Bloomberg Audio Studios, podcasts, radio news.
As frequent listeners know, we record this on Thursdays generally, and apparently we're going to get a biblically bad storm this weekend in the New York City area.
And you are like, yes, yeah.
I feel like we had a real storm this past weekend, and it was like criminally under hypes. I had no idea what was coming.
I was also surprised by the snow. I used to like snow a lot more before I became a suburban data and now it's like sho anymore.
Burrow into your heart, try to find that childlike joy I try.
I just pretty deeply buried under for chaos. Sure, sure, you don't have to shovel the snow. I was telling you before this, and you were like, you like gave me the impression that you had like fifteen minutes of a material on the snowstor on this weekend.
Mostly I just wanted to talk about like why was no one Like there's been a lot of headlines like first big snowstorm of the Mom Donnie era, and it's like, are we all just trying to forget that last weekend happened? I feel like that was the first big snowstorm.
Our colleague Joe wasn't that I was tunting about prediction markets.
For this, Oh, they're popping off. I'm sure this is the first time I've ever felt inclined to get involved in a prediction market.
View of that.
Oh yeah, speaking of folks writing in, we have some JP Morgan material to get through. The first is a correction, And I mistakenly said in last week's podcast that JP Morgan CEO Jamie Diamond did not attend the JP Morgan Healthcare Conference which I attended, and I'm sorry I was
mistaken he was in attendance. You Well, The thing is, I was like acutely aware of his presence last year because we were recording in a hallway, which I guess something I don't want to get myself into more correction territory. But he was giving some sort of fireside or keynote address and the hallway that we were in was somehow on the route, so people were lining up behind us and it was like an enormous scene and everyone was talking about Jamie Diamond. So again I was keenly aware.
Didn't have that experience this year, so I assumed that he didn't attend, but that was you know what assuming does makes you make corrections on podcasts. We have another JP do.
Before we do that, I'm going to say hello and welcome to the Money Stuff podcast. Right, You're a weekly podcast where we talk about stuff for that of the Money. I'm Matt Levine and I read the Money Stuff column from Bloomberg Opinion.
And I'm Katie Greifeld, a reporter for Bloomberg News and an anchor for Bloomberg Television.
What else you got on JP? Morgan?
Oh, I was just going to talk about the pub.
Of the pub.
Is included in.
The banter, talk about it.
The banter this week is very long.
It's the it's the whole episode. It's just the weather and the pub. Although they did get sued for d banking Donald Trump. Yeah on Thursday, which we should.
Yeah, we'll get there.
The pub.
Yeah, the pub. Yeah. I'm excited going tonight at their office.
It's been twenty percent of the content of this podcast. They have a pub at their office. Yes, your brand new office. Yeah, you've given us some tights and figures.
About Yeah, I know so much about this office.
At that pub, they serve drinks although allegedly not before were you a clock? I think we.
Said I'm on the air until five something after five. I can't stress test that.
Yes, you will definitely get served at the JP Morgan Pub.
I hear the guinness is particularly excellent.
So do you hear that?
I have heard that you can get screen printed on the foam the building itself.
No, Yeah, like you can get like Latart on your Guinness.
Yeah, I've heard that. I've also I don't know if this is true. I'm excited to find out that you can get a screen printing of Jamie Diamond's face as well on your Guinness. That's what I've heard. That's what I've heard. I'm gonna I'm going to check this. Yeah, you will.
You will certainly order multiple Guinness. Yeah, yet every available image printed on them?
Yeah, photograph them if I can. If there's photography allowed, the photography? Am I even allowed to say that I'm going to the pub tonight? Well here by next week.
Issue another correction. You did not go to the podcast.
I'm pretty excited. I saw it the outside of it. When of the pub.
Inside the office, you saw the facade of the pub of the town square in the middle of the Javi Worgon.
Office, exactly.
Excellent.
So now I'm.
Inside your way past the bell.
Yeah, so that's what I had in terms of JP Morgan content. But you're right, we should briefly talk about debate.
Yeah, I don't lawsuit, but like I gather from like what I've read on the Bloomberg summary, I thot that it's not long on law.
Yeah, to recab President Donald Trump issuing JP Morgan and Jamie Diamond himself for at least five billion dollars over those allegations that it stopped offering him in his business's banking services for political reasons, and they did for seven weeks. They closed accounts of Trump and his businesses. After January sixth, twenty twenty one.
Banks shot accounts for various reasons. Banks have gotten a lot of trouble for banking Jeffrey Epstein. They weren't like co conspirators in his crimes. They were providing him banking services. And if you provide banking services to people who give off red flags of committing crimes, then you get in
a lot of trouble. Right, and after January sixth, it might have been reasonable for jpmore to think we don't want to be involved in banking people who have been involved in certain sorts of criminal activity, right, But that sort of criminal activity is now associated with a certain sort of politics, So you can say you were banking me, de banking me because of politics rather than because of crime.
Yeah, it's all. It's a little bit interesting when paired with what happened to Brian moynihan at Davos. Brian Mornihan didn't get past the velvet rep being the CEO of Bank of America, the Ft.
Reported also in Victoria's d Banker.
Yeah, well, the Ft reported that the White House excluded Brian moynihan from a Davos reception that included the leaders of other banks and financial institutions, and one of the reported reasons was potentially de banking. Yeah, the suspicion of d banking. Yeah, this is.
Like I was not a successful investment banker, and via some level, well, I'm not a good financial journalist. Like, no part of me wants to go to Davas, And like if I happened to find myself at Davas, like no part of me would want to go to the Trump reception. But like that's that's the job, right, Like, that's the job.
Well, Jamie Diamond was there. Jane Frasier was there.
Jamie Diamond was there.
Yeah, I know, I guess they had dinner and then you know what.
I'm going to tell you about my week?
Yeah, please, I have a meme cwin. Yes, you didn't create it.
The opposite of haveing memequin. The memequin was foisted upon me. Let me take a step back and tell this story. So the guy named Steve Yager, who's a software developer, launched this thing called gas Town, which is like a AI coding vibe cooding situation. It's like open source software that he announced and people liked and got a lot of attention. And at some point he did that genor first and at some point that in the last couple of weeks, someone launched a meme coin called gas on
a crypto platform. And the idea is, like, it's a meme coin that has the same name as gas Town, So if you like think that gastown is a cool project, maybe you'll buy the meme coin. Like whatever, this classic meme coin logic, there's no connection. The person who launched it wasn't the guy who launched gas Town. It's just like, yeah,
I wants it on a platform. But the way this platform works is that when the token trades, it generates what they call royalties like trading piece and the royalties you know, some like whatever, like one percent of the trade volume or something, and the royalties a crue to someone. When you launch the coin, you can designate who gets the royalties, and the person who launched this coin said the royalties would accrue to the developer who launched gas Town.
So there is a connection between the coin and the open source project. The connection is that the coin generates some money for the developer of the project, not because he launched the coin, not because he had anything to do with it, but just because they were like, we'll get some of this money to him.
It's sort of like a non consensual I mean, it's not exactly.
What people used to call on air drop, but it's related to the idea of an air drop in crypto, where like someone just gives you a coin and they're like, oh, you have this coin, right, and why do they do that? Well, what happened here is that someone who was involved in or at least owned some of the crypto tuging emailed the developer and was like, hey, you have all these royalties waiting for you. All you have to do is like set up an account, connect your Twitter to the crypto platform, and then.
Like you can withdraw buy Solana.
He had to open a Salona wallet to withdraw the money. So yeah, and he was like, that's weird. And then he did it and he was like, oh wow, I really got the money.
I love the excerpt that you included.
Yeah, yeah, he wrote. He was like, because it sounds like a scam. It sounds like, yeah, just tho it's Alana, while I didn't send it, but in fact it was real apparently, and he withdrew something like seventy thousand dollars of royalties and then here's the important thing. Then he blogged about it, and he's got a big platform people let gas down, and he bligged about it for apparently a couple of reasons. One is that he thought it was good. Hecalls it an engine that fuels creation, just
like the stock market. That is like, because this thing is retroactively financing his open source software project. He thinks it's cool, right, It's like, this is a way to fund projects through like crowd meme something something right, So one he thought it was cool and then too. The other reason he blied about it is because that will get attention to it, which will one make the token go up. And I think he ended up buying some of the token and to create more royalties for him.
So he actually wrote in his blog posts, allow me to get Richard just by telling you about it. Yeah, just like a good line. And so he did that and I read about it because I thought that was funny in various ways. He's not wrong that it's it's a way to finance something something. I don't know that it's a sustainable way to like fund a lot of projects, but it is like in certain sort of crowdsourceing memei areas of the world, it's a way for people will get money.
It almost months we have a Patreon.
It has some Patreon like elements. But let me tell you like one reason that it is not like a Patriot, which is that you got tens of thousands of dollars out of this, but the market capital of the Clian at some point I went from like kind of zero to like forty million dollars in back down. You know, the people who I think I have no proof of this is like I just looking at the market dynamics. The people I think made a lot of money on this.
The people who bought the coin cheap emailed him, We're like, hey, blog about this. He blogs about it, the coin goes up, and they make a lot of money selling it. Right, So it is not just a way to funnel money to creators. It's a way to funnel money to creators while also giving a lot of that money to the
people involved in the crypto trading. Sean Geteker wrote a blog post about this with the title crypto grifters are recruiting open source AI developers, which is I think closer to my view of it than like this is a way to fuel creation. But in any case, it's interesting. They called it meme coin venture capital, and like, you know, as in regular venture capital, you know, the entrepreneurs get some of the money and the finance series get some of the money. You can quibble over the split of.
That, and so how do you factor in about it?
Yes, and then someone launched one for me, of course, so I wrote about that in my column the next day. But I'm not going to name the coiner of the platform. I do not want people trading the thing to generate royalties for me, for reasons on the record. One of them is you heard it here as a matter of journalistic ethics and Bloomberg standards and everything like that, and another is like, I'm not going to log into the thing,
like I'm not taking the money. But you know, there's like supposedly ten thousand dollars in an account for me.
That is an okay, horse, you can do a lot with that.
I love that your conception of money is.
Just thinking, how do you think about what you can do with ten thousand dollars?
I don't, because like there's no part of you that it's tempted to get and spend this ten thousand dollars.
I mean, you'd have to put some work into it, but I.
Don't know that's that much work. But it's like putting like passwords into some.
Oh no, into the horse, I mean to the horse.
Yeah, I'm not going to buy a horse. No, it's not my Well, you're not going to use of ten thousand dollars.
You're not going to take the money.
I'm not going to take the money.
I'm surprised there hasn't been some sort of matt Levine meme coin.
There probably has been. Yeah, this is like the first one that I know that like attempts to generate profits for me personally.
So, yeah, there's something that I was wondering about as I was reading your initial.
I just want to be really clear, don't buy it.
Don't buy it.
I don't want you to assume me if you like, don't buy it and then it goes up. But to the extent you were buying it for reasons relating to wanting to help me or thinking that I will talk about it more like, don't buy it for those reasons. I'm not going to talk about it more and I'm not going to be helped by any aspect of it.
We'll speak.
I don't own it, you don't own it. I'm not getting the royalties. No, I didn't launch it. I had no involvement in it. All I've done is talk about it. But I have not talked about it in an encouraging way.
No, no, a negative way. If you will speaking doing something that I was wantondering about reading your initial entry. When it comes to Gastown, let's say that he was receiving no economic benefit from this meme coin and it has no actual connection to gas Town. If that happened, if you started a thing and then someone launched a meme coin that is connected only a name, do you have any sort of recourse, Like can you sue them for trying to ride the popularity of your things?
I think it practically it's often hard to sue them. It's came up a lot in NFTs, like people would do NFTs like linked to other people's art. Yeah, you know, because you're like an NT is like an online pointer to an image, right, and you just take someone else's image and then you're selling an NFT of it. People I think have tried last But I think it's hard because these are typically somewhat anonymous, these centralized platforms, and like they're not Yeah, it's not an obvious person to sue,
And you know, I don't know. I mean, it seems like it could in some circumstances be a copyright violation, but like, yeah, you got to wait into like some weird corners of the Internet.
What are you going to do?
What are you going to do?
I just love the phrase moonshot. Do I think it's so romantic. Moonshot anyway, pay packages that is what we're talking about specifically, Yeah, so romantic.
There's a Boss Journal story about an equilar study of let me try to do the math here. There's some CEOs who got moonshot compensation packages, which they defined as compensation packages that had like a notional value of at least ten thousand horses.
That's really funny. I really had a thousand horses.
Or one hundred million dollars. I hope I did the math right. It used to be that the CEOs got paid millions of dollars, and now there's a new vogue for paying them in a form that sort of looks like zero ish dollars plus a bajillion dollars if they hit some very aggressive growth in stock price targets over like some long period of time. The idea is like, one, it's like a long term alignment of incentives, and two it is incentives to like do a lot right. So
it's not just like steadily grow profits. It's like transform the company or make it huge. And this is like probably wasn't invented at Tesla, but it's very Tesla, right, Like Tesla in twenty eighteen gave Elon Musk like a
people throw on the number of fifty six billion. I think, like, you know, give him some tens of billions of dollar package if he grew the company ten x and then he did, and then they gave him the money, and then they've talked about a lot and now they've given him another one that's like a trillion dollars of extra equity if he goes to eight point five trillion. And other people were like, oh, Elon must did it, it must
be cool. And so a lot of companies have done these packages and what the eqular that he found is that most of them, most of those companies have underperformed at the SNP. Yeah, which, as I wrote, makes total sense because these are supposed to be like a moonshots, right and like most of the time they shouldn't work out, and they're getting no reward for matching the S and P performance, right, Like that's not what they're there for.
They're there to like ten X to the company, and if they can't do that, then like they'll fall short and there'll be a bad payoff, right, And the idea of these moonshots is like most of them won't work out, and some of them will work out enormously well, and so if you're a diversified shareholder, you'll get, you know, the benefit of a few companies.
I think the companies went into it with that attitude though, like this probably won't work out.
No, but that's fine. Everyone thinks they're going to be the successful moonshot, right, Like, but if you're a shareholder, if you're a diversefied chaholder, like, that's fine. You have like ten CEOs who think they're going to get to the moon, and eight of them are diluted and two of them are right, and you don't know which is which,
but they let them all try. You know, the CEO is all thinking, oh, of course I'll do this right if some of them are wrong, like, that's good for shaholders as long as some of them are right.
I really liked that framing thinking about it through the perspective of a shareholder, and obviously my brain went to you could construct a moonshot portfolio of these twenty one companies or something that Equilar found did this and a.
Lot of them have under and people Tesla, Yeah.
That's true. It seems like KKR this is working out for them? Who else is it working out for Airbnb also, which is interesting, it's specifically not working out for a lot of people, including trade desk. But it was interesting to see that Equilar was specifically looking at twenty twenty and twenty twenty one packages.
Yeah, so excluding Tesla.
Excluding Tesla, But it does feel like a moment in time. I mean, maybe there have been more in the year since, but it feels like twenty twenty, twenty twenty one you did see.
A lot of these that was apparently there were more than than before or since. I think some of it was the Tesla package was in twenty eighteen, but I think you hit the targets in like twenty twenty one, yeah, or twenty and so there was a lot of like, oh wow, it works. From the perspective of a CEO, it's like, oh wow, I could make sixty billion dollars. And from the perspective of a board, it's like, oh,
this incentivization works and gets CEOs to transform companies. Yeah, it's a little weird to be a board and be like, well, our guy could be Elon Musk too, but it's you know, someone's got to be Yeah, Elon Musk two point zero.
Well, it'll be interesting to see, like what the lag effect of his most recent pay package is, like whether in I.
Don't think anyone else is going to get a jillion dollar pay package.
For a while. No, you don't think so, who knows?
Man? And the other thing I'd say is, like I've written this about, you know, his earlier pay package, and his trillion dollar pay package is like the classic Moonshot pay package is you're an early stage startup founder, right, and your pay is like Ramen and thirty percent of the equity of a company that is now worth you know, nothing ish and it could be worth a trillion dollars, right,
Like that's the Moonshot pay package. That's the package where in theory, you know, every startup CEO is is trying to create something out of nothing and if they fail, they get roughly nothing, and if they succeed, they get Mark Zuckerberg level wealth. And that's like a normal pay package. And what this is doing is translating that to giant
public companies. And it shouldn't work that well, right, Tesla's a car company and it makes me correctly and it can sell cars, and like now Elin must incentives are to transform it utterly to making an eight point five trillion dollar company. The theory there has to be like, either he will succeed and it will we'll have a human odor robot in every home and it will be worth eight point five trillion dollars and he'll get paid, or he'll fail and he won't get paid and it
won't like sell cars anymore. I don't know, like you're sort of making these like very bold bets, and that makes sense when you're a startup, and maybe makes less sense for a large public company, but maybe it makes more sense. On don't know, Maybe it's what the shralders want.
Can you walk me through the psychology of the CEOs who canceled their Moonshot? Oh? Like the psychology you're just like, I'm not going to do this.
This is all stock options, right. It works is like you're optimistic. The board is like, we're gonna pay you a lot of stock options that will be worth a lot of the thought goes up and be worth nothing if the stock goes down, and you're like, great, the stock will go up. And then the stock goes down and you're like, well, but I'm a nice guy. Like I come in every day, I work hard, Like why
am I not getting paid? And the board is like, you're right, and they cancel your stock options and give you a new stock options so you still get paid. And like the Moonshot stuff is like that too, right. It's like at the beginning of the Moonshot package, it's like you'll get nothing unless you're ten x the company, which case we get a bajillion dollars, right, and then after two years you're like, well, I'm not gonna ten next to the company, but like, ye, I'm working hard
and then I get fine, take some money. That's the psychology. It's pretty reasonable. Yeah, it's on the theoretical level, like this sort of like all or nothing that creates the right incentives to like, you know, they're working hard.
They're fine.
What an interesting article that landed on Monday, so I didn't fully appreciate it until Tuesday because Monday was a holiday.
The new or Executy Change and or related entities are building a twenty four ish hour, seven ish day trading idea based on blockchain.
Yeah, tokenized stocks and ETFs, and you can train them walk out, you can train them around the clock. ETFs they're building it, that is.
They're thinking about it. It's in the works.
Yeah. I feel like we've been talking about the concept of twenty four to seven trading for a while.
Yeah, and has the usual problems lighter liquidity if you are market makers at two am. What I was interesting about this story was that it's and I'd never really like closely thought about this, but it's combined with blockchain.
Blockchain blockchain tokenizing stocks. And there is kind of a reason for that, which is that traditionally trade and settlement are separated in a world of business hours and sort of serious institutional trader, like you do a trade between nine thirty and four on a Monday, and then you know, you get the cash and you deliver the shares sometime on Tuesday, and like it's all sort of like civilized, but in a world of like catering to retail traders
who want to trade twenty four seven, like settlement is an obstacle there, Like it would be weird to do a trade at midnight on Friday and then I have three days of like the money hasn't landed in your account yet. It's not like the experience that you're expecting when you're trading twenty four to seven, right, and so
the bloom work. Sorry, right, Catherine already quotes Michael Blackground at and I say saying, we think it aligns with the retail investors emerging desire to be able to trade something at five oh four pm on a Saturday and then use that money to buy something else at five oh five pm on a Saturday.
Right.
You can't use the money if you just like do a trade and then it doesn't settle. Right. You're combining the twenty four seven trading with real time settlement, and the way to do that these days is by token eyes and talking about the blockchain. It's not the only way to do real time settlement, but that's the way everyone talks about it now.
Yeah, and also it's a language that I feel like the people who care about this know the idea. Yeah,
blockchain tokenization. We actually spoke to Michael Blogrund on UTFIQ, which is a television show in addition to being my newsletter I ever heard, and he was talking about like, you know, they're in conversations with a lot of crypto native firms who are really excited about this, but also the largest some of the largest etf issuers out there, and it's all about like getting their products in the
digital wallets of the next generation investors. So that's who they're going after, and that's a language that they know it all.
Yeah, language I don't know, as we've already established.
So we'll see. I mean they're in talks with the SEC. It's not a Johne deal.
It's a pretty good time to be in. Talked about blockchaining and tokenized something something.
Yeah, So were you saying that you don't think like tokenization is inevitable or twenty four to seven trading.
Oh, I don't think the tokenization is an absolute requirement for real time settlement, but it's how it's going to happen, right, Yeah, it's gonna happen.
Because I was going to say, like twenty four to seven trading feels inevitable. Yes, it's coming.
Yeah, although it's always like twenty three and a half, you know. Yeah, you need like time to reset the computers up.
I did like how you framed in your column that I'm trying to imagine another app, Like if I was like a huge fan of an app on my phone and then it stopped working at four pm on Friday, and I couldn't use it all weekend. It would kind of be like what am I doing?
Like I come from a world where like, yes, like you go home at four o'clock on Friday, you don't trade stocks for a while. But like that's not like an app native living on your phone.
Yeah, you grew up on the internet and with these apps. Then that doesn't really make sense.
Trade sucks all.
The time it's happening.
Like one possibility is you'll have very limited liquidity and lots of craziness overnight. But another possibility is like, eh, like everyone just put their traders on two shifts and you know, like it's mostly computers. Anyways, you need someone on the night shift super rise the computer and like maybe it's all fun, Maybe it's fine.
I think it would be really fun to be on the night shift, just.
Like the one person with a bank of computers that are like trading against retail dj ns all night long.
I picture a cozy dark room, the warm glow of your computer screen, right, siff in your tea, got.
Myls aren't going down too much?
My flannel pajama bottoms on. Yeah that sounds good.
I don't think you know, I think that job will be like you're wearing a suit and you're in Tokyo. But it's possible.
Yeah, but that's not very romantic. Yeah, all right. I feel like we covered a lot of grounds, a lot of good good luck, good luck in the snow.
Every book at the pub.
Oh yeah, thank you.
And that was the Money Stuff Podcast.
I'm Matt Levine and I'm Katie Greifeld.
You can find my work by subscribing to the Money Stuff newsletter on Bloomberg.
Dot com, and you can find me on Bloomberg every day on the close between three and five pm Eastern.
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 the air.
You can also subscribe to our show wherever you're listening right now and leave us a review. It helps more people find the show.
The Money Stuff Podcast is produced by Anam Aserakis, Moses Onam and Alexis HoTT Our.
Theme music was composed by Blake Maples.
Amy Keen is our executive producer. Thanks for listening to The Money Stuff Podcast. We'll be back next week with more stuff.