April 11, 2025 • 26 mins
Matt and Katie discuss fake tariff tweets, real tariff Truths, swaps, futures, basis trades and and ETF for shorting leveraged ETFs.
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Speaker 1 (00:02):
Bloomberg Audio Studios, Podcasts, Radio News. Hello and welcome to
The Money Stuff Podcast, your weekly podcast where we talk
about stuff related to money. I'm Matt Levine, and I
write the Money Stuff column for Bloomberg Opinion.
Speaker 2 (00:19):
And I'm Katie Greifeld, a reporter for Bloomberg News and
an anchor for Bloomberg Television.
Speaker 1 (00:23):
Bring this off script?
Speaker 2 (00:26):
Forgot for a moment. What do I do? Matt? It
was funny last week we joked about.
Speaker 1 (00:31):
The all Tariffs episode. Yeah, I think I yeah, the
monkey hand curled or whatever.
Speaker 2 (00:36):
Here we are, Here, we are.
Speaker 1 (00:38):
It's an episode, Kitty. I'm your in vocation next week.
Speaker 2 (00:41):
Yes you are.
Speaker 1 (00:42):
Service for the Money Stuff Podcast may or may not
continue uninterrupted. But I'm going on vacation. I mentioned that
because things have been a little crazy in the financial markets,
and I do have some history of things being crazier
when I'm on vacation. Someone liked a subject report about
where the financial markets are more volatile when I'm on vacation. Certainly,
(01:04):
Elon Musk seems to be a little bit more volatile
when I'm on vocation. And one time, when I was
an investment banker, I went on vacation, and it was
September of two thousand and eight and the Lehman Brothers filed.
Speaker 2 (01:15):
For bankerscy, Like, oh first, oh my god.
Speaker 1 (01:17):
Yeah, So we're recording this on Wednesday. We are twenty
minutes before we started recording, turned out that the tariffs
were a joke.
Speaker 2 (01:26):
I mean I do. I mean, I shure her to think,
what fresh hell awaits us next week when you are
on vacation.
Speaker 1 (01:31):
I know, but I think that what I'm saying is
there's some chance that it's no fresh hell. It's some
chance that all of the tariffics I've ben't was this week.
Donald Trump announced there's like a ninety day pause on
the tariffs.
Speaker 2 (01:42):
And like, that's so naive.
Speaker 1 (01:44):
Who's going to remember any of this in ninety days?
I know, it's pretty nicie. But still there's some chance
that next week will be less crazy than this week,
and sometimes it'll be much crazier.
Speaker 2 (01:53):
I mean, we can only hope and pray. But I'm
glad you signposted that this is happening on Wednesday, because
I mean, this podcast could be a relevant and by Friday.
But at least what we know right now is that
Trump said that he is pausing terrorists for ninety days
on countries that didn't retaliate. That means China.
Speaker 1 (02:11):
He who knows, right, but it seems to me and
the tyres are paused except on China.
Speaker 2 (02:16):
Yes, yes, In fact, he raised tariffs to one hundred
and twenty five percent.
Speaker 1 (02:20):
Are not paused on other countries, right, they're like ten percent?
I don't understand it. Yeah, well, let's the reciprocal who cares.
Speaker 2 (02:26):
Let's like a too deep into the details here, but
this is interesting. We were going to talk about Walter Bloomberg,
who sort of actually gave us a no no relation,
no relation to Bloomberg News, but it kind of gave
us a dry run of what we saw unfold in
the markets because he he sent that tweet, that headline
which turned out to be fake, but it was written
(02:47):
in Bloomberg News style about a ninety day pause. I
believe it was on Monday. I was, of course on
live television as I often am during these events. That
ended up being fake, but CNBC and Reuters ran with
it and then had to issue corrections, but stocks surged
after that. They then came back after it was revealed
that that was not based in reality and again, it
(03:07):
was like a nice dry run. It was a teachable
moment that when there is any good news that you're
going to see markets absolutely explode. And that's what's happening,
at least for right now.
Speaker 1 (03:17):
It's so weird that it was accurate two days in advance, right, Yeah,
it'd be one thing if he was like up, towers
are off, but like it's the same. It's the real thing.
Sort of.
Speaker 2 (03:25):
So do we want to talk about where the ninety
day idea came from?
Speaker 1 (03:28):
Are you going to tell me where it came from?
Speaker 2 (03:29):
A friend of the show, Bill Lackman. At least he
was one of the I think he's the first person
I saw who floated that idea, tweeting over the weekend
that Trump should do a ninety day pause because it
takes a long time to negotiate deals and move manufacturing,
et cetera.
Speaker 1 (03:45):
Manufacturer. Yeah, I mean, look a sure toketend anything makes sense.
It makes sense. But I do love that, Like, it's
not quite that Walter Bloomberg pseudonymous Twitter account.
Speaker 2 (03:54):
Who tweets I want to know it's so bad.
Speaker 1 (03:58):
It's not quite that he this up. It's like someone
asked Trump advisor Kevin hasse This is the thing like
with the Trump administration, you can ask anything and they'd
be like, yeah, maybe that has what about a ninety
day pause? And he said something like no, but you
could sort of read it to me and.
Speaker 2 (04:15):
Maybe he made a noise and then he said, or Bill, yeah,
you know, I think that the president is going to
decide what the president is going to decide.
Speaker 1 (04:25):
Which is not exactly a no, it's not a yes.
Speaker 2 (04:28):
But you know, but boy, it doesn't exactly translate into
the headline.
Speaker 1 (04:32):
You wouldn't send it all caps headline for that. If
you would, it would be like Trump is going to
do what Trump is going to do.
Speaker 2 (04:38):
It's not a very news You could send it any
time a moment. So yeah, it doesn't exactly translate into
the headline that Walter Bloomberg said. I love this only
because I mean, Twitter is not real life, but this
is a moment where Twitter briefly became real life.
Speaker 1 (04:56):
But like, by the way, as far as I can tell,
you know, we're recording this like two o'clock on Wednesday.
As far as I can tell, the only indication that
the tires are paused is a truth social post true.
Speaker 2 (05:10):
That's true. Actually I saw things.
Speaker 1 (05:13):
Get like you know, there's you know how a bill
becomes a law. It's like there's truth social right.
Speaker 2 (05:18):
Yeah, I want to read you something. I thought this
was fantastic. So Commerce Secretary Howard Lutne posted Scott Bessett,
and I sat with the President while he wrote one
of the most extraordinary truth posts of his presidency, most
not like you know, sat down with his scroll and
his quill and like penned out like this, you know,
(05:40):
poetry like Gettysburg address. It was a truth social post.
So I mean that is where policy happens on social media.
Speaker 1 (05:46):
Now we're not going to add up just staring.
Speaker 2 (05:52):
This is why it needs to be a video podcast.
And that's eyes just sort of went cold and we
stare at each other.
Speaker 1 (05:58):
I mean, like I've written this is not interesting, But
I've written this week about how the Constitution of the
United States says that the all tier of power is
in Congress, and like the whole set of rules in
the Constitution and the actual Constitution about how revenue raising
laws need to be passed where the House has to
initiate them. It's like a whole thing, and like we
(06:21):
have twisted the world where now it's like you sit
down and you read it consequential truth social post, and
that's how tax policy gets made. It's pretty weird, man,
It's pretty weird.
Speaker 2 (06:33):
It is.
Speaker 1 (06:39):
This is going to be the Awkward Pauses.
Speaker 2 (06:40):
Episode of I want to talk about Walter Bloomberg a
little bit more. We know that he's French. I think
once he posted a screenshot that you know, his browser
was in French or something, and that was interesting.
Speaker 1 (06:56):
I like that you pay as much attention to Walter
Bloomberg as Walter bloom I'm going to assume pays attention
to Bloomberg.
Speaker 2 (07:02):
I mean, I just love anyone who's so committed to
the game, and he is so committed to the game
so posting screenshots or rather just posting terminal headlines right.
Speaker 1 (07:12):
And one thing I said about it is like, what
an amazing long game it would be to spend years
just posting all cap terminal headlines for people who don't
get the terminal and building up a following of people
who want to follow Bloomberg terminal headlines in real time
for years and years and years of just doing that
consistently all the time, and then one day, one fake
(07:33):
Bloomberg headline to move the market by two point five trillion.
Speaker 2 (07:36):
Lives, what a great rate.
Speaker 1 (07:37):
Yeah, you can't really monetize it because it's like you're
moving all of the stocks. But like, I don't know,
there's something really beautiful about doing such a enormous stock
Manipulation as a is a harsh term, but you know
he manipulated the stocks.
Speaker 2 (07:53):
Yeah, I mean, I'm sure you could find some way
to monetize it.
Speaker 1 (07:56):
Oh, sure you can just buy some stocks, but it's
like you can't, like you know, you're gonna make two
point five trillion dollars by moving the market by two
point five trillion dollars.
Speaker 2 (08:04):
Yeah.
Speaker 1 (08:05):
Remember when bitcoin spot ETFs were.
Speaker 2 (08:07):
Approved, Yeah, I'll never forget.
Speaker 1 (08:09):
And someone tweeted a fake headline about the media approved.
Speaker 2 (08:15):
Yeah that wasnt eight hours before they.
Speaker 1 (08:17):
Were approved, And it's like everyone knew when the SEC
was going to act, and like someone treated that they
got approved like a few hours earlier, and like there's
like a little spike in bitcoin and it seemed to
be some sort of attempt to manipulate the market. But
it was so weird you never knew it was going
to happen, and it did happen a few hours later.
This is not like that. This was I think more
(08:38):
or less a genuine surprise when Trump really did the
thing that he was rumored to do two days earlier.
Speaker 2 (08:42):
But yeah, that's true. I mean, you know, actually he
did say he did post on truth Social earlier on Wednesday.
Now is a good time to buy?
Speaker 1 (08:53):
Amazing, what an amazing thing to do.
Speaker 2 (08:56):
It turns out that was the signal. And I'm so
happy that I have this timestamped because I said on TV,
this raises the possibility that actually the Trump put does exist.
He's clearly watching the stock market and sees it puking
right now, and then hours later comes out with this
extremely stock market friendly headline.
Speaker 1 (09:14):
I know, but isn't it so weird because like, if
you listen to the things that like the Trump team say,
there are things like the tariffs will be good for
America in the long term, right yeah, and then to
like pause the tariffs like you would you would think
that saying this is the time to buy it means
(09:35):
because the market is incorrectly reacting to the glorious future
ahead of us because of these tariffs. But in fact,
it means because I'm bucking back the tariffs in a
few hours. Well, maybe it doesn't mean that. Who knows, who.
Speaker 2 (09:47):
Knows, who knows he did sign it, TJT or whatever.
I can't believe we aren't actually doing an episode on tariffs.
Speaker 1 (09:53):
It is disappointing.
Speaker 2 (09:56):
Anyway, So Walter Bloomberg, So I think it's at least
the New York Times, but maybe too. The Wall Street
Journal DMed him and he answered, and he sort of
deconstructed how he got there. He said he saw some
other account tweet it. Yeah, the market was responding, so
then he ran with it.
Speaker 1 (10:13):
So this is like this is how everything works, right,
because like then, like news stations were reporting it because
they're like, the market is moving. Why is the market moving? Well,
is this tweet? So we have to report on the tree? Yeah,
that's a.
Speaker 2 (10:24):
Reasonable it's a daisy chain, yeah yeah.
Speaker 1 (10:27):
But it's really like it's you know, right, it's like
this little snowball from like one person says a thing,
and if you market moves on that, then someone else
will say it because it's like, yeah, it's often very
hard to explain market moves, and so people look for
whatever they can and like one crisp tweet explaining the
market move is like a useful thing, although here, like here,
it clearly was the explanation.
Speaker 2 (10:48):
Can we have Walter Bloomberg on the show? I hope,
so I'm going to DM him.
Speaker 1 (10:52):
Yeah, let's do it.
Speaker 2 (10:52):
I wonder if MS are open, I can find out.
I can look at my phone right now.
Speaker 1 (10:57):
Should publish a terminal headline like Berg? Your MS to Katie.
Speaker 2 (11:02):
I'm just going to in all caps and put a
little asterisk ahead of it so that whole think it's
a Bloomberg headline. So you're saying, you know, it's hard
(11:24):
to explain market moves. It's nice to have something crisp
to point to. Shall we talk about what's going on
in the treasury market? I guess yeah, A really satisfying
boogeyman is just pointing to the basis trade to explain
why bond yields have been blowing out even though everyone's
worried about a recession, and up until an hour ago,
stock markets had been pretty much flirting with bear market
(11:46):
correction territory, you would expect treasuries to rally and bond
yields to fall. That's not what has been happening. That.
Speaker 1 (11:53):
Yeah, you can tell various like fundamental macro stories about
how the tariffs would cause treasure yields to rise and
stock markets to fall. Right, Like, the story that I've
been telling is the goal of the tariffs is to
have foreigners buy more US goods and fewer US financial assets, which,
like you would think would lead to losses in US
(12:17):
financial assets such as stocks and also bonds. But it
is also the case that the basis trade exists, and
people do like talking about the basis trade. And one
reason that people like talk about the basis trades is,
like I've been thinking, like all week, like there's been
huge moves in asset prices, driven entirely by like economic
(12:37):
fundamentals and like government policy, right, but like huge moves
and asset prices, And so every day you wake up
and you're like, well, there's been huge moves in asset prices.
What hedge fund is going to blow up? Right, Because
like when they're big, like fundamental moves, like someone blows up, Right,
And so you think a lot about contagion and deleveraging.
And if you think about contigent and deleveraging, and you've
been worrying about the basis trade for years and also
(13:01):
know that the basis trade is run at like one
hundred to one leverage ratios. Then like you know, you
might think maybe someone is blowing out of a basis trade.
Speaker 2 (13:08):
Yeah, it's natural that you would think that. Also. I
think it was Torston slock Over at Apollo who had
a note out this week saying that he estimates the
basis trade there's like eight hundred billion dollars in it
right now. It makes sense why you would reach for that,
given all the things that you just laid out. But
I think also that people reach for it because it's
hard to prove. We haven't seen any reports of a
(13:30):
hedge fund blowing up.
Speaker 1 (13:31):
Like I really scare at these reports because I'm very
interested in this question. And like there's definitely like stories
like people are getting some margin calls, some hedge funds
are doing some selling, but no one's like this fund
liquidated at all its positions and shut down, right, Like
there's no real this location. Yeah, Scott Bessen said this
morning something like or said sometime this week something like
(13:53):
this is a uncomfortable but normally leveraging.
Speaker 2 (13:56):
Yeah, you know you would expect, right, you would expect
him to say that you.
Speaker 1 (14:00):
Know, I know, I know, but it also seems correct
so far.
Speaker 2 (14:03):
Yeah, well, there's two trades that we're watching, right, It's
the basis trade, but also it's swaps, like what's going
on with asset swaps. There's a great piece from Edward Bolingbrook,
and I kind of lump these together, but then I
was reading a Wall Street Journal article that explained that
these are two similar but different trades. Yeah, like swap spreads.
Speaker 1 (14:25):
Right, they're related trades because like on the one side
of either trade you have like owning physical treasury bonds
and on the other hand, you have some sort of
interest rate derivative. So like with futures, it's like the
basis trade is like you buy a treasury bond and
you sell the futures contract that corresponds to that treasure bond.
Swap spreads are like you sell a interest rate derivative
(14:48):
that basically moves sofa. But it's it's kind of like
the same, like it's like an unfunded long term interest
rate contract.
Speaker 2 (14:55):
Right.
Speaker 1 (14:56):
And there again, like there's been a trade there where
people think like treasuries will do well relative to the
derivative for whatever reason. The reason has to be something
like people will have better funding to buy treasuries, and
so like one of the reasons for the basis trade
in the swabs trade is like a belief that Trump
(15:19):
would deregulate banks in such a way that banks would
be more interested in using their balance sheet to hold
actual treasuries, and so therefore demand for physical treasuries would
go up relative to like demand for interest rate derivatives,
which don't require as much balance sheet, and so banks
would buy more treasuries. And so one reason to do
(15:42):
like a basis trade of some form is because you
think treasuries will go out relative to futures, and so
you are betting on someone buying the treasuries from you.
And one thing that's happened this week until today is
for whatever reason, people are less interested in buying treasuries
from you. Some of that is like been baked in
for several weeks of like the projections about banks buying
(16:05):
a lot of treasures because of regulation easing up don't
seem to be coming true. And then some of it
is like whatever fundamental events went on this week where
people didn't want to buy treasuries.
Speaker 2 (16:13):
Yeah, I mean the swaps trade as I understand it,
like that peaked in February, so that's been coming off
the boil for a while.
Speaker 1 (16:20):
Yeah. I think the futures trade has too a little bit.
But yeah, yeah, but all those swab spreads collapsed.
Speaker 2 (16:25):
Yeah, they cratered. I think that they hit at least
a multi year low, if not a record low. But yeah,
I don't know. I wonder where this goes in this
new world or order.
Speaker 1 (16:37):
I don't know. I don't know.
Speaker 2 (16:38):
I will say that, you know, we were talking about
the violent stock reaction to the upside to the ninety
day pause. You saw shortened yields in the treasury market
rise pretty sharply. The long end didn't react. Of course,
I wanted timestamp this. We're talking on Wednesday, mid afternoon.
But I don't know, Like I hear what you're saying
that a product of these pols would just be people
(17:01):
don't want to own US assets in general, but at
least treasuries. The long end of the treasury curve had
the narrative that, oh my god, we're worried about the economy,
maybe might as well buy long end treasuries is a
safe haven. But that obviously didn't happen this week.
Speaker 1 (17:16):
Yeah, I mean there's a lot of different markets for it, right,
and like, yeah, nextent some of the market for long
end treasures as tour and buyers. You can imagine less
demand from them.
Speaker 2 (17:27):
Yeah, I guess it was expected though. I mean I've
been tweeting about the treasury market all week, and I've
had a lot of like tinfoil hats about since China
dumping treasuries, if you knew this is going to happen, uh,
I guess it was just expected that that haven impulse
economic hard times you buy treasuries, that it's your muscle
memory overwhelmed any overseas selling that you would see because
China and Japan had been selling treasuries for years.
Speaker 1 (17:49):
Yeah. I wrote on that today, like Wednesday, Like the
musclim memory stuff is like so interesting, right, Like in
previous episodes of problems for the credit of the United States,
people are like, better buy treasuries, right, and like it's
not obvious that would always last forever. Yeah, you might
like have some development that made you think, well, if
like the demand for US financial assets goes down, then
(18:13):
I should sell treasuries rather than buy them.
Speaker 2 (18:15):
Yeah, I don't know, We'll see mortgage rates are still
really high, So I'm sad about that. Is there anything
else to say about the Basis train at this moment?
Seems scary?
Speaker 1 (18:26):
Yeah, I mean like there's a broader question of like
will anyone blow up in this crazy volatility? Yeah, Like
I don't know, Like you know, in general, like the
theory is that banks are supposed to make money during
periods of crazy volatility, but it's like that's like inaggregate
and then like one person should blow up, right because
they just get the crazy volatility wrong. Right. Someone was like, Oh,
(18:47):
the market is so much further to go down, and
like they got positioned themselves really short, and then like
there's this huge rally on Wednesday asternoon. Yeah, someone's got
to blow up.
Speaker 2 (19:00):
That's all. Some stat that the Basis trade is like
double the size of what it was in twenty twenty
when it blew up last and I still haven't seen
any reports I've had trunk blow ups. So that'll be fun.
Speaker 1 (19:11):
Yeah, that'll be fun. Not an old Tiff episode.
Speaker 2 (19:34):
Do you have to talk about ETFs? Can we just
say one thing? This was this was Matt's idea. Matt
wanted to talk about leverage GTFS. This episode seen some
comments on Spotify. I read all the comments. Someone said
that this has turned into a boring ETF podcast. It's
not my fault, man. This was Matt's idea, at least
for this week.
Speaker 1 (19:53):
This is not a boring idea.
Speaker 2 (19:54):
This is The other ones were absolutely.
Speaker 1 (20:00):
The defiance micro strategy double short heads DTF. Its trade
is it takes your money. It goes short a two
time levered micro strategy ETF, and it also goes short
two times levered inverse micro strategy ETF, So it is
(20:21):
short two levered ETFs, one long, one short, so net
it's short long micro strategy and short short micro strategy,
each one doubled. So it's nothing right. It is neither
long nor short micro strategy. All it is is it
is short. The weird structural feature, which we've discussed more
(20:44):
than once on this podcast, the weird structural feature of
levered ETFs, which is that they track two times the
move and micro strategy each day, but if you hold
them for more than one day, they fail to track
two times the move and micro strategy, and they weird,
and like much of the time. The way they get
weird is that they have some like slippage where they
(21:05):
get less than the expected return. Yeah, and so if
you're on the other side of that, you're you know,
getting more than the expected return basically. And so like
this thing has like they like a back test that
makes like thirteen percent or something with no market risk,
no correlation to anything else, just like a weird anomaly
in the ETF market.
Speaker 2 (21:23):
Yeah, this is a real Frankenstein. I mean, as you
laid out leverage gtfs, both long and short, they are
one day only funds, especially you know for some of
the crazier ones, that's really the only realistic holding period.
I am a little bit salty because I wrote about
a similar trade in my newsletter. It's called ETFIQ about
(21:44):
Robert or Not of Research Affiliates. You did, he does
this trade on the side. He told me that he
likes too short both leverage long and inverse ETFs, and
he described it as a slow, boring money machine, which
I find really charming because I'm I mean, you would
think that you would have to have a strong stomach
to do this, to be shortening leverage gtfs, But I mean,
(22:04):
as you just both sides exactly.
Speaker 1 (22:07):
You probably should have a strong stomach because like it's
a boring money making trade for a reason, which is
that it has some probability of blowing up in your face, right, Yeah,
And the way it blows up in your face is
like basically, the way these ets work is like they
rebalance each day, and so the long one, like, every
time the stock goes up, it has to buy more stock.
Every time the stock goes down at the sell more stock,
(22:28):
and so it is like volatility amplifying.
Speaker 2 (22:32):
Yeah, and if.
Speaker 1 (22:33):
The stock bounces around a lot, then it's constantly buying
high and selling low and like bleeding because like people
call it like volatility decay, Like they're yeah, bleeding like
value each time they buy high and solo. But if
the stock keeps going up, you're just compounding that. And
so in fact, if the stock goes up every day,
you get more than two times the return on micro
strategy because you're like, you know, you keep buying into it.
(22:55):
And so similarly, if you do this trade and the
stock moves in one direction for a long time, I'm like,
you're no longer fully edged, right, Like one of your
legs those much better than the other leg. So it's
a risky trade. Yeah, it's you know, it's effectively a
market making trade, right, Like these ETFs are like creating volatility.
They're like they're trading with someone on the other side
(23:15):
who is like kind of a market maker and like
selling them the volatility that they're giving people. We talk
about them so much, like there's this podcast on this podcast,
but people talk about like in general, there's sort of
like a known thing that people kind of make fun of.
And so if you're like a second level sophisticated retail investor,
it's like, I know that people make fun of these
like double levertytfs. How do I get on the other
(23:38):
side of that? It's like, well, there's an ETF for
that too. Yeah, Like people like Rob or not like
are like how do I get on the other side
of that? And you like do the trade, but then
like someone's like, how do I package being on the
other side of that and sell it to more retail investors?
Speaker 2 (23:49):
Yeah, Well, something that Rob and I talked about is that, yes,
it's a great trade, but the borrowing costs can be
pretty punishing. He's give me some details on his returns
from doing this, and you know, I wrote this at
the end of March, so things have changed. But he said.
The twenty twenty fours gain for shorting again both long
and inverse triple leverage GTFS, was around thirteen percent. Half
(24:13):
of that went to borrowing costs for the short positions.
You add in about five percent for collateral, and the
return was about twelve percent. But that's with zero beta
zero correlation to just about anything. That's a good trick,
not a brilliant strategy, not of costs, but fun and
low risks. So it's fun.
Speaker 1 (24:29):
It's fun. Yeah, it's one thing for Ropper or not
to do it. I like the idea of like you
look at the landscape of ETFs and you're like, what
ETFs should people get mad about? I'm going to do
the opposite of them. Yeah, it's like this is like
the very like arcane version of that. But they were like,
you know, anti Kathy Wood ETFs, where it was like,
what are people negative about? I'm going to sell an
ETF that package? Is that negativity? This is like people
(24:52):
are negative about double levered ETFs. I'm going to find
a way to make money on that.
Speaker 2 (24:55):
Here's the other side. Yeah, I'm interested to see these launch.
It's just a filing. So sure. Rob did also say
to me that anyone who buys a triple leverage GTF
is crazy if they don't lend it out, because you
did mention that there's a relatively short supply of these
leverage gtfs that are available for lending, which is interesting.
Speaker 1 (25:17):
Like everybody who buys a triple LEVERYTF is there in
sub sort of retail account, and some of them may
not be aware that they can lend it out, or
they may be they're brokers lending out for them. Probably so,
as I mentioned, next week, I'm on vacation, and so
I will not be recording a money Stuff podcast, but.
Speaker 2 (25:34):
Fear not, fear not.
Speaker 1 (25:37):
In approximately fifteen seconds will be recording a mail of
that episode, which will air next week.
Speaker 2 (25:42):
Mail that.
Speaker 1 (25:45):
And that was the Money Stuff podcast.
Speaker 2 (25:47):
I'm Matt Levian and I'm Katie Greifeld.
Speaker 1 (25:49):
You can find my work by subscribing to the money
Stuff newsletter on Bloomberg dot com.
Speaker 2 (25:54):
And you can find me on Bloomberg TV every day
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Speaker 1 (26:00):
We'd love to hear from you. You can send an
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Speaker 2 (26:06):
You can also subscribe to our show wherever you're listening
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people find the show.
Speaker 1 (26:12):
The Money Stuff Podcast is produced by Ana Mazerakus and
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Speaker 2 (26:16):
Our theme music was composed by Blake.
Speaker 1 (26:18):
Maples, Brandon Francis Newnham. It is our executive.
Speaker 2 (26:20):
Producer and Stage Bauman is Bloomberg's head of Podcasts.
Speaker 1 (26:23):
Thanks for listening to The Money Stuff Podcast. We'll be
back next week with more stuff
Bloomberg Audio Studios, Podcasts, Radio News. Hello and welcome to
The Money Stuff Podcast, your weekly podcast where we talk
about stuff related to money. I'm Matt Levine, and I
write the Money Stuff column for Bloomberg Opinion.
Speaker 2 (00:19):
And I'm Katie Greifeld, a reporter for Bloomberg News and
an anchor for Bloomberg Television.
Speaker 1 (00:23):
Bring this off script?
Speaker 2 (00:26):
Forgot for a moment. What do I do? Matt? It
was funny last week we joked about.
Speaker 1 (00:31):
The all Tariffs episode. Yeah, I think I yeah, the
monkey hand curled or whatever.
Speaker 2 (00:36):
Here we are, Here, we are.
Speaker 1 (00:38):
It's an episode, Kitty. I'm your in vocation next week.
Speaker 2 (00:41):
Yes you are.
Speaker 1 (00:42):
Service for the Money Stuff Podcast may or may not
continue uninterrupted. But I'm going on vacation. I mentioned that
because things have been a little crazy in the financial markets,
and I do have some history of things being crazier
when I'm on vacation. Someone liked a subject report about
where the financial markets are more volatile when I'm on vacation. Certainly,
(01:04):
Elon Musk seems to be a little bit more volatile
when I'm on vocation. And one time, when I was
an investment banker, I went on vacation, and it was
September of two thousand and eight and the Lehman Brothers filed.
Speaker 2 (01:15):
For bankerscy, Like, oh first, oh my god.
Speaker 1 (01:17):
Yeah, So we're recording this on Wednesday. We are twenty
minutes before we started recording, turned out that the tariffs
were a joke.
Speaker 2 (01:26):
I mean I do. I mean, I shure her to think,
what fresh hell awaits us next week when you are
on vacation.
Speaker 1 (01:31):
I know, but I think that what I'm saying is
there's some chance that it's no fresh hell. It's some
chance that all of the tariffics I've ben't was this week.
Donald Trump announced there's like a ninety day pause on
the tariffs.
Speaker 2 (01:42):
And like, that's so naive.
Speaker 1 (01:44):
Who's going to remember any of this in ninety days?
I know, it's pretty nicie. But still there's some chance
that next week will be less crazy than this week,
and sometimes it'll be much crazier.
Speaker 2 (01:53):
I mean, we can only hope and pray. But I'm
glad you signposted that this is happening on Wednesday, because
I mean, this podcast could be a relevant and by Friday.
But at least what we know right now is that
Trump said that he is pausing terrorists for ninety days
on countries that didn't retaliate. That means China.
Speaker 1 (02:11):
He who knows, right, but it seems to me and
the tyres are paused except on China.
Speaker 2 (02:16):
Yes, yes, In fact, he raised tariffs to one hundred
and twenty five percent.
Speaker 1 (02:20):
Are not paused on other countries, right, they're like ten percent?
I don't understand it. Yeah, well, let's the reciprocal who cares.
Speaker 2 (02:26):
Let's like a too deep into the details here, but
this is interesting. We were going to talk about Walter Bloomberg,
who sort of actually gave us a no no relation,
no relation to Bloomberg News, but it kind of gave
us a dry run of what we saw unfold in
the markets because he he sent that tweet, that headline
which turned out to be fake, but it was written
(02:47):
in Bloomberg News style about a ninety day pause. I
believe it was on Monday. I was, of course on
live television as I often am during these events. That
ended up being fake, but CNBC and Reuters ran with
it and then had to issue corrections, but stocks surged
after that. They then came back after it was revealed
that that was not based in reality and again, it
(03:07):
was like a nice dry run. It was a teachable
moment that when there is any good news that you're
going to see markets absolutely explode. And that's what's happening,
at least for right now.
Speaker 1 (03:17):
It's so weird that it was accurate two days in advance, right, Yeah,
it'd be one thing if he was like up, towers
are off, but like it's the same. It's the real thing.
Sort of.
Speaker 2 (03:25):
So do we want to talk about where the ninety
day idea came from?
Speaker 1 (03:28):
Are you going to tell me where it came from?
Speaker 2 (03:29):
A friend of the show, Bill Lackman. At least he
was one of the I think he's the first person
I saw who floated that idea, tweeting over the weekend
that Trump should do a ninety day pause because it
takes a long time to negotiate deals and move manufacturing,
et cetera.
Speaker 1 (03:45):
Manufacturer. Yeah, I mean, look a sure toketend anything makes sense.
It makes sense. But I do love that, Like, it's
not quite that Walter Bloomberg pseudonymous Twitter account.
Speaker 2 (03:54):
Who tweets I want to know it's so bad.
Speaker 1 (03:58):
It's not quite that he this up. It's like someone
asked Trump advisor Kevin hasse This is the thing like
with the Trump administration, you can ask anything and they'd
be like, yeah, maybe that has what about a ninety
day pause? And he said something like no, but you
could sort of read it to me and.
Speaker 2 (04:15):
Maybe he made a noise and then he said, or Bill, yeah,
you know, I think that the president is going to
decide what the president is going to decide.
Speaker 1 (04:25):
Which is not exactly a no, it's not a yes.
Speaker 2 (04:28):
But you know, but boy, it doesn't exactly translate into
the headline.
Speaker 1 (04:32):
You wouldn't send it all caps headline for that. If
you would, it would be like Trump is going to
do what Trump is going to do.
Speaker 2 (04:38):
It's not a very news You could send it any
time a moment. So yeah, it doesn't exactly translate into
the headline that Walter Bloomberg said. I love this only
because I mean, Twitter is not real life, but this
is a moment where Twitter briefly became real life.
Speaker 1 (04:56):
But like, by the way, as far as I can tell,
you know, we're recording this like two o'clock on Wednesday.
As far as I can tell, the only indication that
the tires are paused is a truth social post true.
Speaker 2 (05:10):
That's true. Actually I saw things.
Speaker 1 (05:13):
Get like you know, there's you know how a bill
becomes a law. It's like there's truth social right.
Speaker 2 (05:18):
Yeah, I want to read you something. I thought this
was fantastic. So Commerce Secretary Howard Lutne posted Scott Bessett,
and I sat with the President while he wrote one
of the most extraordinary truth posts of his presidency, most
not like you know, sat down with his scroll and
his quill and like penned out like this, you know,
(05:40):
poetry like Gettysburg address. It was a truth social post.
So I mean that is where policy happens on social media.
Speaker 1 (05:46):
Now we're not going to add up just staring.
Speaker 2 (05:52):
This is why it needs to be a video podcast.
And that's eyes just sort of went cold and we
stare at each other.
Speaker 1 (05:58):
I mean, like I've written this is not interesting, But
I've written this week about how the Constitution of the
United States says that the all tier of power is
in Congress, and like the whole set of rules in
the Constitution and the actual Constitution about how revenue raising
laws need to be passed where the House has to
initiate them. It's like a whole thing, and like we
(06:21):
have twisted the world where now it's like you sit
down and you read it consequential truth social post, and
that's how tax policy gets made. It's pretty weird, man,
It's pretty weird.
Speaker 2 (06:33):
It is.
Speaker 1 (06:39):
This is going to be the Awkward Pauses.
Speaker 2 (06:40):
Episode of I want to talk about Walter Bloomberg a
little bit more. We know that he's French. I think
once he posted a screenshot that you know, his browser
was in French or something, and that was interesting.
Speaker 1 (06:56):
I like that you pay as much attention to Walter
Bloomberg as Walter bloom I'm going to assume pays attention
to Bloomberg.
Speaker 2 (07:02):
I mean, I just love anyone who's so committed to
the game, and he is so committed to the game
so posting screenshots or rather just posting terminal headlines right.
Speaker 1 (07:12):
And one thing I said about it is like, what
an amazing long game it would be to spend years
just posting all cap terminal headlines for people who don't
get the terminal and building up a following of people
who want to follow Bloomberg terminal headlines in real time
for years and years and years of just doing that
consistently all the time, and then one day, one fake
(07:33):
Bloomberg headline to move the market by two point five trillion.
Speaker 2 (07:36):
Lives, what a great rate.
Speaker 1 (07:37):
Yeah, you can't really monetize it because it's like you're
moving all of the stocks. But like, I don't know,
there's something really beautiful about doing such a enormous stock
Manipulation as a is a harsh term, but you know
he manipulated the stocks.
Speaker 2 (07:53):
Yeah, I mean, I'm sure you could find some way
to monetize it.
Speaker 1 (07:56):
Oh, sure you can just buy some stocks, but it's
like you can't, like you know, you're gonna make two
point five trillion dollars by moving the market by two
point five trillion dollars.
Speaker 2 (08:04):
Yeah.
Speaker 1 (08:05):
Remember when bitcoin spot ETFs were.
Speaker 2 (08:07):
Approved, Yeah, I'll never forget.
Speaker 1 (08:09):
And someone tweeted a fake headline about the media approved.
Speaker 2 (08:15):
Yeah that wasnt eight hours before they.
Speaker 1 (08:17):
Were approved, And it's like everyone knew when the SEC
was going to act, and like someone treated that they
got approved like a few hours earlier, and like there's
like a little spike in bitcoin and it seemed to
be some sort of attempt to manipulate the market. But
it was so weird you never knew it was going
to happen, and it did happen a few hours later.
This is not like that. This was I think more
(08:38):
or less a genuine surprise when Trump really did the
thing that he was rumored to do two days earlier.
Speaker 2 (08:42):
But yeah, that's true. I mean, you know, actually he
did say he did post on truth Social earlier on Wednesday.
Now is a good time to buy?
Speaker 1 (08:53):
Amazing, what an amazing thing to do.
Speaker 2 (08:56):
It turns out that was the signal. And I'm so
happy that I have this timestamped because I said on TV,
this raises the possibility that actually the Trump put does exist.
He's clearly watching the stock market and sees it puking
right now, and then hours later comes out with this
extremely stock market friendly headline.
Speaker 1 (09:14):
I know, but isn't it so weird because like, if
you listen to the things that like the Trump team say,
there are things like the tariffs will be good for
America in the long term, right yeah, and then to
like pause the tariffs like you would you would think
that saying this is the time to buy it means
(09:35):
because the market is incorrectly reacting to the glorious future
ahead of us because of these tariffs. But in fact,
it means because I'm bucking back the tariffs in a
few hours. Well, maybe it doesn't mean that. Who knows, who.
Speaker 2 (09:47):
Knows, who knows he did sign it, TJT or whatever.
I can't believe we aren't actually doing an episode on tariffs.
Speaker 1 (09:53):
It is disappointing.
Speaker 2 (09:56):
Anyway, So Walter Bloomberg, So I think it's at least
the New York Times, but maybe too. The Wall Street
Journal DMed him and he answered, and he sort of
deconstructed how he got there. He said he saw some
other account tweet it. Yeah, the market was responding, so
then he ran with it.
Speaker 1 (10:13):
So this is like this is how everything works, right,
because like then, like news stations were reporting it because
they're like, the market is moving. Why is the market moving? Well,
is this tweet? So we have to report on the tree? Yeah,
that's a.
Speaker 2 (10:24):
Reasonable it's a daisy chain, yeah yeah.
Speaker 1 (10:27):
But it's really like it's you know, right, it's like
this little snowball from like one person says a thing,
and if you market moves on that, then someone else
will say it because it's like, yeah, it's often very
hard to explain market moves, and so people look for
whatever they can and like one crisp tweet explaining the
market move is like a useful thing, although here, like here,
it clearly was the explanation.
Speaker 2 (10:48):
Can we have Walter Bloomberg on the show? I hope,
so I'm going to DM him.
Speaker 1 (10:52):
Yeah, let's do it.
Speaker 2 (10:52):
I wonder if MS are open, I can find out.
I can look at my phone right now.
Speaker 1 (10:57):
Should publish a terminal headline like Berg? Your MS to Katie.
Speaker 2 (11:02):
I'm just going to in all caps and put a
little asterisk ahead of it so that whole think it's
a Bloomberg headline. So you're saying, you know, it's hard
(11:24):
to explain market moves. It's nice to have something crisp
to point to. Shall we talk about what's going on
in the treasury market? I guess yeah, A really satisfying
boogeyman is just pointing to the basis trade to explain
why bond yields have been blowing out even though everyone's
worried about a recession, and up until an hour ago,
stock markets had been pretty much flirting with bear market
(11:46):
correction territory, you would expect treasuries to rally and bond
yields to fall. That's not what has been happening. That.
Speaker 1 (11:53):
Yeah, you can tell various like fundamental macro stories about
how the tariffs would cause treasure yields to rise and
stock markets to fall. Right, Like, the story that I've
been telling is the goal of the tariffs is to
have foreigners buy more US goods and fewer US financial assets, which,
like you would think would lead to losses in US
(12:17):
financial assets such as stocks and also bonds. But it
is also the case that the basis trade exists, and
people do like talking about the basis trade. And one
reason that people like talk about the basis trades is,
like I've been thinking, like all week, like there's been
huge moves in asset prices, driven entirely by like economic
(12:37):
fundamentals and like government policy, right, but like huge moves
and asset prices, And so every day you wake up
and you're like, well, there's been huge moves in asset prices.
What hedge fund is going to blow up? Right, Because
like when they're big, like fundamental moves, like someone blows up, Right,
And so you think a lot about contagion and deleveraging.
And if you think about contigent and deleveraging, and you've
been worrying about the basis trade for years and also
(13:01):
know that the basis trade is run at like one
hundred to one leverage ratios. Then like you know, you
might think maybe someone is blowing out of a basis trade.
Speaker 2 (13:08):
Yeah, it's natural that you would think that. Also. I
think it was Torston slock Over at Apollo who had
a note out this week saying that he estimates the
basis trade there's like eight hundred billion dollars in it
right now. It makes sense why you would reach for that,
given all the things that you just laid out. But
I think also that people reach for it because it's
hard to prove. We haven't seen any reports of a
(13:30):
hedge fund blowing up.
Speaker 1 (13:31):
Like I really scare at these reports because I'm very
interested in this question. And like there's definitely like stories
like people are getting some margin calls, some hedge funds
are doing some selling, but no one's like this fund
liquidated at all its positions and shut down, right, Like
there's no real this location. Yeah, Scott Bessen said this
morning something like or said sometime this week something like
(13:53):
this is a uncomfortable but normally leveraging.
Speaker 2 (13:56):
Yeah, you know you would expect, right, you would expect
him to say that you.
Speaker 1 (14:00):
Know, I know, I know, but it also seems correct
so far.
Speaker 2 (14:03):
Yeah, well, there's two trades that we're watching, right, It's
the basis trade, but also it's swaps, like what's going
on with asset swaps. There's a great piece from Edward Bolingbrook,
and I kind of lump these together, but then I
was reading a Wall Street Journal article that explained that
these are two similar but different trades. Yeah, like swap spreads.
Speaker 1 (14:25):
Right, they're related trades because like on the one side
of either trade you have like owning physical treasury bonds
and on the other hand, you have some sort of
interest rate derivative. So like with futures, it's like the
basis trade is like you buy a treasury bond and
you sell the futures contract that corresponds to that treasure bond.
Swap spreads are like you sell a interest rate derivative
(14:48):
that basically moves sofa. But it's it's kind of like
the same, like it's like an unfunded long term interest
rate contract.
Speaker 2 (14:55):
Right.
Speaker 1 (14:56):
And there again, like there's been a trade there where
people think like treasuries will do well relative to the
derivative for whatever reason. The reason has to be something
like people will have better funding to buy treasuries, and
so like one of the reasons for the basis trade
in the swabs trade is like a belief that Trump
(15:19):
would deregulate banks in such a way that banks would
be more interested in using their balance sheet to hold
actual treasuries, and so therefore demand for physical treasuries would
go up relative to like demand for interest rate derivatives,
which don't require as much balance sheet, and so banks
would buy more treasuries. And so one reason to do
(15:42):
like a basis trade of some form is because you
think treasuries will go out relative to futures, and so
you are betting on someone buying the treasuries from you.
And one thing that's happened this week until today is
for whatever reason, people are less interested in buying treasuries
from you. Some of that is like been baked in
for several weeks of like the projections about banks buying
(16:05):
a lot of treasures because of regulation easing up don't
seem to be coming true. And then some of it
is like whatever fundamental events went on this week where
people didn't want to buy treasuries.
Speaker 2 (16:13):
Yeah, I mean the swaps trade as I understand it,
like that peaked in February, so that's been coming off
the boil for a while.
Speaker 1 (16:20):
Yeah. I think the futures trade has too a little bit.
But yeah, yeah, but all those swab spreads collapsed.
Speaker 2 (16:25):
Yeah, they cratered. I think that they hit at least
a multi year low, if not a record low. But yeah,
I don't know. I wonder where this goes in this
new world or order.
Speaker 1 (16:37):
I don't know. I don't know.
Speaker 2 (16:38):
I will say that, you know, we were talking about
the violent stock reaction to the upside to the ninety
day pause. You saw shortened yields in the treasury market
rise pretty sharply. The long end didn't react. Of course,
I wanted timestamp this. We're talking on Wednesday, mid afternoon.
But I don't know, Like I hear what you're saying
that a product of these pols would just be people
(17:01):
don't want to own US assets in general, but at
least treasuries. The long end of the treasury curve had
the narrative that, oh my god, we're worried about the economy,
maybe might as well buy long end treasuries is a
safe haven. But that obviously didn't happen this week.
Speaker 1 (17:16):
Yeah, I mean there's a lot of different markets for it, right,
and like, yeah, nextent some of the market for long
end treasures as tour and buyers. You can imagine less
demand from them.
Speaker 2 (17:27):
Yeah, I guess it was expected though. I mean I've
been tweeting about the treasury market all week, and I've
had a lot of like tinfoil hats about since China
dumping treasuries, if you knew this is going to happen, uh,
I guess it was just expected that that haven impulse
economic hard times you buy treasuries, that it's your muscle
memory overwhelmed any overseas selling that you would see because
China and Japan had been selling treasuries for years.
Speaker 1 (17:49):
Yeah. I wrote on that today, like Wednesday, Like the
musclim memory stuff is like so interesting, right, Like in
previous episodes of problems for the credit of the United States,
people are like, better buy treasuries, right, and like it's
not obvious that would always last forever. Yeah, you might
like have some development that made you think, well, if
like the demand for US financial assets goes down, then
(18:13):
I should sell treasuries rather than buy them.
Speaker 2 (18:15):
Yeah, I don't know, We'll see mortgage rates are still
really high, So I'm sad about that. Is there anything
else to say about the Basis train at this moment?
Seems scary?
Speaker 1 (18:26):
Yeah, I mean like there's a broader question of like
will anyone blow up in this crazy volatility? Yeah, Like
I don't know, Like you know, in general, like the
theory is that banks are supposed to make money during
periods of crazy volatility, but it's like that's like inaggregate
and then like one person should blow up, right because
they just get the crazy volatility wrong. Right. Someone was like, Oh,
(18:47):
the market is so much further to go down, and
like they got positioned themselves really short, and then like
there's this huge rally on Wednesday asternoon. Yeah, someone's got
to blow up.
Speaker 2 (19:00):
That's all. Some stat that the Basis trade is like
double the size of what it was in twenty twenty
when it blew up last and I still haven't seen
any reports I've had trunk blow ups. So that'll be fun.
Speaker 1 (19:11):
Yeah, that'll be fun. Not an old Tiff episode.
Speaker 2 (19:34):
Do you have to talk about ETFs? Can we just
say one thing? This was this was Matt's idea. Matt
wanted to talk about leverage GTFS. This episode seen some
comments on Spotify. I read all the comments. Someone said
that this has turned into a boring ETF podcast. It's
not my fault, man. This was Matt's idea, at least
for this week.
Speaker 1 (19:53):
This is not a boring idea.
Speaker 2 (19:54):
This is The other ones were absolutely.
Speaker 1 (20:00):
The defiance micro strategy double short heads DTF. Its trade
is it takes your money. It goes short a two
time levered micro strategy ETF, and it also goes short
two times levered inverse micro strategy ETF, So it is
(20:21):
short two levered ETFs, one long, one short, so net
it's short long micro strategy and short short micro strategy,
each one doubled. So it's nothing right. It is neither
long nor short micro strategy. All it is is it
is short. The weird structural feature, which we've discussed more
(20:44):
than once on this podcast, the weird structural feature of
levered ETFs, which is that they track two times the
move and micro strategy each day, but if you hold
them for more than one day, they fail to track
two times the move and micro strategy, and they weird,
and like much of the time. The way they get
weird is that they have some like slippage where they
(21:05):
get less than the expected return. Yeah, and so if
you're on the other side of that, you're you know,
getting more than the expected return basically. And so like
this thing has like they like a back test that
makes like thirteen percent or something with no market risk,
no correlation to anything else, just like a weird anomaly
in the ETF market.
Speaker 2 (21:23):
Yeah, this is a real Frankenstein. I mean, as you
laid out leverage gtfs, both long and short, they are
one day only funds, especially you know for some of
the crazier ones, that's really the only realistic holding period.
I am a little bit salty because I wrote about
a similar trade in my newsletter. It's called ETFIQ about
(21:44):
Robert or Not of Research Affiliates. You did, he does
this trade on the side. He told me that he
likes too short both leverage long and inverse ETFs, and
he described it as a slow, boring money machine, which
I find really charming because I'm I mean, you would
think that you would have to have a strong stomach
to do this, to be shortening leverage gtfs, But I mean,
(22:04):
as you just both sides exactly.
Speaker 1 (22:07):
You probably should have a strong stomach because like it's
a boring money making trade for a reason, which is
that it has some probability of blowing up in your face, right, Yeah,
And the way it blows up in your face is
like basically, the way these ets work is like they
rebalance each day, and so the long one, like, every
time the stock goes up, it has to buy more stock.
Every time the stock goes down at the sell more stock,
(22:28):
and so it is like volatility amplifying.
Speaker 2 (22:32):
Yeah, and if.
Speaker 1 (22:33):
The stock bounces around a lot, then it's constantly buying
high and selling low and like bleeding because like people
call it like volatility decay, Like they're yeah, bleeding like
value each time they buy high and solo. But if
the stock keeps going up, you're just compounding that. And
so in fact, if the stock goes up every day,
you get more than two times the return on micro
strategy because you're like, you know, you keep buying into it.
(22:55):
And so similarly, if you do this trade and the
stock moves in one direction for a long time, I'm like,
you're no longer fully edged, right, Like one of your
legs those much better than the other leg. So it's
a risky trade. Yeah, it's you know, it's effectively a
market making trade, right, Like these ETFs are like creating volatility.
They're like they're trading with someone on the other side
(23:15):
who is like kind of a market maker and like
selling them the volatility that they're giving people. We talk
about them so much, like there's this podcast on this podcast,
but people talk about like in general, there's sort of
like a known thing that people kind of make fun of.
And so if you're like a second level sophisticated retail investor,
it's like, I know that people make fun of these
like double levertytfs. How do I get on the other
(23:38):
side of that? It's like, well, there's an ETF for
that too. Yeah, Like people like Rob or not like
are like how do I get on the other side
of that? And you like do the trade, but then
like someone's like, how do I package being on the
other side of that and sell it to more retail investors?
Speaker 2 (23:49):
Yeah, Well, something that Rob and I talked about is that, yes,
it's a great trade, but the borrowing costs can be
pretty punishing. He's give me some details on his returns
from doing this, and you know, I wrote this at
the end of March, so things have changed. But he said.
The twenty twenty fours gain for shorting again both long
and inverse triple leverage GTFS, was around thirteen percent. Half
(24:13):
of that went to borrowing costs for the short positions.
You add in about five percent for collateral, and the
return was about twelve percent. But that's with zero beta
zero correlation to just about anything. That's a good trick,
not a brilliant strategy, not of costs, but fun and
low risks. So it's fun.
Speaker 1 (24:29):
It's fun. Yeah, it's one thing for Ropper or not
to do it. I like the idea of like you
look at the landscape of ETFs and you're like, what
ETFs should people get mad about? I'm going to do
the opposite of them. Yeah, it's like this is like
the very like arcane version of that. But they were like,
you know, anti Kathy Wood ETFs, where it was like,
what are people negative about? I'm going to sell an
ETF that package? Is that negativity? This is like people
(24:52):
are negative about double levered ETFs. I'm going to find
a way to make money on that.
Speaker 2 (24:55):
Here's the other side. Yeah, I'm interested to see these launch.
It's just a filing. So sure. Rob did also say
to me that anyone who buys a triple leverage GTF
is crazy if they don't lend it out, because you
did mention that there's a relatively short supply of these
leverage gtfs that are available for lending, which is interesting.
Speaker 1 (25:17):
Like everybody who buys a triple LEVERYTF is there in
sub sort of retail account, and some of them may
not be aware that they can lend it out, or
they may be they're brokers lending out for them. Probably so,
as I mentioned, next week, I'm on vacation, and so
I will not be recording a money Stuff podcast, but.
Speaker 2 (25:34):
Fear not, fear not.
Speaker 1 (25:37):
In approximately fifteen seconds will be recording a mail of
that episode, which will air next week.
Speaker 2 (25:42):
Mail that.
Speaker 1 (25:45):
And that was the Money Stuff podcast.
Speaker 2 (25:47):
I'm Matt Levian and I'm Katie Greifeld.
Speaker 1 (25:49):
You can find my work by subscribing to the money
Stuff newsletter on Bloomberg dot com.
Speaker 2 (25:54):
And you can find me on Bloomberg TV every day
on Open Interest between nine to eleven am Eastern.
Speaker 1 (26:00):
We'd love to hear from you. You can send an
email to Moneypod at Bloomberg dot net. Ask us a
question and we might answer it on air.
Speaker 2 (26:06):
You can also subscribe to our show wherever you're listening
right now and leave us a review. It helps more
people find the show.
Speaker 1 (26:12):
The Money Stuff Podcast is produced by Ana Mazerakus and
Moses on Them.
Speaker 2 (26:16):
Our theme music was composed by Blake.
Speaker 1 (26:18):
Maples, Brandon Francis Newnham. It is our executive.
Speaker 2 (26:20):
Producer and Stage Bauman is Bloomberg's head of Podcasts.
Speaker 1 (26:23):
Thanks for listening to The Money Stuff Podcast. We'll be
back next week with more stuff
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