No Nap Rooms: Credit, Peace, 24X | Money Stuff: The Podcast
Summary
Market Outlook: The podcast discusses the current state of the credit market, highlighting recent bankruptcies and financial "accidents" as signs of a late-cycle economic environment.
Private vs. Public Credit: There is a debate over whether recent financial issues are more prevalent in private credit or public credit, with some industry leaders defending the stability and underwriting practices of private credit firms.
Investment Risks: The discussion touches on the risks associated with late-cycle lending practices, including over-leveraging and loose collateral standards, which are seen as indicators of a "toppy" market environment.
Prediction Markets: The podcast explores the role of prediction markets in pricing future events, using the example of betting on the Nobel Peace Prize winner, and discusses the potential for these markets to provide economic insights.
24-Hour Trading: The introduction of extended trading hours by the 24X exchange is discussed, with considerations on how this could impact market volatility and investor behavior, particularly among retail investors.
Technological Impact: The conversation highlights the shift towards more continuous trading and the potential challenges and opportunities this presents for both investors and market infrastructure.
Financial Innovation: The podcast reflects on the evolving nature of financial markets, noting the increased role of technology and the persistence of market inefficiencies that create opportunities for informed investors.
Transcript
[Music] Bloomberg Audio Studios podcasts radio news. >> I'm just saying like something could like happen, >> right? >> Something crazy could happen, >> right? >> Something crazy could happen while we're recording this. And >> that's true. >> I'd have to go talk about it in like 52 minutes. >> Isn't that exciting? Like you come in here an hour before you go on television and like you turn off your phone. Obviously, your phone is sitting right in front of you, but like let's pretend you turn off your phone and focus entirely on the Monday stuff podcast and like what if something crazy happens and you get out of here at like 2:59 and you go on air and they're like something crazy happened and you're like yeah >> they're like Katie quick break this headline about the asteroid that took out California and I'm like we're receiving reports or something like that. Um >> feel like you keep your life exciting. >> I do love adrenaline. Like I I crave adrenaline, but >> you know, sometimes I get tired. >> Yeah, I'm pretty tired. >> I was out >> to a dinner until like midnight last night, which is approximately 6 hours later than my usual bedtime. >> So, I'm in bad shape. >> Yeah, that's crazy pants. Matt came over at 9 in the morning >> with a smile on his face and I was like, "How are you upright?" I had a fun dinner last night, but it was way past my bedtime. So now I'm going to do this and then collapse. >> No, then you're going to go watch the clothes on Bloomberg television from 3 to 5. >> You and I, we're our body batteries are turning in different directions. You are going to your adrenalinefilled asteroid reporting and I'm going to nap. >> Just ramping. >> I did come over to you yesterday and ask if you knew where the nap rooms at Bloomberg. >> We can't tell if there's Bloomberg. >> There's no nap rooms at Bloomberg. If there's Bloomberg people listening, they don't exist. >> No nap rooms. Hello and welcome to the Money Stuff Podcast, your weekly podcast where we talk about stuff related to money. I'm Matt Lavine and I write the Money Stuff column for Bloomberg Opinion. >> And I'm Katie Griffeld, a reporter for Bloomberg News and an anchor for Bloomberg Television. I >> think we're um in the like pest control season of the podcast. >> We're talking about bugs. There are like 200 Bloomberg cut lines on the last 3 days about cockroaches. >> Yeah, I feel like the joke's over. We've squeezed as much juice. >> Squeezed all the juice out. >> Cockroach as we can, so let's give it a rest. It's been like in the title of so many newsletters that I've gotten over the past 24 hours. >> Yes, it will not be in the title of this podcast unless we screw up. But right, so Jamie Diamond on the JP Morgan earnings call used a very conventional metaphor that when you see one cockroach, there are probably more. He's talking about the first brands andricolor bankruptcies, failures. >> Yeah. >> Credit bad things. >> Kabooms. >> Kabooms. Actually, the real word that I love and Mark Rowan said this. He said it does not surprise me that we were seeing late cycle accidents. Accident is what you call this. Like the word for what happened with first brands and trial was accident. Yeah. Like you made some loans, you didn't get paid back. Oops. >> You spilled the milk. Just not worth crying. >> It's like accident is the term. But yeah, so there have been some pretty big accidents in the credit space and one dumb thing that is happening is that there is a dispute about whether they exist in the private credit space or the public credit space which I don't think is at all interesting. >> No, >> like at all. But like basically JB Diamond got on a call and was like ah you see the problems with private credit because uh these you know companies went bankrupt and then all the private credit guys are like those are like publicly finance banks led their deals like those are not p and like they're not like private credit private credit they're not like direct loans from like the classic they're not like LBO you know like the core of private credit like I don't know they were funded by funds like are they private credit in some loose sense were some of them bankled and like you know were there bonds like yeah I I don't know, whatever. But the point is, it's not like JP Morgan making bank loans on his books and it's not like core, you know, direct lending private credit. >> Yeah. A funny detail in all of this is that Jamie Diamond didn't specifically call out private credit. I >> Yeah. Although he did talk about like BDC's being >> Yeah. >> Yeah. >> BDC's are private credit. >> Yeah, I know. But like it's not like he said like, "Oh, these guys made bad loans, blah, blah, blah." He did talk a little bit about, you know, BDC's trading at a discount to their NAV, but I think it's just, >> which is the efficient markets way of saying they made bad lines, but anyway. >> Right. Right. Right. But it did so happen that Mark Lip Schultz of Blue was asked about his comments and appears that he took them personally and that's where he told of course JP Morgan to look inwards and the banks to look inwards at their loans. So it is this fun blame game that has played out this week. I feel like we wouldn't be talking about it so much had Jaime Diamond not said cockroaches. I feel like that gave right >> a good like tangible illustration for us to all seize upon. >> But it is like taking a step back like it is the case that like these accidents as Mark called them are like true like bubbly signs. Yeah. Like you don't make loans to like people who are double or triple or 100 times pledging their assets which like there are some al like no one really knows. There's some allegations and or first brands were maybe, you know, a little loose with collateral. Yeah. You don't make those loans unless >> you're really trying hard to make loans, right? Like I wrote about like one thing that I think is interesting about first brands is like the people who had a lot of exposure. You know, there's like this Jeffre fund. There's this like trade finance origination platform. They have like enormous amounts of exposure specifically to first brands. >> Like what does that mean? It means like you're running a fund and you're like, you know, ideally you'd like to have diversified, you know, trade finance receivables or whatever, but like you just need to find paper to put into the fund. And if someone is like, I'm going to generate a lot of paper for you, then like you would love to deal with that person, right? Like you'd love to deal with the first brand if they're like we can, you know, sell you as much as you need. >> Yeah. And so it creates incentives for people to sell you as much paper as you need >> which means >> either becoming very overlevered to generate paper for you or just like writing fake paper or like you know triple pledging things so that they can like sell you more stuff because they sell you stuff and you get the money and like that's you know that's the trade they're in. So it does feel very toppy. Yeah. Yeah, like like Mark Ardan said, accidents, but also late cycle accidents. And like this is a private credit thing, but there's the credit generally these days. Like there's a lot of people going around being like, "Yeah, it feels toffee. Yeah, we're going to keep doing it." >> It's um >> you know, I think one of the most insightful things ever said about finance was when Chuck Prince in 2007 said, "As long as the music is playing, you've got to get up and dance." Like that's what it is, man. We all know we're coming to the end of the song. >> Like if you're in the business of making loans, you can't be like, "We're not making loans." >> Yeah. >> Too many like loans are too frisky right now. We're not going to do it. But you can't do that. >> Yeah. >> You got to dance. >> Yeah. You got to dance. Even if it's late cycle and you know, everyone's tired. It is interesting. I mean, this has been held up as an example of we are in a toppy environment. So too, I said we weren't going to talk about Open AI, but the Open AI Walmart deal that has been a lot of hay has been made on social media about how truly we've reached the top. >> There's like an Etsy article there where someone like the headline is something like, "Of course, it's a bubble." >> Of course, >> like everyone's like, "Yep, here we are in a bubble." >> I do want to talk a little bit more about this other comment that Mark Lipshult said because it seems like he did take this very personally. One of the things he said when it comes to market caps, there are people who have meaningful interests in the industry not continuing to grow and succeed. Blackstone's market cap exceeds the market cap of most financial institutions in the world today. It's not as if that's not coming from someone. And of course, there are people who don't like it, which is interesting that he used Blackstone specifically and not Blue, but Blue has a market cap of about $25 billion. Blackstone is somewhere closer to 200 billion. JP Morgan is over 800 billion. But this is a point we've spoken about before is how the stock market values some of these private credit players even though their assets are much smaller than like a traditional asset manager or even the asset management arms of these banks. >> Yeah. Though I think the point he's making is like when he says that that market cap has to be coming from somewhere, it's not like a comparison to the AUM of banks. It's a comparison to like their lending business, right? It's like, you know, I think he's making more broadly the point that like the business of making a lot of categories of loans is shifting from being a thing that banks >> Yeah. >> at least intermediate and underwrite to being a thing that is kind of being >> led and originated and held on the balance sheets of private credit firms. >> Yeah. Which again, I don't know how interesting it is to like debate about whether the problems you're seeing are like private credit problems or bank problems, but like on the one hand, I think the private credit people make a good point. Like first, I say this a lot, but like the funding model of private credit is a lot more systemically stable than the funding model of banks, right? Instead of having deposits, you have long-term equity capital. That seems good. The private credit people will also argue that like they have better underwriting incentives because they hold it on their books. Yes. Whereas banks obviously hold a lot of loans on their books, but you think about a lot of what they do is originate the distribute model where they maybe have less skin in the game on their underwriting. On the other hand, banks are regulated and you do get the sense that it is such a good fundraising environment for private credit firms. Such a frothy like if you want to sell your private credit firm, a lot of like traditional asset managers will buy it. It's like you do have some pressures to put all this gusher of money to work and that might loosen your underwriting standards as well. >> Can I say one more thing about cockroaches? >> Sure, >> by all means. >> This is so gross. >> Literal or >> Yeah. Jamie Diamond. So, first of all, exactly what he said on the call was, "My antenna goes up when things like this happens." And my first reaction was like an antenna like that on a cockroach. You're saying he feels for the cockroaches? >> Well, it's just >> he can put himself in the shoes of both the lender and the I was going to say the shoes of the cockroaches, but >> perhaps he tipped his hands there. I don't know. But cockroaches do have antennas and so does Jamie Diamond, apparently. entire life. [Music] >> What's uh second on your priority list? >> The Nobel Peace Prize. >> Yeah. All right. Um >> I didn't win again. >> Well, someone won the Nobel Peace Prize, but also the insider trading prize, but it wasn't insider. Well, somebody somebody won the the Nobel Peace Prize. It was Maria Karina Mashado, a um Venezuelan democracy activist. And also somebody won an amount of money on poly market. >> Some sum. >> Yeah, the sum appears to be about $50,000, which is like depends on your like >> I could find something to do with it. >> It's not a bad payday for someone hanging out on a poly market. It's not like institutional grid, you know? You can't like run a hedge fund by like occasionally by once every year making $50,000 on the Nobel Peace Prize winner. But it's something, right? It's like it's true. >> It's a nice individual person's paid it. But anyway, there were some suggestions that it was insider trading because it was done kind of right before the announcement like in the in the you know hours leading up to the announcement. And in fact, a spokesman for the Norwegian Nobel Institute said, "We've noticed that some have made significant financial gains by placing bets on this year's prize. we will investigate whether this means that someone has unlawfully obtained information from us because presumably they knew before they announced it, right? Yeah. And so if like someone in the circle of trust at the Norwegian Nobel Institute went and like placed an anonymous crypto trade on Poly Market, >> which would have been amazing for what it's worth. >> Oh yeah. >> A real sign of the times anyway. >> A real sign of the times. And then that's what they seem to have thought happened. But it probably turns out, one never knows because these things are all like somewhat anonymous. But like, you know, there's an interview with the guy who like allegedly did it and he's like, you know, you can look to like there's all this public basically like when they hit the button on the announcement, like there's a lot of assets on the website. Like there's a picture of Machado >> for sure >> and uh they um upload those assets before they hit the button before they like put out the actual press release. And so if you're like scraping the folder on the website that has all the assets, you can see like you know something with her name in the web page and then you can make an informed bet. And so that may be what happened here. >> That is really funny. Also to your point that 50 grand isn't institutional money. I have to imagine that next year this inefficiency in the market won't exist. Like maybe they'll hit the button and then they'll upload the photo. >> Yeah. There's some of this like like this is a trade that occasionally exists in US public company earnings. Yeah. >> Because you can like >> if you know like the URL of like last quarter's earnings, you can just like change Q2 to Q3 in that URL >> and just refresh that page until something pops up which might be before they officially announce earnings. Yeah. >> And so this is like a well-known enough trade that companies are a little better about not doing that now. So, right. You think that like they will be a little bit more information secure next year or they won't. I don't know. >> I mean, maybe they're not that bothered, but it just feels like that that body >> who actually like if you're the Nobel Institute and it turns out that some junior staffer was using your information to make 50 grand, you'll be annoyed with them. >> If it turns out that someone on the committee that selects the winner was betting on it, then you'll be really annoyed cuz that's like >> don't like that. That's not insider trading. That's like, you know, market manipulation, right? That's like, >> yeah, that's like rigging the game. >> That's rigging the game. It's like instead of betting on who's going to win the Nobel Peace Prize, you're like giving the Nobel Peace Prize to the person you bet on. It seems really really bad. No allegation though that happened. >> But if it's just like someone scraped your website, like who cares? Give them the money. Who cares? >> That's that's a very Kathy Kathy Wood attitude. >> Yeah. >> Referencing of course last week's podcast and nothing else, >> right? No, I know people talk about prediction markets. You know, I've quoted Shane Copelan saying it's like their goal is to help people understand and price the future. >> And people really want prediction markets to create incentives to make the world more informed. >> Mhm. >> And so like the ideal is like, you know, you have a bet on like will Russia invade Ukraine or whatever, right? And like you have people who are really informed geopolitical analysts making bets and then you have like a Russian general making bets and then like you actually know, right? And then like the market implied odds are really informative and so people can make economic decisions based on this like probability that exists in a prediction market. Like that's kind of an interesting ideal and would be useful in a lot of purposes. And you know as we've talked about here the problem with that is like it's not clear there is a lot of dumb money on like >> the market of like will Russia invade in Ukraine and so it's hard to make a lot of money. It's hard to be institutional grade and so like if you're a Russian general you might be like well I can make $10,000 and possibly be shot so I won't do it right. So, it's like it's like hard to incorporate information. And then like you have examples like this where it's like whoever this is like put a lot of work into figuring out who was going to win the Nobel Prize 12 hours early. And like one is that the sort of fact that will inform anyone's economic decisions about like no one's hedging who's going to win the Nobel Prize, >> right? >> Two, is knowing it 12 hours early that useful? And then three, like the reaction might be that they just stop putting these assets on the web 12 hours early and then it's like well okay you haven't like >> you haven't made anyone more informed about anything in any useful way. It's just like yeah you get some money. >> Yeah. Well to that point I mean you write in your newsletter that the point is that the Nobel Peace Prize prediction market is working the way it is supposed to >> in some broad sense. It incentivizes people to find out information and incorporate it into prices, which I agree with, but it feels kind of unsatisfying because you think about the example of, you know, equity markets and a hedge fund analyst scraping a website for earnings makes that market a little bit more efficient and then it informs how companies invest capital and allocate capital. Whereas here it's just someone now knows this early and like there's no follow through on that. Satisfying. >> People care about who won the Nobel Prize, but it doesn't have like economic consequences. They're not a lot of hedggers. >> Yeah. >> Right. >> Yeah. >> But you know, this is like what I've said about sports gambling too, right? It's like if you like create an ecosystem where people professional and like semi-professional and like just hardworking and smart people are dabbling in prediction markets, then like there's possible spillover to like economically meaningful >> prediction markets, right? There's some possibility that the people who spend eight hours building some scraping tools to predict the Nobel Peace Prize will then go on to spend 16 hours building scraping tools to predict the next Russian invasion. Right. Like is this similarish skill sets? Maybe. Yeah, >> maybe. Like maybe >> Russia's uploading its battle plans to a website. Who knows? There's some notion that if prediction markets get bigger and attract capital and skill, then ultimately the thing you really want, which is that they inform people about the probabilities of economically meaningful future events, there's some possibility that will come true. >> Yeah. Yeah. And it's not like it's not in a straightforward linear way where it's we start with the most important markets and get really sophisticated people to do really good predictions of the most important markets. It's we start with places where you can make money and then that attracts money and then that attracts more sophistication. >> It probably also informs your behavior in other markets. Like if the prediction market for who is Russia going to invade next gets really informative and liquid and you could imagine watching that and then going and buying a bunch of calls on oil. >> Oh absolutely. Although I mean right now surely the oil market is more predictive of geopolitical events than you know prediction markets. But I don't know >> the frustrating thing about oil it's my least favorite commodity to talk about. >> It never prices in a sustainable risk premium. So maybe you wouldn't buy calls on oil, >> right? >> Or maybe you would, I don't know, buy treasuries, >> right? This is one of the arguments for prediction markets. There's a lot of ways to implement predictions about future geopolitical events. And what that means is that you can't look at the price of oil or the price of treasuries and read out a prediction about future events because they kind of reflect a lot of different possible events. Yeah. Yeah. >> Whereas if there's just like a contract, will Russia invade wherever? Then you can look at that contract and read off the probability. >> Yeah. It's like very pure play. >> Yeah. Right. >> Congratulations to whoever won 50. >> Yeah. >> 50 grand. Probably less than the Nobel Peace Prize prize. I don't actually >> How much is it? >> I don't know. You get a gold medal. >> That's pretty good. >> Yeah. >> You also get the satisfaction. >> Yeah, it's pretty good. >> Yeah. I I feel like winning the Nobel Peace Prize is in some ways the worst peace. Like there's a decent chance that you're like imprisoned or exiled. >> That's true. >> But uh >> but in the event that you're not, imagine all the speaking engagements and fees that you can command. >> That's okay. That's fair. That's fair. Lucrative business running an LP press. >> Okay. Well, a bunch of people are going to write in and tell you how much. >> Yeah, of course. It's a chunk of change, I think. Maybe it's not. It's fun because we could Google it, but we're not going to do that, >> right? >> Just idally have your phone right in front. >> Yeah. It's staring at me. [Music] >> We're up to 185 stock trading. >> 185, baby. But, you know, in 2026, eventually we'll get to 235. There's a thing called the 24x exchange. The 24 exchange, 24x national exchange. The intuition is that we want to trade stocks 24 hours a day. But like you can't do that because you have to like restart the computers. You do. So their more modest target is trading stocks 23 hours a day, 5 days a week. And their progress towards that is they launched 18 hour a day trading five days a week, which is, you know, it's like >> I feel like their name should be 23x. >> No, that's the thing. Like if you say 24, every Oh, 24. That's the number of hours in a day. You say 23 people like what? >> I know, but it's disingenuous. >> Yes. That's why it's funny. Yeah. >> But like, you know, you're allowed to be funny. Anyway, though, they're now up to 18 hours, which is like, you know, kind of like extended hour. >> That's really all you need. >> I don't know. It's all I need. >> I, as we've established, go to bed at six o'clock. But, um, if you're, for instance, in Japan and you want to trade American stocks, it is convenient to be able to do it in the middle of your day. Yeah, I guess >> like it's a global market. Yeah. For American stocks and stocks generally and so it does kind of make sense that everyone should be able to trade all the time. >> Also, you know, maybe you're in Japan, maybe you're just up at 3 in the morning, >> right? I try to be generous. Like 24x exchange actually says, you know, this is for, you know, investors worldwide. And I don't really think that the paradigmatic user of 24-hour trading is someone drunk on their computer at 3:00 am. >> But I kind of think that I think about that person a lot. I think that's a fun >> Yeah. >> I'm not going to do it justice. There's a famous great bit in like hedge fund market wizards, the Jack Schwagger book, where he interviews one hedge fund manager who says, "I want to hire people who wake up early on Sunday morning and log in to poker sites to pick off the drunks coming home in another time zone." >> Nice. >> Because like what you're doing there is understanding where you have the most edge and then just exploiting your edge and doing it somewhat inconveniently for yourself in a just cold-bloodedly rational way. Anyway, right. There are some people in a world of 24-hour trading who would come home drunk from the bar at 3:00 a.m. and be like, "All right, fire up Robin Hood. Let's trade some options." >> My single triple leveraged ETF now. >> Yeah. And again, I don't think that's the main use case for 24-hour trading, but it's the funniest use case. >> Yeah. Well, hopefully, you know, as this gets online, we'll figure out who exactly the players at 3:00 a.m. Eastern are. It might be Japanese retail players. It might be people drunk coming home from the barn. It might I almost said barn. I say that a lot more often than barn. >> You come home from the barn more often than the barn. >> Trade stocks. >> Or it might be, you know, sophisticated US investors looking to pick off Japanese retail investors. I don't know. >> Well, yeah. I mean the other thing like the thing that I think is interesting is we have this ecosystem where a lot of news gets disclosed outside of regular market hours >> because you don't want to be or traditionally you don't want to be in the situation of disclosing a merger at 10 a.m. and everyone reacting to that sequentially and like reading the press release and saying I should buy the stock and some people not having gotten the press release yet and like selling at outdated prices. It's just a mess. And so what everyone does is they announce earnings at 7 a.m. or 4:05 p.m. So people have time to digest the earnings before the stock opens for trading next. And the purpose of after hours trading really is to let people react to news as it happens. So instead of, you know, if a hurricane hits at midnight, instead of waiting until the next day to dump your stocks, you can dump your stocks at 12:01. Mhm. >> And when you say that, I think it's intuitively appealing to a lot of people. Oh, I can trade as soon as the thing happens. But I think it's like kind of bad for retail investors to >> what it means is that >> instead of everyone reacting to news at the same time because you have a buffer between when it's announced and when can be traded. >> You have people reacting to news as they get it, as they analyze it. And so you're going to have a lot of people trading at wrong prices. Mhm. >> And I do think that's the point or that's the appeal of after hours trading is like you'll just get more volatility. You'll get more wrong prices. If you think you're skilled and you enjoy a gamble or a game of skill, you'll have more opportunities to log on at 9:00 and be like, I know what this news means. I'm going to trade on it. I actually wrote this week about the meme ETF. >> Yeah. >> The Roundtell meme stock ETF that was closed and then revived this week. And you know it was revived with a very small like first day of trading had a very small like thousand dollar a couple hundred thousand dollars on it >> and it traded kind of normally during the day and then in the afterhour session it shot up because like you know there's a few retail investors who are buying it and the market makers all went home because it was after hours trading in this tiny little ETF and so there's no arbitrage mechanism and so people are just buying it at crazy premiums to NAV which should not happen in an ETF but does if no professional profals are awake. And I think if you have like more 24-hour trading, you're just going to have more trading where no professionals are awake and things trading at wrong prices and like people want to trade at wrong prices. >> You're going to have uglier charts basically. >> Yeah. Yeah. Every ugly chart means someone like made a very bad trade and someone else made a very good trade. >> Yeah. Well, you touched on something that I think we've talked about before is like, okay, let's imagine a world where you do have 24 or 23-hour trading 5 days a week is whether or not you'd still get like these windows around the open and the close where everyone is sort of trained to trade the most. >> I think you would because professionals have a rhythm to their day where they want to >> stop trading at the close, you know? >> Yeah. >> Not all, but like you know, index funds time. Yeah. not even like to go home, but just because like you need a benchmark to mark against. >> And then also just because of that like timing tradition, there is so much concentrated liquidity there. And so if you're a huge investor who needs to move a lot of shares, doing that at the close is really useful. I do wonder, you know, I've never fully understood how crypto closes work because crypto just sort of from day one is a 247 market. And so for >> same with traditional currencies as well. >> Yeah, that's right. Yeah, there's no like close, right? And like in stocks there's very clearly a close and a lot of apparatus, you know, index funds and you mutual fund withdrawals and redemptions and benchmarks and everything are all kind of organized around the close. And if you did move to 247 trading, if you just did it in a natural like non-path dependent way, you'd be like, well, when is the close? Yeah, >> but I don't think that's ever going to happen. I think it's always going to be the main exchanges will have a close at 4 and even if the main exchanges offer, you know, 17 hours of extended hours and everything is kind of technologically the same during the regular session and the extended session. I think there'll still be a close that everyone can point to and where a lot of liquidity will be concentrated. >> Yeah, I feel that way too. Like I I do struggle to imagine a world where this is the norm. It's just continuous 24-hour a day, like nothing, no clothes. Yeah, I don't that doesn't seem >> It feels like it goes against just the rhythm of being a human. >> Yeah, it does. Well, it goes against like the stock market's rhythm. >> Yeah. >> I mean, you say the rhythm of being a human, and I hear you, but like >> stock market >> you can buy on Amazon anytime you want, you know. >> Yeah. I was going to say I mean, humans did make the stock market, >> right? >> Yeah. >> Sure. Yeah. No. Right. Right. Right. Right. There is a human rhythm and there is a computer rhythm and like humans have become adapted to the computer and the stock market is from a time of you show up there and you leave to go have dinner, right? So, >> whereas like you know Amazon is from a time of computers and you log in at midnight and buy something, right? And crypto is from a time of computers and so you log in at midnight and buy crypto. >> Yeah. >> And I think that is creeping into the stock market, but I think we're a long way from it entirely taking over the stock market. I did want to point out one thing that you wrote which actually made me grateful for the environment that we live in right now. Um you talk about how a decade ago it was possible to think that investing would gradually become duller and more efficient and more automated and that people would just let robots and professionals manage their retirement savings and basically we wouldn't have any of the silliness that we do now. That was like when I said it was possible to think that like I linked to something I wrote kind of predicting that like so that was dumb. >> That's fine. You called yourself out but I occasionally get tired as discussed. We all get tired of the silliness in the headlines but I think that the world that you described sounds a lot more tiresome. So >> well you say that as a person who goes on TV to talk about financial news every day for several hours. >> Yeah. But you write about it. Oh yeah. No, I agree. I agree. Like all this dumb stuff, you know, once every five times I write about meme stocks or crypto or whatever, I roll my eyes. I'm like, I hate writing about this. The other like, well, at least I have something to write about. No, I agree. I think as a person, as an investor, if you stopped thinking about meme stocks and like just, you know, had like robots perfectly invest your like reasonably perfectly invest your stock and you didn't worry about it, you could spend more time like reading books. >> Yeah. Right. Maybe. Right. Like it's a better world, but it's worse for, you know, making jokes in a financial newsletter. >> That's true. >> That's what we're all here for. >> I have to go talk about all the silly things on the television. >> Have fun. >> And the asteroid if it hit yet. >> Yeah. Good luck with that. [Music] >> And that was the Money Stuff Podcast. I'm Matt Lavine. >> And I'm Katie Griffeld. You can find my work by subscribing to the MoneySL stuff newsletter on bloomberg.com. >> And you can find me on Bloomberg TV every day on the close between 3 and 5:00 p.m. Eastern. >> We'd love to hear from you. You can send an email to moneypod@bloomberg.net. Ask us a question and we might answer it on the 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 Mazerakis and Moses Ambound. >> Our theme music was composed by Blake Maples. >> Amy Keane is our executive producer. >> And Sage Bowman is Bloomberg's head of podcasts. >> Thanks for listening to the Money Stuff Podcast. We'll be back next week with more stuff. [Music]
No Nap Rooms: Credit, Peace, 24X | Money Stuff: The Podcast
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[Music] Bloomberg Audio Studios podcasts radio news. >> I'm just saying like something could like happen, >> right? >> Something crazy could happen, >> right? >> Something crazy could happen while we're recording this. And >> that's true. >> I'd have to go talk about it in like 52 minutes. >> Isn't that exciting? Like you come in here an hour before you go on television and like you turn off your phone. Obviously, your phone is sitting right in front of you, but like let's pretend you turn off your phone and focus entirely on the Monday stuff podcast and like what if something crazy happens and you get out of here at like 2:59 and you go on air and they're like something crazy happened and you're like yeah >> they're like Katie quick break this headline about the asteroid that took out California and I'm like we're receiving reports or something like that. Um >> feel like you keep your life exciting. >> I do love adrenaline. Like I I crave adrenaline, but >> you know, sometimes I get tired. >> Yeah, I'm pretty tired. >> I was out >> to a dinner until like midnight last night, which is approximately 6 hours later than my usual bedtime. >> So, I'm in bad shape. >> Yeah, that's crazy pants. Matt came over at 9 in the morning >> with a smile on his face and I was like, "How are you upright?" I had a fun dinner last night, but it was way past my bedtime. So now I'm going to do this and then collapse. >> No, then you're going to go watch the clothes on Bloomberg television from 3 to 5. >> You and I, we're our body batteries are turning in different directions. You are going to your adrenalinefilled asteroid reporting and I'm going to nap. >> Just ramping. >> I did come over to you yesterday and ask if you knew where the nap rooms at Bloomberg. >> We can't tell if there's Bloomberg. >> There's no nap rooms at Bloomberg. If there's Bloomberg people listening, they don't exist. >> No nap rooms. Hello and welcome to the Money Stuff Podcast, your weekly podcast where we talk about stuff related to money. I'm Matt Lavine and I write the Money Stuff column for Bloomberg Opinion. >> And I'm Katie Griffeld, a reporter for Bloomberg News and an anchor for Bloomberg Television. I >> think we're um in the like pest control season of the podcast. >> We're talking about bugs. There are like 200 Bloomberg cut lines on the last 3 days about cockroaches. >> Yeah, I feel like the joke's over. We've squeezed as much juice. >> Squeezed all the juice out. >> Cockroach as we can, so let's give it a rest. It's been like in the title of so many newsletters that I've gotten over the past 24 hours. >> Yes, it will not be in the title of this podcast unless we screw up. But right, so Jamie Diamond on the JP Morgan earnings call used a very conventional metaphor that when you see one cockroach, there are probably more. He's talking about the first brands andricolor bankruptcies, failures. >> Yeah. >> Credit bad things. >> Kabooms. >> Kabooms. Actually, the real word that I love and Mark Rowan said this. He said it does not surprise me that we were seeing late cycle accidents. Accident is what you call this. Like the word for what happened with first brands and trial was accident. Yeah. Like you made some loans, you didn't get paid back. Oops. >> You spilled the milk. Just not worth crying. >> It's like accident is the term. But yeah, so there have been some pretty big accidents in the credit space and one dumb thing that is happening is that there is a dispute about whether they exist in the private credit space or the public credit space which I don't think is at all interesting. >> No, >> like at all. But like basically JB Diamond got on a call and was like ah you see the problems with private credit because uh these you know companies went bankrupt and then all the private credit guys are like those are like publicly finance banks led their deals like those are not p and like they're not like private credit private credit they're not like direct loans from like the classic they're not like LBO you know like the core of private credit like I don't know they were funded by funds like are they private credit in some loose sense were some of them bankled and like you know were there bonds like yeah I I don't know, whatever. But the point is, it's not like JP Morgan making bank loans on his books and it's not like core, you know, direct lending private credit. >> Yeah. A funny detail in all of this is that Jamie Diamond didn't specifically call out private credit. I >> Yeah. Although he did talk about like BDC's being >> Yeah. >> Yeah. >> BDC's are private credit. >> Yeah, I know. But like it's not like he said like, "Oh, these guys made bad loans, blah, blah, blah." He did talk a little bit about, you know, BDC's trading at a discount to their NAV, but I think it's just, >> which is the efficient markets way of saying they made bad lines, but anyway. >> Right. Right. Right. But it did so happen that Mark Lip Schultz of Blue was asked about his comments and appears that he took them personally and that's where he told of course JP Morgan to look inwards and the banks to look inwards at their loans. So it is this fun blame game that has played out this week. I feel like we wouldn't be talking about it so much had Jaime Diamond not said cockroaches. I feel like that gave right >> a good like tangible illustration for us to all seize upon. >> But it is like taking a step back like it is the case that like these accidents as Mark called them are like true like bubbly signs. Yeah. Like you don't make loans to like people who are double or triple or 100 times pledging their assets which like there are some al like no one really knows. There's some allegations and or first brands were maybe, you know, a little loose with collateral. Yeah. You don't make those loans unless >> you're really trying hard to make loans, right? Like I wrote about like one thing that I think is interesting about first brands is like the people who had a lot of exposure. You know, there's like this Jeffre fund. There's this like trade finance origination platform. They have like enormous amounts of exposure specifically to first brands. >> Like what does that mean? It means like you're running a fund and you're like, you know, ideally you'd like to have diversified, you know, trade finance receivables or whatever, but like you just need to find paper to put into the fund. And if someone is like, I'm going to generate a lot of paper for you, then like you would love to deal with that person, right? Like you'd love to deal with the first brand if they're like we can, you know, sell you as much as you need. >> Yeah. And so it creates incentives for people to sell you as much paper as you need >> which means >> either becoming very overlevered to generate paper for you or just like writing fake paper or like you know triple pledging things so that they can like sell you more stuff because they sell you stuff and you get the money and like that's you know that's the trade they're in. So it does feel very toppy. Yeah. Yeah, like like Mark Ardan said, accidents, but also late cycle accidents. And like this is a private credit thing, but there's the credit generally these days. Like there's a lot of people going around being like, "Yeah, it feels toffee. Yeah, we're going to keep doing it." >> It's um >> you know, I think one of the most insightful things ever said about finance was when Chuck Prince in 2007 said, "As long as the music is playing, you've got to get up and dance." Like that's what it is, man. We all know we're coming to the end of the song. >> Like if you're in the business of making loans, you can't be like, "We're not making loans." >> Yeah. >> Too many like loans are too frisky right now. We're not going to do it. But you can't do that. >> Yeah. >> You got to dance. >> Yeah. You got to dance. Even if it's late cycle and you know, everyone's tired. It is interesting. I mean, this has been held up as an example of we are in a toppy environment. So too, I said we weren't going to talk about Open AI, but the Open AI Walmart deal that has been a lot of hay has been made on social media about how truly we've reached the top. >> There's like an Etsy article there where someone like the headline is something like, "Of course, it's a bubble." >> Of course, >> like everyone's like, "Yep, here we are in a bubble." >> I do want to talk a little bit more about this other comment that Mark Lipshult said because it seems like he did take this very personally. One of the things he said when it comes to market caps, there are people who have meaningful interests in the industry not continuing to grow and succeed. Blackstone's market cap exceeds the market cap of most financial institutions in the world today. It's not as if that's not coming from someone. And of course, there are people who don't like it, which is interesting that he used Blackstone specifically and not Blue, but Blue has a market cap of about $25 billion. Blackstone is somewhere closer to 200 billion. JP Morgan is over 800 billion. But this is a point we've spoken about before is how the stock market values some of these private credit players even though their assets are much smaller than like a traditional asset manager or even the asset management arms of these banks. >> Yeah. Though I think the point he's making is like when he says that that market cap has to be coming from somewhere, it's not like a comparison to the AUM of banks. It's a comparison to like their lending business, right? It's like, you know, I think he's making more broadly the point that like the business of making a lot of categories of loans is shifting from being a thing that banks >> Yeah. >> at least intermediate and underwrite to being a thing that is kind of being >> led and originated and held on the balance sheets of private credit firms. >> Yeah. Which again, I don't know how interesting it is to like debate about whether the problems you're seeing are like private credit problems or bank problems, but like on the one hand, I think the private credit people make a good point. Like first, I say this a lot, but like the funding model of private credit is a lot more systemically stable than the funding model of banks, right? Instead of having deposits, you have long-term equity capital. That seems good. The private credit people will also argue that like they have better underwriting incentives because they hold it on their books. Yes. Whereas banks obviously hold a lot of loans on their books, but you think about a lot of what they do is originate the distribute model where they maybe have less skin in the game on their underwriting. On the other hand, banks are regulated and you do get the sense that it is such a good fundraising environment for private credit firms. Such a frothy like if you want to sell your private credit firm, a lot of like traditional asset managers will buy it. It's like you do have some pressures to put all this gusher of money to work and that might loosen your underwriting standards as well. >> Can I say one more thing about cockroaches? >> Sure, >> by all means. >> This is so gross. >> Literal or >> Yeah. Jamie Diamond. So, first of all, exactly what he said on the call was, "My antenna goes up when things like this happens." And my first reaction was like an antenna like that on a cockroach. You're saying he feels for the cockroaches? >> Well, it's just >> he can put himself in the shoes of both the lender and the I was going to say the shoes of the cockroaches, but >> perhaps he tipped his hands there. I don't know. But cockroaches do have antennas and so does Jamie Diamond, apparently. entire life. [Music] >> What's uh second on your priority list? >> The Nobel Peace Prize. >> Yeah. All right. Um >> I didn't win again. >> Well, someone won the Nobel Peace Prize, but also the insider trading prize, but it wasn't insider. Well, somebody somebody won the the Nobel Peace Prize. It was Maria Karina Mashado, a um Venezuelan democracy activist. And also somebody won an amount of money on poly market. >> Some sum. >> Yeah, the sum appears to be about $50,000, which is like depends on your like >> I could find something to do with it. >> It's not a bad payday for someone hanging out on a poly market. It's not like institutional grid, you know? You can't like run a hedge fund by like occasionally by once every year making $50,000 on the Nobel Peace Prize winner. But it's something, right? It's like it's true. >> It's a nice individual person's paid it. But anyway, there were some suggestions that it was insider trading because it was done kind of right before the announcement like in the in the you know hours leading up to the announcement. And in fact, a spokesman for the Norwegian Nobel Institute said, "We've noticed that some have made significant financial gains by placing bets on this year's prize. we will investigate whether this means that someone has unlawfully obtained information from us because presumably they knew before they announced it, right? Yeah. And so if like someone in the circle of trust at the Norwegian Nobel Institute went and like placed an anonymous crypto trade on Poly Market, >> which would have been amazing for what it's worth. >> Oh yeah. >> A real sign of the times anyway. >> A real sign of the times. And then that's what they seem to have thought happened. But it probably turns out, one never knows because these things are all like somewhat anonymous. But like, you know, there's an interview with the guy who like allegedly did it and he's like, you know, you can look to like there's all this public basically like when they hit the button on the announcement, like there's a lot of assets on the website. Like there's a picture of Machado >> for sure >> and uh they um upload those assets before they hit the button before they like put out the actual press release. And so if you're like scraping the folder on the website that has all the assets, you can see like you know something with her name in the web page and then you can make an informed bet. And so that may be what happened here. >> That is really funny. Also to your point that 50 grand isn't institutional money. I have to imagine that next year this inefficiency in the market won't exist. Like maybe they'll hit the button and then they'll upload the photo. >> Yeah. There's some of this like like this is a trade that occasionally exists in US public company earnings. Yeah. >> Because you can like >> if you know like the URL of like last quarter's earnings, you can just like change Q2 to Q3 in that URL >> and just refresh that page until something pops up which might be before they officially announce earnings. Yeah. >> And so this is like a well-known enough trade that companies are a little better about not doing that now. So, right. You think that like they will be a little bit more information secure next year or they won't. I don't know. >> I mean, maybe they're not that bothered, but it just feels like that that body >> who actually like if you're the Nobel Institute and it turns out that some junior staffer was using your information to make 50 grand, you'll be annoyed with them. >> If it turns out that someone on the committee that selects the winner was betting on it, then you'll be really annoyed cuz that's like >> don't like that. That's not insider trading. That's like, you know, market manipulation, right? That's like, >> yeah, that's like rigging the game. >> That's rigging the game. It's like instead of betting on who's going to win the Nobel Peace Prize, you're like giving the Nobel Peace Prize to the person you bet on. It seems really really bad. No allegation though that happened. >> But if it's just like someone scraped your website, like who cares? Give them the money. Who cares? >> That's that's a very Kathy Kathy Wood attitude. >> Yeah. >> Referencing of course last week's podcast and nothing else, >> right? No, I know people talk about prediction markets. You know, I've quoted Shane Copelan saying it's like their goal is to help people understand and price the future. >> And people really want prediction markets to create incentives to make the world more informed. >> Mhm. >> And so like the ideal is like, you know, you have a bet on like will Russia invade Ukraine or whatever, right? And like you have people who are really informed geopolitical analysts making bets and then you have like a Russian general making bets and then like you actually know, right? And then like the market implied odds are really informative and so people can make economic decisions based on this like probability that exists in a prediction market. Like that's kind of an interesting ideal and would be useful in a lot of purposes. And you know as we've talked about here the problem with that is like it's not clear there is a lot of dumb money on like >> the market of like will Russia invade in Ukraine and so it's hard to make a lot of money. It's hard to be institutional grade and so like if you're a Russian general you might be like well I can make $10,000 and possibly be shot so I won't do it right. So, it's like it's like hard to incorporate information. And then like you have examples like this where it's like whoever this is like put a lot of work into figuring out who was going to win the Nobel Prize 12 hours early. And like one is that the sort of fact that will inform anyone's economic decisions about like no one's hedging who's going to win the Nobel Prize, >> right? >> Two, is knowing it 12 hours early that useful? And then three, like the reaction might be that they just stop putting these assets on the web 12 hours early and then it's like well okay you haven't like >> you haven't made anyone more informed about anything in any useful way. It's just like yeah you get some money. >> Yeah. Well to that point I mean you write in your newsletter that the point is that the Nobel Peace Prize prediction market is working the way it is supposed to >> in some broad sense. It incentivizes people to find out information and incorporate it into prices, which I agree with, but it feels kind of unsatisfying because you think about the example of, you know, equity markets and a hedge fund analyst scraping a website for earnings makes that market a little bit more efficient and then it informs how companies invest capital and allocate capital. Whereas here it's just someone now knows this early and like there's no follow through on that. Satisfying. >> People care about who won the Nobel Prize, but it doesn't have like economic consequences. They're not a lot of hedggers. >> Yeah. >> Right. >> Yeah. >> But you know, this is like what I've said about sports gambling too, right? It's like if you like create an ecosystem where people professional and like semi-professional and like just hardworking and smart people are dabbling in prediction markets, then like there's possible spillover to like economically meaningful >> prediction markets, right? There's some possibility that the people who spend eight hours building some scraping tools to predict the Nobel Peace Prize will then go on to spend 16 hours building scraping tools to predict the next Russian invasion. Right. Like is this similarish skill sets? Maybe. Yeah, >> maybe. Like maybe >> Russia's uploading its battle plans to a website. Who knows? There's some notion that if prediction markets get bigger and attract capital and skill, then ultimately the thing you really want, which is that they inform people about the probabilities of economically meaningful future events, there's some possibility that will come true. >> Yeah. Yeah. And it's not like it's not in a straightforward linear way where it's we start with the most important markets and get really sophisticated people to do really good predictions of the most important markets. It's we start with places where you can make money and then that attracts money and then that attracts more sophistication. >> It probably also informs your behavior in other markets. Like if the prediction market for who is Russia going to invade next gets really informative and liquid and you could imagine watching that and then going and buying a bunch of calls on oil. >> Oh absolutely. Although I mean right now surely the oil market is more predictive of geopolitical events than you know prediction markets. But I don't know >> the frustrating thing about oil it's my least favorite commodity to talk about. >> It never prices in a sustainable risk premium. So maybe you wouldn't buy calls on oil, >> right? >> Or maybe you would, I don't know, buy treasuries, >> right? This is one of the arguments for prediction markets. There's a lot of ways to implement predictions about future geopolitical events. And what that means is that you can't look at the price of oil or the price of treasuries and read out a prediction about future events because they kind of reflect a lot of different possible events. Yeah. Yeah. >> Whereas if there's just like a contract, will Russia invade wherever? Then you can look at that contract and read off the probability. >> Yeah. It's like very pure play. >> Yeah. Right. >> Congratulations to whoever won 50. >> Yeah. >> 50 grand. Probably less than the Nobel Peace Prize prize. I don't actually >> How much is it? >> I don't know. You get a gold medal. >> That's pretty good. >> Yeah. >> You also get the satisfaction. >> Yeah, it's pretty good. >> Yeah. I I feel like winning the Nobel Peace Prize is in some ways the worst peace. Like there's a decent chance that you're like imprisoned or exiled. >> That's true. >> But uh >> but in the event that you're not, imagine all the speaking engagements and fees that you can command. >> That's okay. That's fair. That's fair. Lucrative business running an LP press. >> Okay. Well, a bunch of people are going to write in and tell you how much. >> Yeah, of course. It's a chunk of change, I think. Maybe it's not. It's fun because we could Google it, but we're not going to do that, >> right? >> Just idally have your phone right in front. >> Yeah. It's staring at me. [Music] >> We're up to 185 stock trading. >> 185, baby. But, you know, in 2026, eventually we'll get to 235. There's a thing called the 24x exchange. The 24 exchange, 24x national exchange. The intuition is that we want to trade stocks 24 hours a day. But like you can't do that because you have to like restart the computers. You do. So their more modest target is trading stocks 23 hours a day, 5 days a week. And their progress towards that is they launched 18 hour a day trading five days a week, which is, you know, it's like >> I feel like their name should be 23x. >> No, that's the thing. Like if you say 24, every Oh, 24. That's the number of hours in a day. You say 23 people like what? >> I know, but it's disingenuous. >> Yes. That's why it's funny. Yeah. >> But like, you know, you're allowed to be funny. Anyway, though, they're now up to 18 hours, which is like, you know, kind of like extended hour. >> That's really all you need. >> I don't know. It's all I need. >> I, as we've established, go to bed at six o'clock. But, um, if you're, for instance, in Japan and you want to trade American stocks, it is convenient to be able to do it in the middle of your day. Yeah, I guess >> like it's a global market. Yeah. For American stocks and stocks generally and so it does kind of make sense that everyone should be able to trade all the time. >> Also, you know, maybe you're in Japan, maybe you're just up at 3 in the morning, >> right? I try to be generous. Like 24x exchange actually says, you know, this is for, you know, investors worldwide. And I don't really think that the paradigmatic user of 24-hour trading is someone drunk on their computer at 3:00 am. >> But I kind of think that I think about that person a lot. I think that's a fun >> Yeah. >> I'm not going to do it justice. There's a famous great bit in like hedge fund market wizards, the Jack Schwagger book, where he interviews one hedge fund manager who says, "I want to hire people who wake up early on Sunday morning and log in to poker sites to pick off the drunks coming home in another time zone." >> Nice. >> Because like what you're doing there is understanding where you have the most edge and then just exploiting your edge and doing it somewhat inconveniently for yourself in a just cold-bloodedly rational way. Anyway, right. There are some people in a world of 24-hour trading who would come home drunk from the bar at 3:00 a.m. and be like, "All right, fire up Robin Hood. Let's trade some options." >> My single triple leveraged ETF now. >> Yeah. And again, I don't think that's the main use case for 24-hour trading, but it's the funniest use case. >> Yeah. Well, hopefully, you know, as this gets online, we'll figure out who exactly the players at 3:00 a.m. Eastern are. It might be Japanese retail players. It might be people drunk coming home from the barn. It might I almost said barn. I say that a lot more often than barn. >> You come home from the barn more often than the barn. >> Trade stocks. >> Or it might be, you know, sophisticated US investors looking to pick off Japanese retail investors. I don't know. >> Well, yeah. I mean the other thing like the thing that I think is interesting is we have this ecosystem where a lot of news gets disclosed outside of regular market hours >> because you don't want to be or traditionally you don't want to be in the situation of disclosing a merger at 10 a.m. and everyone reacting to that sequentially and like reading the press release and saying I should buy the stock and some people not having gotten the press release yet and like selling at outdated prices. It's just a mess. And so what everyone does is they announce earnings at 7 a.m. or 4:05 p.m. So people have time to digest the earnings before the stock opens for trading next. And the purpose of after hours trading really is to let people react to news as it happens. So instead of, you know, if a hurricane hits at midnight, instead of waiting until the next day to dump your stocks, you can dump your stocks at 12:01. Mhm. >> And when you say that, I think it's intuitively appealing to a lot of people. Oh, I can trade as soon as the thing happens. But I think it's like kind of bad for retail investors to >> what it means is that >> instead of everyone reacting to news at the same time because you have a buffer between when it's announced and when can be traded. >> You have people reacting to news as they get it, as they analyze it. And so you're going to have a lot of people trading at wrong prices. Mhm. >> And I do think that's the point or that's the appeal of after hours trading is like you'll just get more volatility. You'll get more wrong prices. If you think you're skilled and you enjoy a gamble or a game of skill, you'll have more opportunities to log on at 9:00 and be like, I know what this news means. I'm going to trade on it. I actually wrote this week about the meme ETF. >> Yeah. >> The Roundtell meme stock ETF that was closed and then revived this week. And you know it was revived with a very small like first day of trading had a very small like thousand dollar a couple hundred thousand dollars on it >> and it traded kind of normally during the day and then in the afterhour session it shot up because like you know there's a few retail investors who are buying it and the market makers all went home because it was after hours trading in this tiny little ETF and so there's no arbitrage mechanism and so people are just buying it at crazy premiums to NAV which should not happen in an ETF but does if no professional profals are awake. And I think if you have like more 24-hour trading, you're just going to have more trading where no professionals are awake and things trading at wrong prices and like people want to trade at wrong prices. >> You're going to have uglier charts basically. >> Yeah. Yeah. Every ugly chart means someone like made a very bad trade and someone else made a very good trade. >> Yeah. Well, you touched on something that I think we've talked about before is like, okay, let's imagine a world where you do have 24 or 23-hour trading 5 days a week is whether or not you'd still get like these windows around the open and the close where everyone is sort of trained to trade the most. >> I think you would because professionals have a rhythm to their day where they want to >> stop trading at the close, you know? >> Yeah. >> Not all, but like you know, index funds time. Yeah. not even like to go home, but just because like you need a benchmark to mark against. >> And then also just because of that like timing tradition, there is so much concentrated liquidity there. And so if you're a huge investor who needs to move a lot of shares, doing that at the close is really useful. I do wonder, you know, I've never fully understood how crypto closes work because crypto just sort of from day one is a 247 market. And so for >> same with traditional currencies as well. >> Yeah, that's right. Yeah, there's no like close, right? And like in stocks there's very clearly a close and a lot of apparatus, you know, index funds and you mutual fund withdrawals and redemptions and benchmarks and everything are all kind of organized around the close. And if you did move to 247 trading, if you just did it in a natural like non-path dependent way, you'd be like, well, when is the close? Yeah, >> but I don't think that's ever going to happen. I think it's always going to be the main exchanges will have a close at 4 and even if the main exchanges offer, you know, 17 hours of extended hours and everything is kind of technologically the same during the regular session and the extended session. I think there'll still be a close that everyone can point to and where a lot of liquidity will be concentrated. >> Yeah, I feel that way too. Like I I do struggle to imagine a world where this is the norm. It's just continuous 24-hour a day, like nothing, no clothes. Yeah, I don't that doesn't seem >> It feels like it goes against just the rhythm of being a human. >> Yeah, it does. Well, it goes against like the stock market's rhythm. >> Yeah. >> I mean, you say the rhythm of being a human, and I hear you, but like >> stock market >> you can buy on Amazon anytime you want, you know. >> Yeah. I was going to say I mean, humans did make the stock market, >> right? >> Yeah. >> Sure. Yeah. No. Right. Right. Right. Right. There is a human rhythm and there is a computer rhythm and like humans have become adapted to the computer and the stock market is from a time of you show up there and you leave to go have dinner, right? So, >> whereas like you know Amazon is from a time of computers and you log in at midnight and buy something, right? And crypto is from a time of computers and so you log in at midnight and buy crypto. >> Yeah. >> And I think that is creeping into the stock market, but I think we're a long way from it entirely taking over the stock market. I did want to point out one thing that you wrote which actually made me grateful for the environment that we live in right now. Um you talk about how a decade ago it was possible to think that investing would gradually become duller and more efficient and more automated and that people would just let robots and professionals manage their retirement savings and basically we wouldn't have any of the silliness that we do now. That was like when I said it was possible to think that like I linked to something I wrote kind of predicting that like so that was dumb. >> That's fine. You called yourself out but I occasionally get tired as discussed. We all get tired of the silliness in the headlines but I think that the world that you described sounds a lot more tiresome. So >> well you say that as a person who goes on TV to talk about financial news every day for several hours. >> Yeah. But you write about it. Oh yeah. No, I agree. I agree. Like all this dumb stuff, you know, once every five times I write about meme stocks or crypto or whatever, I roll my eyes. I'm like, I hate writing about this. The other like, well, at least I have something to write about. No, I agree. I think as a person, as an investor, if you stopped thinking about meme stocks and like just, you know, had like robots perfectly invest your like reasonably perfectly invest your stock and you didn't worry about it, you could spend more time like reading books. >> Yeah. Right. Maybe. Right. Like it's a better world, but it's worse for, you know, making jokes in a financial newsletter. >> That's true. >> That's what we're all here for. >> I have to go talk about all the silly things on the television. >> Have fun. >> And the asteroid if it hit yet. >> Yeah. Good luck with that. [Music] >> And that was the Money Stuff Podcast. I'm Matt Lavine. >> And I'm Katie Griffeld. You can find my work by subscribing to the MoneySL stuff newsletter on bloomberg.com. >> And you can find me on Bloomberg TV every day on the close between 3 and 5:00 p.m. Eastern. >> We'd love to hear from you. You can send an email to moneypod@bloomberg.net. Ask us a question and we might answer it on the 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 Mazerakis and Moses Ambound. >> Our theme music was composed by Blake Maples. >> Amy Keane is our executive producer. >> And Sage Bowman is Bloomberg's head of podcasts. >> Thanks for listening to the Money Stuff Podcast. We'll be back next week with more stuff. [Music]