Podcasts about mf global

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Best podcasts about mf global

Latest podcast episodes about mf global

Grain Markets and Other Stuff
RFK Jr. to Overhaul USDA? What Does this Mean for Farming??

Grain Markets and Other Stuff

Play Episode Listen Later Oct 31, 2024 15:55


Joe's Premium Subscription: www.standardgrain.comGrain Markets and Other Stuff Links-Apple PodcastsSpotifyTikTokYouTubeFutures and options trading involves risk of loss and is not suitable for everyone.0:00 RFK Jr USDA Overhaul5:17 MF Global Anniversary9:04 Rains are Back11:45 Ethanol Production is STRONG12:59 China, Russia, Soybeans13:48 Biofuel Money14:34 Flash Sales

MicDropMarkets
MicDropMarkets Spaces #40: Let's Talk Trading Markets

MicDropMarkets

Play Episode Listen Later Oct 17, 2024 68:24


Host: Tracy Shuchart for MicDropMarketsGuests: Matt "Pax" Kenah Helen MeislerCarley Garner Matt “Pax” Kenah Matt “PAX” Kenah started as a runner on the Chicago Mercantile Exchange (CME) trading floor in January 1988. He quickly realized this was the place for him. Without knowing anyone on the floor, he worked his way up from a runner to a top paid arbitration clerk for one of the most significant orders filling brokers in the front month Eurodollar pit. Disaster struck in October of 2011, the collapse of MF Global withheld the majority of PAX's account, he went from being one of the largest traders in the pit to broke overnight.As trading evolved from the pits to the screens, PAX evolved with it. He quickly found that managing his positions with capital preservation at their core is the most critical aspect of successful long-term trading, whether in the pit or on screen.From his desire to serve others, he discovered a passion for helping traders create a solid foundation for their careers and guiding successful traders to take their careers to new and higher levels.Pax Trading Group Helene MeislerHelene Meisler is a world-renowned market technician and equity trader. As a self-identified swing trader, she specializes in utilizing technical analysis to capture short-to-medium term stock gains over a period of several days to several weeks. As the first-ever technical analyst for Goldman Sachs in 1989, Meisler has been one of the pioneers in the financial industry for over 40 years. She has gained notoriety for her use of hand-drawn charts and ability to find profitable opportunities other financial experts miss. In addition to her work at TheStreet where she contributes daily to Real Money and Top Stocks, and is an Action Alerts PLUS team member, Meisler frequently appears as a commentator on various financial news networks, including CNBC and Bloomberg TV. She also speaks regularly at industry conferences and events.TheStreet Pro -Helene Meisler Carley Garner Carley Garner is a futures and options broker with DeCarley Trading, a division of Zaner Financial Services, in Las Vegas, Nevada. With nearly two decades of experience, her commodity market analysis is often referenced on Jim Cramer's Mad Money on CNBC, and she is a regular guest on Bloomberg Television's Options Insight segment with Abigail Doolittle. Garner is a regular contributor to TheStreet.com and its Real Money Pro service and is also a regular on the speaking circuit and can be found at TradersEXPOs and MoneyShows throughout the country.Garner is also an award-winning commodity futures and options trading book author. In addition to Trading Commodity Options with Creativity, Garner has authored Higher Probability Commodity Trading; A Trader's First Book on...

Speculators Podcast
Confessions of Multi-Millionaire KING OF THE NASDAQ PIT: Matt PAX Kenah

Speculators Podcast

Play Episode Listen Later Aug 30, 2024 68:55


EPISODE SPONSOR: ELITE TRADER FUNDING → SPECIAL OFFER✅ 40% OFF ANY EVALUATION: https://go.tradacc.com/getfunded-elitetraderExclusive Discount Code: ETFKORBSJoin us in this candid conversation with THE KING OF THE NASDAQ PIT: Matt PAX Kenah. PAX built up his career from the dirt starting in 1988 as a runner on the CME floor, eventually purchasing his seat on the floor and becoming a trader in 1997. He soared to incredible heights: trading hundred lots on a daily basis & making MILLIONS of dollars. But then dramatically fell to devastating lows: virtually going BROKE overnight with the collapse of MF Global. About a decade after amassing what would safely be considered "generational wealth", he hit one of the lowest points of his life: scavenging for spare change between the seats of his car in order to buy milk for his 5 kids. The extreme highs & lows of PAX's life and trading career are something out of a movie script. Tune in to discover the biggest lessons, regrets, and confessions of a die-hard futures trader with a career spanning across 5 decades in this week's can't-miss episode of the Speculators Podcast.➡️ Where You Can Find Matt PAX KenahX: @PaxTrader777 https://twitter.com/paxtrader777 Website: The Pax Group https://www.thepaxgroup.org 1st Speculators Podcast Appearance: https://youtu.be/c348mbiwefw NQ Pit Trader Makes Millions, Goes Broke Overnight & Bounces Back w/ PAX✅Start Your Freedom Lifestyle Trading Business with Free Video:https://go.tradacc.com/video HERE'S WHAT WE COVER:0:00 Introduction to Matt PAX Kenah5:51 Strategies for Long-Term Success in Trading15:46 Building a Lasting Trading Career One Trade at a Time18:42 Why P&L Shouldn't Be Your Only Trading Metric24:48 Navigating Setbacks in Trading28:58 Trading Lows: Beyond Financial Loss35:42 Resetting After Rock Bottom in Trading41:34 Reflecting on a Life Well-Traded42:50 The Best Days: Triumphs in the Trading Pit48:54 How Values Shape a Trader's Journey54:19 How Trading Influenced Matt's Lifestyle Choices58:39 Integrating Spirituality into Trading and LifeWHO IS KORBS → HOST OF SPECULATORS PODCAST:My name is Aaron Korbs and I'm a professional intraday Futures Trader specializing in Auction Market Theory, Volume Profile & Order Flow. I'm also the founder of Tradacc.com. Tradacc is a trading education, training, and mentorship platform where I help traders leverage institutional capital using my volume profile methodology through courses like Volume Profile Formula™, Funding Accelerator™ & Profile Method™. I typically work with people that want to create a reliable online side hustle or that would like to turn trading into their main profession.https://go.tradacc.com/video--------------------------------------------Happy Trading & Watch Your Risk- KorbsRisk Disclaimerhttps://go.tradacc.com/Risk#ThePAXGroup #MattPAXKenah #NQFutures #NasdaqTrading #FuturesTrader #FuturesTrading #Nasdaq #OpeningRangeBreakoutStrategy #SpeculatorsPodcast

The James Altucher Show
The Diary of a Fraudster | James Brandolino Part 1

The James Altucher Show

Play Episode Listen Later Mar 20, 2024 43:17 Transcription Available


A Note from James:James Bandolino committed serious financial fraud - started a hedge fund which was a Ponzi scheme - went to jail for nine years, and we really dive into the details of his fraud, the psychology of it. What's critical is that not all frauds have the same flavor - all frauds are bad,  don't get me wrong. It is morally bad to be fraudulent. There's a reason why he went to jail. He wanted to go to jail. He tried to kill himself. It's amazing the story of how he failed to do that. But, before I give too much away we're going to discuss in detail the fraud and then tomorrow I'm going to release the story of him going to jail, what happened there, and how he came out the other side.So,  without further ado, let's dive into the details of the fraud that James Brandolino committed. Episode Description:This episode delves into the life of James Brandolino, a former hedge fund manager who crafted a Ponzi scheme leading to significant financial fraud. Brandolino pleaded guilty to mail fraud in August 2011 and was sentenced to 107 months in prison and ordered to pay $3,865,484 in restitution. It begins with an introduction to Brandolino's fraudulent activities, leading to his nine-year imprisonment. Altucher and Brandolino explore the psychology behind the fraud, emphasizing the gradual and unintentional entry into illegal activities. James Brandolino shares a detailed backstory of his trading career, starting with inspiration from the movie Trading Places and his progression in the financial sector, working at MF Global and creating a futures trading company. Initially, honest intentions led him to a Ponzi scheme when attempts to cover a minor initial loss spiraled out of control. The discussion includes technical aspects of his trading strategies and the choice to commit fraud to escape from admitting failure. In a dramatic turn, James attempts suicide but survives, leading to his voluntary surrender to authorities and incarceration. Episode Summary:00:00 The Intriguing Case of James Brandolino's Financial Fraud01:48 Diving Deep into the Psychology of Fraud02:26 The Early Trading Days and the Birth of a Scheme08:28 The Slippery Slope: From Legitimate Trading to Financial Fraud16:40 The Descent: Amplifying the Fraud and Facing the Consequences20:35 The Personal Toll of Financial Fraud21:18 The Isolation and Stress of Financial Deception24:00 Turning to Criminal Actions for Survival25:25 The High-Risk Attempts to Recover Losses28:05 The Psychological Battle and Trading Strategies36:12 Facing the Consequences and the Brink of Despair40:09 A Failed Suicide Attempt Leads to Redemption ------------What do YOU think of the show? Head to JamesAltucherShow.com/listeners and fill out a short survey that will help us better tailor the podcast to our audience!Are you interested in getting direct answers from James about your question on a podcast? Go to JamesAltucherShow.com/AskAltucher and send in your questions to be answered on the air!------------Visit Notepd.com to read our idea lists & sign up to create your own!My new book, Skip the Line, is out! Make sure you get a copy wherever books are sold!Join the You Should Run for President 2.0 Facebook Group, where we discuss why you should run for President.I write about all my podcasts! Check out the full post and learn what I learned at jamesaltuchershow.com------------Thank you so much for listening! If you like this episode, please rate, review, and subscribe to "The James Altucher Show" wherever you get your podcasts: Apple PodcastsiHeart RadioSpotifyFollow me on social media:YouTubeTwitterFacebookLinkedIn

The James Altucher Show
The Diary of a Fraudster | James Brandolino Part 1

The James Altucher Show

Play Episode Listen Later Mar 20, 2024 43:17


A Note from James:James Bandolino committed serious financial fraud - started a hedge fund which was a Ponzi scheme - went to jail for nine years, and we really dive into the details of his fraud, the psychology of it. What's critical is that not all frauds have the same flavor - all frauds are bad,  don't get me wrong. It is morally bad to be fraudulent. There's a reason why he went to jail. He wanted to go to jail. He tried to kill himself. It's amazing the story of how he failed to do that. But, before I give too much away we're going to discuss in detail the fraud and then tomorrow I'm going to release the story of him going to jail, what happened there, and how he came out the other side.So,  without further ado, let's dive into the details of the fraud that James Brandolino committed. Episode Description:This episode delves into the life of James Brandolino, a former hedge fund manager who crafted a Ponzi scheme leading to significant financial fraud. Brandolino pleaded guilty to mail fraud in August 2011 and was sentenced to 107 months in prison and ordered to pay $3,865,484 in restitution. It begins with an introduction to Brandolino's fraudulent activities, leading to his nine-year imprisonment. Altucher and Brandolino explore the psychology behind the fraud, emphasizing the gradual and unintentional entry into illegal activities. James Brandolino shares a detailed backstory of his trading career, starting with inspiration from the movie Trading Places and his progression in the financial sector, working at MF Global and creating a futures trading company. Initially, honest intentions led him to a Ponzi scheme when attempts to cover a minor initial loss spiraled out of control. The discussion includes technical aspects of his trading strategies and the choice to commit fraud to escape from admitting failure. In a dramatic turn, James attempts suicide but survives, leading to his voluntary surrender to authorities and incarceration. Episode Summary:00:00 The Intriguing Case of James Brandolino's Financial Fraud01:48 Diving Deep into the Psychology of Fraud02:26 The Early Trading Days and the Birth of a Scheme08:28 The Slippery Slope: From Legitimate Trading to Financial Fraud16:40 The Descent: Amplifying the Fraud and Facing the Consequences20:35 The Personal Toll of Financial Fraud21:18 The Isolation and Stress of Financial Deception24:00 Turning to Criminal Actions for Survival25:25 The High-Risk Attempts to Recover Losses28:05 The Psychological Battle and Trading Strategies36:12 Facing the Consequences and the Brink of Despair40:09 A Failed Suicide Attempt Leads to Redemption ------------What do YOU think of the show? Head to JamesAltucherShow.com/listeners and fill out a short survey that will help us better tailor the podcast to our audience!Are you interested in getting direct answers from James about your question on a podcast? Go to JamesAltucherShow.com/AskAltucher and send in your questions to be answered on the air!------------Visit Notepd.com to read our idea lists & sign up to create your own!My new book, Skip the Line, is out! Make sure you get a copy wherever books are sold!Join the You Should Run for President 2.0 Facebook Group, where we discuss why you should run for President.I write about all my podcasts! Check out the full post and learn what I learned at jamesaltuchershow.com------------Thank you so much for listening! If you like this episode, please rate, review, and subscribe to “The James Altucher Show” wherever you get your podcasts: Apple PodcastsiHeart RadioSpotifyFollow me on social media:YouTubeTwitterFacebookLinkedIn

The Digital Executive
Championing Financial Justice: Crusade Against Market Corruption with James Koutoulas | Ep 833

The Digital Executive

Play Episode Listen Later Mar 1, 2024 17:37


In this compelling episode of The Digital Executive, Brian Thomas sits down with James Koutoulas, Esq., the formidable founder of Typhon Capital Management and a staunch advocate for financial transparency and ethics. Koutoulas, known for his pivotal role in the Commodity Customer Coalition, where he fought for the recovery of $6.7 billion in customer assets during the MF Global bankruptcy, shares insights from his journey at the intersection of law, finance, and advocacy.Starting with the origin story of Typhon Capital Management, Koutoulas delves into how his classics background influenced the firm's unique approach to investment, focusing on stress events and leveraging volatility to protect and profit investors. He highlights Typhon's success in navigating financial crises and its expansion into long-short strategies and cryptocurrency funds, emphasizing the firm's adeptness at risk management and benefitting from market fluctuations.The conversation takes a deeper turn as Koutoulas recounts the formation and achievements of the Commodity Customer Coalition during the MF Global crisis. His pro bono work not only led to significant financial recoveries for affected customers but also exposed systemic flaws in financial regulation and the management of customer funds. Koutoulas's story reveals the challenges and triumphs of advocating for justice in the face of corporate malfeasance and regulatory shortcomings.Reflecting on the broader implications of these events, Koutoulas critiques the current state of financial regulation in the U.S., highlighting conflicts of interest, lack of accountability, and the pressing need for reform. His ongoing legal battles, including a lawsuit against the SEC, underscore his commitment to challenging corruption and advocating for sensible digital asset regulation.As the discussion concludes, Koutoulas shares his vision for the future of commodities and futures trading, emphasizing the importance of integrating technology and digital assets into the financial markets responsibly. His insights into the evolving landscape of investment, combined with his fierce advocacy for ethical management and transparency, offer a powerful perspective on the challenges and opportunities facing the financial industry today.This episode of The Digital Executive not only sheds light on James Koutoulas' remarkable contributions to financial justice but also serves as a call to action for more transparent, ethical, and effective regulation and management of financial markets.

Speculators Podcast
NQ Pit Trader Makes Millions, Goes Broke Overnight & Bounces Back w/ PAX

Speculators Podcast

Play Episode Listen Later Jan 19, 2024 63:07


EPISODE SPONSOR: JIGSAW TRADING → SPECIAL OFFER✅ Free Professional Order Flow Training [https://go.tradacc.com/Jigsaw-Order-Flow]Join us in this riveting conversation with Opening Range Breakout Trader: Matt “PAX” Kenah. PAX has an incredible story full of highs & lows in the Nasdaq Futures pit (and in life). He started as a runner on the Chicago Mercantile Exchange (CME) trading floor in 1988, quickly transitioning into better, higher-paying positions as time went by. He made MILLIONS of dollars on the floor; generational wealth by the time he was 35. But disaster struck in 2011 with the collapse of MF Global - and PAX went from being one of the largest traders in the world to BROKE overnight. This devastating scenario forced him to re-evaluate his trading career and figure out a way forward to support his family. Discover how PAX overcame this massive setback and successfully shifted his approach from floor to screens in this week's episode of the Speculators Podcast.➡️ Where You Can Find Matt "PAX" KenahYouTube:  @ThePaxGroup Twitter: @paxtrader777Website: ThePAXGroup.org✅ Get Funded & Create Your Freedom Lifestyle Trading BusinessHERE'S WHAT WE COVER:0:00 Introduction to Matt “PAX” Kenah2:21 Matt's Market Approach: The Opening Range Breakout Strategy12:04 Daily Trading Limits and Hold Strategies13:44 Morning Rituals to Market Focus and Size Decisions22:07 Matt's Post-Trading Routine28:44 Market Worldview: Navigating the Waves Like a Surfer, Not a Warrior33:18 Matt's View on Retail Traders37:39 Debunking Trading Myths45:08 Focusing on Precision and Discipline in Technical Analysis49:37 Embracing Radical Responsibility and Authentic Learning52:57 Developing Discipline in TradingWHO IS KORBS → HOST OF SPECULATORS PODCAST:My name is Aaron Korbs and I'm a professional Futures trader specializing in Auction Market Theory, Volume Profile & Order Flow. I'm also the founder of Tradacc.com.Tradacc is a trading education, training, and mentorship platform where I help traders leverage institutional capital using my volume profile methodology through courses like Volume Profile Formula™, Funding Accelerator™ & Profile Method™.Happy Trading & Watch Your Risk- KorbsRisk Disclaimer: https://go.tradacc.com/Risk#ThePAXGroup #MattPAXKenah #SpeculatorsPodcast

The Julia La Roche Show
#071 ‘The Patriot Economy': Omeed Malik On The Rise Of A New Economy In Response To ESG

The Julia La Roche Show

Play Episode Listen Later Apr 27, 2023 58:24


Omeed Malik (@RealOmeedMalik), founder and CEO of Farvahar Partners, a boutique merchant bank and broker/dealer which invests partner capital into growth businesses and acts as a liquidity provider of private placements on behalf of companies and institutional investors, joins Julia La Roche on episode 71 to share what he sees as an emerging parallel economy in the U.S. that's in stark contrast to ESG. Omeed is the chairman and CEO of a SPAC called Colombier Acquisition Corp. that is taking PublicSq., a marketplace for “pro-America business and consumers,” public later this year. He also started a fund called 1789 Capital to provide “venture and growth capital to companies building the next era of American prosperity.”  Prior to starting his own firm, Omeed was a Managing Director and the Global Head of the Hedge Fund Advisory Business at Bank of America Merrill Lynch. Omeed was also the founder and head of the Emerging Manager Program within the Global Equities business. In this capacity, Omeed was charged with selecting both established and new hedge funds for the firm to partner with and oversaw the allocation of financing/prime brokerage, capital strategy, business consulting and talent introduction resources. Before joining Bank of America Merrill Lynch, Omeed was a Senior Vice President at MF Global, where he helped reorganize the firm's distribution platform globally and developed execution and clearing relationships with institutional clients. An experienced financial services professional and securities attorney, Omeed was a corporate lawyer at Weil, Gotshal & Manges LLP working on transactional matters in the capital markets, corporate governance, private equity and bankruptcy fields. Omeed has also worked in the United States Senate and House of Representatives. Omeed received a JD, with Honors, from Emory Law School (where he serves on the Advisory Board) and a BA in Philosophy and Political Science, Cum Laude, from Colgate University. He holds Series 7, 63, 3, 79, and 24 registrations.  Omeed is a Term Member of the Council on Foreign Relations, a Centennial Society Member of the Economic Club of New York and a Chairman's Circle Member of the Milken Institute. Omeed is a Contributing Editor and minority owner of The Daily Caller. 0:00 Intro 2:06 Welcoming Omeed Malik 2:50 From D.C. to corporate law to Wall Street 3:30 Started as a speechwriter in D.C.  4:11 Working for Jon Corzine at MF Global 5:12 Launching Farvahar in 2018, advising founders 5:38 New opportunity in a new economy called the “patriot economy”  6:33 D.C. is a place where you get a lot of power, but not money 7:20 The country has changed 8:05 No longer identifying as a Democrat 8:33 2016 election of Trump 9:12 Rise of China  11:33 Leaving the Democratic Party  14:15 Tulsi Gabbard  16:22 China is the most significant geopolitical threat in my lifetime  20:16 ‘Red America' is a huge TAM  21:02 ESG is a marketing scam  23:00 ESG backlash  26:20 Opportunity for a parallel economy focused on ‘EIG' (Entrepreneurship, Innovation, Growth) 28:30 A $7T opportunity  33:00 A bifurcated economy  34:30 Taking PublicSq. public via SPAC 35:00 Bud Light Dylan Mulvaney backlash led to spike in search for alternative beer 36:30 Scratching the surface of the opportunity  38:40 Changes on a personal level 40:00 TikTok a ‘Trojan Horse' in a modern-day Opium War  41:00 Evisceration of the middle class 42:00 Ceding liberty when you work for a large corporation  44:41 Need to reevaluate the relationship between the U.S. and China  51:27 Optimistic for the future of the U.S. 53:00 Big Tech's “Devil's bargain”  55:00 Impact on relationships 

The Valmy
[Best] Byrne Hobart - FTX, Drugs, Twitter, Taiwan, & Monasticism

The Valmy

Play Episode Listen Later Dec 3, 2022 90:45


Podcast: The Lunar Society (LS 37 · TOP 2.5% )Episode: [Best] Byrne Hobart - FTX, Drugs, Twitter, Taiwan, & MonasticismRelease date: 2022-12-01Perhaps the most interesting episode so far.Byrne Hobart writes at thediff.co, analyzing inflections in finance and tech.He explains:* What happened at FTX* How drugs have induced past financial bubbles* How to be long AI while hedging Taiwan invasion* Whether Musk's Twitter takeover will succeed* Where to find the next Napoleon and LBJ* & ultimately how society can deal with those who seek domination and recognitionWatch on YouTube. Listen on Apple Podcasts, Spotify, or any other podcast platform. Read the full transcript here.Follow me on Twitter for updates on future episodes.If you enjoy this episode, I would be super grateful if you shared it. Post it on Twitter, send it to your friends & group chats, and throw it up wherever else people might find it. Can't exaggerate how much it helps a small podcast like mine.A huge thanks to Graham Bessellieu for editing this podcast.Timestamps: (0:00:50) - What the hell happened at FTX?(0:07:03) - How SBF Faked Being a Genius:  (0:12:23) - Drugs Explain Financial Bubbles (0:17:12) - On Founder Physiognomy (0:21:02) - Indexing Parental Involvement in Raising Talented Kids (0:30:35) - Where are all the Caro-level Biographers? (0:39:03) - Where are today's Great Founders?  (0:49:05) - Micro Writing -> Macro Understanding (0:52:04) - Elon's Twitter Takeover (1:01:28) - Does Big Tech & West Have Great People? (1:12:10) - Philosophical Fanatics and Effective Altruism  (1:17:54) - What Great Founders Have In Common (1:20:24) - Thinkers vs. Analyzers (1:26:17) - Taiwan Invasion bets & AI Timelines TranscriptAutogenerated - will not be perfectly accurate.Dwarkesh Patel 0:00:00Okay, today I have the pleasure of interviewing Bern Hobart again for the second time now, who writes at thediff.co. The way I would describe Bern is every time I have a question about a concept or an event in finance, I Google the name of that event or concept into Google, and then I'd put in Bern Hobart at the end of that search query. And nine times out of 10, it's the best thing I've read about that topic. And it's just so interesting. It's just like the most schizophrenic and galaxy brain it takes about like how, you know, the discourses of, you know, Machiavelli's discourses relate to big tech or like how source of serial reflexivity explains hiring in finance and tech. So just very interesting stuff. I'm glad to have him back on again.Byrne Hobart 0:00:47Yeah, great to be back. Awesome.Dwarkesh Patel 0:00:50Okay. So first, I really want to jump into the FTX saga. What the hell happened? Let me just like leave an open ended question for you.Byrne Hobart 0:00:59Yeah, so I think the first thing to say is that there's a lot we don't know. There's a lot we may never know, because so many of the decisions at FTX were made through self like auto deleting encrypted chat. So like there are some holes we will never be able to fill in. The lack of accounting is also going to make it tough. Like basically, I think you can tell a bunch of different stories here. The really obvious one is fraud. And you can debate over exactly when it started, like one version of the story, which is getting some currency is that SPF had this entity Alameda, and it was supposed to be this really hot crypto trading fund, but maybe it was a Ponzi scheme all along. And then maybe at some point that Ponzi scheme started to run short on cash. So he decided to start an exchange and the exchange got more cash, and then he used the cash to pay off previous bachelors, whatever. I think that's one version. And then kind of the maximally exculpatory version, which actually is still really bad is Alameda was a real company. They really made money trading. They took tons of risks. And SPF has talked about why he thinks that's a good thing, that FTX cut some corners when they were raising money and that they had really bad internal accounting. And that basically the extended entity of Alameda and FTX sort of lost track of whose money was where and it ended up with Alameda spending FTX customer money, which I think is like, one way to look at that is like, if you think, okay, fraud is like twice as bad as just incompetently losing money. Well, it's not as if we had a $4 billion fraud instead of $8 billion fraud, everyone would be like, well, that's fine. That's normal. Like, why are you giving sky high time? It's bad no matter what. Running a big company that is systemically important in crypto and then having that company completely vaporize over the course of a couple of days, really, really bad and worth understanding what happened. But it's partly worth understanding what happened because there are just different solutions that present themselves depending on what you think the story is. Like if the story is fraud, it's actually a lot harder to solve because there are just a lot of people who are willing and able to commit fraud and to lie. If the story is bad accounting, then that's actually a lot more solvable because then you could say things like, the solution is make sure you never invest in a crypto exchange that doesn't have a real auditor and make sure that they have their proof of reserves calculation and it's happening consistently and that you can audit that. There are different solution sets. And then I think the actual story is going to be somewhere in the middle of extreme risk tolerance plus extremely poor accounting plus fraud at some point. But I suspect the fraud actually happened pretty late. If it happened, which I think there's like 80, 90% chance that there was some level of fraud versus pure incompetence. But if so, I think may have happened fairly late in the story and as kind of a last desperate move. I think part of what drives the response to what happened with FTX and Alameda is that if you think the story is pure fraud, it's very easy to say you would never do that. I can say very easily, I would definitely never start a Ponzi scheme and then start another bigger Ponzi scheme to pay off the first Ponzi scheme. That's not me. That's not most people. But I think if you draw the scenario where they discover at some point like a couple months ago or even a month ago, they realized, hey, we actually there's a billion dollars plus that was supposed to be customer money, but we thought it was Alameda money and we actually spent it and now it's gone. We've lost it. What would you do in that circumstance? And I think the ideal answer is, well, I'd immediately come clean and step down and commit myself to getting everyone paid back and made whole. And I think there's also the possibility that the realistic answer is more like, well, I would scramble and try to make sure that that didn't cause the company to collapse and try to pick up later. And so at that point, you've sort of backed your way into fraud through earlier episodes of incompetence. But I think like one of the problems with the fraud story is frauds have to be good at accounting because they have to like, you know, there's very rough schematic sense. They have to be twice as good at accounting as everybody else, because not only do they have to have the real books that tell them how much money the business has and whether or not the next check they're at will bounce, but they have to have the fake set of books and they have to have a way to make those tie out with one another. So they actually like frauds, accounting frauds tend to be fairly sophisticated. They tend to really dive into edge cases. I was reading up on MF Global, which was a big futures brokerage that collapsed in part because they were dipping into customer funds and making some investments they shouldn't have. And they did a lot of clever and shady stuff. Like one of the things they would do is there was one point where they were transferring money at the last minute out of their consumer, out of their customer funds in order to make margin calls. And what they would do is they would send the wire from the customer account to a different company account. And they'd send it a couple of minutes before the wires closed for the night. And then they would send this email right after the wires closed saying, Hey, we just realized we set this transfer fraud account got to reverse tomorrow. So that gave them at least one night of enough liquidity to survive. Now, you can only do that kind of fraud if you are actually keeping really close track of where your money is, where it's supposed to be, what the rules are, so that you know exactly how to break those rules. I don't think FDX was in any position to commit that kind of fraud. I think that if they tried to do something like that, like they wire the money from an account that didn't have any money in it or something or send it to the wrong account. There are these stories about them accidentally burning a bunch of USDC by sending it to an address that didn't exist or something like that. The operational slip ups actually make it harder for them to have committed fraud. And it's unquestionable at this point that their record keeping was very bad.Dwarkesh Patel 0:07:03Yeah, to your point about the fraud being harder. I mean, it's like a classic story about if you just tell the truth, it's just gonna be much easier for you. You just don't have to keep track with that many things. But the one thing I've been thinking about, I interviewed him for like an hour. And before that, I tried to do quite a bit of research into how FDX worked and what was going on. And I had this impression that this guy was like the most competent genius that had ever graced finance. And this was like a common impression. This wasn't just... And then, but it turns out that, you know, they were like, it just like out of sheer incompetency loses track of billions of dollars, the internal operations, it just like him putting together spreadsheets and throwing them around and putting emojis on slack messages, asking for payments. And I just like, I want to understand how it is that this guy put out the impression out there that he is just hyper competent. And it turns out that it's like the opposite. It's not even that he's mediocre. It's the opposite.Byrne Hobart 0:08:09Right. Yeah. So I think you can tell a couple stories there, like one story. And I know I've been saying a lot, like you can tell multiple stories. There are multiple stories that fit the facts. We have lots of different weird things to explain and therefore many different weird explanations that fit them. So I think one version is, okay, he's never all that smart and decided that he could just play up this weird, you know, eccentric genius thing. And that would be able to get away with it. And there are these anecdotes about how someone told him to cut his hair and he said, no, I have to look kind of crazy for this. And so that fits in. And it is kind of an MIT thing to do that, to play up your eccentricity because you know there are these super brilliant, very eccentric people and you can be like them. It's kind of like, a lot of people, they read about Steve Jobs and they're like, well, the secret to success is be this brilliant perfectionist who can always see the future and also be just a giant a*****e to everyone you meet. And I'm going to try to do both of those things. And it turns out one of those is really, really easy to do. And then one of them is really, really hard and you have to do both to be Steve Jobs. But you can sort of give this surface level impression of Jobsy and this by just being really obnoxious to everyone. So I think some of it is that. But the other is that if you get really good at just very narrow domain specific stuff, you might miss what other stuff people have to be good at for that skill set to be valuable. And so I think thinking about his previous background where he worked at a prop trading firm and seemed to do well there. It's Jane Street. They're very, very selective with who they hire, very hard to get in and they're very profitable. So good to get in. It's entirely possible that part of what happened was just that Jane Street has its operations people, they have their trading people. And it may there may have been enough siloing within that, that if your job is just identify discrepancies in ETF prices and take advantage of them, you don't actually have to know things like how do we figure out which counterparties are credit worthy? How do we make sure we have enough liquidity? How do we have backup plans upon backup plans upon backup plans in case something goes wrong with our liquidity situation? Because part of the Jane Street model seems to be there. They're very, very opaque, but like very opaque in terms of their trading operations. But part of the model seems to be that they want to be the trader who is there and trading and making a market when everything fell apart. And what that means is that like the way you make the most money in trading is when markets are insanely volatile, volume is very, very high, and you're still trading. But the reason that markets get really volatile when prices collapse and there's a lot of trade going on is that other people who would love to be trading can't trade because maybe the broker they use is suddenly insolvent and they can't get to a new broker, their money is frozen. So if you're planning to be there when everybody else is out of the market, then you have to have lots and lots of contingency plans. And it's not enough to buy lots of deep out of the money put options as Jane Street does. You also have to make sure that you're buying those options from counterparty who will actually send you the money when you need it or that you want to structure those things so the actual cash gets to your account at the time that needs to be there. And that maybe is something that a prop trader should not be spending most of their time thinking about. Like, it's one of those things where it's like, if you own a house and you like if over the last 24 hours, you learned a whole lot about electrical wiring, or you learned a whole lot about how plumbing works or how septic tanks work, like, that's not good. That means something very, very bad happened in your house. And it could be nice to be an expert on those things. But if you suddenly became an expert, it's because somebody else wasn't doing their job. So I think you could you could be a trader like that where they can be very good at the finding little pricing discrepancies thing and have just no awareness of what the operation stuff is, especially because the better the operations team is, the less anyone else needs to be aware of them. Like they like you only email them when something is going wrong. So if nothing is going wrong, you never email them and then you forget they exist.Dwarkesh Patel 0:12:23Yeah, yeah, no, that's a good point. In fact, in the interview I did of him, he mentioned that I asked him what is the difference between Jane Street and FTX. And he mentioned that at Jane Street, there was like this button he could press to like buy. And all that's all the intermediaries, all the servers, it was just taken care of. And what was really funny is then he said, and just getting a bank account and he goes, and let's talk about that. Just getting a bank account is so hard when you're in an infinite. It apparently turns out it's so hard that you might have like commingled funds because you couldn't manage to separate them out. Yeah, no, that's crazy. You had this really interesting take. I think one point we were talking about how every single market crash can be explained by the drug that was common in the industry at the time. And we finally achieved like the hypergrade meth stage of I forgot the name of like that patch you was taking, but it's like stronger than Adderall or whatever.Byrne Hobart 0:13:23So it was, I think it's saying every crash can be explained by the drug they're taking at the time. That takes a little, but I do think that the impact of drugs, of new drugs on financial markets is underrated. And you can have examples of this going back pretty far. Like there is some connection between caffeine consumption and like extroversion and risk taking like you temporarily get a little bit more willing to do deals when you consume caffeine and in Lloyd's of London before it was this insurance consortium, it was a coffee shop. It was Lloyd's coffee shop. So you do have some history of coffee shops being associated with financial centers. And then you have to zoom forward because we just haven't had that many novel stimulants, I guess depressants, deliriums, whatever, like other drug categories probably just don't lead to that much financial activity. Like I don't know how someone would trade differently or invest differently if they had a really strong acid trip or took ecstasy or something. But the stimulants where people can just consistently reuse them, they keep people alert, they make them active and wanting to do things. It seems like stimulants would have a connection to financial markets. So yeah, that theory is like if you look at the 1980s where there were a lot of these hostile takeover deals where someone would find a company that's underperforming and when you look at the spreadsheets and say this company is underperforming, what you're often looking at is a story that is more like this company believes that they have this social obligation to the community where people work and that they have an obligation to give their customers a fairly priced product and maybe they give them really good customer service that doesn't really pay for itself and it's the right thing to do. Well maybe especially if you are a coke head with kind of coke head morality, you decide well that's not the right thing to do at all. You should actually just take the money and we should fire these people and replace them with cheaper employees. So you know levering up a company and then like levering up in order to buy out a bigger company and then firing everyone and you know shutting down the pension plan and distributing the surplus to shareholders like it is just very standard coke head behavior. Whereas if you look at the mortgage backed securities boom and structured products generally in the mid-2000s, the way that people made money in that was just by being very very detail oriented and being able to make these incredibly fine grained distinctions between different products that were basically similar but one of them pays 5.7% and one of them pays 5.75% and if you lever up that difference enough times you're actually making really good money consistently. It's super boring but maybe with enough Adderall it's actually very tolerable work that you can enjoy. So I do think that just like within stimulants the difference between short acting stimulants and long acting stimulants does mean the difference between a hostile takeover boom and a structured products boom. And then yeah there's I think the drug is called M-sem or something which is like a Parkinson's treatment and there's some evidence from pretty small sample size studies that one of the side effects of this drug is compulsive gambling. So yeah and the drug story there have been very very fun tweets about this claim and then there have been these official denials from the company doctor on the other hand if you're a company that has a company doctor maybe that says something about the level of medication you're consuming and maybe the company doctor's job is partly to say as a doctor I can assure you I would never give someone three times the normal dose of Adderall just because their boss hired me to do that specifically. I think dealers don't exactly have patient confidentiality norms, doctors do so maybe you hire a doctor instead of a dealer specifically to get that plausible deniability.Dwarkesh Patel 0:17:12Other than drugs I also want to ask you about the phenotype of the founder. You wrote a post I think it was like just a couple of weeks before this crash happened where you were pointing out that this idea of a founder who comes in shorts and a t-shirt and a crazy haircut. By the way so FTX had a barber who would come in every Tuesday to cut everybody's hair it might have been Thursday and that so he could have just like sat in line and gotten his haircut like that was that was completely unnecessary the way he dressed and it was like very purposeful. But yeah so if that archetype of a founder who's in a t-shirt and shorts if that's been priced in and that's beta instead of alpha now what is the new phenotype and physiognomy of the founder? Where are you looking for alpha?Byrne Hobart 0:17:58Well I guess I would draw the distinction between like the physical type of someone versus their presentation and their dress. Yeah I don't know I'm sure someone could run some interesting numbers on that but I don't have a good sense of what exactly they'd get from that but in terms of you know how people public people publicly present that present themselves my guess is that yeah there will be this swing towards investing in people who look a little bit more formal a little bit more boring and these things are somewhat cyclical. Like I think part of you know part of the norm on investing in or you know treating basically treating the suit as a negative signal is that a lot of investors have this view that when the MBAs come into an industry a lot of the alpha is gone and it is true that MBAs at least you know there's it's like a decent market timing signal apparently that if a lot of people from Harvard Business School go straight into some field that field is probably peaking. So there's a little bit to that where the suit is some example of conformity on the other hand wearing a suit in Silicon Valley is an example of non-conformity and I guess outside of outside of New York within the US most of the time wearing a suit as a tech company founder would be this weird sign that you know you're either like you don't know what you're doing you don't know what the right signals are or you know you're about to testify to Congress and that's why you have a suit now. You're not not generally a great sign but maybe it is a sign that you are willing to do some more conformist things and that you could pay attention to details the details are boring and also that you are putting some you're making some kind of financial investment in in that particular appearance. So yeah I would I would guess that there is there will be a tilt away from the hyper informal founders but I also think that if you treat that hyper informality as either this attempt to gain the system and just say like I'm going to be as much I'm going to try to remind people of Mark Zuckerberg circa 2005 as much as possible so I can raise money and pretend to be the next big thing that is that's one thing people are signaling and then the other thing is they're just accidentally signaling total indifference to anything except the thing they're working on and maybe that's a good thing but maybe maybe it's a good thing in unregulated domains and then a really really bad thing in regulated domains like if you're investing in a medical devices company you you probably don't want a founder who just cannot focus on anything except the product because there are rules they have to follow and you know norms and things and yeah it gets bad if all they're focused on is this one element you know if the hyper focus is like just right perfectly calibrated that's good but then maybe maybe adjusting your appearances this way to say that you have correctly calibrated your hyper focus and you're going to get one thing right and it's going to be really really right like you're going to get things right they're going to be really really right and you've identified what things matter what things don't.Dwarkesh Patel 0:21:02Yeah you'll lose track of your bank accounts. That's the dress itself but I also want to ask about the other characteristics you had this really interesting point in that blog post about how you know when you try to scout for talent when the talent is young you're over indexing for parental involvement and I'm curious if you had to identify somebody who had to be under the age of 18 or under the age of 20 what is the metric you're looking at that least indexes for parental involvement where they're being forced or encouraged by their parents to do it?Byrne Hobart 0:21:35I think the closest you could get is something that is either totally illegible to the parent's status like understanding of status or something that is actively low status and it's hard to hard to enumerate those and not just get swamped in well should this thing be low status the high status is actually terrible to say that you ever want to hire someone who was really good at x for some value of x but I do think that you so basically the origin of that point was that I was arguing that when you if you look at people who are at some percentile and they're in their 20s or 30s like a lot of like at a high percentile like a lot of it has to be that they have some combination of talent and have tried really hard there's probably been some element of luck but over time the luck starts to starts to wash out hopefully but the younger you go and this is probably just my experience of having kids like if you talk to your kids every day about multiplication they will start doing multiplication at a pretty early age and it's not that they are you know really really smart and they got to multiplication a couple years early it's that you push them in that direction and they were able to do it early so like the earlier you go the more you are over indexing on what the parents did what they emphasized and also what they told the kids was just part of the script and there are anecdotes about this from none of the specifics coming to mind but I remember anecdotes about people who grew up in lower middle class or below circumstances but would have one distant relative who owned a business and that made them aware that they could own a business and this is like a thing they could do it's part of the script now and that wasn't the only reason that they would have started business but it could be a reason that they decided to do that when they did and you have to imagine that for everyone who had one uncle who owned a scrap dealer or something that maybe there are five or ten or fifty people who grew up in similar circumstances had a similar level of innate ability and just didn't have anyone in their social circle who demonstrated to them that this was something you could actually do so I think like getting getting back to the talent identification problem but part of my thesis there was that it's it's really hard and it's getting harder that you had Y Combinator going after the relatively young talent versus what the medium BC was going after when YC started and then stuff like Pioneer and Emergent Ventures is going even younger and the younger you get the more it is this luck driven thing that is about what they got exposed to with the exception of prodigies so I'd like to think that if I encountered an eight-year-old Mozart I would be able to identify this person as just an extraordinary talent where like even if their parents were making them practice ten hours a day they couldn't be that good without talent and maybe something similar with the Polar Sisters where okay if I you know encounter a six-year-old who can routinely beat me at chess and so I go Google some you know read some chess books and then go back and try to beat them again and they're actually better and they're laughing at me and things like at some point you decide that this is actually natural talent but there's for a lot of other domains there's just so much room for parents to push one thing and do some combination of their kids talent and their own emphasis to get their kids really good at it and that's very hard to adjust for especially because if you ask the parents they're going to underestimate how much they overemphasize things because to them this is just a normal thing that everyone should be interested in and so you won't you won't get a good signal from asking parents and then you won't get a good signal from asking other people because they don't know how this family spends time at home and you know if if the medium family has more more YouTube and Netflix time and less you know less math practice time that family's just going to assume it's pretty pretty much their behavior is normal.Dwarkesh Patel 0:25:25It's a bit confusing because you also want to potentially include parental involvement in your estimate of how good this person will end up being if you think for example that giving somebody a shot to get started programming early is actually a big factor in putting them on that sort of like loop where they get better by practicing and they enjoy it more so on you might expect momentum more than mean reversion in that kind of like early start.Byrne Hobart 0:25:54Sure so I think part of part of what this gets to is the question of what are you optimizing for when you're doing a talent search and I think this is maybe one reason there could be some alpha left in talent search among people who are super young is that a lot of the academic institutions that are doing some form of talent search what they're pretty much optimizing for is how does this person do over the next year so you know if someone is a math prodigy and they get to join the math team at that school the school is not trying to optimize for will this person be proving novel theorems when they're 25 it's really will this seven-year-old be doing you know algebra by the time they're eight and that's that is still very tied to parental involvement especially once you know parents like kids they like structure and if you tell them this is the appropriate next thing to do with your kid then they're more likely to do it so you can post on that momentum for a while but what I think you the trap you can run into is that you identify people who are like 95th percentile talent with 99th percentile just super aggressive parents and that combination gets them to 99th percentile performance until they leave home and then they never do whatever that thing is ever again because they didn't really like it it was just something their parents pressured them into now maybe the ideal would be you get 99 percentile on both so the parents are putting them on this trajectory but the parents are actually aiming you know a very powerful rocket ship and it's going to go right in the right direction which is ideal and I think there's a there's a reasonable possibility that like I think there are there's like some level of just imprinting that young kids have where a lot of kids learn about programming when they're very young and that's something that they do from a very very early age and then it becomes the thing that they work on for their entire career obviously that has to be fairly new because it's not like they're you know from like anyone who was born before 1970 just had this constant yearning to program computers and could never satisfy it like those kids found something else to do maybe a generation before it was repairing transistor radios like mine did when he was a kid and maybe a century before that it was experimenting by building little internal combustion engines and seeing whether or not they explode like Henry Ford did with his friends at school and maybe before that like the earlier you got the harder it gets to really map these activities to anything concrete that we understand and can relate to but there's there's probably some extent to which you can you can sort of direct kids into whatever the modern instantiation of this long-term enduring tendency is and I guess one so one interesting example of that I've been reading the Robert Caro LBJ biography and there's this bit towards the end of the first volume where LBJ is put in charge of this fundraising organization for Democrats in Congress and when you read about it he sounds like a traitor he sounds like someone who was just born to be slinging currency derivatives or something because he is constantly on the phone constantly picking up rumors constantly sending money here and there and everywhere else and he's like always sending money overnight and then sending someone a telegram the day before saying you're going to get a package from Lyndon Baines Johnson and you're welcome so he's like he's doing this thing where he's constantly relentlessly optimizing every little tiny detail of some very complicated process clearly requires enormous working memory requires a very strong basically a very strong poker face like he has to be able to differentiate between someone who is begging for money because they are at they're pulling at 49% and with a little bit more money for newspaper ads they get to 50.1% versus someone who just wants the money or just is constantly freaking out by their nature so it requires a lot of the same character traits but 1930s were just not a great time to go to Wall Street maybe if LBJ had been born at a slightly different time that's that's just what he would have done and it would have been a very successful private equity executive or something but sometimes those these general skills they can translate into a lot of different areas and they get honed into very specific skills through through deliberate practice in those areas so if you have that combination of natural tendency and some level of motivation which in LBJ's case his dad was also a politician so he had this example of this is part of the life script you can't do it but he also had the example of his dad was broke after a while and so he he had this example of what not to do and ended up making good money for himself in addition to his political career yeah yeahDwarkesh Patel 0:30:35I'm glad you brought up the biography I'm reading it right now as well and the other biography by Robert Caro the power broker just for the audience the last episode or the second to last episode in the feed is we go deep into deep into that biography and talk about why it might be inaccurate in certain respects but what is what it is accurate and I think what Caro has a genius in is talking about the personalities of these great great men about the people who have really shaped their cities or their countries for decades and centuries there's many places where I mean I'm sure this is true for you if you understand like the economics of an issue he's talking about there's a lot to be left to care his explanation but the actual like the sort of breakdown of the personalities is just so fascinating and worth a reading care for but you know come to think of it so maybe the difference between the cases where you want to price in the parents involvement and the ones where you don't is where in situations like maybe being a politician where it really is about building a network building know-how building this sort of inarticulable knowledge from an early age it might be the case that in those situations just having connections and having parental involvement gets you far but if it's like becoming a programmer sure you'll like have done data structures by the time you're 16 but eventually you'll get to the point where you know everybody knows the basics and now you actually how to do interesting and cool things in computer science and now you're like a 95th percentile of spatial reasoning IQ is not going to get you that far but let me ask you about the care of biography because you had a really interesting comment that I've been warning you about as well in your in your review of the book or in your comment about the book you said it's worth speculating on how many lbg level figures exist today perhaps in domains outside of politics and how many caro level biographers there are who could do them justice so do you have some idea of who these figures are or if not that at least what areas you'd expect them to beByrne Hobart 0:32:34in I think a lot of people who are close to that tier and have some of the same personality types are in sales and corporate development and stuff like that where they you know they're they're building a big network they are constantly building out this giant levered balance sheet of favors you know favors out to them favors they owe to other people and like all forms of leverage it does allow you to grow a lot faster but you occasionally want these big big blowups so that's that's one place I would look I think if you try to look at the more you know pure executive founder types then it gets harder to find someone who would have exactly that kind of personality it's like part of what made lbj's methods work was that he was adjacent to a bunch of these really big institutions and he could sort of siphon off some of the power that these institutions had and in some cases could make them more powerful so I'm about a third of the way through master of the senate right now so it's it's just getting to the point where he's really getting cooking and really making the senate more more effective than it used to be and also making it an organization where someone where it's less seniority based so you kind of you need to be attached to something much bigger than yourself for that particular skill set to work really well that said you could have a really big impact because it is it's another form of leverage so if you are one of a hundred senators or I guess at the point at that point it was 96 senators and you're you're able to exert a lot more influence and be you know be the equivalent to 40 senators for example then you can get a whole lot done because it's it's the us senate but if you have that same kind of skill set and you're the ceo of your company well you're you're already in front of the company like there's only so much extra force you can exert so you you kind of see a figure with exactly that kind of personality trait in a case where there are big institutions that have slowed down somewhat and this is another interesting point that is raised early master at the senate is that the senate was getting old and if you look at these long-term charts of average age of politicians we're we're definitely in a bull market for extremely extremely old politicians in the u.s right now but we've gone through cycles before and one of the things that that tends to cause a reset is the war where wars among other things cause this huge reset in social capital so the people who made mistakes in the early stages all get discredited and then the the social bonds that people forge from actually fighting alongside one another and the the prestige you get from actually being part of the winning side that is very hard to replicate and so you end up with much younger people in much you know in positions of a lot more power whereas the the way that that worked a decade and a half earlier was the 1930s there just weren't a lot of organizations that were hiring heavily and looking for really ambitious young people who are going to shake things up but the u.s government was so that's that's how lbj got in and started on his path was that the new deal created these big programs like the national youth administration and they needed people like johnson to to run them so when you look at um you look at an industry that is aging it's usually an industry where um ambitious people stay away from it like they recognize it's becoming more seniority focused and there's just less going on but there becomes this huge opportunity when the aging stops because a bunch of people either retire or they get discredited and have to leave and suddenly the average age of the industry ratchets down and you can basically look at the set of opportunities that were missed over the previous decade for example because um because the industry was like the whatever this institution was was too risk averse you you get to take all of those opportunities at once so you have tons and tons of low-hanging fruit when that shift happens so i think that's that's the other thing to look for is look for cases where there's some some institution some part of the economy or society that has just been slowing down for a long time clearly getting to the limit of whatever its current operating model is hasn't found a new model and there's someone young and disruptive who's just entering it so i mean maybe maybe the place to look for the next lbj is um someone doing independent films and someone who looks at the top box office results and sees that everything is a spin-off of a spin-off of a spin-off and it's you know 50 percent marvel and says this is disgusting we have to destroy it and i'm going to build something completely different like maybe that person is actually the kind of lbj archetype now the other half of this question is the caro archetype and part of what i found fun about this was that um i felt like caro had this kind of um like he was kind of disgusted with himself when he realized how similar his some of his methods were to lbj's because he's writing this story about this guy who's will do anything to make a sort of friendship but it's really a fake friendship just to accomplish his goals and he's constantly doing doing the reading that other people aren't doing and doing the work and making the calls and reiterating and reiterating iterating just endless patience and then you read about how caro works and he does things like moves to dc for a while talks to everyone in dc befriends people goes to um texas talks you know moves to the hill country and gets to know people there he has these anecdotes in the book because the book is like um it's sort of has these hints of gonzo journalism where sometimes caro will just narrate it's that he'll he will go from here's what happened in 1946 to here's what happened to me in the 70s while i was talking to this guy about what he did in 1946 and sometimes he he will basically come out and say i waited until the person who paid this bribe had alzheimer's and then i asked him if he remembered paying the bribe and he remembered that he did it and didn't remember he wasn't supposed to say it so that's how i know and um there's this line that caro keeps quoting from lbj which i think was from lbj's speech coach days or speech like debate team coach days where his line was if you do everything you will win and caro does everything um so i think probably the population of caros is smaller than the population of lbj's because the people who have that skill set probably have ambitions other than writing a canonical book about one particular person or you know writing two canonical books two canonical works on um two important people but maybe a lot of those people are just doing thingsDwarkesh Patel 0:39:03other than typing man there's so many threads there that i i'm like tempted to just spend the rest of the episode just digesting um and talking about that but one thing that i like there's so many interesting things about caro's story uh and i guess the impact is that one of them is there's been this focus in terms of thinking about impact especially in like circles like effective altruism of trying to crunch the numbers and there's no reasonable crunching into the numbers you could have come up with before the power broker is written where you say i'm going to spend by the way this is he tries to downplay his accomplishments as a journalist before he wrote the power broker but he was nominated for the pulitzer prize for his journalism before the power broker so he's like a top level uh investigative journalist and then you say here's i'm going to spend my talents i'm going to spend eight years looking into and researching every conceivable person who has even potentially been in the same room as or been impacted by robert moses and i'm going to document all this i'm going to write a book where that's like million words or something and but in fact that's he probably didn't think about it this way right but what was the result he probably that book probably changed how many of the most influential people who came up through politics uh think about politics think it probably changed how urban governance is done how we think about accountability and transparency for good or ill right depending on your perspective um and just that example alone really makes me suspect the sort of number crunching way of thinking about what to do and rather just like i don't know i gotta understand how the you know from procurus perspective i gotta understand how this guy accumulated this power he doesn't and it like completely transforms uh you know how urbanByrne Hobart 0:40:41governance has been yeah you know it actually uh kind of looping back to the the parental influence thing i think part of what happened was that the more caro dug into it the more he realized this is actually a big and compelling project and there's there's this kind of fun phenomenon that you can get when you're researching something where you you you've read enough that when you read something new and you see that there's a footnote you actually know what is going to be cited in that footnote and maybe you've also read the thing about how the thing in that footnote is wrong and here's why and um you know you're picking up information a lot faster you get that that nice convexity where you can skim through the stuff you know and everything you read is new information and challenges something about what you what you previously knew and that's just a really intoxicating feeling and i can imagine that it's even more fun if you're actually digging up the primary sources so you know if you're caro you've gone through the new york times archives you've read through all of the all the external coverage of what people said about most time and then you start talking to people and you realize here are things that were we got completely wrong like we thought moses didn't want x to happen and it turns out that he kept scheming and plotting to make x happen and just wanted to pretend that it wasn't his doing um you so i think that but what happens is you you build this ongoing motivation and then you can you can make something that you just wouldn't be able to make before and i think if um if you start out saying i'm going to write a million words about how cities are run um you will probably fail but if you keep writing another 500 words a day about how robert moses operated and what he did and then you have some reflections throughout that on what that means for cities then then maybe maybe you actually get there and yeah so um and and maybe some of this is like you you want to have an adversary like a lot of these like the carol books do seem partly to be this cross-examination of of who he's writing about and often he he seems to have very mixed feelings like he you know with um i think one of the one of the really interesting things in um in the years of lyndon johnson is the carol's description of um coke stevenson and how they contrast him with lbj because it's really clear that uh carol's politics are completely opposed to stevenson's and that when carol's writing about lbj there's like the good stuff he did which is the great society and his his participation in the new zealand and there's a bad stuff which is anything that wasn't bad and um so he clearly like he likes what lbj accomplished and despises the person and then really likes the person of coke stevenson and kind of wishes him well but also doesn't actually want people like that to be in charge of anything and so it's like a you know it's partly partly carol debating with his subject and interrogating his subject and partly debating with himself and asking these very long-standing questions about whether or not justify the ends and you know would it be worth it to not have a great society in exchange for not letting lbj steal an election in 1948 and i don't think that like if he's good at his writing he shouldn't be coming to firm conclusions on that and he should be presenting this very very mixed picture where you really only get the things you really want if you also accept that there are some very bad things that come along with that as long as as long as the things you want come from powerful ambitious people who will do anything to win hey guysDwarkesh Patel 0:44:14i hope you're enjoying the conversation so far if you are i would really really appreciate it if you could share the episode with other people who you think might like it this is still a pretty small podcast so it's basically impossible for me to exaggerate how much it helps out when one of you shares the podcast you know put the episode and the group chat you have with your friends post it on twitter send it to somebody who you think might like it all of those things helps out a ton anyways back to the conversation yep yep no and it's worth remembering that it takes him a decade to write each of those volumes and each of that i guess in the case of the power broker or that entire book but in the course of a decade just imagine how many times you would change your mind on a given subject and you really notice this when you read different paragraphs of like for example the power broker where you notice um early on if you just read the first third or the first half the power broker you're like clearly caro is like writing about uh uh robert moses the way he writes about robert linden johnson where it's like yeah this guy had some flaws but like look at the cool s**t he did and the awesome stuff he did for new york um and then the tone completely changes but you gotta remember it's he's just writing this so many years and uh in between i do want to uh talk about the thing about you know young people being able to you know young people i guess a war being a catalyst for young people entering an arena i did an interview of um alexander mikorovitsky i forgot his last name but anyways he wrote a really interesting book about the polyonic wars and this is actually one of the things we talked about um there's a line from war and peace where one of the russian aristocrats is mad that his son is joining uh is joining the war and he goes you know it's is that man napoleon you you've all seen him and now you all want to like go off to war and i'm curious um like filmmaking doesn't seem like we're super quantitative and super smart and super competent like somebody who has thymus and the desire to dominate and the desire to achieve recognition uh i mean do you really think he's making films like where where is he really i mean is he like still trying to start a startup or is that like now a decade too old and now he's trying to dominate some other arena i mean maybe the lame answer is we don'tByrne Hobart 0:46:31actually know because um the way like you know paul graham has that essay about the trope of startups starting in garages and i think it's called the power of the marginal and it's all about how the the really interesting projects are the ones that can barely get off the ground because they're so weird and so out there that there is no infrastructure to support them and what that ends up doing is selecting for people who are extremely passionate about that project and also people who are extremely willful and will get impossible things done so you it's hard to just rattle off a bunch of examples of that because you your hit rate would be like 99 things out of 100 are just like things you read one fun blog post speculating about and they're actually never going to happen and then you know one of them maybe maybe you're right but it's very hard to tell which one it is and you know if it were very easy venture capital would not have such such skewed returns so yeah so maybe maybe it is like harder to harder to optimize for what area do you look for maybe it's actually easier to do the meta optimization of identifying the things you would quit you know quit podcasting and go work on given the opportunity and you know it's like good to have that sort of dread list like I I had that mental list of like you know if someone at Spotify ping me and they're like we really need a product manager who can help us display classical music such that we don't list like tons of redundant information and the first 50 characters of the track name and the actual incremental useful information in the 10 characters you have to wait for it to scroll through unless it doesn't actually scroll through like if someone pinged me it was like we really need someone to fix that can you come and do this I'd be sorely tempted feel the same way about Google Finance like if if if someone emails me and says you have a mandate to make Google Finance good I'd be tempted but I think thinking of like what industries would have that kind of pull for you and then what can you do to really dig into those industries you probably find the the the proto successful people in spaces like that versus trying to optimize in advance for well if I were you know if I were someone who thinks like nobody else thinks and we're a true natural contrarian and also had spent several years learning about different opportunities which one would I have ended up picking because then you're sort of magicking away all of the things that actually make the person you're looking for it's looking for so yeah can't quite be done that way yeah yeah yeah I want to go backDwarkesh Patel 0:49:05to that thing you said a moment ago about how you couldn't have written a million words that were as impactful about just you know how cities work but if you just wrote 500 words at a time about how Robert Moses accumulated power did the things he did you can actually have a really interesting and influential piece of work is that how you see the diff that you can't write one million words at a time about where where technology is going what's happening with the productivity slowdown what's happening with all these emerging industries but if you just write 2,000 words a day about what's happening with any particular you know company or industry then you can compile this really interesting overall worldview aboutByrne Hobart 0:49:44finance and tech that's the hope and I might be projecting things about my own attention span on to on to Cairo when I say that you can't just set out to do a million words on topic X and then do it but I do think you know I hope that I am by increments producing something that is a lot more than the sum of a bunch of business profiles and a bunch of you know strategy breakdown things like that like and that's that's one of the reasons that I spent time on things like reading Machiavelli and thinking about how Machiavelli's thoughts not just not just the the totally cynical amoral stuff but the other stuff you wrote at the same time which he may have met more seriously about how to build a sustainable and good republic rather than how to be a completely amoral monarch I try to read that kind of thing because I do think that it's valuable to have that more rounded view of the human condition and and I think that it contributes a lot to to writing about these individual companies like you know technology changes a lot humans change very slowly so if you if you want to understand technology you do have to study that this specific object level case of what is this thing what does it do differently what is it a substitute for what are the compliments to it etc but if you're trying to understand things like why did this company do X like why why did they fire fire this person and not that person and why did they choose to acquire this other business why is the CEO dumping tons of money into this thing that seems like it's it doesn't make much sense well you can find lots of historical examples of people in power making these decisions that just get continuously worse and continuously more costly and they refuse to back down sometimes they turn to be right sometimes they turn to be very very wrong but you'll find more examples of that if you go back further in history and they're often just a lot more fun to read about whereas like you know if you you can read about things like board spending too much money on the pencil and it not working out or IBM investing a ton in the 360 and that working out very nicely but you know you can also go back to the Iliad and read another case where sunk cost fallacy dominated rational strictly rational decision making and you know only divine intervention could ultimately lead to a good outcome for for the attacker and even then maybe not suchDwarkesh Patel 0:52:04great outcome often considered the that particular question about where trying to predict if somebody is overstepping or if they're making the best bet of their life is something that I've been trying to think about and I really have no reasonable method for I mean if you think about like what Elon Musk is doing with Twitter is this like Napoleon trying to conquer Russia and it's this super ego filled and pride filled you know completely illogical bet from somebody who has just had like 20 consecutive wins in a row and he thinks he's invincible or is it like Elon Musk like 20 years ago where he's like yeah I did PayPal and now let's you know let's build some rockets and let's build some electric vehicles yeah exactly and in each of these cases there's there's like so many analogies to like complete bust and there's so many analogies to oh this is just like part one of this grand plan and how do you figure out what which one is happening like how do you distinguish the visionary from the collapsing you know star the cynical answer is you wait about 200 years and thenByrne Hobart 0:53:18you write about how it was obvious all along like yeah you you really don't and I mean even there are a lot of cases that are actually still ambiguous so like Alexander you know conquered most of the known world at least most of the world that that people knew of around where he grew up and and then just goes to Babylon and drinks himself to death and that's the end right you know there there could have been an alternate story where he gets his life together a little bit and runs a giant sprawling empire on the other hand like reading the story battle to battle a lot of it it actually is basically this Ponzi scheme where every time he conquers a city he gets enough enough to pay off the people he hired to help him conquer the city and then has to move to the next city because they want to get paid again and so he's sort of you know was sort of being chased by his his obligations the entire way through until he finally got got just ahead of them enough to get a lot of loot and and a lot of land that could give people instead of just giving money so giving them like bars of silver and things so so yeah even even that story it's very hard to say you know he he rolled the dice a bunch of times and he won every time so clearly he was just one of those people who's born to win maybe it was sort of like he actually backed himself into a bunch of corners over and over and over again and then desperately fought his way out every single time and then was just completely sick of it and burnt out by the time he was in his early 30s in terms of how you would figure it out in advance like I think some of it does come down to getting a sense of whether they're responding to circumstances or whether they actually have have a long-term plan but then lots of like you know there's probably nothing more dangerous than a long-term plan that someone actually has the means to execute you know five-year plan does not have a good connotation Stalin had some of those and didn't turn out well for for a lot of people so even within that there's there's some difficulty in evaluating like I think there's kind of that that meta-cynical layer where if they don't know what they're doing then probably it's dumb luck they keep succeeding on the other hand if they do know what they're doing then maybe you hope that the world is lucky enough that they get unlucky and can't actually pull off whatever it is that they're they're planning to do maybe I guess another thing would be is there is there like an end state that they can get to because I think you know someone like Alexander he basically just kept going until he couldn't go any farther until his troops were basically on the point of mutiny and then just turned around and went not all the way home but went to like the nicest place halfway home and hung out there and partied but you know if if the story if you look at someone if the story is less about conquest and more about reconquest and restoration of something then there are these natural limits you can say like you go this far and you don't go any farther because you've actually finished your task so something like you know I think like I don't actually know who was who what which generals were on the other side of Napoleon but the ones who chased him out of Russia like for them the master plan was not we're going to conquer all of Europe the master plan was like we're getting our country back and then we're going to chase him far enough that he doesn't feel like he can just wait a year and do this again when it's not winter so so maybe that's that's another way to constrain it but then then you end up naturally selecting for less ambitious people it's like one way to one way to have these guardrails on your behavior is just don't have very big ambitions so you might and in that case those people are also stuck responding to circumstances so so maybe maybe you just end up with many different iterations of the same thing on different scales where everyone is stuck in certain historical circumstances they have they have their skills they have their opportunities they can they can go after some things maybe they achieve great things maybe they fail but either way eventually their luck runs out or they run out of ideas and then there's nothing to do except go home or just keep trying to keep keep being bolder until you eventually fail on most particularly I I don't really I don't really understand it I think there's like a remote possibility that he actually has a bunch of specific concrete ideas for how to increase Twitter's free cash flow and how to pay down the debt and make it a more profitable company maybe he just had that sense that it was overstaffed and that it should survive with a smaller headcount and if you cut headcount enough then you you end up with with a profitable business it could also just have been fun and seems fun so far and I think like that you know the the pursuit of fun is is not to be discounted like you if you're super rich you can afford to do all sorts of things varying levels of entertainment but it may be that the only thing that is actually like truly novel thrill seeking fun opportunity is something like buy Twitter and then turn it into you know what it is and it is like there's I think Rostad that at this this point about how the nature of Twitter's legitimacy has changed and that now it is a it is under the rule of a single monarch instead of ruled by these sort of faceless bureaucracies so now you know if something if Twitter does something you don't like there's actually a specific person you can blame and because you have Twitter you can actually yell at that person and potentially get an answer whereas if Twitter bans you because you made a joke and the joke looked like it was serious there's really there's no recourse and you know there's there's nothing lower status than someone like arguing with someone in authority about how serious or they should take your jokes there's like you know it's like a weird component of and it works both ways so like there's I think I started noticing this years ago because there are these underscore TXT Twitter accounts where they're just posting out of context comments from some niche community and the comments always sound deranged in a lot of cases to me the comments read as someone who is doing a bit they're playing a role they know it's funny they're exaggerating for their friends and then you take it out of context and read it as totally seriously and then you get to say these people are all like this they're all crazy but it is like it is a marker of high status to be able to not get jokes and to you know be able to be like righteously angry at someone because they made a joke and if they've been serious that would have been an appalling thing to say but they obviously weren't if you if you can get away with saying no I actually don't think it was a joke at all these people are humorless and they must have been totally serious then that's that's actually you know that's cool that's high status makes you impressive but yeah must like must must rule as this more you know personal monarch I think it's a it speaks to this question of legitimacy like why do people trust moderation and why do they trust sites to operate in the way that they do and you can either say these are like really high quality institutions so you know

The Lunar Society
Byrne Hobart - FTX, Drugs, Twitter, Taiwan, & Monasticism

The Lunar Society

Play Episode Listen Later Dec 1, 2022 90:45


Perhaps the most interesting episode so far.Byrne Hobart writes at thediff.co, analyzing inflections in finance and tech.He explains:* What happened at FTX* How drugs have induced past financial bubbles* How to be long AI while hedging Taiwan invasion* Whether Musk's Twitter takeover will succeed* Where to find the next Napoleon and LBJ* & ultimately how society can deal with those who seek domination and recognitionWatch on YouTube. Listen on Apple Podcasts, Spotify, or any other podcast platform. Read the full transcript here.Follow me on Twitter for updates on future episodes.If you enjoy this episode, I would be super grateful if you shared it. Post it on Twitter, send it to your friends & group chats, and throw it up wherever else people might find it. Can't exaggerate how much it helps a small podcast like mine.A huge thanks to Graham Bessellieu for editing this podcast.Timestamps: (0:00:50) - What the hell happened at FTX?(0:07:03) - How SBF Faked Being a Genius:  (0:12:23) - Drugs Explain Financial Bubbles (0:17:12) - On Founder Physiognomy (0:21:02) - Indexing Parental Involvement in Raising Talented Kids (0:30:35) - Where are all the Caro-level Biographers? (0:39:03) - Where are today's Great Founders?  (0:49:05) - Micro Writing -> Macro Understanding (0:52:04) - Elon's Twitter Takeover (1:01:28) - Does Big Tech & West Have Great People? (1:12:10) - Philosophical Fanatics and Effective Altruism  (1:17:54) - What Great Founders Have In Common (1:20:24) - Thinkers vs. Analyzers (1:26:17) - Taiwan Invasion bets & AI Timelines TranscriptAutogenerated - will not be perfectly accurate.Dwarkesh Patel 0:00:00Okay, today I have the pleasure of interviewing Bern Hobart again for the second time now, who writes at thediff.co. The way I would describe Bern is every time I have a question about a concept or an event in finance, I Google the name of that event or concept into Google, and then I'd put in Bern Hobart at the end of that search query. And nine times out of 10, it's the best thing I've read about that topic. And it's just so interesting. It's just like the most schizophrenic and galaxy brain it takes about like how, you know, the discourses of, you know, Machiavelli's discourses relate to big tech or like how source of serial reflexivity explains hiring in finance and tech. So just very interesting stuff. I'm glad to have him back on again.Byrne Hobart 0:00:47Yeah, great to be back. Awesome.Dwarkesh Patel 0:00:50Okay. So first, I really want to jump into the FTX saga. What the hell happened? Let me just like leave an open ended question for you.Byrne Hobart 0:00:59Yeah, so I think the first thing to say is that there's a lot we don't know. There's a lot we may never know, because so many of the decisions at FTX were made through self like auto deleting encrypted chat. So like there are some holes we will never be able to fill in. The lack of accounting is also going to make it tough. Like basically, I think you can tell a bunch of different stories here. The really obvious one is fraud. And you can debate over exactly when it started, like one version of the story, which is getting some currency is that SPF had this entity Alameda, and it was supposed to be this really hot crypto trading fund, but maybe it was a Ponzi scheme all along. And then maybe at some point that Ponzi scheme started to run short on cash. So he decided to start an exchange and the exchange got more cash, and then he used the cash to pay off previous bachelors, whatever. I think that's one version. And then kind of the maximally exculpatory version, which actually is still really bad is Alameda was a real company. They really made money trading. They took tons of risks. And SPF has talked about why he thinks that's a good thing, that FTX cut some corners when they were raising money and that they had really bad internal accounting. And that basically the extended entity of Alameda and FTX sort of lost track of whose money was where and it ended up with Alameda spending FTX customer money, which I think is like, one way to look at that is like, if you think, okay, fraud is like twice as bad as just incompetently losing money. Well, it's not as if we had a $4 billion fraud instead of $8 billion fraud, everyone would be like, well, that's fine. That's normal. Like, why are you giving sky high time? It's bad no matter what. Running a big company that is systemically important in crypto and then having that company completely vaporize over the course of a couple of days, really, really bad and worth understanding what happened. But it's partly worth understanding what happened because there are just different solutions that present themselves depending on what you think the story is. Like if the story is fraud, it's actually a lot harder to solve because there are just a lot of people who are willing and able to commit fraud and to lie. If the story is bad accounting, then that's actually a lot more solvable because then you could say things like, the solution is make sure you never invest in a crypto exchange that doesn't have a real auditor and make sure that they have their proof of reserves calculation and it's happening consistently and that you can audit that. There are different solution sets. And then I think the actual story is going to be somewhere in the middle of extreme risk tolerance plus extremely poor accounting plus fraud at some point. But I suspect the fraud actually happened pretty late. If it happened, which I think there's like 80, 90% chance that there was some level of fraud versus pure incompetence. But if so, I think may have happened fairly late in the story and as kind of a last desperate move. I think part of what drives the response to what happened with FTX and Alameda is that if you think the story is pure fraud, it's very easy to say you would never do that. I can say very easily, I would definitely never start a Ponzi scheme and then start another bigger Ponzi scheme to pay off the first Ponzi scheme. That's not me. That's not most people. But I think if you draw the scenario where they discover at some point like a couple months ago or even a month ago, they realized, hey, we actually there's a billion dollars plus that was supposed to be customer money, but we thought it was Alameda money and we actually spent it and now it's gone. We've lost it. What would you do in that circumstance? And I think the ideal answer is, well, I'd immediately come clean and step down and commit myself to getting everyone paid back and made whole. And I think there's also the possibility that the realistic answer is more like, well, I would scramble and try to make sure that that didn't cause the company to collapse and try to pick up later. And so at that point, you've sort of backed your way into fraud through earlier episodes of incompetence. But I think like one of the problems with the fraud story is frauds have to be good at accounting because they have to like, you know, there's very rough schematic sense. They have to be twice as good at accounting as everybody else, because not only do they have to have the real books that tell them how much money the business has and whether or not the next check they're at will bounce, but they have to have the fake set of books and they have to have a way to make those tie out with one another. So they actually like frauds, accounting frauds tend to be fairly sophisticated. They tend to really dive into edge cases. I was reading up on MF Global, which was a big futures brokerage that collapsed in part because they were dipping into customer funds and making some investments they shouldn't have. And they did a lot of clever and shady stuff. Like one of the things they would do is there was one point where they were transferring money at the last minute out of their consumer, out of their customer funds in order to make margin calls. And what they would do is they would send the wire from the customer account to a different company account. And they'd send it a couple of minutes before the wires closed for the night. And then they would send this email right after the wires closed saying, Hey, we just realized we set this transfer fraud account got to reverse tomorrow. So that gave them at least one night of enough liquidity to survive. Now, you can only do that kind of fraud if you are actually keeping really close track of where your money is, where it's supposed to be, what the rules are, so that you know exactly how to break those rules. I don't think FDX was in any position to commit that kind of fraud. I think that if they tried to do something like that, like they wire the money from an account that didn't have any money in it or something or send it to the wrong account. There are these stories about them accidentally burning a bunch of USDC by sending it to an address that didn't exist or something like that. The operational slip ups actually make it harder for them to have committed fraud. And it's unquestionable at this point that their record keeping was very bad.Dwarkesh Patel 0:07:03Yeah, to your point about the fraud being harder. I mean, it's like a classic story about if you just tell the truth, it's just gonna be much easier for you. You just don't have to keep track with that many things. But the one thing I've been thinking about, I interviewed him for like an hour. And before that, I tried to do quite a bit of research into how FDX worked and what was going on. And I had this impression that this guy was like the most competent genius that had ever graced finance. And this was like a common impression. This wasn't just... And then, but it turns out that, you know, they were like, it just like out of sheer incompetency loses track of billions of dollars, the internal operations, it just like him putting together spreadsheets and throwing them around and putting emojis on slack messages, asking for payments. And I just like, I want to understand how it is that this guy put out the impression out there that he is just hyper competent. And it turns out that it's like the opposite. It's not even that he's mediocre. It's the opposite.Byrne Hobart 0:08:09Right. Yeah. So I think you can tell a couple stories there, like one story. And I know I've been saying a lot, like you can tell multiple stories. There are multiple stories that fit the facts. We have lots of different weird things to explain and therefore many different weird explanations that fit them. So I think one version is, okay, he's never all that smart and decided that he could just play up this weird, you know, eccentric genius thing. And that would be able to get away with it. And there are these anecdotes about how someone told him to cut his hair and he said, no, I have to look kind of crazy for this. And so that fits in. And it is kind of an MIT thing to do that, to play up your eccentricity because you know there are these super brilliant, very eccentric people and you can be like them. It's kind of like, a lot of people, they read about Steve Jobs and they're like, well, the secret to success is be this brilliant perfectionist who can always see the future and also be just a giant a*****e to everyone you meet. And I'm going to try to do both of those things. And it turns out one of those is really, really easy to do. And then one of them is really, really hard and you have to do both to be Steve Jobs. But you can sort of give this surface level impression of Jobsy and this by just being really obnoxious to everyone. So I think some of it is that. But the other is that if you get really good at just very narrow domain specific stuff, you might miss what other stuff people have to be good at for that skill set to be valuable. And so I think thinking about his previous background where he worked at a prop trading firm and seemed to do well there. It's Jane Street. They're very, very selective with who they hire, very hard to get in and they're very profitable. So good to get in. It's entirely possible that part of what happened was just that Jane Street has its operations people, they have their trading people. And it may there may have been enough siloing within that, that if your job is just identify discrepancies in ETF prices and take advantage of them, you don't actually have to know things like how do we figure out which counterparties are credit worthy? How do we make sure we have enough liquidity? How do we have backup plans upon backup plans upon backup plans in case something goes wrong with our liquidity situation? Because part of the Jane Street model seems to be there. They're very, very opaque, but like very opaque in terms of their trading operations. But part of the model seems to be that they want to be the trader who is there and trading and making a market when everything fell apart. And what that means is that like the way you make the most money in trading is when markets are insanely volatile, volume is very, very high, and you're still trading. But the reason that markets get really volatile when prices collapse and there's a lot of trade going on is that other people who would love to be trading can't trade because maybe the broker they use is suddenly insolvent and they can't get to a new broker, their money is frozen. So if you're planning to be there when everybody else is out of the market, then you have to have lots and lots of contingency plans. And it's not enough to buy lots of deep out of the money put options as Jane Street does. You also have to make sure that you're buying those options from counterparty who will actually send you the money when you need it or that you want to structure those things so the actual cash gets to your account at the time that needs to be there. And that maybe is something that a prop trader should not be spending most of their time thinking about. Like, it's one of those things where it's like, if you own a house and you like if over the last 24 hours, you learned a whole lot about electrical wiring, or you learned a whole lot about how plumbing works or how septic tanks work, like, that's not good. That means something very, very bad happened in your house. And it could be nice to be an expert on those things. But if you suddenly became an expert, it's because somebody else wasn't doing their job. So I think you could you could be a trader like that where they can be very good at the finding little pricing discrepancies thing and have just no awareness of what the operation stuff is, especially because the better the operations team is, the less anyone else needs to be aware of them. Like they like you only email them when something is going wrong. So if nothing is going wrong, you never email them and then you forget they exist.Dwarkesh Patel 0:12:23Yeah, yeah, no, that's a good point. In fact, in the interview I did of him, he mentioned that I asked him what is the difference between Jane Street and FTX. And he mentioned that at Jane Street, there was like this button he could press to like buy. And all that's all the intermediaries, all the servers, it was just taken care of. And what was really funny is then he said, and just getting a bank account and he goes, and let's talk about that. Just getting a bank account is so hard when you're in an infinite. It apparently turns out it's so hard that you might have like commingled funds because you couldn't manage to separate them out. Yeah, no, that's crazy. You had this really interesting take. I think one point we were talking about how every single market crash can be explained by the drug that was common in the industry at the time. And we finally achieved like the hypergrade meth stage of I forgot the name of like that patch you was taking, but it's like stronger than Adderall or whatever.Byrne Hobart 0:13:23So it was, I think it's saying every crash can be explained by the drug they're taking at the time. That takes a little, but I do think that the impact of drugs, of new drugs on financial markets is underrated. And you can have examples of this going back pretty far. Like there is some connection between caffeine consumption and like extroversion and risk taking like you temporarily get a little bit more willing to do deals when you consume caffeine and in Lloyd's of London before it was this insurance consortium, it was a coffee shop. It was Lloyd's coffee shop. So you do have some history of coffee shops being associated with financial centers. And then you have to zoom forward because we just haven't had that many novel stimulants, I guess depressants, deliriums, whatever, like other drug categories probably just don't lead to that much financial activity. Like I don't know how someone would trade differently or invest differently if they had a really strong acid trip or took ecstasy or something. But the stimulants where people can just consistently reuse them, they keep people alert, they make them active and wanting to do things. It seems like stimulants would have a connection to financial markets. So yeah, that theory is like if you look at the 1980s where there were a lot of these hostile takeover deals where someone would find a company that's underperforming and when you look at the spreadsheets and say this company is underperforming, what you're often looking at is a story that is more like this company believes that they have this social obligation to the community where people work and that they have an obligation to give their customers a fairly priced product and maybe they give them really good customer service that doesn't really pay for itself and it's the right thing to do. Well maybe especially if you are a coke head with kind of coke head morality, you decide well that's not the right thing to do at all. You should actually just take the money and we should fire these people and replace them with cheaper employees. So you know levering up a company and then like levering up in order to buy out a bigger company and then firing everyone and you know shutting down the pension plan and distributing the surplus to shareholders like it is just very standard coke head behavior. Whereas if you look at the mortgage backed securities boom and structured products generally in the mid-2000s, the way that people made money in that was just by being very very detail oriented and being able to make these incredibly fine grained distinctions between different products that were basically similar but one of them pays 5.7% and one of them pays 5.75% and if you lever up that difference enough times you're actually making really good money consistently. It's super boring but maybe with enough Adderall it's actually very tolerable work that you can enjoy. So I do think that just like within stimulants the difference between short acting stimulants and long acting stimulants does mean the difference between a hostile takeover boom and a structured products boom. And then yeah there's I think the drug is called M-sem or something which is like a Parkinson's treatment and there's some evidence from pretty small sample size studies that one of the side effects of this drug is compulsive gambling. So yeah and the drug story there have been very very fun tweets about this claim and then there have been these official denials from the company doctor on the other hand if you're a company that has a company doctor maybe that says something about the level of medication you're consuming and maybe the company doctor's job is partly to say as a doctor I can assure you I would never give someone three times the normal dose of Adderall just because their boss hired me to do that specifically. I think dealers don't exactly have patient confidentiality norms, doctors do so maybe you hire a doctor instead of a dealer specifically to get that plausible deniability.Dwarkesh Patel 0:17:12Other than drugs I also want to ask you about the phenotype of the founder. You wrote a post I think it was like just a couple of weeks before this crash happened where you were pointing out that this idea of a founder who comes in shorts and a t-shirt and a crazy haircut. By the way so FTX had a barber who would come in every Tuesday to cut everybody's hair it might have been Thursday and that so he could have just like sat in line and gotten his haircut like that was that was completely unnecessary the way he dressed and it was like very purposeful. But yeah so if that archetype of a founder who's in a t-shirt and shorts if that's been priced in and that's beta instead of alpha now what is the new phenotype and physiognomy of the founder? Where are you looking for alpha?Byrne Hobart 0:17:58Well I guess I would draw the distinction between like the physical type of someone versus their presentation and their dress. Yeah I don't know I'm sure someone could run some interesting numbers on that but I don't have a good sense of what exactly they'd get from that but in terms of you know how people public people publicly present that present themselves my guess is that yeah there will be this swing towards investing in people who look a little bit more formal a little bit more boring and these things are somewhat cyclical. Like I think part of you know part of the norm on investing in or you know treating basically treating the suit as a negative signal is that a lot of investors have this view that when the MBAs come into an industry a lot of the alpha is gone and it is true that MBAs at least you know there's it's like a decent market timing signal apparently that if a lot of people from Harvard Business School go straight into some field that field is probably peaking. So there's a little bit to that where the suit is some example of conformity on the other hand wearing a suit in Silicon Valley is an example of non-conformity and I guess outside of outside of New York within the US most of the time wearing a suit as a tech company founder would be this weird sign that you know you're either like you don't know what you're doing you don't know what the right signals are or you know you're about to testify to Congress and that's why you have a suit now. You're not not generally a great sign but maybe it is a sign that you are willing to do some more conformist things and that you could pay attention to details the details are boring and also that you are putting some you're making some kind of financial investment in in that particular appearance. So yeah I would I would guess that there is there will be a tilt away from the hyper informal founders but I also think that if you treat that hyper informality as either this attempt to gain the system and just say like I'm going to be as much I'm going to try to remind people of Mark Zuckerberg circa 2005 as much as possible so I can raise money and pretend to be the next big thing that is that's one thing people are signaling and then the other thing is they're just accidentally signaling total indifference to anything except the thing they're working on and maybe that's a good thing but maybe maybe it's a good thing in unregulated domains and then a really really bad thing in regulated domains like if you're investing in a medical devices company you you probably don't want a founder who just cannot focus on anything except the product because there are rules they have to follow and you know norms and things and yeah it gets bad if all they're focused on is this one element you know if the hyper focus is like just right perfectly calibrated that's good but then maybe maybe adjusting your appearances this way to say that you have correctly calibrated your hyper focus and you're going to get one thing right and it's going to be really really right like you're going to get things right they're going to be really really right and you've identified what things matter what things don't.Dwarkesh Patel 0:21:02Yeah you'll lose track of your bank accounts. That's the dress itself but I also want to ask about the other characteristics you had this really interesting point in that blog post about how you know when you try to scout for talent when the talent is young you're over indexing for parental involvement and I'm curious if you had to identify somebody who had to be under the age of 18 or under the age of 20 what is the metric you're looking at that least indexes for parental involvement where they're being forced or encouraged by their parents to do it?Byrne Hobart 0:21:35I think the closest you could get is something that is either totally illegible to the parent's status like understanding of status or something that is actively low status and it's hard to hard to enumerate those and not just get swamped in well should this thing be low status the high status is actually terrible to say that you ever want to hire someone who was really good at x for some value of x but I do think that you so basically the origin of that point was that I was arguing that when you if you look at people who are at some percentile and they're in their 20s or 30s like a lot of like at a high percentile like a lot of it has to be that they have some combination of talent and have tried really hard there's probably been some element of luck but over time the luck starts to starts to wash out hopefully but the younger you go and this is probably just my experience of having kids like if you talk to your kids every day about multiplication they will start doing multiplication at a pretty early age and it's not that they are you know really really smart and they got to multiplication a couple years early it's that you push them in that direction and they were able to do it early so like the earlier you go the more you are over indexing on what the parents did what they emphasized and also what they told the kids was just part of the script and there are anecdotes about this from none of the specifics coming to mind but I remember anecdotes about people who grew up in lower middle class or below circumstances but would have one distant relative who owned a business and that made them aware that they could own a business and this is like a thing they could do it's part of the script now and that wasn't the only reason that they would have started business but it could be a reason that they decided to do that when they did and you have to imagine that for everyone who had one uncle who owned a scrap dealer or something that maybe there are five or ten or fifty people who grew up in similar circumstances had a similar level of innate ability and just didn't have anyone in their social circle who demonstrated to them that this was something you could actually do so I think like getting getting back to the talent identification problem but part of my thesis there was that it's it's really hard and it's getting harder that you had Y Combinator going after the relatively young talent versus what the medium BC was going after when YC started and then stuff like Pioneer and Emergent Ventures is going even younger and the younger you get the more it is this luck driven thing that is about what they got exposed to with the exception of prodigies so I'd like to think that if I encountered an eight-year-old Mozart I would be able to identify this person as just an extraordinary talent where like even if their parents were making them practice ten hours a day they couldn't be that good without talent and maybe something similar with the Polar Sisters where okay if I you know encounter a six-year-old who can routinely beat me at chess and so I go Google some you know read some chess books and then go back and try to beat them again and they're actually better and they're laughing at me and things like at some point you decide that this is actually natural talent but there's for a lot of other domains there's just so much room for parents to push one thing and do some combination of their kids talent and their own emphasis to get their kids really good at it and that's very hard to adjust for especially because if you ask the parents they're going to underestimate how much they overemphasize things because to them this is just a normal thing that everyone should be interested in and so you won't you won't get a good signal from asking parents and then you won't get a good signal from asking other people because they don't know how this family spends time at home and you know if if the medium family has more more YouTube and Netflix time and less you know less math practice time that family's just going to assume it's pretty pretty much their behavior is normal.Dwarkesh Patel 0:25:25It's a bit confusing because you also want to potentially include parental involvement in your estimate of how good this person will end up being if you think for example that giving somebody a shot to get started programming early is actually a big factor in putting them on that sort of like loop where they get better by practicing and they enjoy it more so on you might expect momentum more than mean reversion in that kind of like early start.Byrne Hobart 0:25:54Sure so I think part of part of what this gets to is the question of what are you optimizing for when you're doing a talent search and I think this is maybe one reason there could be some alpha left in talent search among people who are super young is that a lot of the academic institutions that are doing some form of talent search what they're pretty much optimizing for is how does this person do over the next year so you know if someone is a math prodigy and they get to join the math team at that school the school is not trying to optimize for will this person be proving novel theorems when they're 25 it's really will this seven-year-old be doing you know algebra by the time they're eight and that's that is still very tied to parental involvement especially once you know parents like kids they like structure and if you tell them this is the appropriate next thing to do with your kid then they're more likely to do it so you can post on that momentum for a while but what I think you the trap you can run into is that you identify people who are like 95th percentile talent with 99th percentile just super aggressive parents and that combination gets them to 99th percentile performance until they leave home and then they never do whatever that thing is ever again because they didn't really like it it was just something their parents pressured them into now maybe the ideal would be you get 99 percentile on both so the parents are putting them on this trajectory but the parents are actually aiming you know a very powerful rocket ship and it's going to go right in the right direction which is ideal and I think there's a there's a reasonable possibility that like I think there are there's like some level of just imprinting that young kids have where a lot of kids learn about programming when they're very young and that's something that they do from a very very early age and then it becomes the thing that they work on for their entire career obviously that has to be fairly new because it's not like they're you know from like anyone who was born before 1970 just had this constant yearning to program computers and could never satisfy it like those kids found something else to do maybe a generation before it was repairing transistor radios like mine did when he was a kid and maybe a century before that it was experimenting by building little internal combustion engines and seeing whether or not they explode like Henry Ford did with his friends at school and maybe before that like the earlier you got the harder it gets to really map these activities to anything concrete that we understand and can relate to but there's there's probably some extent to which you can you can sort of direct kids into whatever the modern instantiation of this long-term enduring tendency is and I guess one so one interesting example of that I've been reading the Robert Caro LBJ biography and there's this bit towards the end of the first volume where LBJ is put in charge of this fundraising organization for Democrats in Congress and when you read about it he sounds like a traitor he sounds like someone who was just born to be slinging currency derivatives or something because he is constantly on the phone constantly picking up rumors constantly sending money here and there and everywhere else and he's like always sending money overnight and then sending someone a telegram the day before saying you're going to get a package from Lyndon Baines Johnson and you're welcome so he's like he's doing this thing where he's constantly relentlessly optimizing every little tiny detail of some very complicated process clearly requires enormous working memory requires a very strong basically a very strong poker face like he has to be able to differentiate between someone who is begging for money because they are at they're pulling at 49% and with a little bit more money for newspaper ads they get to 50.1% versus someone who just wants the money or just is constantly freaking out by their nature so it requires a lot of the same character traits but 1930s were just not a great time to go to Wall Street maybe if LBJ had been born at a slightly different time that's that's just what he would have done and it would have been a very successful private equity executive or something but sometimes those these general skills they can translate into a lot of different areas and they get honed into very specific skills through through deliberate practice in those areas so if you have that combination of natural tendency and some level of motivation which in LBJ's case his dad was also a politician so he had this example of this is part of the life script you can't do it but he also had the example of his dad was broke after a while and so he he had this example of what not to do and ended up making good money for himself in addition to his political career yeah yeahDwarkesh Patel 0:30:35I'm glad you brought up the biography I'm reading it right now as well and the other biography by Robert Caro the power broker just for the audience the last episode or the second to last episode in the feed is we go deep into deep into that biography and talk about why it might be inaccurate in certain respects but what is what it is accurate and I think what Caro has a genius in is talking about the personalities of these great great men about the people who have really shaped their cities or their countries for decades and centuries there's many places where I mean I'm sure this is true for you if you understand like the economics of an issue he's talking about there's a lot to be left to care his explanation but the actual like the sort of breakdown of the personalities is just so fascinating and worth a reading care for but you know come to think of it so maybe the difference between the cases where you want to price in the parents involvement and the ones where you don't is where in situations like maybe being a politician where it really is about building a network building know-how building this sort of inarticulable knowledge from an early age it might be the case that in those situations just having connections and having parental involvement gets you far but if it's like becoming a programmer sure you'll like have done data structures by the time you're 16 but eventually you'll get to the point where you know everybody knows the basics and now you actually how to do interesting and cool things in computer science and now you're like a 95th percentile of spatial reasoning IQ is not going to get you that far but let me ask you about the care of biography because you had a really interesting comment that I've been warning you about as well in your in your review of the book or in your comment about the book you said it's worth speculating on how many lbg level figures exist today perhaps in domains outside of politics and how many caro level biographers there are who could do them justice so do you have some idea of who these figures are or if not that at least what areas you'd expect them to beByrne Hobart 0:32:34in I think a lot of people who are close to that tier and have some of the same personality types are in sales and corporate development and stuff like that where they you know they're they're building a big network they are constantly building out this giant levered balance sheet of favors you know favors out to them favors they owe to other people and like all forms of leverage it does allow you to grow a lot faster but you occasionally want these big big blowups so that's that's one place I would look I think if you try to look at the more you know pure executive founder types then it gets harder to find someone who would have exactly that kind of personality it's like part of what made lbj's methods work was that he was adjacent to a bunch of these really big institutions and he could sort of siphon off some of the power that these institutions had and in some cases could make them more powerful so I'm about a third of the way through master of the senate right now so it's it's just getting to the point where he's really getting cooking and really making the senate more more effective than it used to be and also making it an organization where someone where it's less seniority based so you kind of you need to be attached to something much bigger than yourself for that particular skill set to work really well that said you could have a really big impact because it is it's another form of leverage so if you are one of a hundred senators or I guess at the point at that point it was 96 senators and you're you're able to exert a lot more influence and be you know be the equivalent to 40 senators for example then you can get a whole lot done because it's it's the us senate but if you have that same kind of skill set and you're the ceo of your company well you're you're already in front of the company like there's only so much extra force you can exert so you you kind of see a figure with exactly that kind of personality trait in a case where there are big institutions that have slowed down somewhat and this is another interesting point that is raised early master at the senate is that the senate was getting old and if you look at these long-term charts of average age of politicians we're we're definitely in a bull market for extremely extremely old politicians in the u.s right now but we've gone through cycles before and one of the things that that tends to cause a reset is the war where wars among other things cause this huge reset in social capital so the people who made mistakes in the early stages all get discredited and then the the social bonds that people forge from actually fighting alongside one another and the the prestige you get from actually being part of the winning side that is very hard to replicate and so you end up with much younger people in much you know in positions of a lot more power whereas the the way that that worked a decade and a half earlier was the 1930s there just weren't a lot of organizations that were hiring heavily and looking for really ambitious young people who are going to shake things up but the u.s government was so that's that's how lbj got in and started on his path was that the new deal created these big programs like the national youth administration and they needed people like johnson to to run them so when you look at um you look at an industry that is aging it's usually an industry where um ambitious people stay away from it like they recognize it's becoming more seniority focused and there's just less going on but there becomes this huge opportunity when the aging stops because a bunch of people either retire or they get discredited and have to leave and suddenly the average age of the industry ratchets down and you can basically look at the set of opportunities that were missed over the previous decade for example because um because the industry was like the whatever this institution was was too risk averse you you get to take all of those opportunities at once so you have tons and tons of low-hanging fruit when that shift happens so i think that's that's the other thing to look for is look for cases where there's some some institution some part of the economy or society that has just been slowing down for a long time clearly getting to the limit of whatever its current operating model is hasn't found a new model and there's someone young and disruptive who's just entering it so i mean maybe maybe the place to look for the next lbj is um someone doing independent films and someone who looks at the top box office results and sees that everything is a spin-off of a spin-off of a spin-off and it's you know 50 percent marvel and says this is disgusting we have to destroy it and i'm going to build something completely different like maybe that person is actually the kind of lbj archetype now the other half of this question is the caro archetype and part of what i found fun about this was that um i felt like caro had this kind of um like he was kind of disgusted with himself when he realized how similar his some of his methods were to lbj's because he's writing this story about this guy who's will do anything to make a sort of friendship but it's really a fake friendship just to accomplish his goals and he's constantly doing doing the reading that other people aren't doing and doing the work and making the calls and reiterating and reiterating iterating just endless patience and then you read about how caro works and he does things like moves to dc for a while talks to everyone in dc befriends people goes to um texas talks you know moves to the hill country and gets to know people there he has these anecdotes in the book because the book is like um it's sort of has these hints of gonzo journalism where sometimes caro will just narrate it's that he'll he will go from here's what happened in 1946 to here's what happened to me in the 70s while i was talking to this guy about what he did in 1946 and sometimes he he will basically come out and say i waited until the person who paid this bribe had alzheimer's and then i asked him if he remembered paying the bribe and he remembered that he did it and didn't remember he wasn't supposed to say it so that's how i know and um there's this line that caro keeps quoting from lbj which i think was from lbj's speech coach days or speech like debate team coach days where his line was if you do everything you will win and caro does everything um so i think probably the population of caros is smaller than the population of lbj's because the people who have that skill set probably have ambitions other than writing a canonical book about one particular person or you know writing two canonical books two canonical works on um two important people but maybe a lot of those people are just doing thingsDwarkesh Patel 0:39:03other than typing man there's so many threads there that i i'm like tempted to just spend the rest of the episode just digesting um and talking about that but one thing that i like there's so many interesting things about caro's story uh and i guess the impact is that one of them is there's been this focus in terms of thinking about impact especially in like circles like effective altruism of trying to crunch the numbers and there's no reasonable crunching into the numbers you could have come up with before the power broker is written where you say i'm going to spend by the way this is he tries to downplay his accomplishments as a journalist before he wrote the power broker but he was nominated for the pulitzer prize for his journalism before the power broker so he's like a top level uh investigative journalist and then you say here's i'm going to spend my talents i'm going to spend eight years looking into and researching every conceivable person who has even potentially been in the same room as or been impacted by robert moses and i'm going to document all this i'm going to write a book where that's like million words or something and but in fact that's he probably didn't think about it this way right but what was the result he probably that book probably changed how many of the most influential people who came up through politics uh think about politics think it probably changed how urban governance is done how we think about accountability and transparency for good or ill right depending on your perspective um and just that example alone really makes me suspect the sort of number crunching way of thinking about what to do and rather just like i don't know i gotta understand how the you know from procurus perspective i gotta understand how this guy accumulated this power he doesn't and it like completely transforms uh you know how urbanByrne Hobart 0:40:41governance has been yeah you know it actually uh kind of looping back to the the parental influence thing i think part of what happened was that the more caro dug into it the more he realized this is actually a big and compelling project and there's there's this kind of fun phenomenon that you can get when you're researching something where you you you've read enough that when you read something new and you see that there's a footnote you actually know what is going to be cited in that footnote and maybe you've also read the thing about how the thing in that footnote is wrong and here's why and um you know you're picking up information a lot faster you get that that nice convexity where you can skim through the stuff you know and everything you read is new information and challenges something about what you what you previously knew and that's just a really intoxicating feeling and i can imagine that it's even more fun if you're actually digging up the primary sources so you know if you're caro you've gone through the new york times archives you've read through all of the all the external coverage of what people said about most time and then you start talking to people and you realize here are things that were we got completely wrong like we thought moses didn't want x to happen and it turns out that he kept scheming and plotting to make x happen and just wanted to pretend that it wasn't his doing um you so i think that but what happens is you you build this ongoing motivation and then you can you can make something that you just wouldn't be able to make before and i think if um if you start out saying i'm going to write a million words about how cities are run um you will probably fail but if you keep writing another 500 words a day about how robert moses operated and what he did and then you have some reflections throughout that on what that means for cities then then maybe maybe you actually get there and yeah so um and and maybe some of this is like you you want to have an adversary like a lot of these like the carol books do seem partly to be this cross-examination of of who he's writing about and often he he seems to have very mixed feelings like he you know with um i think one of the one of the really interesting things in um in the years of lyndon johnson is the carol's description of um coke stevenson and how they contrast him with lbj because it's really clear that uh carol's politics are completely opposed to stevenson's and that when carol's writing about lbj there's like the good stuff he did which is the great society and his his participation in the new zealand and there's a bad stuff which is anything that wasn't bad and um so he clearly like he likes what lbj accomplished and despises the person and then really likes the person of coke stevenson and kind of wishes him well but also doesn't actually want people like that to be in charge of anything and so it's like a you know it's partly partly carol debating with his subject and interrogating his subject and partly debating with himself and asking these very long-standing questions about whether or not justify the ends and you know would it be worth it to not have a great society in exchange for not letting lbj steal an election in 1948 and i don't think that like if he's good at his writing he shouldn't be coming to firm conclusions on that and he should be presenting this very very mixed picture where you really only get the things you really want if you also accept that there are some very bad things that come along with that as long as as long as the things you want come from powerful ambitious people who will do anything to win hey guysDwarkesh Patel 0:44:14i hope you're enjoying the conversation so far if you are i would really really appreciate it if you could share the episode with other people who you think might like it this is still a pretty small podcast so it's basically impossible for me to exaggerate how much it helps out when one of you shares the podcast you know put the episode and the group chat you have with your friends post it on twitter send it to somebody who you think might like it all of those things helps out a ton anyways back to the conversation yep yep no and it's worth remembering that it takes him a decade to write each of those volumes and each of that i guess in the case of the power broker or that entire book but in the course of a decade just imagine how many times you would change your mind on a given subject and you really notice this when you read different paragraphs of like for example the power broker where you notice um early on if you just read the first third or the first half the power broker you're like clearly caro is like writing about uh uh robert moses the way he writes about robert linden johnson where it's like yeah this guy had some flaws but like look at the cool s**t he did and the awesome stuff he did for new york um and then the tone completely changes but you gotta remember it's he's just writing this so many years and uh in between i do want to uh talk about the thing about you know young people being able to you know young people i guess a war being a catalyst for young people entering an arena i did an interview of um alexander mikorovitsky i forgot his last name but anyways he wrote a really interesting book about the polyonic wars and this is actually one of the things we talked about um there's a line from war and peace where one of the russian aristocrats is mad that his son is joining uh is joining the war and he goes you know it's is that man napoleon you you've all seen him and now you all want to like go off to war and i'm curious um like filmmaking doesn't seem like we're super quantitative and super smart and super competent like somebody who has thymus and the desire to dominate and the desire to achieve recognition uh i mean do you really think he's making films like where where is he really i mean is he like still trying to start a startup or is that like now a decade too old and now he's trying to dominate some other arena i mean maybe the lame answer is we don'tByrne Hobart 0:46:31actually know because um the way like you know paul graham has that essay about the trope of startups starting in garages and i think it's called the power of the marginal and it's all about how the the really interesting projects are the ones that can barely get off the ground because they're so weird and so out there that there is no infrastructure to support them and what that ends up doing is selecting for people who are extremely passionate about that project and also people who are extremely willful and will get impossible things done so you it's hard to just rattle off a bunch of examples of that because you your hit rate would be like 99 things out of 100 are just like things you read one fun blog post speculating about and they're actually never going to happen and then you know one of them maybe maybe you're right but it's very hard to tell which one it is and you know if it were very easy venture capital would not have such such skewed returns so yeah so maybe maybe it is like harder to harder to optimize for what area do you look for maybe it's actually easier to do the meta optimization of identifying the things you would quit you know quit podcasting and go work on given the opportunity and you know it's like good to have that sort of dread list like I I had that mental list of like you know if someone at Spotify ping me and they're like we really need a product manager who can help us display classical music such that we don't list like tons of redundant information and the first 50 characters of the track name and the actual incremental useful information in the 10 characters you have to wait for it to scroll through unless it doesn't actually scroll through like if someone pinged me it was like we really need someone to fix that can you come and do this I'd be sorely tempted feel the same way about Google Finance like if if if someone emails me and says you have a mandate to make Google Finance good I'd be tempted but I think thinking of like what industries would have that kind of pull for you and then what can you do to really dig into those industries you probably find the the the proto successful people in spaces like that versus trying to optimize in advance for well if I were you know if I were someone who thinks like nobody else thinks and we're a true natural contrarian and also had spent several years learning about different opportunities which one would I have ended up picking because then you're sort of magicking away all of the things that actually make the person you're looking for it's looking for so yeah can't quite be done that way yeah yeah yeah I want to go backDwarkesh Patel 0:49:05to that thing you said a moment ago about how you couldn't have written a million words that were as impactful about just you know how cities work but if you just wrote 500 words at a time about how Robert Moses accumulated power did the things he did you can actually have a really interesting and influential piece of work is that how you see the diff that you can't write one million words at a time about where where technology is going what's happening with the productivity slowdown what's happening with all these emerging industries but if you just write 2,000 words a day about what's happening with any particular you know company or industry then you can compile this really interesting overall worldview aboutByrne Hobart 0:49:44finance and tech that's the hope and I might be projecting things about my own attention span on to on to Cairo when I say that you can't just set out to do a million words on topic X and then do it but I do think you know I hope that I am by increments producing something that is a lot more than the sum of a bunch of business profiles and a bunch of you know strategy breakdown things like that like and that's that's one of the reasons that I spent time on things like reading Machiavelli and thinking about how Machiavelli's thoughts not just not just the the totally cynical amoral stuff but the other stuff you wrote at the same time which he may have met more seriously about how to build a sustainable and good republic rather than how to be a completely amoral monarch I try to read that kind of thing because I do think that it's valuable to have that more rounded view of the human condition and and I think that it contributes a lot to to writing about these individual companies like you know technology changes a lot humans change very slowly so if you if you want to understand technology you do have to study that this specific object level case of what is this thing what does it do differently what is it a substitute for what are the compliments to it etc but if you're trying to understand things like why did this company do X like why why did they fire fire this person and not that person and why did they choose to acquire this other business why is the CEO dumping tons of money into this thing that seems like it's it doesn't make much sense well you can find lots of historical examples of people in power making these decisions that just get continuously worse and continuously more costly and they refuse to back down sometimes they turn to be right sometimes they turn to be very very wrong but you'll find more examples of that if you go back further in history and they're often just a lot more fun to read about whereas like you know if you you can read about things like board spending too much money on the pencil and it not working out or IBM investing a ton in the 360 and that working out very nicely but you know you can also go back to the Iliad and read another case where sunk cost fallacy dominated rational strictly rational decision making and you know only divine intervention could ultimately lead to a good outcome for for the attacker and even then maybe not suchDwarkesh Patel 0:52:04great outcome often considered the that particular question about where trying to predict if somebody is overstepping or if they're making the best bet of their life is something that I've been trying to think about and I really have no reasonable method for I mean if you think about like what Elon Musk is doing with Twitter is this like Napoleon trying to conquer Russia and it's this super ego filled and pride filled you know completely illogical bet from somebody who has just had like 20 consecutive wins in a row and he thinks he's invincible or is it like Elon Musk like 20 years ago where he's like yeah I did PayPal and now let's you know let's build some rockets and let's build some electric vehicles yeah exactly and in each of these cases there's there's like so many analogies to like complete bust and there's so many analogies to oh this is just like part one of this grand plan and how do you figure out what which one is happening like how do you distinguish the visionary from the collapsing you know star the cynical answer is you wait about 200 years and thenByrne Hobart 0:53:18you write about how it was obvious all along like yeah you you really don't and I mean even there are a lot of cases that are actually still ambiguous so like Alexander you know conquered most of the known world at least most of the world that that people knew of around where he grew up and and then just goes to Babylon and drinks himself to death and that's the end right you know there there could have been an alternate story where he gets his life together a little bit and runs a giant sprawling empire on the other hand like reading the story battle to battle a lot of it it actually is basically this Ponzi scheme where every time he conquers a city he gets enough enough to pay off the people he hired to help him conquer the city and then has to move to the next city because they want to get paid again and so he's sort of you know was sort of being chased by his his obligations the entire way through until he finally got got just ahead of them enough to get a lot of loot and and a lot of land that could give people instead of just giving money so giving them like bars of silver and things so so yeah even even that story it's very hard to say you know he he rolled the dice a bunch of times and he won every time so clearly he was just one of those people who's born to win maybe it was sort of like he actually backed himself into a bunch of corners over and over and over again and then desperately fought his way out every single time and then was just completely sick of it and burnt out by the time he was in his early 30s in terms of how you would figure it out in advance like I think some of it does come down to getting a sense of whether they're responding to circumstances or whether they actually have have a long-term plan but then lots of like you know there's probably nothing more dangerous than a long-term plan that someone actually has the means to execute you know five-year plan does not have a good connotation Stalin had some of those and didn't turn out well for for a lot of people so even within that there's there's some difficulty in evaluating like I think there's kind of that that meta-cynical layer where if they don't know what they're doing then probably it's dumb luck they keep succeeding on the other hand if they do know what they're doing then maybe you hope that the world is lucky enough that they get unlucky and can't actually pull off whatever it is that they're they're planning to do maybe I guess another thing would be is there is there like an end state that they can get to because I think you know someone like Alexander he basically just kept going until he couldn't go any farther until his troops were basically on the point of mutiny and then just turned around and went not all the way home but went to like the nicest place halfway home and hung out there and partied but you know if if the story if you look at someone if the story is less about conquest and more about reconquest and restoration of something then there are these natural limits you can say like you go this far and you don't go any farther because you've actually finished your task so something like you know I think like I don't actually know who was who what which generals were on the other side of Napoleon but the ones who chased him out of Russia like for them the master plan was not we're going to conquer all of Europe the master plan was like we're getting our country back and then we're going to chase him far enough that he doesn't feel like he can just wait a year and do this again when it's not winter so so maybe that's that's another way to constrain it but then then you end up naturally selecting for less ambitious people it's like one way to one way to have these guardrails on your behavior is just don't have very big ambitions so you might and in that case those people are also stuck responding to circumstances so so maybe maybe you just end up with many different iterations of the same thing on different scales where everyone is stuck in certain historical circumstances they have they have their skills they have their opportunities they can they can go after some things maybe they achieve great things maybe they fail but either way eventually their luck runs out or they run out of ideas and then there's nothing to do except go home or just keep trying to keep keep being bolder until you eventually fail on most particularly I I don't really I don't really understand it I think there's like a remote possibility that he actually has a bunch of specific concrete ideas for how to increase Twitter's free cash flow and how to pay down the debt and make it a more profitable company maybe he just had that sense that it was overstaffed and that it should survive with a smaller headcount and if you cut headcount enough then you you end up with with a profitable business it could also just have been fun and seems fun so far and I think like that you know the the pursuit of fun is is not to be discounted like you if you're super rich you can afford to do all sorts of things varying levels of entertainment but it may be that the only thing that is actually like truly novel thrill seeking fun opportunity is something like buy Twitter and then turn it into you know what it is and it is like there's I think Rostad that at this this point about how the nature of Twitter's legitimacy has changed and that now it is a it is under the rule of a single monarch instead of ruled by these sort of faceless bureaucracies so now you know if something if Twitter does something you don't like there's actually a specific person you can blame and because you have Twitter you can actually yell at that person and potentially get an answer whereas if Twitter bans you because you made a joke and the joke looked like it was serious there's really there's no recourse and you know there's there's nothing lower status than someone like arguing with someone in authority about how serious or they should take your jokes there's like you know it's like a weird component of and it works both ways so like there's I think I started noticing this years ago because there are these underscore TXT Twitter accounts where they're just posting out of context comments from some niche community and the comments always sound deranged in a lot of cases to me the comments read as someone who is doing a bit they're playing a role they know it's funny they're exaggerating for their friends and then you take it out of context and read it as totally seriously and then you get to say these people are all like this they're all crazy but it is like it is a marker of high status to be able to not get jokes and to you know be able to be like righteously angry at someone because they made a joke and if they've been serious that would have been an appalling thing to say but they obviously weren't if you if you can get away with saying no I actually don't think it was a joke at all these people are humorless and they must have been totally serious then that's that's actually you know that's cool that's high status makes you impressive but yeah must like must must rule as this more you know personal monarch I think it's a it speaks to this question of legitimacy like why do people trust moderation and why do they trust sites to operate in the way that they do and you can either say these are like really high quality institutions so you know you can take the discourse as the oblivion approach and say we built these systems such that anyone can be dropped in and can do a reasonably good job

Forward Guidance
FTX and “The Money Noose”: Scott Skyrm On The Fall of MF Global

Forward Guidance

Play Episode Listen Later Nov 29, 2022 74:48


Scott Skyrm, Executive Vice President in fixed income and Repo at Curvature Securities, joins Jack Farley to share insights from his book “The Money Noose: Jon Corzine and the Collapse of MF Global.” Scott and Jack explore the startling parallels between the fall of the futures brokerage MF Global in 2011 and the recent collapse of cryptocurrency exchange FTX: the merging of proprietary trading with a brokerage, the illusion of “risk-free” trades funded with borrowed money, the liquidity mismatch between liabilities and assets, the misuse of client funds, the stubborn CEO with political connections and heavy risk appetite who is surrounded by “yes men,” and an alleged acquisition by a supposed savior that is later terminated (Binance for FTX, Interactive Brokers for MF Global). Jack explains why it is his opinion that the fall of FTX is much “worse” than the the MF Global, in that at MF Global the use of customer funds was a last resort, where in the case of FTX, it is Jack's reading that FTX likely misused (or at least “mislabelled) its customer funds well before its liquidity crisis. Lastly, Scott shares his outlook on the repurchase (“repo”) markets in 2022, as well as the Fed's dilemma between price stability and financial stability. Follow Scott on Twitter https://twitter.com/ScottSkyrm Follow Jack Farley on Twitter https://rb.gy/uesguv Follow Forward Guidance on Twitter https://rb.gy/cy0dki Follow Blockworks on Twitter https://rb.gy/igyzsj ____ Get top market insights and the latest in crypto news. Subscribe to Blockworks Daily Newsletter: https://rb.gy/5weeyw Market commentary, charts, degen trade ideas, governance updates, token performance, can't-miss-tweets and more. Subscribe to the Blockworks Research “Daily Debrief” Newsletter: https://rb.gy/feusos __ Timestamps: (00:00) Intro (01:18) Is FTX The New MF Global? (02:24) MF Global's Transformation After 2008 (11:07) Can Broker Dealers Touch Client Funds? (20:11) Lack Of Controls At MF Global And FTX (23:29) Cross-Margining (32:52) MF Global's Risky Repo-To-Maturity Trades (40:54) The Risks Of Repo-To-Maturity Trades (43:19) FTX's Imaginary Tokens: FTT & SRM (47:40) MF Global's Ultimate Fate (53:59) The Fed's Dilemma (58:51) The Repo Market in 2022 __ Disclaimer: Nothing discussed on Forward Guidance should be considered as investment advice. Please always do your own research & speak to a financial advisor before thinking about, thinking about putting your money into these crazy markets.

Midas Letter Podcast
FTX Special | Midas Letter Live

Midas Letter Podcast

Play Episode Listen Later Nov 25, 2022


James West & Ed Milewski discuss how Sam Bankman-Fried (SBF) went from the crypto genius who founded one of the biggest cryptocurrency exchanges in the world to an epic flameout that left his empire and the future of crypto teetering on the […]

The Prevailing Narrative with Matt Bilinsky
Episode 39: The Elon-pocalypse Turns Out To Be a Fraud; Saudi Arabia Bullies Biden Into Immunity on the Jamal Khashoggi Murder; Investor Advocate James Koutoulas On the Pursuit of FTX Funds; CBS Admits Hunter Biden Laptop is Real

The Prevailing Narrative with Matt Bilinsky

Play Episode Listen Later Nov 24, 2022 99:28


0:015 - Hysterical media claimed Twitter was about to implode last week as Elon's job cuts took hold. Nothing happened. A play by play on the media's illusory battle against Elon's Twitter.  21:37 - Joe Biden promised to make Saudi Arabia a "pariah" over the murder of Jamal Khashoggi. Now he's going back to them hat in hand and granting them immunity on the murder. What happened? 34:43 - James Koutoulas helped investors retrieve $3 billion in funds from the MF Global scandal. He tells us what lies ahead for investors pursuing their money from FTX. 1:07:30 - CBS admits the Hunter Biden Laptop is real after 2 years. Jon Levine of the NY Post was directly involved with its initial discovery and release before the 2020 election, and gives us his insight.  Learn more about your ad choices. Visit podcastchoices.com/adchoices

Money For the Rest of Us
What Happens If Your Brokerage Firm Goes Bankrupt?

Money For the Rest of Us

Play Episode Listen Later Jul 13, 2022 24:35


How protected are you if the brokerage firm where you hold your stocks, bonds, and crypto assets files for bankruptcy? Why you shouldn't store your crypto assets with an online broker.Topics covered include:How traditional brokerage firms protect their client assets in case of bankruptucyHow cryptocurrency brokers, such as Voyager, mistreat their clients in bankruptcy proceedingsWhat is the safest way to hold cryptocurrencySponsorsKeeper - keep your passwords safePolicygeniusMoney For the Rest of Us PlusShow NotesVoyager To Acquire Circle Invest Retail Digital Asset Business From Circle Internet Financial—CisionWelcome, Circle Invest! Voyager Acquires Circle Invest's Retail Customers—VoyagerCrypto lender Voyager Digital files for bankruptcy by Shivam Patel, Sinead Cruise, and Tom Wilson—ReutersCrypto lender Voyager addresses customer anger in first bankruptcy hearing by Dietrich Knauth—ReutersIf a Brokerage Firm Closes Its Doors—FINRACrypto Broker Voyager Digital Says Three Arrows Capital Hasn't Repaid $666 Million in Loans by Vicky Ge Huang—The Wall Street JournalFrom $10 billion to zero: How a crypto hedge fund collapsed and dragged many investors down with it by MacKenzie Sigalos—NCBCRopes & GrayUpdate on Customer USD and Crypto—VoyagerInvestors lament potentially lost ‘millions' on Voyager bankruptcy by Brian Quarmby—CointelegraphCoinbase Quarterly ReportCFTC Charges MF Global Inc., MF Global Holdings Ltd., Former CEO Jon S. Corzine, and Former Employee Edith O'Brien for MF Global's Unlawful Misuse of Nearly One Billion Dollars of Customer Funds and Related Violations—Commodity Futures Trading CommissionSee Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Superstonk DD
EPISODE 6: The Everything Short

Superstonk DD

Play Episode Listen Later Jun 27, 2021 31:09


Original post by u/atobitt on 03/30/21. All below links were included in the original post. Links to graphics were removed due to high word count.  Link, YouTube, The Coming Crash from Hyperinflation & Suing the Fed [w/ George Gammon]. Link, Citadel Has No Clothes. Link, WhaleWisdom.com Link, Federal Reserve Bank of New York, 'Repo and Reverse Repo Operations.' Link, CPA Journal, 'How Lehman Brothers and MF Global's Misuse of Repurchase Agreements Reformed Accounting Standards' Link, ProRebulica, 'Housing and Economic Recovery Act of 2008' Link, FAS.org, 'The MF Global Bankruptcy, Missing Customer Funds, and Proposals for Reform' Link, ProRepublica, 'The Bailout: Initiatives and Programs' Link, Federal Reserve, 'What Happened in Money Markets in September 2019?' Link, Citadel Advisors LLC 13F Link, Citadel Advisors LLC ADV Link, Offshore Leaks Database Link, Reuters article, 'EXPLAINER-U.S. Treasury sell-off spills over to repo market'

Limit Up!
Commodities Trading to Diversify Your Portfolio with David Klusendorf

Limit Up!

Play Episode Listen Later Aug 13, 2020 49:42


If you’ve only been trading S&P futures, you’re missing out on the flexibility and diversity of commodities trading. David Klusendorf is the Chief Investment Officer at Typhon Capital Management and joined Jack and Dan to give an overview on how you can benefit from a CTA.David is a trading veteran and was around for the 1987 crash. He discusses what happened that day and the differences he sees between then and our current market volatility. He also shares current trends as well as the most important question to ask yourself when trading: do I have an edge?(02:48) - Interview with David Klusendorf(08:24) - MF Global(11:09) - Starting your own place(15:43) - Typhon Capital Management(16:56) - The CTA advantage(20:41) - Risk management in 2020(28:40) - Floored(31:57) - Dominating trends(37:33) - Making trading a professionDavid Klusendorf is the Chief Investment Officer and a principal of Typhon Capital Management, a tactical trading firm. He is responsible for the firm’s trading and risk.Mr. Klusendorf is a financial industry veteran having been a member of the CME, CBOT, and CBOE. He has run his own trading group for 22 years and has served on numerous CME committees.Mr. Klusendorf holds a B.A. and M.B.A. from Loyola University Chicago. He also holds a series 3 and 30.Limit Up! is a podcast for traders of all levels brought to you by TopstepTrader. Whether you’re considering a career in trading and don’t know where to start, or you’re a seasoned veteran looking for advice from big names in the financial industry, Limit Up! is your guide. Join us weekly as we discuss the market in all of its volatile glory.Jack Pelzer is a co-host of Limit Up! He traded as part of a U.S. Treasury group for 7 years at Chopper Trading and DRW. After leaving the industry, he became a Writing Fellow and Senior Contributing Writer for The Onion. He is now the Head of Content at Topstep.Dan Hodgman is a co-host of Limit Up! Prior to coming to Topstep Dan traded 30 Yr Treasury Options and Yield Spreads. Before that, he served in the United States Marine Corps where he simultaneously managed his own Futures Account applying the skills he grew up learning from clerking on the trading floor. Now Dan works with the Traders here at Topstep as a Performance Coach as well as being a regular on the Daily Market Recap.Learn about becoming a Funded Futures Trader at Topstep here: www.topsteptrader.com/Join our Facebook group to connect with other traders: www.facebook.com/groups/TopstepTraderCommunityIf you'd like to receive new episodes as they're published, please subscribe to Limit Up! in Apple Podcasts, Google Podcasts, Spotify or wherever you get your podcasts. If you enjoyed this episode, please consider leaving a review in Apple Podcasts. It really helps others find the show.Podcast episode production by Dante32.

Limit Up!
How to Get into Prop Trading with Matt Murnighan

Limit Up!

Play Episode Listen Later Feb 13, 2020 44:28


Trading today is a different beast than it was in the 80s and 90s. Whereas it used to be all about who you knew, today there are many points of entry to the industry. Today we’re talking to Matt Murnighan, a front-end developer for Topstep Trader. Matt cut his teeth trading props before moving on to software engineering and how he navigated a post-crash market is a lesson for all the newbie traders out there.Matt, Jack, and Dan swap stories on each of their different paths that led them to trading. Whether you went to business school, got a spot on the floor, or answered an ad on Craigslist, there are many routes to making trades. Check back next week for Part Two.[01:58] - This week: Interview with Matt Murnighan[04:05] - Footman[05:15] - Getting a job as a prop trader[06:54] - Entering the workforce after college[09:00] - Becoming interested in trading[11:43] - The interview process[16:04] - Pay structure[18:27] - Night guys and clerks[21:48] - Crush options[26:37] - Managing a busted options book[31:22] - Correlation trading[33:49] - The MF Global buzzsaw[36:22] - Starting a firm[37:53] - Weaving timelinesMatt Murnighan is a web developer for Topstep Trader and an assistant teacher at Northwestern’s Coding Bootcamp. Matt spent the first eight years of his career as a trader of props and derivatives.Limit Up! is a podcast for traders of all levels brought to you by Topstep Trader. Whether you’re considering a career in trading and don’t know where to start, or you’re a seasoned veteran looking for advice from big names in the financial industry, Limit Up! is your guide. Join us weekly as we discuss the market in all of its volatile glory.If you'd like to receive new episodes as they're published, please subscribe to Limit Up! in Apple Podcasts, Google Podcasts, Spotify or wherever you get your podcasts. If you enjoyed this episode, please consider leaving a review in Apple Podcasts. It really helps others find the show.This podcast episode was produced by Dante32.

Limit Up!
The Man Who Took on MF Global with James Koutoulas of Typhon Capital Management

Limit Up!

Play Episode Listen Later Dec 12, 2019 60:47


In 2011, MF Global went bankrupt, destroying the livelihoods of thousands of people. James Koutoulas, CEO of Typhon Capital Management, co-founded the Commodity Customer Coalition and set to work helping customers of MF Global get their money back. James joined Jeff for this week’s episode of Limit Up!Tune in to learn how Typhon Capital Management operates, why James believes traders need to be process-oriented, and how he was able to lead a large customer suit with virtually no experience.  [00:41] - This week: James Koutoulas[01:35] - Listener survey[02:27] - Market reaction[07:31] - Jeff Carter interview with James Koutoulas[08:35] - Futures over equities[09:10] - Screening process[11:59] - Becoming a candidate[13:12] - Qualified eligible participants[15:10] - Getting money out[16:25] - Due diligence[18:04] - Crypto diligence[20:49] - Smarter than the algorithms[22:07] - Commodity Customer Coalition & Corzine[36:21] - Getting CCC off the ground[52:36] - The media angle[54:19] - Non-partisan prosecution James L. Koutoulas, Esq. is the CEO of Typhon Capital Management, which he founded in 2008. Typhon is a deconstructed multi-strategy trading firm, where managers can focus only on trading under an umbrella of unified operations, compliance, and risk management. He co-founded the Commodity Customer Coalition, a non-profit customer advocacy organization, in response to the MF Global bankruptcy. James is the President and lead attorney for the CCC.This episode of Limit Up! is hosted by Jeff Carter. Jeff is a general partner at West Loop Ventures. In April of 2007, he co-founded Hyde Park Angels and spearheaded the growth and development of one of the most active angel groups in the United States. He has consulted on the startup of several other angel groups. He is a former independent trader and member of the CME Board of Directors and was part of a small group that transformed CME from an open outcry exchange to the largest electronic exchange in the world. In 1998, CME was worth $182,134,000 in membership enterprise value. Today it’s worth $55 Billion.If you'd like to receive new episodes as they're published, please subscribe to  Limit Up! in Apple Podcasts, Google Podcasts, Spotify or wherever you get your podcasts. If you enjoyed this episode, please consider leaving a review in Apple Podcasts. It really helps others find the show.This podcast episode was produced by Dante32.

Barnhardt Podcast
Barnhardt Podcast #065: Awakening Awareness of the Avalanche of Avarice

Barnhardt Podcast

Play Episode Listen Later Oct 29, 2018 100:21


In this episode, after a good-news update on Tiny Princess, we discuss the "national vice" of avarice and how this vice, at times, results in unequal protection under the law. Rugged individualism and seeking one's fortune has long been considered an American virtue but corporations are now determining what is and isn't virtue and de facto cutting off access to the financial system to companies they deem unworthy (gun manufacturers, abrasive free-speech practitioners, tax-protestors) to say nothing of companies flat-out ignoring the rule of law and doing what they want (MF Global et al). Also among the daughters of avarice are morally evil decisions made by individuals for the sake of economics -- contraception and abortion being perhaps the two biggest -- and the many forms of coercion enabled by crushing debts (college, automobile, house, credit cards) which the residents of the Land of the Free are morphed into morally weak, high-functioning slaves unwilling to rock the boat lest they lose their earthly possessions. We've allowed an evil angelic intellect to stack the deck and our star-spangled country will surely reap judgement in this world. Links, reading, and YouTube: Exorcist On Generational Healing Bank of America to Stop Financing Makers of Military-Style Guns Wells Fargo Bucks Pressure, Grants New Loan to Ruger Gun Company Apple's Social Justice Bludgeon Hedge Fund (film) Gosnell: The trial of America's biggest serial killer   Feedback: please send your questions, comments, and suggestions to podcast@barnhardt.biz The Barnhardt Podcast is produced by SuperNerd Media; if you found this episode to be of value you can share some value to back to SuperNerd at the SuperNerd Media website. You can also follow SuperNerd Media on Twitter.

Debtwire Radio
APAC Explorer: Hong Kong Insolvency

Debtwire Radio

Play Episode Listen Later Aug 31, 2017 30:34


Tanner De Wit partner Robin Darton joins Debtwire Asia senior editor Chaim Estulin to discuss the state of Hong Kong’s insolvency regime, including work arounds used to implement compromises in a city lacking a holistic bankruptcy code and steps that should be taken to modernize the restructuring process. Darton has been practicing as a lawyer in Hong Kong for more than 20 years, with a strong focus on insolvency and restructuring, including cross border matters. He has acted in many of the high profile insolvency and restructuring case involving Hong Kong over the past several years -- including Lehman Brothers, MF Global, OW Bunker and Kaisa -- on both the creditor and debtor side as well as for office-holders or directors. Darton was re-elected earlier this year as chairman of the Hong Kong Chapter of TMA, which will hold its annual APAC conference in the city on 16-17 November. For Darton's full bio click here: www.tannerdewitt.com/our-people/robin-darton/ 2:05 provisional liquidator, a key mechanism for HK insolvency process; 2:38 Legend Resorts ruling; 5:38 Using offshore court’s “light touch” procedures, recognition; 9:57 Kaisa, consensual scheme restructuring without PL; 15:22 modernizing the HK restructuring framework; 16:15 African Minerals case; 17:30 Singapore and other competition; 19:56 change on the cards; 22:50 changes needed -- consolidating legislation, recognition, moratorium; 25:20 likely non-DIP legislation.

Wall St For Main St
Welcome to Dystopia Episode 31: Golden Showers Are Not A Precious Metals Investment

Wall St For Main St

Play Episode Listen Later Jan 20, 2017 80:24


Jason Burack of Wall St for Main St and managing editor of The News Doctors and independent financial journalist, Eric Dubin are back for Episode #31 of Welcome to Dystopia. To start the show, Jason and Eric discus whether gold and silver have bottomed? Eric talks about how the currency markets are affecting gold and silver prices and Jason talks about how the President of Turkey is calling FOREX speculators "terrorists" http://www.zerohedge.com/news/2017-01... Jason and Eric then talk about capital controls in China, Bitcoin and how there's now a tug of war between the elite's version of globalism that only benefits people in the West with some cheap goods and economic nationalism post Brexit, Donald Trump and Italian referendum. Jason and Eric also discuss what could go wrong with Trump raising tariffs on China. There's some good laughs in this episode! Scumbag Nominees: 1) Former Goldman Sachs CEO, NJ Governor, & Scumbag Hall of Fame Member, Jon Corzine https://en.wikipedia.org/wiki/Jon_Cor... who was able to gamble with $1.6 billion in customer money at his firm MF Global in 2011 when he bankrupted the company and escape with only a $5 million civil fine! http://www.reuters.com/article/us-mfg... 2) Joe Biden for winning a Presidential Medal of Freedom today- WTF did he do to deserve it??? 3) Fiat Chrysler for lying/cheating on pollution tests with the EPA http://www.zerohedge.com/news/2017-01...

Free Court Show with Jason Hartman
Free Court 15 - Investment Fraud on Wall Street with Former LA Deputy District Attorney John Lawrence Allen

Free Court Show with Jason Hartman

Play Episode Listen Later Jan 11, 2017 45:44


Securities litigation attorney John Lawrence Allen helps recover investor funds lost through investment fraud or incompetence. John is a former Los Angeles Deputy District Attorney and author of “Make Wall Street Pay You Back.” Jason Hartman and John Lawrence Allen talk about Wall Street dirty tricks plays and how average people can protect themselves from Wall Street. Allen also gives some tips for investors before they invest a large sum of money with an advisor or hedge fund. He also shares how financial advisors can mitigate their risk of fraud. Key Takeaways: (2:20) John Lawrence Allen: background and history of latest book (3:06) How Wall Street and the investment landscape have changed over the last 20 years (4:06) On the arbitration process (7:34) On the laws not being in favor of the consumer (11:13) Causes of action: fraud, incompetence, etc. (16:00) The extraordinarily high commissions on life insurance sales (18:11) How does the investor know what fees are being assessed by financial advisors? (21:08) The length of the FINRA arbitration process (21:55) On “simplified arbitration” for small claims (23:58) Discussion of other types of fraud, beyond incompetence and excessive commission (29:20) Discussion of a managed future deal Jason was pitched on (32:30) Some tips on buying gold: always invest in bullion, never numismatic coins (37:12) Who claims are usually made against (38:42) Jon Corzine, MF Global, & the Insider’s Game (43:19) Bad monetary policy forces people to take inappropriate risks Websites: www.MakeWallStreetPayYouBack.com Make Wall Street Pay You Back on Amazon www.myinvestorfraud.com

FT Banking Weekly
HSBC forex fallout, Luxembourg's pitch to City firms and the MF Global settlement

FT Banking Weekly

Play Episode Listen Later Jul 26, 2016 17:30


Patrick Jenkins and Martin Arnold discuss US authorities’ allegation that current and former HSBC employees cheated clients on a foreign exchange deal, and look at how Luxembourg is pitching to win business from firms in the City of London stung by Brexit. Meanwhile, Ben McLannahan speaks to Nader Tavakoli, CEO of Ambac, about the settlement to end litigation brought by investors burnt by the collapse of the futures brokerage MF Global. See acast.com/privacy for privacy and opt-out information.

Radical Personal Finance
296-The Collapse of MF Global, Breakdown of Trust in the Financial Systems, the Prospect of Global War, and What It's Like to Be a Tax Protester on the Lam: Interview with Ann Barnhardt

Radical Personal Finance

Play Episode Listen Later Feb 18, 2016 92:06


My guest today is Ann Barnhardt. I first became aware of Ann in late 2011 after she published a letter detailing the closure of her firm, Barnhardt Capital Management. At the time, this letter troubled me. Many people make strong statements and publish strongly worded essays. But when someone follows through on their word to the point of closing a functioning firm, I pay attention. I never could quite wrap my head around what happened at MF Global in 2011. Frankly, I still can't. But I thought it would be awesome to invite Ann on the show to hear her first-hand experience. She obliged. During the course of our interview we discussed: her professional background in the trading and commodities business what actually happened in 2011 in the markets what has happened since then her predictions for future world events what led her to become a tax protester Enjoy the show! Joshua Ann's website: www.barnhardt.biz https://twitter.com/AnnBarnhardt Support Radical Personal Finance on Patreon www.radicalpersonalfinance.com/patron 

The Food Chain - What's Eating What Radio
Show #756: THROUGH MF GLOBAL'S LOOKING GLASS

The Food Chain - What's Eating What Radio

Play Episode Listen Later Jan 17, 2016


Thousands of U.S. farmers lost over 1.2 billion dollars when MF Global’s off-balance-sheet leveraged repo-to-maturity play on foreign sovereign debt collapsed into bankruptcy. And so we ask…

The Options Insider Radio Network
Options News Rundown 12-29-14: MF Global to Pay $100M Fine

The Options Insider Radio Network

Play Episode Listen Later Dec 29, 2014 7:38


Your daily options news rundown for Monday, December 29, 2014.

The Options Insider Radio Network
Options News Rundown 12-16-14: MF Global Near Settlement With CFTC

The Options Insider Radio Network

Play Episode Listen Later Dec 16, 2014 8:17


Your daily options news rundown for Tuesday, December 16, 2014.

Michael Covel's Trend Following
Ep. 259: Bucky Isaacson Interview with Michael Covel on Trend Following Radio

Michael Covel's Trend Following

Play Episode Listen Later Jul 24, 2014 42:35


My guest today is Bucky Isaacson, one of the early pioneers of managed futures. In 1969, he helped to develop one of the first computerized trading systems. He's been involved in the managed futures industry ever since, particularly in Asia and the US. The topic is managed futures. In this episode of Trend Following Radio we discuss: Fractured state of conferences these days What it was like to be involved with a group developing a computerized trading system in 1969 Being with one of the earliest incarnations of a managed futures firm Trading attitudes Marketing and doing business in Asia Differences in business practices between Asian countries Refco, MF Global, PFG and other aberrations that have damaged the Chicago futures brand Madoff as a marketer Raising the initial capital to start a trading venture How to differentiate yourself from a marketing perspective Growth in the managed futures industry Jump in! --- I'm MICHAEL COVEL, the host of TREND FOLLOWING RADIO, and I'm proud to have delivered 10+ million podcast listens since 2012. Investments, economics, psychology, politics, decision-making, human behavior, entrepreneurship and trend following are all passionately explored and debated on my show. To start? I'd like to give you a great piece of advice you can use in your life and trading journey… cut your losses! You will find much more about that philosophy here: https://www.trendfollowing.com/trend/ You can watch a free video here: https://www.trendfollowing.com/video/ Can't get enough of this episode? You can choose from my thousand plus episodes here: https://www.trendfollowing.com/podcast My social media platforms: Twitter: @covel Facebook: @trendfollowing LinkedIn: @covel Instagram: @mikecovel Hope you enjoy my never-ending podcast conversation!

Trend Following with Michael Covel
Ep. 259: Bucky Isaacson Interview with Michael Covel on Trend Following Radio

Trend Following with Michael Covel

Play Episode Listen Later Jul 24, 2014 42:35


Michael Covel speaks with Bucky Isaacson on today’s podcast. Isaacson is one of the early pioneers of managed futures. In 1969, he helped to develop one of the first computerized trading systems. He’s been involved in the managed futures industry ever since, particularly in Asia and the US. Covel and Isaacson talk about the fractured state of conferences these days; what it was like to be involved with a group developing a computerized trading system in 1969; being with one of the earliest incarnations of a managed futures firm; trading attitudes; marketing and doing business in Asia; differences in business practices between Asian countries; Refco, MF Global, PFG and other aberrations that have damaged the Chicago futures brand; Madoff as a marketer; raising the initial capital to start a trading venture; how to differentiate yourself from a marketing perspective; and growth in the managed futures industry. For more information on Bucky Isaacson, visit CTAExpo.com. Want a free trend following DVD? Go to trendfollowing.com/win.

Creating Wealth Real Estate Investing with Jason Hartman
CW 388: Investment Fraud on Wall Street with John Lawrence Allen Former LA Deputy District Attorney & Author of ‘Make Wall Street Pay You Back'

Creating Wealth Real Estate Investing with Jason Hartman

Play Episode Listen Later Jul 16, 2014 48:55


Introduction: John Lawrence Allen is a securities litigation attorney helping investors recover funds lost through investment fraud or incompetence. He's a former Los Angeles Deputy District Attorney and author of the new book, “Make Wall Street Pay You Back.”  Allen talks about the dirty tricks Wall Street plays and how average people can protect themselves from Wall Street. Allen also gives some tips for investors before they invest a large sum of money with an advisor or hedge fund. He also shares how financial advisors can mitigate their risk of fraud.   Key Takeaways & Time Stamps: (2:20) John Lawrence Allen: background and history of latest book (3:06) How Wall Street and the investment landscape have changed over the last 20 years (4:06) On the arbitration process (7:34) On the laws not being in favor of the consumer (11:34) A brief message from Bill Clinton (12:13) Causes of action: fraud, incompetence, etc. (17:00) The extraordinarily high commissions on life insurance sales (19:11) How does the investor know what fees are being assessed by financial advisors? (22:08) The length of the FINRA arbitration process (22:55) On “simplified arbitration” for small claims (24:58) Discussion of other types of fraud, beyond incompetence and excessive commission (30:20) Discussion of a managed future deal Jason was pitched on (33:30) Some tips on buying gold: always invest in bullion, never numismatic coins (38:12) Who claims are usually made against (39:42) Jon Corzine, MF Global, & the Insider's Game (44:19) Bad monetary policy forces people to take inappropriate risks (45:03) Closing statements   Links: www.MakeWallStreetPayYouBack.com. www.Amazon.com to purchase the book: Make Wall Street Pay You Back Find out more about John Lawrence Allen at www.myinvestorfraud.com.   Bio: Former Los Angeles Deputy District Attorney John Lawrence Allen represents investors nationwide in securities arbitration. Mr. Allen spent seven years working for two major Wall Street firms and was chief investment officer for two hedge funds. Mr. Allen pens a blog on impactful subjects that affect all of us and is a respected legal expert who provides insightful commentary on national TV, radio and print.   Audio Transcription: ANNOUNCER: Welcome to Creating Wealth with Jason Hartman!  During this program Jason is going to tell you some really exciting things that you probably haven't thought of before, and a new slant on investing: fresh new approaches to America's best investment that will enable you to create more wealth and happiness than you ever thought possible.  Jason is a genuine, self-made multi-millionaire who not only talks the talk, but walks the walk.  He's been a successful investor for 20 years and currently owns properties in 11 states and 17 cities.  This program will help you follow in Jason's footsteps on the road to financial freedom.  You really can do it!  And now, here's your host, Jason Hartman, with the complete solution for real estate investors.   JASON HARTMAN: Welcome to the Creating Wealth Show.  This is your host, Jason Hartman, and thank you so much for joining me today.  We'll be back with today's guest or segment, in just a moment.   [MUSIC]   JASON HARTMAN: It's my pleasure to welcome John Lawrence Allen to the show!  He is a securities litigation attorney, helping investors recover funds lost through investment fraud or incompetence.  He's a former Los Angeles Deputy District Attorney, and the author of a new book, entitled, Make Wall Street Pay You Back.  And of course you know over the years I've said with some degree of sarcasm, that Wall Street is the modern version of organized crime, and my Commandment #3 for successful investing is, maintain control, because when you don't maintain control, you leave yourself susceptible to three major problems.  Number one, and we're gonna address that during the interview with John today, you might be investing with a crook.  Number two, you might be investing with an idiot.  And so we'll address those two.  And number three, even if they're honest, even if they're competent, they take a huge management fee off the top for managing the deal.  So, we'll kind of dive into this.  John, welcome.  How are you?   JOHN LAWRENCE ALLEN: I'm good.  How are you today?   JASON HARTMAN: Good, good.  Well, it's great to have you.  And just to give our listeners a sense of geography, where are you located?   JOHN LAWRENCE ALLEN: My office is in White Plains, New York.  I used to have an office in California and midtown Manhattan, and I've now moved out to the Connecticut countryside to work in White Plains.   John Lawrence Allen: background and history of latest book   JASON HARTMAN: Fantastic.  Well, tell us about your background, and how you came to write the book.   JOHN LAWRENCE ALLEN: Well, I wrote my first book, Investor Beware, 20 years ago.  And that was—actually, more than 20 years, I guess it's been now.  Almost 25 years ago.  And that was the result of having been in the industry.  I spent 7 years on Wall Street, and I invented an arbitraged [unintelligible] program.  That's how I went into Wall Street.  And I got very, very dissatisfied with the [unintelligible], and the outright unethical activity I saw around me.  And it got so bad that I quit, and I wrote my first book, Investor Beware, to help people protect themselves from the way Wall Street operates.  But over the last 20 years, the entire investment landscape has radically, radically changed.  And the entire way brokers do business has changed.  And if investors aren't aware of these changes, they may very well end up becoming victims of the Wall Street community.   How Wall Street and the investment landscape have changed over the last 20 years   JASON HARTMAN: You know, when you say those changes, I don't know what you're referring to, so I'll have you tell me.  but is one of them—one way that I think large corporations really oppress people, is through the commercial arbitration act.  And I know so many years ago in the 90s, when there was a lot of securities fraud in the news—of course, that seems to be an ongoing issue, of course.  And, you know, a lot of people have lost money in the stock market.  They made some new rules—I don't know, you know, exactly which agency that came out of.  Maybe it was the FCC, or FINRA, I didn't mean to say FCC, did I say that?  The SEC, the Scoundrels Encouragement Commission, as it's been called.  But it is—is that arbitration?  Because arbitration, really I think takes away people's rights quite a bit.   On the arbitration process   JOHN LAWRENCE ALLEN: Well, that's an interesting—there's two sides to that coin.  Yes, they take away people's rights.  And people don't know it, but if you have a problem with a broker dealer—that's, you know, any licensed firm that buys and sells securities for you—if you have a problem with the representative who works at a broker dealer, when you sign your contract with them, you waive your right to a court trial or jury trial.  That means, you don't get to be in front of a group of your peers, you don't get to have any of the help that you would get in a court room, or in a civil or jury trial.  That's the negative side.  But there's a positive side to it.  The positive side is, you're gonna go into arbitration, which is significantly less expensive, significantly less time-consuming, and far swifter justice than you could ever get in a court.  Let's say you win a court case, and what's gonna happen?  Well, the arbitration—not the arbitration.  Securities firm is going to appeal that matter, and you're gonna get stuck in court for another couple of years.  On the other hand, if you go to FINRA—Financial Industry Regulatory Authority arbitration—you're gonna be in front in a case of $100,000 or more, three arbitration judges, who are gonna rule very quickly, and you're gonna have a result very quickly.  And if you win, they have to pay within 30 days.  You don't have any of the problems of collecting, or appeal, or the lengthy process that's involved in the court proceeding.  And there's one more positive, I find, in arbitration.  That is, if you get into a complex securities case, there are complex issues and facts that the average juror really can't grasp that well.  But these arbitrators are usually business people, and they have a business background, and they understand wrongdoing when they see it, and they're not afraid to make an award.  The one thing that is difficult is to try to get punitive damages.  That's very difficult arbitration.  I've attained it more than once, I've gotten it, but it's a difficult road to go, to try to get punitive damages.  And lastly, you don't have to get bogged down in a motion practice where a wealthy brokerage company with an unlimited pocket can paper you to death with motions and motions to compel and sanctions and hearings and depositions and request remissions and all the discovery stuff that goes on.  None of that's allowed in arbitration.   JASON HARTMAN: I mean, I've been in arbitrations.  They have depositions though.   JOHN LAWRENCE ALLEN: Not in federal arbitration.  For securities cases.  Yes, in civil arbitration, but if you go into a FINRA arbitration, there are no depositions, there are no request remissions, there are no interrogatories.  You can do a document request, but it's very limited, which means that you're gonna save a great amount of time and a great amount of expense, and a great amount of heartache.  So, all in all, oddly enough I actually—when I started, I didn't like, or I perceived not to like, the arbitration process.  But now that I've done it for so many years, I think that it's a good methodology to get swift justice.   JASON HARTMAN: Okay.  Well, I don't want to belabor that one, because it'll take away from sort of the crux of our discussion, but it's good to hear your point of view on that.  So, the thing you were saying, in terms of the laws not being in favor of the consumer, in this case the investor, is no jury trial, and what was the other one?   On the laws not being in favor of the consumer   JOHN LAWRENCE ALLEN: No court trial.  No judge—   JASON HARTMAN: Okay, no court trial at all.  So, arbitration.  But, were there any other things you wanted to mention there, before I got you on this tangent of arbitration?   JOHN LAWRENCE ALLEN: Well, I just—I think that the cost effectiveness is so overwhelmingly in the—you know what it does?  It puts you on an even footing with someone who has an unlimited budget, which you can't do in litigation unless you're willing to spend the money to ante up.  But in arbitration, you're on an equal footing with your opponent.  And if you have a competent, skilled, highly qualified and knowledgeable attorney who knows the ins and outs of FINRA arbitration, you've got a long way towards getting your money back.   JASON HARTMAN: So, that may be different—and again, I don't want to belabor this arbitration point too much, because there's other issues, of course.  But, it sounds like it's better, with a FINRA situation, for people that have been defrauded, just lost money because of incompetence on Wall Street.  But in a typical arbitration, those arbitrators—I think, I'm pretty sure, they really lean toward the person who put the arbitration clause into the contract, because they view them as repeat customers, and we'll call it part of the vast Wall—the vast arbitration conspiracy.  It blows my mind that AAA, the American Arbitration Association, is actually a nonprofit organization.  The fees are enormous.  And we all pay taxes to have a public court system.  And listen, I'm no fan of prolonged litigation, or litigation at all, but gosh, why do you have to pay for a private court, which in the typical arbitration, probably not FINRA, with what you explained, acts, in my opinion, as a bit of a kangaroo court—especially the fact that these things are confidential.  And you get these real estate developers that develop these condo properties and so forth, and you know, they all put arbitration clauses in their contracts.  And you can't do a litigation search on them before you, say, buy a property, to see if they're a bad apple, if they've been sued by hundreds of investors!  It's all hidden from public view.  And that just makes me think of a Third World, Banana Republic country where they've got these kangaroo courts, and you know, our whole system is based on transparency.  At least that was the original idea of it.  So, that's my bone to pick with arbitration.   JOHN LAWRENCE ALLEN: Well, you raise a good point.  And I would tend to agree with you.  Up until a couple years ago, arbitration had two panel members that were public, and one who actually came from the industry, and it was in many cases biased in favor of the arbitration people, meaning the broker dealers.  And I think the statistics, not from me personally, but the statistics generally bear out your concerns.  People don't do all that well in arbitration.  They win about half their cases, and of the cases they win, they win about half the money they got back.  So, I don't put that as good odds.  That's not been my experience, but I am very selective in the cases I take, and I put in a great deal of time to win these cases.  I understand that you're not gonna get money from three business people unless you can find a way to emotionally connect your client with them.  if you can't find a way for them to care about your client, they're not gonna give you anything back.  But if you can find a way to develop the cast to find an emotional connection—something that touches them, they're gonna be far more willing to knock the arbitration—when I say, to go after the broker dealer for fraud.   JASON HARTMAN: Let me take a brief pause; we'll be back in just a minute.   A brief message from Bill Clinton   BILL CLINTON: Hi.  This is Bill Clinton, and I want to invite you to hang out with my friend, Jason Hartman, in my hometown of Little Rock.  Jason and his interns, you know I like interns, are having his famous Creating Wealth Seminar and Property Tour here!  So drop everything, including Hillary, and go register at www.jasonhartman.com, right now.  This event is coming up soon, but, as I like to say, it depends on what the meaning of the word ‘is' is.  See ya there.   [MUSIC]   Causes of action: fraud, incompetence, etc.   JASON HARTMAN: Let's talk about what are some of the causes of action.  I mean, of course fraud is one of them.  But you also mentioned incompetence, and when someone has a securities claim, whom is the claim directed at?  You know, you've got the advisor who works at Merrill Lynch, which in my opinion, or whatever firm, I'm just saying Merrill Lynch because they're big.  But they can work at any firm; Ameriprise, Merrill Lynch, whatever, okay, and I tend to find those advisors are usually just slick salespeople who wear nice suits, okay?  Nothing more than salespeople.  They have cursory knowledge.  Very little real depth of knowledge, usually.  Of course I'm making a generalization here, and I apologize to those smart, great, ethical good brokers out there, because there are some.  But you've got the broker, you've got the investment banker, you've got the firm.  Who are you really—you've got the company.  There are so many layers to this.   JOHN LAWRENCE ALLEN: Well, let's talk about that for a second.  People don't know that you can hold a brokerage firm and its registered representative—that's the stock broker who provides you with a recommendation—for giving bad advice.  People think, well, that doesn't sound right!  If he gave me bad advice?  I mean, if I get advice, and the stock doesn't do what he thought, how can he be responsible?  And the corollary, or the answer to that, is this.  Under the FINRA guidelines, and the Securities and Exchange Commission guidelines, brokers are required to know your risk tolerance, time horizon, financial goals, and anything that can affect your capacity to invest.  That means if you're employed, unemployed, medical problems, but mostly, what they have to do is they have to match the correct product with your goals, objectives, risk tolerance, and time horizon, so that they make a recommendation that's suitable for you.  So, if you're 35, and have a good job, and you want to take some risk with having 70, 60, 75% of your money in the stock market, probably not bad.  The opposite of that is, what if you're 65 or 70, and you're retired, and living on your retirement assets, it would not be appropriate for a broker to recommend that you buy a highly speculative stock, or that you have 70 or 80% of your investments in equities, and stocks!   JASON HARTMAN: They seem like they do a pretty—I mean, I'm sure there are brokers out there that do that kind of stuff, but it seems like they do a pretty good job of making all the appropriate disclaimers, and you gotta sign a mountain of paperwork that of course is all written in their favor, and has a zillion disclaimers, and a lot of legalese—I mean, don't they pretty much cover themselves on that type of stuff usually?   JOHN LAWRENCE ALLEN: The paperwork covers them perfectly fine.  But that doesn't relieve them from their obligation.  A broker that makes a recommendation to a customer has a fiduciary duty to that customer to put the customer ahead of the broker.  So, let's say I have a client who wants to make an investment of a couple hundred thousand dollars, and I want to put them in what quote is a suitable investment, based on what they've told me about themselves.  Unless they put it in a suitable investment, I can make, let's say, $200,000 investment, maybe I can make $100, $150 in fees.  However, if I put them in something that the brokerage company is promoting, or pays a double commission, or is highly speculative, I might be able to charge them significantly more.  Let's say $1000.  So, if I can make $1000 on a improper or unsuitable investment, and $100 or $200 on one that's suitable, that puts in kind of a trap for the broker to say to themselves well you know, I'm really gonna forgo that extra 800 bucks I'm gonna make on this transaction and do what's right for my client.  How many people have the ethical and moral heart to do that?   The extraordinarily high commissions on life insurance sales   JASON HARTMAN: Not a lot of people, certainly on Wall Street.  Not a lot.  And you know, when you say that, it reminds me of two investments that are really just laden with heavy commissions, from what I understand.  One of them is oil and gas, and another is life insurance.  The fact that life insurance is even kind of promoted as an investment bugs me in some ways, although the needle might be moving a little bit, for me, on that.  But still, I just think it's insurance.  You know?  But those—I mean, some of these things have extraordinarily high commissions.  I mean, I'll give you an example of one.  One time a life insurance guy came into my office, and he wanted to market his life insurance products as an investment to my investors in my real estate firm.  And he slapped down literally a copy of some checks that he earned on some policies that he sold.  And one of them was like a $7 million life insurance policy.  And I'm not gonna get this exactly right, because I don't remember, but the check was for like $250,000.  I mean, it was insane, how—he says, look, I could split this with you.  I'm like, well don't I have to have a license or something?  And he says, well, there's a way around that.  We'll reclassify the fee.  And obviously I didn't do any deal with him, but I mean, some of these commissions on these things are just extraordinary.  On these oil and gas deals?  I hear that some of them are like half of the investment amount!  You know, if they get an investor to put $100,000 into some oil and gas deal, the salesmen will make 50 grand!  Whoa!  That's crazy!   JOHN LAWRENCE ALLEN: Yep.  That's true.  And in fact, if you want to go back a little bit further in time, there was a period in the late 80s and middle 90s where Prudential [unintelligible], which, you know, the rock solid, sold 400,000 of its customers $8 billion in phony partnership deals.  And those deals, they were making 30, 35, and 40% off the top before the customer saw a single dime.   JASON HARTMAN: Unbelievable.  That's just—that's just crazy.  So, is—so, okay.  So, the broker, or the investment advisor, with a registered rep—I don't know exactly what to call them—but, they steer the investor into something that's not as good for them, that obviously pays them a higher fee.  Right?  So, that's one form of—that's one actionable thing.  Now, how is the investor ever going to find that out though?  How does the investor know what the menu of fees is for the things that that advisor has to steer them into, available to them?   How does the investor know what fees are being assessed by financial advisors?   JOHN LAWRENCE ALLEN: Well, that's a very tough question.  And that's a very good question.  And the reason is because on a lot of these products that they're selling a product, the commission's in the product, and the customer will never know.  So, on that $200,000 example, if the broker makes $5000, you know, a 2½% fee, and that's in the cost of the $200,000, that means that really 195 of your money actually ever went into the investment.  And there's no way you can know, unless you read the prospectus, or you ask the broker.  They're certainly not gonna volunteer and tell you, oh yeah I'm gonna make 5 grand on this break.  And also, that also happens on principle transactions.  If you ever buy a stock or a bond, most bonds are sold on principle transactions.   JASON HARTMAN: What is a principle transaction?  What does that mean?   JOHN LAWRENCE ALLEN: A principle transaction is where there's no commission charge.  The fee is in the price of the bond.   JASON HARTMAN: Alright.   JOHN LAWRENCE ALLEN: So, as an example, if I call up my broker and say, you know, I want to get a 10-year bond, and let's say you can get a 10-year bond for 2.3% return per year over the 10 years.  So, you buy the bond with this 2.3%.  You don't know what the brokerage firm picked that up for.  Let's say they picked it up for 2%, and they charge you 2.3.  That difference in that spread is an enormous markup.  It could be many thousands of dollars.  So you just don't know in a principle transaction, and that's another way brokerage companies can—in fact, I've gotta case right now, I have a lady who had a very, very, very substantial portfolio, many millions of dollars, and she was charged over $3 million in markups and fees on bond transactions, and she never knew it, over the course of a 6-year period.   JASON HARTMAN: Wow.  Wow.  So, $3 million in fees and markups on what—   JOHN LAWRENCE ALLEN: On municipal bond transactions.  The safest most conservative of all transactions.   JASON HARTMAN: Right.  Yeah, right.  And I'll tell you something.  If you ask me, a lot more municipalities are gonna be filing bankruptcy in the future, because there are so many of them underwater.  Of course we've seen that with Detroit, Vallejo, California, some others.  But very interesting.  So, $3 million in fees—that is unbelievable!  What was the principle investment though?  I've gotta have some comparison.   JOHN LAWRENCE ALLEN: She had $30 million in municipal bonds.   JASON HARTMAN: So, 10%.   JOHN LAWRENCE ALLEN: In a laddered portfolio that never should have been touched, that had never been—not that—there should not have been any transactions, and in 6 years they traded $120 million with the bonds in her portfolio.   JASON HARTMAN: Unbelievable.  That's just insane.  So, she's in process, right?  Did you recover for her yet?   JOHN LAWRENCE ALLEN: We're in the arbitration process now.   JASON HARTMAN: How long does that take, when it's a FINRA arbitration?  What's the length of that process?   The length of the FINRA arbitration process   JOHN LAWRENCE ALLEN: Somewhere between 11 and 14 months, on average.   JASON HARTMAN: Okay, alright.  And, what is the amount of money—I mean, obviously that's a large client with some big money you're talking about, in terms of the investment size, and the investment losses.  But, how much does someone need to lose in order to make going to a FINRA arbitration worth it?   JOHN LAWRENCE ALLEN: Well, that's a good question.  I would answer that in twofold.  First of all, anybody that wants to seek help should only hire an attorney that would be willing to work on a contingent fee so they don't end up spending a lot of money trying to get back their losses.  That's item one.  Two, there are different levels of arbitration.  FINRA, within the last year and a half, has established a new type of arbitration called small claims.  They call it simplified arbitration.   On “simplified arbitration” for small claims   JASON HARTMAN: Oh, that's great.  Like small claims court kind of idea.   JOHN LAWRENCE ALLEN: Kind of, but a little different.  And that would—for FINRA, small claim is any loss below $50,000.  And if you have a loss below $50,000, you don't—and you go into this simplified arbitration, you don't even have to appear at a hearing.  You submit the entire claim, on paperwork; the respondents, the broker dealer, file an answer, and one arbitrator makes a ruling without you ever having to appear.  So it saves you testimony, litigation cost, travel expense, hearing fees, expert testimony.  It's all done in the pleas.  Now, you don't have to do it that way.  If the case is $50,000 or smaller, you have a one party, one arbitration chairperson, that's it.  You don't have a panel of three.  You have a panel of three above $100,000.  So really, I would say anybody that loses $10,000 or more, even $5000 or more, it's certainly worth it to pursue it.  I don't think you'd probably get many attorneys to handle a $5000 case.  But I've developed a methodology to help people with cases between $10 and $50,000, which is on my website, and I take them into the small claims arbitration process, and the whole thing can be done for very, very little money, and the best part is, unlike regular arbitration, small claims are usually resolved in 7 months or less.   JASON HARTMAN: Excellent.  So give out your website if you would.  That's a great resource, thank you.   JOHN LAWRENCE ALLEN: Well, my website is the same as my book; the book is Make Wall Street Pay You Back, and the website iswww.MakeWallStreetPayYouBack.com.   JASON HARTMAN: www.MakeWallStreetPayYouBack.com.  And you've got the small claims information on there, which is fantastic.  But then also, for larger losses, they can hire you, or another attorney?   JOHN LAWRENCE ALLEN: Correct.   Discussion of other types of fraud, beyond incompetence and excessive commission   JASON HARTMAN: Okay, good.  So, talk to us more about some of the other types of fraud out there.  there's incompetence, there's, I guess I'll call it steering to the product that pays the highest commission.  What else is there?   JOHN LAWRENCE ALLEN: Well, beyond the suitability issues, which are very numerous, and that expands a lot of things that brokers might do.  They might put you in—there's an example, as I said before, if you're 70 years of age, you probably shouldn't be in a 75% stock portfolio.  On the other hand, if you're 75 and they put you on 100% in one investment, and over-concentrate you, that's not correct, that's not suitable either.  So, it really doesn't matter what age you are.  if a brokerage company takes all your money and puts it in one investment, that's clearly unsuitable, because if that investment goes down—even Apple, as an example.  People do fabulous in Apple, but Apple also had, about six months ago, a 300-point drawdown.  And if you had all your money in Apple, you're hurting!  So, that's another thing they do.  Also churning.  Churning is where a broker makes excessive buys and sells in your account, without an interest in making you profits, the broker's interest is in getting as many commissions as they can from your account.  And what's interesting is in a churning case, you could actually—I've had cases in churning where the client never knew the account was churned, because they didn't lose any money!  The account was churned for a couple years, they ended up—you know, the stock market was up 30% over a two-year period and their account was flat.  They couldn't understand why.  And when I dived into it, I found out, well, it was flat because $200,000 in commissions were paid over that period, and if you hadn't had the $200,000 in commissions, you would have been up 200 grand, and you would have been up pretty much where the stock market was.  So, if a broker exercises control over the account, and buys and sells excessively to generate commissions, they churn your account, and that's actionable.   JASON HARTMAN: So, in other words, you don't have to have actually lost money in the aggregate.  You could still have an investment.  Your portfolio could still be up.  But just because of the malfeasance of the brokerage firm, or the individual broker, you could have lost money through churning—now, the churning thing, is that as big as a deal anymore?  Because it seems like the industry has moved to a model of managed money, where all they're really doing is, you give them $100,000, and they're charging you, you know, 2% a year, or whatever the number is.  And you're not really paying for trades.  But, one of the scams is, a lot of times, you're paying in multiple layers!  So, you'll give the guy sitting at Merrill Lynch your $100,000, and he'll say, well, I'm gonna charge you 2% a year, or whatever the number is, and so, he doesn't make money on churning per se, but then what he does is he goes and he puts your money into a bunch of other funds like mutual funds where they're making money inside that fund too, because of all these management fees.  I mean, that's just, wow.   JOHN LAWRENCE ALLEN: Well, you're absolutely correct.  And that is—and that's one of the things I had to cite in the book.  The methodology on Wall Street has shifted from a commission-driven business to an asset-gathering business.  So, the churning claims are down dramatically.  They're not out.  And the reason they're not out is because there are products called managed futures.  And most of these managed future products really don't exist to have the customer make money.  They exist for the broker dealer to reap huge commissions from buying and selling at a high velocity commodities.  And, what's interesting about these managed futures, is most of them have a program in which, let's say you give somebody 50 grand.  And let's say they have a hot hand and their managed commodity accounts have doubled, and you go up from 50 to 100,000.  The prudent thing to do would be to pull your 50 out and play with their money.  But that's not what they do.  What they do is, if you go to $100,000, they merely double the amount of contracts they're trading, so they can generate double the commissions.  So, if you had a $50,000 account, and you were doing, let's say, five contracts in a trade, and you now have $100,000 account, they double that, they go to 10 contracts.  Let's say you make an incredible profit, you go to $200,000. Your 50 has grown to 200.  Well, you're now gonna go from 5 to 20 contracts.  Which means that even the smallest move, after those enormous profits, will wipe out all your gains in a very short time.  Classic example of that is long term capital, which made 30, 35, 40% a year for three years, and then in six weeks, wiped out not only all of the gains, but the $4.5 billion that was still there.  Totally wiped it out when the commodity markets went the wrong way.   Discussion of a managed future deal Jason was pitched on   JASON HARTMAN: Wow, unbelievable.  Hey, can I run something by you that I was pitched on?  I actually had the guy on one of my shows, and it sounded pretty good…it's a managed future deal, and I just wanted to see what you thought of it.   JOHN LAWRENCE ALLEN: Sure.   JASON HARTMAN: I didn't do this investment; at least not yet.  But, the guy was pretty convincing, I have to tell you.  And so, he works in Chicago, and you know, is on the floor of the exchange there, and the big pitch is that Japan, which most of us know is massively in debt, the whole country is just in a mess.  I mean, the US is too, but the US has the reserve currency, and you know, some different circumstances, obviously.  And the pitch is that Japan will default on their debt, and what you should do is over a 5-year plan, with a $30,000 minimum investment, let me buy options on this debt, that it'll default.  Let me short the Japanese debt.  It's just saying, it's gonna default at some point.  And there will be what's called option decay.  Now, granted, I don't have a big understanding of this.  I'm just a consumer.  But there's something called option decay, and as the option decays, what he's basically doing is over the course of five years, using $500,000 per month of your $30,000.  I think—I don't know the math on that.  Yeah, 60 months.  500 a month.  To pay for option decay.  But at some point in that 5 years, there's gonna be a default, and you're gonna win, you're gonna make money.  That's the prediction.  Of course it's a prediction.  What do you think of that?   JOHN LAWRENCE ALLEN: Well, that's a long-term bet, and I guess the thing I'd be most concerned about would be, do they have the—I presume this is not an exchange-traded fund?  If it doesn't trade at any known stock exchange or commodity exchange, you have to worry about the counterparty risk of the person, should they do what they claim it's gonna do, are they gonna be able to pay you?  And a lot of these counterparty risk cases that have come up during the 08, 09 crisis when a lot of off-market contracts were traded, and they couldn't make good when the unlikely event occurred, like AIG, which was betting on collateralized debt obligations, they said, oh, no country's ever gonna go into bankruptcy.  No, we're not really gonna have to worry about that.  And lo and behold, Greece goes into bankruptcy, and AIG almost went under!  Took us close to a trillion dollars to bail out AIG, which I think was a big mistake.  But there was a counterparty who couldn't pay!   JASON HARTMAN: Maybe the concept is a winner.  Maybe it actually works.  But then the counterparty just defaults, and they can't pay you.   JOHN LAWRENCE ALLEN: Yeah, that's why I try to stick with anything that's exchange listed.  So then at least I know they're going through a well known New York stock exchange, the COMEX, the NASDAQ, and there's some third party who's trying to make sure that they're gonna honor their margin requirements.   Some tips on buying gold: always invest in bullion, never numismatic coins   JASON HARTMAN: Good.  Okay, good point, good point.  Okay, what else should people know?  Do you want to talk about any other types of investments?  I mean, maybe you want to mention just quickly maybe gold?  I know that that's not a huge market, but we touched on oil and gas.  If, you know, you want to mention any other alternatives.   JOHN LAWRENCE ALLEN: Well, I think for gold, my suggestion would be, anybody who wants to invest in gold, I don't have a problem with them investing in gold.  I do have a problem in how they do it.  I don't think anybody who wants to own gold should ever use leverage, options, or margin.  They should only buy it for cash.  They should take delivery, they shouldn't allow any third party to store their gold, and they should only buy gold from a reputable dealer who's been in business over 10 years, and then finally, only gold bullion, not numismatic coins which are supposed to have great asset value.  And when I say bullion, I mean a Canadian maple leaf, an American gold eagle, you know, a South African Kruger rand, an Austrian krone, some well known gold bullion that's difficult to make in a, what I would call a forged or dishonest way.   JASON HARTMAN: Right, right.  A lot—the scams and the numismatic market are rampant, and every gold dealer, when you call them up, you know, a lot of times they're advertising on the radio, and they're promoting the concept of gold or silver or platinum or palladium, and they're talking about bullion.  But when you call them, they try to up sell you to numismatic coins, because they're just much higher margins.   JOHN LAWRENCE ALLEN: Tremendous, tremendous margins.  You're talking sometimes 30, 40% margin on a numismatic coin.   JASON HARTMAN: Right.  But you know, that's not a security necessarily.  I mean, are you talking about—see, I think the only way someone should invest in gold, or precious metals, is in the way where you actually take possession of it.   JOHN LAWRENCE ALLEN: I agree.   JASON HARTMAN: You're talking about inside of a fund, right?  I mean, you're not talking about—I mean, there's—there are frauds where people actually take possession, and they find out the metal is fake.  But I don't think that's super common, probably.   JOHN LAWRENCE ALLEN: Those are very, very rare.  And those are usually not government-sponsored products like American eagles or maple leaves from Canada.  And, they're usually sold by disreputable dealers.  But if you buy gold from a reputable dealer and have it shipped to your home, put in a safety deposit box, or bury it somewhere, that's the safe way.  You don't want to have them tell you, oh, we'll store it for you.  No, you want your gold, if you're gonna buy gold.   JASON HARTMAN: I agree with you.  The point of that types of investing is to be in possession of it.  absolutely.  And I just can't believe the people that go for these deals where they say, oh, they're gonna store them in a vault in Switzerland.  Yeah, right.   JOHN LAWRENCE ALLEN: And another thing now—another section of my book, Make Wall Street Pay You Back, is, as you said very early on, we're no longer a commission-driven business; we're a management business, where they grab their assets and send them out to management.  That adds a layer of protection to the broker dealer and the registered representative, the stockbroker.  However, that doesn't stop them from still having to make a suitable recommendation to this manager.  So, when you go to a broker dealer and you give them your assets, and they agree to manage them, and they're not gonna charge you a commission, they're gonna charge you a percentage of the assets you have under management, you need to be sure that whatever manager they hire, that that manager is—and the manager style—is in keeping with your goals, objectives, risk tolerance, and time horizon.  You don't want to go into an all equity small cap microcap fund, if you're trying to invest in what is supposed to be on the stock investing side, a more conservative portfolio.  And also, you want to be sure that the style of that manager doesn't involve, unless you're willing to take that risk—you know, I'm not saying risk is bad.  You just need to know about it, make an informed consent about it, and be willing to accept it.  But you need to be sure that that style of that manager is in keeping with your risk assessment.  Because, if you don't want to take a lot of risk, then you can't have options, derivatives, or futures, or leverage, employed by that manager.  So you need to know the style, and the type of investments, and where they're gonna make those investments.   Who claims are usually made against   JASON HARTMAN: Toward the beginning of the show I talked to you about all the different layers of this onion, and how, who are you really—who is your claim against?  We've talked about registered reps, brokerage firms.  What about the other people in the food chain?  And then, all the way up to the actual company, whose stock you own.  In the board of directors, and the CEO, and the CFO, and the CTO—all of these guys are just skimming off the top.  I mean, the Dennis Kozlowskis of the world, and all the rest of them.  I mean, there's a lot of fraud going on at that level too, where, you know, the brokerage firm could be okay, the rep could be okay, but the actual company whose stock you own, do you go after them too?   JOHN LAWRENCE ALLEN: Well, I try to make a rule not to go after anybody who has a questionable pocketbook to recover from.  Generally—   JASON HARTMAN: Oh, right.   JOHN LAWRENCE ALLEN: Generally, when there is a corporate crime, or a corporate fraud, most of the time, not always, most of the time, there aren't assets sufficient to recover for the shareholders.   JASON HARTMAN: Because they've sucked it all out of the company, and the company's basically an empty shell.   JOHN LAWRENCE ALLEN: Exactly.  Madoff, or Enron, or Delphi, you know, if we were to go back a few years to all of the security problems going on.  But interestingly enough, if you do it at a grand enough scale, you get to walk away scot-free and you don't even go to prison.   JASON HARTMAN: It's unbelievable.  Yeah.   Jon Corzine, MF Global, & the Insider's Game   JOHN LAWRENCE ALLEN: A perfect example is Corzine, who was the governor of New Jersey—   JASON HARTMAN: MF Global.   JOHN LAWRENCE ALLEN: And Jon Corzine.  And he was a huge donator to the Democratic Party, and a big supporter of Obama, and he took over a company, MF Global.  And they were just a plain bread and butter vanilla commodity broker.  They bought and sold commodities, they made, you know, a few pennies off of the buying and selling of these commodities.  Well, he didn't think that was enough money.  So he went and made a multi-billion dollar—I think 3.6, to be exact—billion dollar bet on the debt of other countries and companies.  And that bet went awry.  Very badly awry.  And Corzine went in, and he claims he did not do this.  He claims he didn't know.  But under his supervision as the chairman of the company, they invaded the assets of their own clients, and stole $1.3 billion of assets from their clients to cover their bad bet.   JASON HARTMAN: And that's Jon Corzine, and $1.3 billion, that's billion with a ‘b.'  Not million—billion, okay?  Huge.   JOHN LAWRENCE ALLEN: Correct.  Took it out of their clients' accounts.  They got caught, they had to return what money they could find, he paid a fine, and he walked away without going to jail for committing absolute grand larceny on a monster scale.   JASON HARTMAN: Un-fricking-believable.  I mean, this is so disgusting.  It's just—it's just disgusting!  And it's amazing to me, like, one of the things I tell my listeners is, don't trust resumes.  Ken Lay, with Enron—he was buddies with George Bush, okay?  I'm sure the pictures were all over the company for people to see when they came in.  Bernie Madoff was president of NASDAQ.  Jon Corzine was governor of New Jersey!  I mean, your resume doesn't get much better than any of those, right?   JOHN LAWRENCE ALLEN: Oh, absolutely.  And let's add to the list Mr. Mozilo, who was the chairman of Countrywide, who got bought out by B of A, and he was one of the large perpetrators of the entire mortgage debacle, and people lost billions, maybe even trillions, and he walked away scot-free and he, he had his “friends of Mozilo,” who got mortgage—well, I should put it this way.  Members of Congress and the Senate, who got special mortgages from Countrywide at highly reduced rates, because they were friends of Mozilo.  And he walked away scot-free.   JASON HARTMAN: It's just a total insider's game.  That old question, you know, when the broker takes his buddy down to show his buddy his new yacht, and his friend says, where are all the clients' yachts?  You know?  It's an in—that's what people have to understand.  Wall Street is an insider's game.  And the insiders are the ones who get rich, because the insiders have all the connections, and they basically make the laws.  Because they have lobbyists, they have lawyers, they have PR firms, they have accounting firms, and the game is just so stacked against the investor, I don't know why the general public is still playing in this field.  They're totally outgunned!  And then you look at Michael Lewis and his great new book, Flash Boys, which I'm sure you're familiar with—I mean, are these—Goldman Sachs—are they just a totally criminal organization too?  Probably.  I don't know.  It sure seems like it.  It's just unbelievable.  I mean, in Flash Boys, which I highly recommend, Michael Lewis talks—he just profiles all of these companies that are like, getting in line to do this high frequency trading, where the speed of light is not even fast enough anymore, at 186,000 miles per second, and all the people profiting from all of this stuff in the food chain, it's beyond despicable.  It's totally rigged.   JOHN LAWRENCE ALLEN: It's very difficult.  It's a hard game to play.  But, the other side of the coin is, with the Fed maintaining these totally illusionary, 0% interest rates—   JASON HARTMAN: What else can you do?   JOHN LAWRENCE ALLEN: Everybody's having a hard time trying to make ends meet, and they're forced, almost, to go into the stock market.   Bad monetary policy forces people to take inappropriate risks   JASON HARTMAN: Yeah, they're forced to do—see, this is—bad monetary policy like we have, forces people to take inappropriate risk!  Because they can't get any yield in their bank account.  And it's so sad to see the people that are older and have really done the right thing all their lives.  You know, they saved money, they planned for the future, they delayed gratification, and now they got a few bucks.  It's sitting in a bank account, being destroyed by taxes and inflation, especially inflation, which, you know, is higher than what the government would have us believe, and they just can't get any yield.  So, they go in, and they play with the stock market, and, you know what happens.  I mean, that's your business.   JOHN LAWRENCE ALLEN: Yes.   JASON HARTMAN: Yeah.  It really—   JOHN LAWRENCE ALLEN: Sad but true.   Closing statements   JASON HARTMAN: Yeah.  It really is sad.  Well, this has been a fascinating discussion.  A lot of people tell lawyer jokes, but I'm glad there are lawyers out there who really help people get some justice.  And one of them is you, so, thank you for doing that.  And give out your website again.  Of course the book is onwww.Amazon.com.  I definitely encourage people to read it: Make Wall Street Pay You Back.  The website is the same name, right?   JOHN LAWRENCE ALLEN: Yeah.  www.MakeWallStreetPayYouBack.com.  There's also a section in the book about arbitration, what it's like, what you have to know, what it's like to go through one, so people won't feel so nervous about going through the process, and realizing that they have rights, they ought to stick up for their rights, and not be afraid to pursue even Merrill Lynch or Morgan Stanley or Goldman Sachs.   JASON HARTMAN: Good.  Good stuff.  Well John Lawrence Allen, thank you so much for joining us today.  This has been very informative.   JOHN LAWRENCE ALLEN: Thank you very much, Jason, and I appreciate the time.   [MUSIC]   ANNOUNCER (FEMALE): I've never really thought of Jason as subversive, but I just found that's what Wall Street considers him to be!   ANNOUNCER (MALE): Really?  How is that possible at all?   ANNOUNCER (FEMALE): Simple.  Wall Street believes that real estate investors are dangerous to their schemes, because the dirty truth about income property is that it actually works in real life.   ANNOUNCER (MALE): I know!  I mean, how many people do you know, not including insiders, who created wealth with stocks, bonds, and mutual funds?  Those options are for people who only want to pretend they're getting ahead.   ANNOUNCER (FEMALE): Stocks, and other non-direct traded assets, are losing game for most people.  The typical scenario is: you make a little, you lose a little, and spin your wheels for decades.   ANNOUNCER (MALE): That's because the corporate crooks running the stock and bond investing game will always see to it that they win!  Which means, unless you're one of them, you will not win.   ANNOUNCER (FEMALE): And, unluckily for Wall Street, Jason has a unique ability to make the everyday person understand investing the way it should be.  He shows them a world where anything less than a 26% annual return is disappointing.   ANNOUNCER (MALE): Yep, and that's why Jason offers a one book set on creating wealth that comes with 20 digital download audios.  He shows us how we can be excited about these scary times, and exploit the incredible opportunities this present economy has afforded us.   ANNOUNCER (FEMALE): We can pick local markets, untouched by the economic downturn, exploit packaged commodities investing, and achieve exceptional returns safely and securely.   ANNOUNCER (MALE): I like how he teaches you to protect the equity in your home before it disappears, and how to outsource your debt obligations to the government.   ANNOUNCER (FEMALE): And this set of advanced strategies for wealth creation is being offered for only $197.   ANNOUNCER (MALE): To get your creating wealth encyclopedia, book one, complete with over 20 hours of audio, go to www.jasonhartman.com/store.   ANNOUNCER (FEMALE): If you want to be able to sit back and collect checks every month, just like a banker, Jason's creating wealth encyclopedia series is for you.   [MUSIC]   ANNOUNCER: This show is produced by the Hartman Media Company.  All rights reserved.  For distribution or publication rights and media interviews, please visit www.HartmanMedia.com, or email media@hartmanmedia.com.  Nothing on this show should be considered specific personal or professional advice.  Please consult an appropriate tax, legal, real estate, or business professional for any individualized advice.  Opinions of guests are their own, and the host is acting on behalf of Platinum Properties Investor Network, Inc. exclusively.  

Michael Covel's Trend Following
Ep. 233: Larry Doyle Interview with Michael Covel on Trend Following Radio

Michael Covel's Trend Following

Play Episode Listen Later Apr 28, 2014 31:25


My guest today is Larry Doyle, a former JP Morgan banker. Larry embarked on his Wall Street career in 1983 as a mortgage-backed securities trader for The First Boston Corporation, and was involved in the growth and development of the secondary mortgage market from its near infancy. The topic is his book In Bed with Wall Street: How Bankers, Regulators and Politicians Conspire to Cripple Our Global Economy. In this episode of Trend Following Radio we discuss: Doyle's background and why he put “In Bed With Wall Street” together Madoff, and what was missed from a regulatory perspective KYC, or “knowing your customer” MF Global, Jon Corzine, and touching customer funds Dodd Frank and the supposed fixes to the 2008 financial crisis, and why Dodd Frank was more of an architectual blueprint rather than a completed piece of legislation Regulatory reforms to help fix the problems created in the 2008 financial crisis Informing the general public of the problems surrounding Wall Street today The “bribe” of equity markets at all-time highs; manipulation of the markets Why Tim Geithner said “we saved the economy, but we lost the country” If a crash is the only thing that will bring about change Why the banks must be broken up What would have happened if Goldman Sachs and Morgan Stanley had failed Jump in! --- I'm MICHAEL COVEL, the host of TREND FOLLOWING RADIO, and I'm proud to have delivered 10+ million podcast listens since 2012. Investments, economics, psychology, politics, decision-making, human behavior, entrepreneurship and trend following are all passionately explored and debated on my show. To start? I'd like to give you a great piece of advice you can use in your life and trading journey… cut your losses! You will find much more about that philosophy here: https://www.trendfollowing.com/trend/ You can watch a free video here: https://www.trendfollowing.com/video/ Can't get enough of this episode? You can choose from my thousand plus episodes here: https://www.trendfollowing.com/podcast My social media platforms: Twitter: @covel Facebook: @trendfollowing LinkedIn: @covel Instagram: @mikecovel Hope you enjoy my never-ending podcast conversation!

Trend Following with Michael Covel
Ep. 233: Larry Doyle Interview with Michael Covel on Trend Following Radio

Trend Following with Michael Covel

Play Episode Listen Later Apr 27, 2014 31:25


Today on the podcast Michael Covel interviews Larry Doyle. Doyle’s book is called “In Bed With Wall Street”. Doyle is a former JP Morgan banker gets into why the system is fragile despite being five or six years removed from the crisis. Covel and Doyle discuss Doyle’s background and why he put “In Bed With Wall Street” together; Madoff, and what was missed from a regulatory perspective; KYC, or “knowing your customer”; MF Global, Jon Corzine, and touching customer funds; Dodd Frank and the supposed fixes to the 2008 financial crisis, and why Dodd Frank was more of an architectual blueprint rather than a completed piece of legislation; regulatory reforms to help fix the problems created in the 2008 financial crisis; informing the general public of the problems surrounding Wall Street today; the “bribe” of equity markets at all-time highs; manipulation of the markets; why Tim Geithner said “we saved the economy, but we lost the country”; if a crash is the only thing that will bring about change; why the banks must be broken up; and what would have happened if Goldman Sachs and Morgan Stanley had failed. Want a free trend following DVD? Go to trendfollowing.com/win.

FT Alphachat
An MF Global catchup

FT Alphachat

Play Episode Listen Later Jul 25, 2013 36:21


In this episode of Alphachat, Alphaville reporters Izabella Kaminska and David Keohane chat to repo market specialist Scott Skyrm about the fall of MF Global. See acast.com/privacy for privacy and opt-out information.

The Options Insider Radio Network
Option Block 256: The Great AAPL and GLD Rebound

The Options Insider Radio Network

Play Episode Listen Later Jul 2, 2013 56:12


Option Block 256: The Great AAPL and GLD Rebound Trading Block Another broad rally - a "doing stuff" kind of day. Gold spikes. Blackberry annihilated post-earnings. Corzine finally charged in MF Global debacle. The Options Industry Council (OIC) announced today that 361,180,257 total options contracts traded in June, up 10.86 percent compared to last year. Odd Block Calls Rolled in Sina Corp (SINA)  Legging into a Butterfly in Tempurpedic (TPX)  Puts Trading Air Products and Chemical (APD) Xpress Block Metals, Tesla and Apple were lighting up the tape. Alex gives us a good lesson about margin. Strategy Block Tosaw walks us through his recent strategy involving moving to cash after some rumbling in SPY Around the Block Earnings looming on the horizon. Remember the Independence Day holiday is this Thursday - be aware to the effect of theta.

The Option Block
Option Block 256: The Great AAPL and GLD Rebound

The Option Block

Play Episode Listen Later Jul 2, 2013 56:12


Option Block 256: The Great AAPL and GLD Rebound: Trading Block Another broad rally - a "doing stuff" kind of day. Gold spikes. Blackberry annihilated post-earnings. Corzine finally charged in MF Global debacle. The Options Industry Council (OIC) announced today that 361,180,257 total options contracts traded in June, up 10.86 percent compared to last year. Odd Block Calls Rolled in Sina Corp (SINA)  Legging into a Butterfly in Tempurpedic (TPX)  Puts Trading Air Products and Chemical (APD) Xpress Block Metals, Tesla and Apple were lighting up the tape. Alex gives us a good lesson about margin. Strategy Block Tosaw walks us through his recent strategy involving moving to cash after some rumbling in SPY Around the Block Earnings looming on the horizon. Remember the Independence Day holiday is this Thursday - be aware to the effect of theta.

The Options Insider Radio Network
Option Block 255: Balloon is Over-squeezed

The Options Insider Radio Network

Play Episode Listen Later Jun 28, 2013 57:58


Option Block 255: Balloon is Over-squeezed   Trading Block: Rally Ho! Again. Vol crushed, but not as aggressively as expected. Are the pronouncements of the death of Apple's vol premature?  Prosecutors finally get around to charging Corzine in MF Global debacle. 30-year mortgage rate at 4.46%. Odd Block: Calls trade in Statoil ASA (STO), Goodrich Petroleum Corp (GDP), and New York Community Bancorp (NYCB). Xpress Block: Alex discusses GDX, Newmont Mining (NEM), and other trade ideas from the Idea Hub. Around the Block: Blackberry earnings before the open.

The Option Block
Option Block 255: Balloon is Over-squeezed

The Option Block

Play Episode Listen Later Jun 28, 2013 57:58


Option Block 255: Balloon is Over-squeezed Trading Block: Rally Ho! Again. Vol crushed, but not as aggressively as expected. Are the pronouncements of the death of Apple's vol premature?  Prosecutors finally get around to charging Corzine in MF Global debacle. 30-year mortgage rate at 4.46%. Odd Block: Calls trade in Statoil ASA (STO), Goodrich Petroleum Corp (GDP), and New York Community Bancorp (NYCB). Xpress Block: Alex discusses GDX, Newmont Mining (NEM), and other trade ideas from the Idea Hub. Around the Block: Blackberry earnings before the open.

Michael Covel's Trend Following
Ep. 66: Mark Melin Interview with Michael Covel on Trend Following Radio

Michael Covel's Trend Following

Play Episode Listen Later Oct 8, 2012 35:33


My guest today is Mark Melin, managed futures expert, editor/writer for Opalesque, and author. Melin has his fingers on the pulse of the nasty things going behind the scenes; specifically, over-the-counter ("OTC") markets and the MF Global scandal. The topic is managed futures. In this episode of Trend Following Radio we discuss: Possible solutions If politicians can actually be held accountable if there are no repercussions beyond not being reelected How the average American can digest this information and how it affects them Debt crisis in Europe unfolds banks are going to expose the US government to unlimited loss potential How people simply won't listen if the Dow is rigged to keep them happy Why the average person who sees the Dow at a high level today should care about this, and what they can do to protect themselves beyond sitting around and waiting for the sky to fall Jump in! --- I'm MICHAEL COVEL, the host of TREND FOLLOWING RADIO, and I'm proud to have delivered 10+ million podcast listens since 2012. Investments, economics, psychology, politics, decision-making, human behavior, entrepreneurship and trend following are all passionately explored and debated on my show. To start? I'd like to give you a great piece of advice you can use in your life and trading journey… cut your losses! You will find much more about that philosophy here: https://www.trendfollowing.com/trend/ You can watch a free video here: https://www.trendfollowing.com/video/ Can't get enough of this episode? You can choose from my thousand plus episodes here: https://www.trendfollowing.com/podcast My social media platforms: Twitter: @covel Facebook: @trendfollowing LinkedIn: @covel Instagram: @mikecovel Hope you enjoy my never-ending podcast conversation!

Trend Following with Michael Covel
Ep. 66: Mark Melin Interview #2 with Michael Covel on Trend Following Radio

Trend Following with Michael Covel

Play Episode Listen Later Oct 8, 2012 35:33


Michael Covel speaks for the second time with managed futures expert, editor/writer for Opalesque, and author Mark Melin. Melin has his fingers on the pulse of the nasty things going behind the scenes; specifically, over-the-counter ("OTC") markets and the MF Global scandal. Covel talks to Melin about his recent piece in Opalesque: "The Untold Story: Brooksley Born, Larry Summers & the Truth About Unlimited Risk Potential". Most understand stock and futures exchanges; you can trade in these exchanges and expect a certain amount of regulation and transparency, and people understand the balancing side of the equation. However, the OTC derivatives that Melin has been digging into are completely off the everyone exposed to a possible mega-implosion in the near future. Melin discusses the history of these unregulated derivatives and notes that if the problems that were initially identified by Brooksley Born in 1998 are not properly addressed, the next market catastrophe could be worse than anything that has preceded it. Covel and Melin discuss the possible solutions; if politicians can actually be held accountable if there are no repercussions beyond not being reelected; and how the average American can digest this information and how it affects them. Covel also brings up the idea of the "four political parties": Democrats, Republicans, Libertarians, and Bankers. If you look at it from that perspective can they be defeated? (Covel: "No.") You can't vote the bankers out. Melin contends that if the debt crisis in Europe unfolds banks are going to expose the US government to unlimited loss potential. Covel and Melin go on to discuss how people simply won't listen if the Dow is rigged to keep them happy; why the average person who sees the Dow at a high level today should care about this, and what they can do to protect themselves beyond sitting around and waiting for the sky to fall. Covel is the skeptic and Melin is the optimist in this fiery conversation about how to handle this situation before it implodes. Melin notes: "The Fed cannot prop up the stock market forever. At some point, gravity takes over." Covel believes the die is cast and offers trend following as an "out". Special offer free DVD: www.trendfollowing.com/win.

The Zero Hedge Daily Round Up
The Zero Hedge Daily Round Up #109 - 16/08/2012

The Zero Hedge Daily Round Up

Play Episode Listen Later Aug 17, 2012 7:52


1. Corzine not to face criminal prosecution over MF Global. 2. Julian Assange granted assylum by embassy. 3. Brent crude in Euros sees biggest rise in 2 months. 4. Whitehouse may countre Iran embargo with oil reserves. 5. Market delusion. Tick of approval. 6. Facebook shares plunge into teens. 7. Romney 13.9% tax rate on $21 million. 8. South African strike turns violent. 9. Portugal gold exports x5. www.thefinancialrelaity.com

Michael Covel's Trend Following
Ep. 38: Brad Rathe Interview with Michael Covel on Trend Following Radio

Michael Covel's Trend Following

Play Episode Listen Later Jul 23, 2012 57:15


My guest today is Brad Rathe, a trader, and programmer. Rathe allocates funds to other traders, as well as operates his own global macro fund. Rathe has worked at such firms as EMC (original Turtle), Northbourne, and Rotella. Rathe moved to Chicago the day he graduated college and immersed himself in the pits of the Chicago Board of Trade, initially working in the "meats" pit (pork bellies, live cattle, live hogs, and feeder cattle). The topic is Trend Following. In this episode of Trend Following Radio we discuss: Practical/physical factors involved in the futures pit in the late 80's/early 90's The move to screen-based exchanges (computer trading) replacing floor trading Working at Globex How the CTA business grew under the Turtles The importance of programming Tweaking and changing your trend following system MF Global, Madoff, Wasendorf and other cheaters The importance of being unemotional during a big blowup Jump in! --- I'm MICHAEL COVEL, the host of TREND FOLLOWING RADIO, and I'm proud to have delivered 10+ million podcast listens since 2012. Investments, economics, psychology, politics, decision-making, human behavior, entrepreneurship and trend following are all passionately explored and debated on my show. To start? I'd like to give you a great piece of advice you can use in your life and trading journey… cut your losses! You will find much more about that philosophy here: https://www.trendfollowing.com/trend/ You can watch a free video here: https://www.trendfollowing.com/video/ Can't get enough of this episode? You can choose from my thousand plus episodes here: https://www.trendfollowing.com/podcast My social media platforms: Twitter: @covel Facebook: @trendfollowing LinkedIn: @covel Instagram: @mikecovel Hope you enjoy my never-ending podcast conversation!

Trend Following with Michael Covel
Ep. 38: Brad Rathe Interview with Michael Covel on Trend Following Radio

Trend Following with Michael Covel

Play Episode Listen Later Jul 23, 2012 57:15


Michael Covel talks to trader and programmer Brad Rathe. Rathe allocates funds to other traders, as well as operatoring his own global macro fund. Rathe has worked at such firms as EMC (original Turtle), Northbourne, and Rotella. Rathe moved to Chicago the day he graduated college and immersed himself in the pits of the Chicago Board of Trade, initially working in the "meats" pit (pork bellies, live cattle, live hogs, and feeder cattle). Covel and Rathe talk about some of the practical/physical factors involved in the futures pit in the late 80's/early 90's. In the off-season, some of Chicago's athletes would work in the pits, and Rathe was surrounded by ex-Bulls, Blackhawks, and Bears. It was a very physical game back then, and Rathe saw broken ribs in the pits. Rathe shares some great anecdotes about someone who sold his spot in the pit for $1 million dollars - even though there were no assigned spots to begin with. Covel and Rathe discuss the move to screen-based exchanges (computer trading) replacing floor trading; Rathe states that when you get off the floor, it takes on more and more importance to have a systematic, non-emotion based trading strategy. Rathe fell into working at Globex, which was just starting, and saw some of the beginnings of electronic trading. By 1991, Rathe moved to EMC, where he worked under Liz Cheval (original Turtle). Rathe relates some of the lessons he learned from Cheval, and sheds a little light on the Turtle story from the perspective of having worked for Cheval. Covel and Rathe also discuss how the CTA business grew under the Turtles; the importance of programming; tweaking and changing your trend following system; MF Global, Madoff, Wasendorf and other cheaters; and the importance of being unemotional during a big blowup. Special Offer: receive free DVD delivered to your home or office: www.trendfollowing.com/win.

The Zero Hedge Daily Round Up
The Zero Hedge Daily Round Up #101 - 09/07/2012

The Zero Hedge Daily Round Up

Play Episode Listen Later Jul 10, 2012 7:00


1. MF Global v2.0. $220 million funds of "BFG Best" brokerage funds vaporized. 2. Italy: 3 months vacation too much. lol. 3. Scanton: all your wages are minimum. 4. Corporate bond holdings, lowest in decade. 5. Brent crude > $100. 6. Obama, voters say change for worst. 7. Crazy headlines. 8. China trade threats. 9. Silver corp down. 10. Last week recap. www.thefinancialreality.com sounds from samplecat and kantouth.

The Zero Hedge Daily Round Up
The Zero Hedge Daily Round Up #90 - 15/06/2012

The Zero Hedge Daily Round Up

Play Episode Listen Later Jun 15, 2012 5:11


1. How JP Morgan doubled it's money from MF Global collapse. 2. Primary Dealer Treasury holdings soar to highest. 3. Ex-Goldman Rajat Gupta Convicted Of Insider Trading. 4. Obama DREAM Act, bypass congress. 5. Greece's struggling health sector. 6. Slow news day, blame the fed. www.thefinancialreality.om

Michael Covel's Trend Following
Ep. 13: Mark Melin Interview with Michael Covel on Trend Following Radio

Michael Covel's Trend Following

Play Episode Listen Later May 4, 2012 54:05


My guest today is Mark Melin, a managed futures expert, editor/writer for Opalesque, and author. Melin has become a defacto investigative reporter for the MF Global scandal.  The topic is managed futures. In this episode of Trend Following Radio we discuss: Covel and Melin consider the MF Global story from the very beginning, back to the very basics, and discuss the political context, why the story isn't front page news, and how it might effect you in the long run. Jump in! --- I'm MICHAEL COVEL, the host of TREND FOLLOWING RADIO, and I'm proud to have delivered 10+ million podcast listens since 2012. Investments, economics, psychology, politics, decision-making, human behavior, entrepreneurship and trend following are all passionately explored and debated on my show. To start? I'd like to give you a great piece of advice you can use in your life and trading journey… cut your losses! You will find much more about that philosophy here: https://www.trendfollowing.com/trend/ You can watch a free video here: https://www.trendfollowing.com/video/ Can't get enough of this episode? You can choose from my thousand plus episodes here: https://www.trendfollowing.com/podcast My social media platforms: Twitter: @covel Facebook: @trendfollowing LinkedIn: @covel Instagram: @mikecovel Hope you enjoy my never-ending podcast conversation!

Trend Following with Michael Covel
Ep. 13: Mark Melin Interview with Michael Covel on Trend Following Radio

Trend Following with Michael Covel

Play Episode Listen Later May 3, 2012 54:05


Michael speaks to Mark Melin, a managed futures expert, editor/writer for Opalesque, and author. Melin has become a defacto investigative reporter for the MF Global scandal. Covel and Melin consider the MF Global story from the very beginning, back to the very basics, and discuss the political context, why the story isn't front page news, and how it might effect you in the long run. A sobering conversation. Special Offer: receive free DVD delivered to your home or office: www.trendfollowing.com/win.

techzing tech podcast
181: TZ Discussion - When a Model is Just a Model

techzing tech podcast

Play Episode Listen Later Apr 24, 2012 107:05


Justin's upcoming post about the Yelp review filtering system, the new version of Pluggio, looking forward to MicroConf, Freeman Dyson and his global warming heresy, a La Critique of RootBuzz, more thoughts on simulating the zombie apocalypse, island economics and the danger of extreme wealth inequality, TBTF banks and thoughts on the MF Global fiasco, Matt Tiabbi's coverage of Wall Street's endemic corruption and why William Black thinks the American JOBS Act will introduce fraud, $10 million loans for everyone, how Iran is reverse engineering a downed U.S. drone, why CENTCOM's Operation Earnest Voice will ultimately be turned inward like the NSA's Operation Stellar Wind and completing the AnyFu payout cycle.

We Are Not Cattle Radio
Wednesday Night Show 3/28

We Are Not Cattle Radio

Play Episode Listen Later Mar 28, 2012 30:00


The Option Block
Option Block 135: Naked Canadians & A Conference Roundup

The Option Block

Play Episode Listen Later Mar 21, 2012 62:49


Option Block 135: Naked Canadians & A Conference Roundup Trading Block: VIX on the rebound - the weekend coming back into the VIX, but the futures themselves were down today. A rundown from RMC: What is going into the term structure of the VIX futures? How does negative gamma scalping impact the market? Weeklies are not the primary gamma driver - it's still in the front month. SPX put spread vs. VIX call calendars as a market hedge. A rundown from FIA Boca: Blame is still being tossed about for MF Global. CBOE announces "VIX of VIX." ISE is perhaps creating a trading floor - what is the thought process on this? One share of Apple stock is now worth more than a new iPad! Thoughts on the Apple dividend? Odd Block: Friday review: Lululemon Athletica, Inc. (LU), an activity review from Feb. 27: United Technologies Corp. (UTX) Xpress Block: Holding down the OX desk, John Grigus discusses the increase in volume that's been seen recently. Also JP Morgan dividends, a lot of OTM calls going out to June/July. The interest rate futures got pummeled. Around the Block: Economic Calendar: This week starts with and ends with housing. DG on 3/22

Benzinga Attention
Typhon Capital's Koutoulas on the latest from the center of the MF Global case

Benzinga Attention

Play Episode Listen Later Feb 24, 2012 26:11


Typhon Capital Management CEO and attorney James Koutoulas is leading the Commodity Customer Coalition to recover customer funds from the MF Global unwinding.

typhon mf global james koutoulas
We Are Not Cattle Radio
We Are Not Cattle Radio Sunday Show

We Are Not Cattle Radio

Play Episode Listen Later Feb 19, 2012 31:00


Topic for this show, MF Global

The Zero Hedge Daily Round Up
The Zero Hedge Daily Round Up #24 - 06/02/2012

The Zero Hedge Daily Round Up

Play Episode Listen Later Feb 7, 2012 3:51


1. U.S. close embassy in Syria, diplomats leave country. 2. GMI pay glencore to use their ships. 3. Greek prime minister prepares country for default. 4. MF Global inquiry, dodgy practices. 5. San Fran Fed: Fiscal stimulus ineffective. www.thefiancialreality.com

The Zero Hedge Daily Round Up
The Zero Hedge Daily Round Up #22 - 02/02/2012

The Zero Hedge Daily Round Up

Play Episode Listen Later Feb 3, 2012 4:39


1. Israel accuses Russia of supplying nuclear material to Iran. 2. Facebook Click through rate on ads at 0.014%. 3. NYSE volume at 1999 levels. 4. Bernanke testifies on U.S. economy. 5. Merkel snubs France from the "AAA rating club". 6. Fed responsible for 91% of long-dated treasuries. 7. Roseman , MF Global, sacked for doing his job. 8. 45% of Greek population never used internet. www.thefinancialreality.com

The Zero Hedge Daily Round Up
The Zero Hedge Daily Round Up #19 - 30/01/2012

The Zero Hedge Daily Round Up

Play Episode Listen Later Jan 31, 2012 3:27


1. Germany demands Greece surrender their sovereignty. 2. Iran delays oil embargo. 3. 50% of Greek and Spain youth unemployed. 4.Federal reserve admits that US employment is a lost cause. 5. Japan workforce to half by 2060. 6. 1.2 billion dollars disappear from MF Global. 7. Chinese Gold sales up 49%. 7. Shanghai new house prices down 50%. www.thefinancialreality.com

The End Within -
TONIGHT 01/12 09:00PM CST - MF Global and Implications

The End Within - "Come and Take It"

Play Episode Listen Later Jan 13, 2012 121:00


TODAY - 1/12 09:00PM CST - "MF Global" and it's implications in commodities i.e. Gold and Silver and what it may mean for you.   A game is being played to depleat US citizens and all citizens of commodities and real, tangible wealth in the form of Gold and Silver.  You need to know the game that is being played while they devalue 'paper' money and make scarce commidities by seizing commodities on 'paper'.  This is a game being played out to establish a 'NEW WORLD' monetary order and why you should be prepared. 

Motley Fool Money
Motley Fool Money: 12.23.2011

Motley Fool Money

Play Episode Listen Later Dec 23, 2011 38:41


On this week's show, we discuss the MF Global scandal, preview the year ahead, and share some stocks on our radar.   Plus, former Gambino family associate Louis Ferrante talks about his book, Mob Rules: What the Mafia Can Teach the Legitimate Businessman.

Cutting Through the Matrix with Alan Watt Podcast (.xml Format)
Dec. 9, 2011 Alan Watt "Cutting Through The Matrix" LIVE on RBN: "End of an Era Getting Nearer" *Title/Poem and Dialogue Copyrighted Alan Watt - Dec. 9, 2011 (Exempting Music, Literary Quotes, and Callers' Comments)

Cutting Through the Matrix with Alan Watt Podcast (.xml Format)

Play Episode Listen Later Dec 10, 2011 46:31


--{ End of an Era Getting Nearer: "There's a Spate of Government Moral Depravity, As "Civilized" Nations Go Down the Lavatory, Federal and Local Gangs Racketeering, Plundering Elderly and Profiteering, The War on Islam Will Go On for Years As the Pretext to Play Upon Our Fears And Give All Obedience to the Totalitarian, Be He Left, Right, Fascist or Fabian, There's No Point Appealing to Morality, To the Lotus Eating Hedonistic Mentality, Carefully Instilled Over the Last Generation, By the Culture Industry's TV Persuasion" © Alan Watt }-- PR Hearings for the Public on MF Global and Goldman Sachs - Use of Eurozone Crisis to Further Integrate Europe, Centralize Banking - Public Overloaded with Data, Cannot Reason for Themselves - Permanent State of Terrorism - TSA Strip-Searches of Children and Elderly - Training Exercises to Obey Authority - Clinton and Presidential Memorandum on LGBT Rights - Racketeering by Code Enforcement Officers - Education Designed to Dumb-Down - Employees Treated like Criminals - Flu Shots Coming to Your Church - Black Market Organ Trafficking, Gangs - Cities of the Future for Workers (Slums), Gated Communities for Middle Classes - Think-Tank Projections up to Year 2050. (See http://www.cuttingthroughthematrix.com for article links.) *Title/Poem and Dialogue Copyrighted Alan Watt - Dec. 9, 2011 (Exempting Music, Literary Quotes, and Callers' Comments)

The Option Block
Option Block 112: VIX Resistance

The Option Block

Play Episode Listen Later Dec 9, 2011 48:40


Option Block 112: VIX Resistance Trading Block: VIX cash back above 30, how long can it last? MF Global disaster continues to get worse, with no clue as to where customer money is. Customers are making additional margin payments because their funds at MF Global are frozen. This disaster may have ramifications for years to come. Metals/commodity rundown -- volatile gold and silver. Ford brought their dividend back after five years.  Odd Block: Three-legged spreads.  Unusual activity in Yahoo!, Inc. – (YHOO) andLiz Claiborne, Inc. –  (LIZ).  Plus, an update on last week's activity review: RIMM and Darden Restaurants (DRI).  Strategy Block: Uncle Mike Tosaw discusses the simulated index concept and how to relate it to higher income and higher net worth individuals. How to use a life insurance policy if you exceed your retirement plan contribution level.  Around the Block: The ongoing turmoil in the Eurozone is continuing to keep the VIX in limbo. RIMM earnings next week. Walgreens producing very high vol levels.

Benzinga Attention
Typhon Capital's Koutoulas on the battle to recover missing client funds at MF Global

Benzinga Attention

Play Episode Listen Later Nov 18, 2011 17:33


Typhon Capital Management CEO and attorney James Koutoulas is leading the Commodity Customer Coalition to prevent JP Morgan from getting a lien on MF Global's bankruptcy assets that could take precedent over the return of client funds, which are suspected to have been commingled with MF Global's own money.

The Option Block
Option Block 104: Piling Onto Groupon

The Option Block

Play Episode Listen Later Nov 8, 2011 58:33


Option Block 104: Piling Onto Groupon Trading Block: A bit of a market turnaround, but mainly a relatively mild day. What a strange place VIX and volatility are in general right now. Priceline (PCLN) earnings today after the close, trading over $500. The frenzy began Friday as Groupon went public -- when will the options go live? A quick metals/commodity rundown. Odd Block: Unusual activity in: McMoRan Exploration Co. (MMR) - Two noticeably bullish option trades in Gulf of Mexico oil and gas producer McMoRan Exploration Co. (MMR) today with investors looking for the stock to climb back to the 16 - 17.50 range over the coming months. The largest trade saw the purchase of 2,000 January 15 Calls and the simultaneous sales of 2,000 January 17.5 and 19 strike calls. This traded for a net debit of $.08 and reach maximum profit if the stock settles at $17.50 by January expiration. A more short term trade saw the purchase of the December 10-16 call spread 1,500 times for $3.55. No news in MMR today to account for today's activity. Knight Capital Group (KCG) - FRIDAY REVIEW The global financial services firm is seeing bearish option order flow for the second day in a row. Thursday saw new positions opened in the January and April 10 puts with open interest increasing more than twofold in both strikes. Friday's activity was even more eye opening with investors focusing on the 35% out-of-the-money 7.50 strike bearish contacts in the December and January expiries with VWAPs of $.15 and $.32 respectively. Career Education Corp. (CECO) Put selling on the for-profit provider of education services may represent a vote of confidence by at least one options strategist positioning for shares in Career Education Corp. to exceed $7.00 through November expiration. The stock was hammered in the most recent six-month period, declining around 75.0% off its 52-week high of $27.60 on June 2, down to a more than 10-year low of $6.92 last Thursday. CECO's shares are in recovery-mode today, gaining 5.25% in the first half of the session to trade at $8.40 as of 11:15 in New York. Options traders exchanged some 4,400 puts at the Nov. $7.0 strike against open interest of 1,544 contracts. It appears the majority of these put options were sold for an average premium of $0.10 apiece. Xpress Block: John Grigus discusses the details of the MF Global account, which has brought about stress at OX fielding questions. Around the Block: Earnings! Disney 11/10 - General Motors 11/9 - Cisco 11/9. Also, jobless claims 11/10.

FT Banking Weekly
António Horta-Osório’s break from Lloyds, the MF Global collapse and Bob Diamond’s cuddly bankers

FT Banking Weekly

Play Episode Listen Later Nov 6, 2011 18:52


In this week’s show: Lloyd’s faces a vacuum at the top as its chief executive takes a leave of absence on medical grounds, MF Global’s collapse has worrying echoes of Lehman Brothers and are bankers fulfilling their role in society? Presented by Megan Murphy, with Sharlene Goff. Produced by Amie Tsang. See acast.com/privacy for privacy and opt-out information.

Weekend Business
Another Grim U.S. Unemployment Report

Weekend Business

Play Episode Listen Later Nov 4, 2011 32:14


Jeff Sommer with Catherine Rampell on unemployment, David Gillen and Evelyn Rusli on LinkedIn, Gretchen Morgenson on MF Global and Robert Frank on flat taxes.

Benzinga Strategies
MrTopStep's Eubanks on MF Global, long squeeze

Benzinga Strategies

Play Episode Listen Later Nov 2, 2011 21:21


MrTopStep founder, principal, and director of institutional sales and trading Stephen Eubanks: "If it's a chase and it's nothing more than guys trying to flip stock to get their performance numbers up, that's a moment in time that is eventually going to evaporate."

The Option Block
Option Block 102: Turn Off the Idiot Box

The Option Block

Play Episode Listen Later Nov 1, 2011 30:12


Option Block 102: Turn Off the Idiot Box Trading Block: Bonds rallied, volatility exploded. MF Global news, combined with inflation and the Japanese efforts to intervene in their currency, provided for a big up day in the dollar. Given the lack of volume, the market had a strong sell-off today. Here in Chicago the Merc and the Board had to come down and say no trading. Gold and silver, they've been down a bit and out of the news spotlight, but could there be another run on it give the lows here? Odd Block: Unusual activity in: Chesapeake Energy (CHK) - Traders came in and bought 12,000 of the Nov 28 puts, with earning coming out on the 3rd, this may not be a good sign for CHK The Materials Sector (XLB) - A 12-to-1 put to call ratio in XLB today, 42,000 of the 34 puts and 66,000 of the 31 puts traded. We saw a trader sell about 10,000 of the March 26 puts, a big sell in Dec 29 and buy of Dec 31 puts, this could be traders setting up hedges, looking for ways to get long in the sector. Herbalife (HLF) - Earnings just came out, and in the spirit of Halloween, they were quite scary. Already off 10% before the bell, a very strong sell-off. It seems companies that miss a little bit on their earnings have not been treated well. Strategy Block: Host Mark Sebastian gives a special strategy block, "Turn off the Idiot-Box". If you're an active trading, turn off what CNBC thinks the market may do and watch the market the see what it actually does and you are bound to have better success. Around the Block: Looking for some follow through on last Thursday's big volume move or any stocks that hit new highs and were able to hold on to those highs. A lot of earnings and employment data come out this week, so you may be on the edge of your seat. Tomorrow may be a big day, as people try not to miss another big up-turn. But overall the tone will be set by the international markets.

The Option Block
Option Block 101: Size Money vs. Smart Money

The Option Block

Play Episode Listen Later Oct 28, 2011 54:49


Option Block 101: Size Money vs. Smart Money Trading Block: The market is off to the races...again. Strong rallies across the board. VIX cash finally makes its way down into the sub-30 range, welcome news for those who have been leaning to the downside in VIX. European leaders expand bailout fund - 50% write-down on Greek debt. Is the European debacle behind us? Strong economic data -- the economy grew at 2.5%, consumers strongest since Q4 2010. Also, a strong earnings season so far -- more than half of the companies in the S&P 500 have released quarterly results since Oct. 11, and about three- quarters have beaten the average analyst estimate, data compiled by Bloomberg show. Odd Block: Unusual activity in: Avon Products, Inc. (AVP) It's been a rough day for door-to-door cosmetic seller Avon Products, Inc. (AVP) with the company posting Q3 earnings this morning that missed estimates by 17% and announcing the SEC is investigating its contracts with financial analysts. The shares are currently trading 17% lower and are flirting with their 52 week low. Option volume is already 10 times the company's average daily activity with the most notable trading carrying a long term Bullish sentiment. The January '13 20 strike Calls have seen more than 6,000 contracts cross the tape and, with 85% of the trades taking place on the offers and little current open interest, it appears to be opening buyers looking for the stock to climb above the $22.20 price level during 2012. MGIC Investment Corp. (MTG) A long term Bullish option player appears in private mortgage insurer MGIC Investment Corp. (MTG) this morning with the purchase of 82,500 January '13 10 Calls at $.45. This trade not only creates the largest contract position in all of MTG's listed option but also ranks as the highest volume option trade so far today. With a long delta of 32, this trade carry's a long share equivalence of more than 2.6 million shares and will need the stock to rally more than 300% over the next 14 months to reward this investor with any profits. Total option volume in MTG is currently more than 17 times its average daily contract activity. HL – Hecla Mining Co. Shares in the mining company are up 7.5% to stand at $6.30 as of 1:40 pm EDT, on an up-up-and-away kind of day for U.S. equities. Hecla Mining Co. popped up on our ‘hot by options volume' market scanner following a burst of activity in December contract calls. Options traders exchanged about 25,000 calls at the Dec. $6.0 strike this morning against open interest of 3,315 positions. It looks like most of these in-the-money calls were purchased for an average premium of $0.63 apiece. Shares in Hecla Mining last traded above $6.63 back on September 22. Xpress Block: Tim Navabi runs down the recent activity at OX. Buy, buy, buy! Traders are getting long as sellers are exhausted and saying goodbye to the puts holders. Using a LEAP as a covered call swap out - the LEAP vs. the short term call. What happens to that LEAP if your front month option expires or is about to expire and the option is in the money? Around the Block: An update that the Baidu (BIDU) earnings just came out and in the afterhours is trading, hovering around $1.50. Netflix trading in the 80 handle, creating widows left and right. Amazon down as well, closed today at about $2.07, was trading as high as $2.40 before earnings. MF Global hitting the 4 handle, a lot of activity in the Nov 01 puts - not a good sign.

Financial 411
Financial 411: Pressure on Local Government

Financial 411

Play Episode Listen Later Jun 29, 2011 5:18


The big worry last summer was the possibility of states across the country defaulting on their debts. Now it appears most states have turned the corner, and are seeing an uptick in their collections of sales and income taxes. This summer, the pressure is on local governments, like New York City's, which are struggling with cuts in state aid. Josh Zeitz, a research analyst at the brokerage firm MF Global, said there are several reasons why local governments will feel more pain than state governments. "Most states have actually balanced their budgets this year by making steep cuts to municipal and county aid," he said. "That's aid that goes directly to local governments, and by making steep cuts to public education, which is largely a local function."Zeitz also breaks down how New York City is faring, and talks about some of the structural advantages and disadvantages it has over other localities. Markets Greek lawmakers have approved a new austerity plan that's needed to get an infusion of emergency loans. That pushed markets higher on Wednesday. The Dow rose 73 points, ending at 12,261. The Nasdaq added 11 points, closing at 2,740. The S&P 500 settled at 1,307, after gaining 11 points.