Bat Tat: Labubu, OBDC, Frank

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Speaker 3 I got a haircut.

Speaker 4 That was actually, that's the first thing I said to you today after I told you that I didn't want you to watch me eat yogurt.

Speaker 3 But in other news, you got a neck tattoo. I did.

Speaker 4 Yeah, I got a neck tattoo last Friday.

Speaker 3 It's a Bat Ban bat.

Speaker 4 Yeah, it's the bat signal.

Speaker 3 The bat signal? Yeah.

Speaker 4 It's a bat tat on my neck. It's my first tattoo.
A little intense to get it on the neck.

Speaker 3 You can't. Is it your last tattoo? Like, having only one tattoo and having a pan neck tattoo is pretty good.

Speaker 4 The tattoo artist asked me that as well. The thing is, I got the tattoo for my late pony Batman.
I'd had him since I was 11. He passed away in May, the day before my birthday.
Also intense.

Speaker 4 I knew I was going to get this tattoo when he did leave us. So my answer to that question is, when my cat dies, I'll probably get another tattoo.

Speaker 4 I wasn't expecting my TV producers to be as into it as they were.

Speaker 4 We have this thing called this.

Speaker 3 I feel like a Meg Tattoo is news.

Speaker 4 I know, but I thought that, you know, we are a buttoned-up financial news network. I thought that they wouldn't be thrilled about it, but they really wanted to do an on-air reveal, so we did.

Speaker 4 We had a man with a study cam, which is just a handheld camera, essentially come in and zoom in on it at one point during Monday show.

Speaker 4 Thankfully, it wasn't scabbing yet, so it still looked kind of good. It's in like a little

Speaker 3 bit of scabbing. Yeah, yeah.

Speaker 4 I think it's healing nicely. It was really painful.

Speaker 3 Are you going to get a tattoo? No. No.
No. I've missed that.
I don't think that's a good idea. It'd be weird for me to get a tattoo now.
I'm an old man.

Speaker 4 I was kind of thinking about that, that my first tattoo was at 32 years old. 32 is fine.
It's still, I don't know, I feel like...

Speaker 3 I can adapt to my age, but I'm too old for a tattoo.

Speaker 4 But I feel like if you want a tattoo, you probably get it in your teens or 20s.

Speaker 3 No, I feel like a lot of people enter a new phase of life in their 30s and become tattoo people. Yeah, maybe.

Speaker 3 Yes, I saw it on Instagram on Friday and I said to my wife, oh, Katie got a neck tattoo. My wife was like, what? I'm like, Katie is not just a financial news anchor.
She's also an emo girl.

Speaker 3 Yeah, at heart.

Speaker 4 I'm just trying to get back to my roots, you know?

Speaker 3 Hello, and welcome to the Money Stuff Podcast, your weekly podcast where we talk about stuff related to money.

Speaker 3 I'm Matt Levine, and I write the Money Stuff column for Bloomberg Opinion.

Speaker 4 And I'm Katie Greifeld, a reporter for Bloomberg News and an anchor for Bloomberg Television.

Speaker 4 Do you know what a luboo boo is? I do. They're impossible to escape.
Did you know what a luboo boo was prior to this week?

Speaker 3 I'm definitely aware. of luboo boos as an important cultural force.
Yeah.

Speaker 3 Do I know what they are even now?

Speaker 3 I couldn't pick them out of a lineup.

Speaker 4 I really hate them. Sure.

Speaker 3 They seem bad.

Speaker 4 There's a printout of a lou boo-boo between us on the table right now.

Speaker 3 They're like furry creatures that they're freaky.

Speaker 4 They're freaky little things. Now you can trade derivatives of them, kind of.

Speaker 3 Derivatives of them. Yes, absolutely.
Yeah. You can trade binary options on the boo-boos.
It's so good. Yeah, through Calci.
I'm sure the enthusiasm in our foot.

Speaker 3 I really, I don't get it.

Speaker 4 This is one of the first cultural phenomenons where I just feel like I can't get into the headspace to appreciate it.

Speaker 3 Okay, wow, yeah, this is like the 400th for me. Really? Yeah, I'm an old man.

Speaker 4 Yeah, that's true. See, I'm still getting neck tattoos.

Speaker 4 This is my limit, though.

Speaker 4 So Calci

Speaker 4 and StockX are partnering up so that there's going to be event contracts tied to many things. Yeah.

Speaker 3 Sneakers. Collectibles, that's how you say it.
Sneakers, the boo-boos.

Speaker 3 A third category of

Speaker 3 sneakers and the boo-boos and also some. Trading cards.
trading cards, yes.

Speaker 4 I don't understand

Speaker 4 this because I have my mind wrapped around what StockX does. And there's other alternative asset marketplaces where you can buy shares of collectible items.

Speaker 4 I don't know how you turn that into an events contract.

Speaker 3 Right. This is what I've been writing about.
It's a weird mechanism. Yeah.

Speaker 3 What you can do is you can buy a yes-no contract that pays off a dollar if, like, you know, the price of some box of labo-boos is over $120, dollars and it pays off zero dollars if the price of that box of labo boos is less than 120 or you know like you can turn any continuous variable into a binary right you can say if the price of tesla is above four hundred dollars then you get a dollar and if it's below four hundred dollars you don't get a dollar right but it's not the most natural no product it seems not fun but that's a different

Speaker 3 but i don't know it's like kind of interesting right like i don't know the reason for this but i've speculated on some reasons the simplest of which is like calci is an event contract marketplace, right?

Speaker 3 Like, that's what it does. It lets you bet on whether or not some event will happen.
And if that's your lens, then like you could turn anything in the world into a yes-no event, right?

Speaker 3 And if you get money for

Speaker 3 trading, then you want to turn everything in the world into a yes-no event. And so you sort of look around and say, what products can we trade? And it's like, well, sneakers.

Speaker 3 I was like, well, sneakers are not really yes, no events, but if you have to, you can make them into yes, no events. And then you can trade them.

Speaker 4 You know, convolute the question in such a way that it becomes

Speaker 3 a crazy convolution, but it's like a little crazy. Yeah, it is.
Yeah, it's a little crazy.

Speaker 3 Like, I was looking at their charts, you know, and like they have like price of some sneaker, and like there's a chart, and the chart is like four different lines for the probabilities of different like price levels.

Speaker 3 You want the chart to be just like the price, right?

Speaker 3 This is an intuitive chart of a sneaker price. And they don't show that intuitive chart.
So it's a strange, strange mechanism.

Speaker 3 Maybe this is just like a publicity stunt, but I've enjoyed writing about it because like

Speaker 3 one thing that is going on here is that

Speaker 3 there is a belief, possibly a money-motivated belief, among people who work in prediction markets and who work at like big exchanges and who are partnering with prediction markets, that this is like the path to be an everything exchange, which is like the term that Coinbase has used.

Speaker 3 This is the way that you can sort of suck everything in the world into financial markets. And

Speaker 3 one point I've been making this week is it's like kind of a rickety way. Like

Speaker 3 why does it have to be a prediction market like this? But it is something that people are pretty enthusiastic about because at the end of the day, if you're running a financial market, like

Speaker 3 one big category of what you're doing is offering people more opportunities to bet, let's say, on more things.

Speaker 3 And this is the most general purpose way that people have found to let people bet on things. Yeah.

Speaker 4 I get the betting argument. People like to bet.

Speaker 3 I don't know why they would want to bet on like the yes nay.

Speaker 4 That's the thing. Like it has to be fun, right?

Speaker 4 And it doesn't seem as fun versus like, I'm going to buy shares of a meme stock and hope it goes to the moon versus I'm going to hope the price of the box of the Laboo Boos goes above this certain threshold.

Speaker 4 Yeah.

Speaker 3 I do wonder if this is like a baby step on the way to some more moon-worthy financial market. Yeah.

Speaker 3 One thing I've written is that the essential thing here is that these are contracts with someone on either side of them, right? Like you're betting against someone else.

Speaker 3 And if you have a contract that can go to a million dollars, then the person on the other side of that has to put up collateral and could have to put up a million dollars of collateral, right?

Speaker 3 So you have like a really complicated and risky margining system if you're having bets that can go continuously as far as you want in either direction. Yeah.

Speaker 3 Whereas like traditional prediction markets, the bets are like you get a dollar or you don't get a dollar. And so the collateral and the margining is a lot easier and the risk is a lot lower.

Speaker 3 So these are like not super risky exchanges. The exchange itself is not a particularly risky proposition as compared to, oh, say certain crypto exchanges we've talked about.

Speaker 3 And so going from that system to a system where the price can be whatever the price is is like a risky and complicated set of decisions, but possibly something that is in the future if you want to be at everything exchange.

Speaker 3 Yeah.

Speaker 4 I do wonder how this can be manipulated. This

Speaker 4 is events contracts on little booze.

Speaker 3 You know, the answer, I think, is very clearly that it can't be because

Speaker 3 who is trading this?

Speaker 3 You and me. The way to manipulate this is like there's a contract on like the average price of some sneaker and I go and buy a bunch of the sneaker to push out the average price, right?

Speaker 3 And then I win on my prediction market contract.

Speaker 3 But I assume that however big the market for the sneaker is, it's probably not that big, not like treasury bonds, but however big the market for the sneaker is, presumably the prediction market is like orders of magnitude smaller because like

Speaker 3 Some people buy sneakers because they want to wear the sneakers. Weirdos.
But like, how many people are going to like want to buy the contract that's like, oh, the sneaker price will be above $120.

Speaker 3 So I think that it's going to be very hard to manipulate because it is

Speaker 3 at this point, two days in or whatever, a very small derivative on top of a moderately larger market. But in the long run, sure, like, you know, you have an event contract that is a binary, right?

Speaker 3 It pays zero or one.

Speaker 3 And it's on some underlying thing.

Speaker 3 And if the event contract gets big enough and it's like trading a penny below the threshold, you'll buy some of the underlying thing to push it up above the threshold and you make a lot of money on the contract.

Speaker 3 It's like very easy to manipulate in concept. It's probably very hard to manipulate right now in reality.
But like, you know, give it time, get more things.

Speaker 4 Let me get at sea legs first.

Speaker 3 And the other thing is, you know, I think about this all the time. Like

Speaker 3 the CFTC, the U.S. Commodities Futures Trading Commission, regulates...
commodities futures.

Speaker 3 It doesn't like really regulate the market for wheat, you know, but it does regulate like you can't manipulate the wheat market if it's going to affect commodity futures.

Speaker 3 So the CFTC has some like anti-manipulation powers. And if you put everything onto prediction markets, then everything becomes a commodity.
And

Speaker 3 the CFTC has to think about, were you buying those sneakers to push up the price of sneaker futures? And then it's like,

Speaker 3 yeah.

Speaker 4 It's going to be interesting to

Speaker 4 see how just the prediction market space matures because this, I think, is firmly silly season. And I think we can put it in that bucket.

Speaker 3 Yeah. I think there are two paths for it maturing.
One is like what everyone says, which is like it somehow becomes a market for everything.

Speaker 3 And it's like becomes like the way that companies and like real people think about hedging risk and like predicting the future and like understanding the probabilities and potentialities for the future.

Speaker 3 And then the other way is it's like a giant legalized sports book, right? Yeah. And that's kind of where my money is.
But who knows? Who knows?

Speaker 4 Well, I was speaking to the CEO of SIBO

Speaker 4 last week.

Speaker 3 Probably not in the

Speaker 3 legalized sports book.

Speaker 3 No, no.

Speaker 4 So SIBO doesn't have their own prediction markets outfit yet, but they're going to roll something 45 minutes.

Speaker 4 Well, they're going to roll it out in the next few months, which is interesting because there's kind of a land grab going on right now.

Speaker 4 I have to imagine that the exchanges think about this all the time.

Speaker 3 They should.

Speaker 3 They've been doing commodity futures for years, and now it's like, ooh, it turns out they were running a sports book and they didn't know it, right? No, yeah, we got to do sports.

Speaker 4 SIBO specifically is not going to go into sports. At least that's what's what the CEO said

Speaker 4 as of mid-November 2025. So we have the receipts.

Speaker 3 And that makes sense because

Speaker 3 if you're Calci or Polymarket and you're a little hobbyist prediction site, and then sports is this enormous gusher of money, then you go into sports, right? If you're SIBO,

Speaker 3 if you have

Speaker 3 treasuries,

Speaker 3 there's more money in sports books than there is in traditional prediction markets. There's more money in real financial markets than there's in sports books.

Speaker 4 Yeah, exactly. So they're focusing on economic and financial

Speaker 4 prediction markets for the next 45 minutes. Right.

Speaker 3 Synergies there with interest rates and whatnot. Yeah, for sure.

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Speaker 3 You're thoughtful about where your money goes.

Speaker 5 You've got your core holdings, some recurring crypto buys, maybe even a few strategic option plays on the side. The point is, you're engaged with your investments, and public gets that.

Speaker 5 That's why they built an investing platform for those who take it seriously. On Public, you can put together a multi-asset portfolio for the long haul.
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Speaker 4 From laboobus to owls?

Speaker 3 Owls? Yeah.

Speaker 4 The blue kinds. What an interesting week.

Speaker 3 We've talked about this before, but like you,

Speaker 3 your first love besides your horse is ETFs. Yeah.
You love an ETF. I do.
And so we've talked about private credit.

Speaker 3 We've talked a lot about retail private credit and like ETFs for private credit, which is like a category that

Speaker 3 kind of sort of exists.

Speaker 4 They're trying to make it a thing.

Speaker 3 They're trying to make it a thing.

Speaker 3 And whenever we talk about that, I always say there is a retail exchange-traded fund category for private credit, and it is called a BDC or a business development company, which is a terrible name because it makes it sound like it's a business development company.

Speaker 3 And that is not what it is. I don't know what a business development company would be, but it would sound like a company that develops businesses, right? For sure.

Speaker 3 But in fact, a BDC is just a private credit fund. It's just a pot into which a manager like Blue Owl puts private credit investments.

Speaker 4 And it's publicly traded.

Speaker 3 It's publicly traded. And so investors can buy shares.
A traded BDC, not all, some are like private, like not traded, and we'll talk about that.

Speaker 4 Which we'll get into, yes.

Speaker 3 But like a listed BDC is just a stock on the stock market. You can buy shares.
Anyone can buy shares. You can sell shares on the market.
It's a little bit like an ETF. Yeah.

Speaker 3 With one really important distinction. Go on.
You can't redeem.

Speaker 3 Like you can sell your shares in the market. And so what that means means is that the price of the shares is the price of the shares.

Speaker 3 There's no mechanism to make sure that the price of the shares is in line with NAV. Whereas with an ETF,

Speaker 3 if the shares are trading below NAV, then you buy some shares and you

Speaker 3 pop the assets out of the fund and you get stuff at NAV.

Speaker 4 In authorized participants, maybe. Yeah, yeah, yeah.

Speaker 3 Yeah, whatever. Whatever.
With BDCs, that's not necessarily the case. No.

Speaker 3 And

Speaker 3 it's therefore not factually the case

Speaker 3 for whatever reason.

Speaker 4 And

Speaker 4 I feel feel like we got another lesson in that this week with Blue Owl having to call off the merger between one of its publicly listed BDCs and then a private fund. Yeah.

Speaker 3 So it has a thing called OBDC, which is like the Blue Owl Business Development Company, which is a publicly traded PDC. And it has a thing called OBDC2, which is a private BDC.

Speaker 3 So a private BDC is like they sell it to, you know, investors. It doesn't trade on the market.

Speaker 3 And so if you're an investor in OBDC2, the private one, you can't get your money back by just selling on the stock market.

Speaker 3 And so the way it works is that they have a redemption mechanism where like every quarter they'll buy up to a certain amount of the shares back if you want to, right?

Speaker 3 So they'll offer to buy shares back and you can tender or not. And in recent months, there's been a little tension.
Yes.

Speaker 3 They have bought back anyone's shares who's wanted to sell, but there's like been a little bit more redemptions than they'd like.

Speaker 3 And there's like, you know, a widespread sense that if it continued at that pace, they would eventually get redemptions, which they're allowed to do, right?

Speaker 3 Like, they can sort of buy back as much as they want. And so, to get out ahead of that, they announced that they were going to merge these two funds.

Speaker 3 So, if you had shares of OBDC2, the private company, you'd get shares of OBDC, the public company, and then you could sell those whenever you wanted. No problem.
You don't have to redeem anymore.

Speaker 3 And that caused some unhappiness because OBDC1, the publicly traded one, happens to trade at about a 20% discount to net asset value.

Speaker 3 And so instead of being able to get back 100 cents on the dollar, you can get back 80 cents on the dollar if you sell your public shares. No one wanted that.
Yeah.

Speaker 3 So they ultimately called off the merger.

Speaker 4 Yeah. Specifically, when it comes to redemptions, in the third quarter, they approved about $60 million worth that was already exceeding their preset limit here.

Speaker 4 The discount, they've been trying to address that. They've been doing, you know, a bunch of share repurchases.
They have a $200 million program, but I could see how that would cause some indigestion.

Speaker 3 Yeah. Yeah.

Speaker 3 Right. Yeah.

Speaker 4 So now they're evaluating how to go forward.

Speaker 3 Yeah, it's hard because like the publicly traded product seems kind of like a better product for the manager.

Speaker 3 And getting people out of the private product into the public product. The public product, for the manager's perspective, is permanent capital, right? Like they never have to redeem any of it.
Yeah.

Speaker 3 They can if they want to, and they have been, right?

Speaker 3 They've been doing buybacks, which you can think of a buyback as like a way to address the discount and make shareholders happy, or you can think of it as like just an opportunistic trade where like they can buy 100 cents worth of stuff at 80 cents on the dollar, right?

Speaker 3 But with the private company, it's like people complaining when they don't get liquidity. You have them asking for liquidity, so you have to pay up money when you don't necessarily want to.

Speaker 3 It's a less good product, but it is hard to get people out when the public product trades at a discount. Yeah.

Speaker 3 The other question that one might ask is, why does the public product trade at a discount?

Speaker 3 And

Speaker 3 some of the answer for that is like everything trades at a discount. Like close-in funds trade at a discount.
And like the traditional reason for that is like

Speaker 3 you capitalize future fees in the discount.

Speaker 3 And so like, you know, you'd rather own 100 cents worth of loans than 100 cents worth of loans plus like the fees you have to pay Blue Owl for the rest of the time.

Speaker 3 But in November of 2025, the other reason that there might be a discount is that there are some people who believe, you may not believe this, there are some people who believe that some private credit loans aren't worth as much as private credit managers think they are.

Speaker 4 Aaron Powell, Jr.: Yeah, that seems to be a more and more pervasive view.

Speaker 3 It's a view. It's a view.
Jamie Dimon said some words about cockroaches, et cetera, et cetera.

Speaker 3 Jeffrey Gundlach.

Speaker 3 Everyone.

Speaker 3 Not everyone. I shouldn't say that.

Speaker 4 Mark Lipscheltson.

Speaker 3 Yeah, this is not necessarily correct, but it is a view that people have.

Speaker 3 And so one reason that a publicly traded pot of private credit loans might trade at 80 cents on the dollar is that some of the people trading it don't really believe the pot of loans is worth a dollar.

Speaker 3 Yeah.

Speaker 3 And so if that's the case, then like, one, this merger is awkward, but two, the awkwardness around this merger calls awkward attention to people's worries about valuation. Yeah.

Speaker 4 I mean, you can also see this just in shares of Blue Owl proper, which are down like 40-something percent this year. They're at their lowest since 2023.

Speaker 4 A lot of that decline happened before we got into any drama with the fund merger. Yeah.

Speaker 3 But that's like a little, you know, Blue Owl is a management company, right? Like it's, you don't get a pure sense of like the valuation of the portfolio.

Speaker 4 No, but people view it as a proxy.

Speaker 3 No, no, I understand, right? The price of Blue Owl shares tells you something about what people think about the future cash flows. of the private credit business.

Speaker 3 The price of OBDC shares tells you what people think about what the current loans are currently worth, right? And like,

Speaker 3 there's slightly different questions.

Speaker 4 Slightly different.

Speaker 3 The price of the blue owl shares going down suggests that people think that the private credit party is over, coming to an end, not as good as it used to be, something like that. Right.
Yeah.

Speaker 3 The price of the business development company possibly suggests cockroaches. Yeah.
Possibly.

Speaker 4 Well, it's going to be interesting to see what happens here.

Speaker 4 According to Bloomberg News, they have until April to find a solution or will consider liquidating or dissolving the vehicle according to filings typically there's you know some wiggle room around those deadlines i will say liquidating is like not a terrible outcome for the shareholders because it's like then you get a hundred thousand dollar yeah assuming which is fair they're hundred tenths on the dollar better than 80 for sure yeah probably

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Speaker 5 Support for the show comes from public.com.

Speaker 3 You're thoughtful about where your money goes.

Speaker 5 You've got your core holdings, some recurring crypto buys, maybe even a few strategic option plays on the side. The point is, you're engaged with your investments, and public gets that.

Speaker 5 That's why they built an investing platform for those who take it seriously. On Public, you can put together a multi-asset portfolio for the long haul.
Stocks, bonds, options, crypto, it's all there.

Speaker 5 Plus, an industry-leading 3.6% APY high-yield cash account. Switch to the platform built for those who take investing seriously.

Speaker 5 Go to public.com/slash market and earn an uncapped 1% bonus when you transfer your portfolio. That's public.com/slash market.

Speaker 6 Paid for by Public Investing. All investing involves the risk of loss, including loss of principal.

Speaker 6 Brokerage services for U.S.-listed registered securities, options, and bonds in a self-directed account are offered by Public Investing Inc., member FINRA, and SIPC.

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Speaker 3 There's an incredible brain controversy, let's say, about Charlotte Javis. Another one? So she was the founder and CEO of a company called Frank

Speaker 3 that helped students fill out financial aid forms, basically. And she sold it to jp morgan for 175 million dollars and

Speaker 3 the allegations are that she sold it to them on the basis of like having millions of devoted customers and then it turned out that all of the customer email addresses in her database were fake and they sent out you know like jp morgan is not really in the business of providing financial aid advice like jp morgan bought Frank to get like access to this like devoted young customer base.

Speaker 3 And then they sent out an email to all of Frank's customers being like, hey, sign up for a JP Morgan credit card or whatever and like all of the emails bounced and they're like wait a minute and so they sued her for fraud and then ultimately it got referred to prosecutors and she was arrested and charged with fraud and tried and convicted and sentenced to seven years imprisonment she's now out on battle i'm trying to find the title that jp morgan gave her because it was pretty good but anyway go on she was like yeah they bought frank and she was like made a managing director and head of frank or whatever right it was like head of student something yeah and then like they sent out this email and it all bounced and they were like, wait a minute.

Speaker 3 And they put her on leave and fired her and so forth.

Speaker 3 But because she was a JP Morgan employee and because she had a merger agreement where she sold Frank, they had agreed to indemnify her for legal expenses, pay her defense costs in certain legal cases, including it turns out, and they litigated this, but they lost.

Speaker 3 They were on the hook to pay for her criminal defense, which is like, seems a little weird that like she defrauded them allegedly and now convictedly, and they had to pay for her legal defense.

Speaker 3 But it's not that weird. Like, that's actually like a thing that happens somewhat regularly, is that you agree to indemnify your employees even against charges that they stole from you.

Speaker 3 But what has also happened is that she has racked up astonishing,

Speaker 3 amazing, incredible legal bills to the point that people keep saying the legal bills might approach the amount the $175 million that she defrauded from J.P. Morgan.

Speaker 3 The legal bills are now nine digits.

Speaker 4 According to the Wall Street Journal, between her and her co-executives' legal defense, it's already cost more than $142 million. So they're pretty dang close.

Speaker 3 Incredible. Yeah.

Speaker 4 Queen, just kidding.

Speaker 3 If the government is trying to send you to prison and someone else will pay for your lawyers, you might as well hire all of the best lawyers and leave no stone unturned in your defense. Yeah.

Speaker 3 Which I think is what happened. Like, she hired really fancy lawyers and they put in a lot of hours and they reviewed a lot of documents.
And

Speaker 3 from where sit,

Speaker 3 that doesn't seem all that useful because, like, you know, they shed a lot of emails being like, let's do fraud, right? That's not true.

Speaker 3 There is more of a defense of her actions than I'm

Speaker 3 whatever. I mean, like, pretty bad fraud.
But

Speaker 3 if it's not your money, you might as well spend as much as you can to take any shot of that kind of prison.

Speaker 3 But the other thing is that, and this is like at the Times Ron Lieber wrote about this last week.

Speaker 3 Like,

Speaker 3 JP Morgan is trying to claw back some of this money and like stop paying for it. And one thing that they're accusing her is like, you know, enormous, wasteful, unconscionable spending on legal bills.

Speaker 3 But the other thing is they're like,

Speaker 3 she spent money on

Speaker 3 cellulite butter? Yeah. I never heard of it.

Speaker 4 Okay. I'm interested.

Speaker 3 And I don't exactly know why JP Morgan, in paying her legal bills, would have paid her cellulite butter bills. But I have a guess,

Speaker 3 which I wrote about, which is that

Speaker 3 law firms will serve you lunch. Yeah.
Like

Speaker 3 you know, I used to work at a law firm and like, so I once worked on a deal where like we had a client and like they were negotiating a merger with some other client and the other client had another law firm and we were meeting at that other law firm's offices and

Speaker 3 our client was like,

Speaker 3 let's go to Wachtel's offices. They have better food.
And so we went to our offices and we had better food. And it's much nicer to be at our offices.

Speaker 3 Like you have a sort of negotiating advantage when it's at your office.

Speaker 3 And I was like, oh, that's so nice. We got a real advantage by having better food.
And we didn't cook the food, you know, like we ordered in, but like we ordered in nice food.

Speaker 3 I was like, on the one hand, it's nice that we're doing this nice thing for the client, but we're billing it to the client. Like the client pays for all of this eventually.

Speaker 3 And so there's a lot of stuff like that where like, if you're a client and you're at the law firm and you're paying the law firm an enormous bill and you ask the law firm to do anything at all for you, like buy you a change of clothes because you've been there overnight, really anything.

Speaker 3 They'll just do it for you. But then they'll put it on your bill, right? Yeah.
And so I think that one thing that might be happening here is that J.P.

Speaker 3 Morgan is not only paying the law firm's bills, they're paying the law firm's expenses. And the law firm's expenses could be some stuff for Charlie Javis.
Yeah.

Speaker 4 Well, according to the Wall Street Journal,

Speaker 4 lawyers were billing for 20 hours of work in a single day. Sure.
So maybe there were day shift and night shift lawyers working around the clock.

Speaker 3 No, that's that's no, that's individual lawyers.

Speaker 3 That's the same guy, 24 hours. I've worked on a law for him.

Speaker 4 That's awesome. Luxury hotel upgrades, fine.

Speaker 4 The cellulite butter, again, I'm very interested in that, but we should probably say that a spokesperson for Charlie Javis says that Charlie says she has nothing to do with that, and it's a ridiculous allegation.

Speaker 3 By the way, it's not obvious that

Speaker 3 they could have bought the cellulite butter for themselves. That's true.
You're on a work trip, you're like...

Speaker 4 Yeah, it's very...

Speaker 3 Like, you bill enough hours, you work enough hours, you're like, I'm gonna expense everything on this work trip.

Speaker 4 It is very heteronormative that we assumed it was for Charlie.

Speaker 3 Well, right, because like JP Morgan is sort of accusing her of wasting their money, yeah, but

Speaker 3 it could have been the lawyer. It could have been the law, lawyers, right? The lawyers rack up whatever expenses they rack up.

Speaker 3 They're no angels, yeah.

Speaker 4 This is amazing, and I didn't fully appreciate that. I would have just thought she's very expensive lawyers, but I'm glad that so many different news outlets have tackled this.

Speaker 4 Do you think that JP Morgan is going to be able to stop paying for her legal defense?

Speaker 3 Maybe.

Speaker 3 I don't know.

Speaker 4 When does it start to impact their earnings? Like, when do we see analysts ask questions about this?

Speaker 3 Million-dollar appeal.

Speaker 4 Someone asked Jamie Dimon next earnings call.

Speaker 3 Yeah, it's true. It's true.
It's true. I think sometimes about

Speaker 3 the level of mistake

Speaker 3 that you have to make at a bank to be asked about on the earnings call. And to be fair, the $175 million acquisition of Frank definitely got raised on some calls, right?

Speaker 3 Like Jamie Diamond has addressed this, I think, more than once with like analysts and reporters.

Speaker 3 People being like, yeah, how come you do such bad due diligence and spend $175 million in this company that just had fake email addresses? But now we're getting to that level.

Speaker 3 We're getting to 100 million levels.

Speaker 4 Yeah, we've doubled that price tag. Charlie Javis is exactly my age.
She was born in March of 1993.

Speaker 3 She's done so much.

Speaker 4 What have I done?

Speaker 4 God, what a whirlwind that must have been.

Speaker 4 And by the time she gets out of prison, when she eventually goes, I mean, she'll still be a relatively young woman. Yeah.
Early 40s.

Speaker 4 A lot to live for.

Speaker 4 She could still get a tattoo.

Speaker 3 And that was the Money Stuff Podcast. I'm Matt Levine.

Speaker 4 And I'm Katie Greifeld.

Speaker 3 You can find my work by subscribing to the Money Stuff newsletter on Bloomberg.com.

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

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Speaker 3 The Money Stuff Podcast is produced by Anna Mazarakis and Moses Andam.

Speaker 4 Our theme music was composed by Blake Maples.

Speaker 3 Amy Keene is our executive producer.

Speaker 4 And Sage Bauman is Bloomberg's head of podcasts.

Speaker 3 Thanks for listening to the Money Stuff Podcast. We'll be back next week with more stuff.

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