteria.

So we'll buy the mortgages.

And so all of the like mortgages in like the risky areas migrate to Fannie and Freddie because the market doesn't want to hold them.

Similar to houses in Florida.

It seems like a really shakily built system there.

There you go.

It is interesting.

I mean, coming back to the timelines here, reading and listening to your summary of this paper, which I haven't read, it seems like these insurers are cropping up in Florida.

Whereas, again, this is in New York with the taxi industry.

I am just speechless that it's been going on for longer than I've been alive.

Yeah.

Some of this is like increased claims and products, right?

Yeah.

Some of it is like all of insurance is like estimating risks, right?

And like maybe they were

doing an okay job of estimating risks and then the risks changed, but maybe not.

Well, it'll be fun to follow.

We'll definitely talk about it next week.

Yeah, when the whole system collapses and I can't get here because I can't get a newer.

Then we really have to cancel the podcast.

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Truth Social.

DJT.

DJT.

Trump Media and Technology Technology Group.

Right, for sure.

Truth Social is the company.

Let me be formal.

Trump and Media and Technology Group is

the name of the company.

And DJT is the ticker, which is what everyone calls it.

So true.

So this stock is flat, at least on Thursday, on a year-to-date basis, a one-year basis.

It's down close to 70% since its market cap peaked in early May.

It's now worth $3.4 billion.

It was almost $10 billion.

It has to be one of the few $3 billion companies that doesn't have a single analyst that covers it.

And I know why, because what are the fundamentals here?

But I was still really hoping when I typed an A and R on my Bloomberg terminal that something would pop up.

Can you imagine being an analyst covering this company?

Like, it's bad enough for me writing about it.

But, like,

what can you say?

Yeah.

You're like, sell, and then, like, Donald Trump will be mad at you.

Yeah.

And

what's the benefit of that?

Like, everyone knows that, like, there's no fundamentals to this company.

Do you remember when meme stocks were just dawning?

I guess.

So GameStop and amc there were real analysts who covered those companies thankfully the shop but like those are like you could say stuff about the business exactly you can be like okay this this is you know a thousand percent but a lot of them did end up dropping coverage and you know because like you what like like what value do you add yeah I remember inviting a couple of them on TV and they were like, I am not going to talk about this on TV.

I mean, it's similar because like, one, what value do you add?

Because like the dynamics are not things that you can inform with your fundamental analysis.

But then also, people will be mad at you.

Oh, yeah.

Right.

Yeah.

It's the same with DJT, right?

Like, oh, you'd be like,

you know, this company has like $1 million of revenue and it's a $3.5 billion market cap.

Sell, right?

Like, okay.

One, everyone knows that.

And then two, people get mad at you.

Like, what's you, why?

Yeah.

Yeah.

So it's interesting.

It's enormous fall from Greece.

Of course, it's approaching the end of the lockup period, but also the fundamentals that it did have have been eroded,

undermined by the fact that Donald Trump is back on X now.

I don't know what the.

Are you not a Truth Social guy?

This is shocking.

I've never posted on Truth Social.

I lurk only.

Truth Social, I agree with you that like if you're, if your case, if your business case for Trump media was like Truth Social is like the place for tens of millions of Donald Trump fans to like get their social media, then like the fact that Donald Trump is back on X and that X is like clearly the right-wing social network now undermines that business case.

I do have some stats for you.

Okay.

So Bloomberg's Bailey Lipschulz has done such a fantastic job covering pretty much everything, but including DJT.

So

I was asking him how many people are actually on Truth Social, and it's really difficult to tell.

DJT, Truth Social, will refute these figures, but this is according to Aptopia.

It's been around 350,000, not above 1 million over the past year.

For context, I think Twitter has a few hundred million.

And then you compare it to Reddit.

I want to compare that number to the Money Stuff subscriber base, but I won't because those figures may be right hard.

Oh, okay.

Flex, flex.

What's your market cap?

Yeah, it's 3.5 billion.

That's huge.

Wait, wait, wait, wait.

One more point.

Reddit, 91 million users in the second quarter.

Reddit's market cap is only three times that of DJT.

Reddit is like 9.7 billion.

At some point, maybe the case for the stock was Donald Trump is going to start the I could see that.

I think that's over now, right?

I mean,

no one really thinks that now.

The case for the stock, if I had to make a case for the stock, it would be like, it would be a corruption-based case, right?

It would be like Donald Trump will become president again.

His most obviously large and monetizable asset will be his like 60% holdings of DJT.

And

people who want his attention and favor will do things to increase the value of that stock.

I don't know exactly what that is, right?

Maybe like the Saudi government will buy 10% of the stock at a premium, right?

Maybe someone will offer to take over the company.

Maybe Elon Musk will strike a business deal where like, you know, there's a lot of ways you could imagine the stock going up because people want to influence and or send money to Donald Trump.

That case, I think, has been a little undermined by the fact that Trump and his sons have been promoting a crypto project, right?

Yeah.

Because it's like, like DJT is essentially a token of like, let's give money to Donald Trump.

And they're like, wait, we can create those tokens like freely.

We can create as many tokens as we want.

Can I confess something to you?

I have been blissfully not following that story at all.

So you're going to have to.

I'm going to follow it closely.

But there is, there's like, and there's not much of a story.

It's like they have teased, like, we're starting this like DeFi crypto world liberty

project.

And then the other day they were hacked.

It was Eric Trump, right?

It's like the Trump sons, but then like some other Trump family members were hacked and like were posting promotions for their crypto project that were actually just like scam sites that would take your money.

So it's just like, it's like too perfect.

But anyway, the point is, the DJT thing is such an amazing proof of concept because you have this minimal business and you attach a $3 billion meme stock to it.

And you can just do that again with like without the minimal business, right?

You do like some DeFi project and you're like, oh, give us money for our DeFi project.

And it gets a billion dollar market cap.

It's not there yet, but it's like the more they do that, the less any individual project is worth.

So I think that undermines DJT too.

But then the real problem with DJT

is that Donald Trump owns like 60% of it.

For sure he does.

His shares are locked up and the lockup ends like this month.

Yeah.

I think September 19th or 20th.

Yeah.

And so like, it's fascinating to me because what if he sold it all?

Yeah.

And can he?

Sure.

I mean, in what sense?

I don't know.

There was some, in reading the various articles that Billy Lipschulz has written about this, it seems like there are some complications about whether he'd be able to sell it if one fell suit.

You can't, if you're an insider of a company, you have limit, like legal limits on how much you can sell without registering your sales.

But like he could conceivably do a registration statement.

I mean, the company would do a registration statement saying, we're selling, he's selling $2 billion of stock.

And then they could try to find buyers for it.

And

they might, right?

Like they might, not as like a, not necessarily as a

bet on the fundamentals of the company, but as a like,

I would like to give money to Donald Trump.

Yeah.

You see this a lot in crypto, where it's like, you can do a thing

and it can have a like nominal multi-billion dollar market capitalization.

But then when you try to cash in,

the valuation poofs down to zero, right?

Like, because like the valuation is like trading of a like a sort of small like portion of the, of the

market cap.

Like you own most of it and like your involvement is crucial.

And once you sell, everyone will say, oh, this thing is going to zero.

zero.

And so, like, the market cap just poofs.

And you're not able to actually extract the billions of dollars of paper value.

That's like easily imaginable here, right?

And like, it's probably part of why the stock is going down.

And it's like Trump wants to monetize it.

Like, that's a bad sign for the future of the stock.

And so, like, why would you hold going into that?

But I'm not sure what would happen here.

Yeah.

Another possibility is people are like, oh, yeah, we love Donald Trump.

We love what he's done with Truth Social.

And we're going to pay to buy stock from him, right?

Maybe not, you know, it's at like $17 now, maybe not $17, but enough that he could extract hundreds of millions of dollars from this company that has a million dollars of revenue.

Yeah.

So we'll see because that period, that lockup period is expiring very soon.

I assume he's not actually going to dump stock.

Now, might he borrow against the stock?

Like, I love that outcome because I love the idea.

of being the margin lender at a bank and having him come in and say, I have $2 billion of DJT collateral.

How much will you lend me against it non-recourse?

What's the right answer then?

You literally start rubbing your hands together as you say, I love this outcome.

To me, if you're like, Donald Trump wants to borrow against $2 billion of DJT stock non-recourse,

how much would you give him?

$20 million, but like someone will go higher.

Someone.

Someone will.

So there's a lot to keep an eyeball on here.

You do present two.

robust compelling reasons to explain why the stock has absolutely pancaked over the last few months.

It hasn't even like, pancaked is the wrong word.

It's a $3.5 billion market gap.

But it's down $70.

It's a SPAC.

So it's like, you know, like people put in $10 a share like way back when when the SPAC launched and it's at 17.

So it's like, it's a pretty successful SPAC, ignoring it was more successful, though.

Right.

It is less successful than it was.

There's also the argument to be made that Donald Trump's clear lead in the polls has eroded since Kamala Harris

entered the race.

Right, absolutely.

And this was like a proxy.

Partly because it was just literally a proxy, right?

It's just literally a token of attention.

And then partly because if you had a business case for the stock, it was it revolved around him being president and somehow value accruing to the company because he's president.

And if he's not president, like

if he's not president, maybe he has more time to focus on his social media company and it will become a powerhouse.

But

yeah.

It did make me think briefly, and this is something we've talked about before: election contracts and the fact that they're illegal, question mark, can't really do that.

Right.

Like if you want to bet on, like, the fluctuating chances of Donald Trump being elected, like, trading DJT stock is not the worst way to do it because it does seem pretty correlated to his like polls.

Yeah.

It's probably easier to get money down than it is in like the election contracts markets.

Yeah.

So if you want to scratch that itch, this is the way that people have been doing it.

Go on.

Because it doesn't like resolve to $100 if he's elected and $0 if he's not, right?

It's like not, it doesn't really have anything to do with, but it does because like.

It could go up a million percent.

Right.

There's some like business case for if he's president, it's worth a lot of money.

And if he's not president, it's not worth a lot of money.

But I think probably the moves and the price are exaggerating that business case.

And it's really just mostly like people want some proxy for that.

And it feels like a good proxy.

I still wish some analysts covered it.

I want to interview the loan analysts.

It would be fun, right?

Because this is the thing.

There should be analysts who cover meme stocks and this stock and crypto.

And they should just have a different method of analysis.

Because obviously you're not going to be like, oh, you looked at orders and they're coming in a little late, right?

You need a different method of analyzing this company.

But, like, if you're good at making calls about what the stock would do, that'd be like a value-added signal.

Could it read in the room reading sentiment?

I will say zero analysts track the stock as tracked by Bloomberg.

So, maybe there's someone out there in the world, but they're not on the Bloomberg terminal system.

Someone is trying to

sort of analysis.

I want to hear from you.

How's your battery?

Oh, God.

It's 19.

So, this this has drained me.

You've lost a certain amount of KD electricity over the course of the last year.

It's fading before your eyes and ears.

I'm going on vacation, though.

Really?

Yeah.

Didn't you just go on vacation?

It wasn't enough.

I'm going to redact it the week after next.

Maybe not.

Maybe I'll wait a few months there.

But anyway, the week after next, I'm going on vacation.

So there won't be a Monty Supp podcast.

In lieu of a scintillating conversation about the monetary news of the week, we're going to can a mailbag.

episode.

Yes, absolutely.

So send us your best questions.

We appreciate everyone who has sent questions so far, and we have those in the can, but we want to fill 30 minutes

of answering questions.

So send them all.

What kind of questions do we like, our producer asked?

And we look flummoxed.

What do you like?

Fun questions.

I love talking about myself.

Oh, yes.

No one ever asks me questions.

Oh, okay.

This is the call-out.

Please, I love talking about myself.

Two minutes of talking about Katie.

That would be a good episode.

I like other things, too.

But what do you like, Matt?

I like questions about myself.

We're both needy people.

True, that's right.

That's the point of all podcasts.

Yeah.

I also like finance stuff, huh?

Weird conceptual stuff.

I love

Katie's horse.

Horses.

Horses.

And cats and reptiles.

I'm more of a dog guy myself.

And that was the Money Stuff podcast.

I'm Matt Livium.

And I'm Katie Greyfeld.

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.

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We'd love to hear from you.

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

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

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

Our theme music was composed by Blake Maples.

Brendan Francis Newnham is our executive producer.

And special thanks this week to Kel Brooks.

And Sage Bauman is Bloomberg's head of podcasts.

Thanks for listening to the Money Stuff Podcast.

We'll be back next week with more stuff.

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