Revenge of the Hedge Funds

That's the biggest increase since way back when all my hair was still browned and I was just a cub reporter covering school boards and car crashes out of newspaper. And while markets initially reacted positively to the feds aggressive inflation fighting efforts after the decision on Wednesday, well something resembling a car crash broke out the following day, with

both stocks and bonds tanking violently. We'll be joined by a chief in usmen strategists to the sect what is freaking out markets and what it all means going forward. But first, Bill Donna, I have to say I think regular listeners of the podcast no that I can't resist a good gimmick. Yeah, yeah, I know. And and my latest gimmick was that if we got more ratings and reviews on the show. I think I said if we got the three hundred, that we would reveal your your

high school nickname. Um. What I did not anticipate is that in those ratings and reviews you would receive an actual marriage proposal. Yeah. I saw them in the in the Apple UH podcast reviews. By the way, you accepted, Yeah, I didn't accept. I don't know who it is because they I think they posted under UH like a user name, isn't their name? Yeah. The bad news for that listener is, I'm sorry, Bill, Donna has already had happily married and and further more, well, Donna will not even allow me

to join her professional network on LinkedIn. So I don't I think your chances of getting a marriage proposal accepted through the comments on Apple podcast. While I admire the effort, you know, shooters got to take their shot, I do not suppose this one will be accepted. I went on LinkedIn after you called me out for not accepting you, and I had one fifty eight invites, So you're not alone. I accepted one of them, like there was somebody I

really liked. Yeah, this one of them. Okay, another Bloomberg reporter. Yeah, you know this is gonna sound like sponsored content from Lincoln. I'm not even really a big LinkedIn guy. I just checked my my notifications to see if anyone's yelling at me or complaining about something they probably I was like, I was like someone Tagg Fildata and I go and I'm looking at Bill Donna's page. It's like, oh second,

I'm a second. Yeah, you're not going first. You're not like a runner up member of your of your professional network. You know who's first in the first year, our guest our guests this week. Oh that's great. Yeah, but I do want to bring in Anastasia emiro So. She's the chief investment strategist at I Capital. Anastasia, thank you for joining us again. Good to talk to your with with your Modanna and Mike, and Mike I would be happy to accept. He was the first connection on my professional network.

There you can have some friend. That's fantastic. You're one one friend. But Anastatia, you've been on the podcast before. You actually have changed jobs since the last time you were on, so I was hoping you could just sort of start out telling us about your new role in your new shop. Sure, well, I am a chief investment strategist at I Capital, have enjoyed from JP Morgan actually

about a year ago. And you know, I Capital is really the global alternative investment platform, and we are on a mission to make it easier for more and more investors to access all round of investments. And you know, this year in particular has been a case in point white.

It's so important to think beyond the sixty forty. You know, I wrote this outlook in the beginning of the year that called for higher kernel rates and lower potential reference and I don't think any of us would have guessed that the kernel rate was going to end up being a point six percent inflation and the returns for the sixty forty um, you know, just got dectimated. So this is why, and I kept all the focus on things like private equity, private credit, real estate and increasingly allocating

to digital assets as well. So you know, my role as a chief investment strategist is really trying just to help investors understand what alternatives are the right ones for this particular part of the business ycle you know, and the stage. I want to get your thoughts on all this recent market action. But um, just to follow on that notion of of how you're sort of interacting with

cients these days. I think it was an interesting period after the financial crisis, and we just had this almost uninterrupted, uh all run in equities. UM. It seemed to be almost uh maybe this is over dramatic, but almost an existential threat to the hedge fund industry. You know that the line just kept going up. UM. All of the sort of the best strategies started to become turned into factors that you could use in in ETFs and passive

passive vehicles. But I do feel like this nasty market action this year UM sort of flips the switch a little bit turn turns the narrative back UM and hedge funds. You know, while we certainly see a lot of headlines about some that are struggling, uh in aggregate I I you know, the indexes I looked at, they are outperforming pretty significantly, still not you know, up a lot for the year, but losing less from from a sort of

an aggregate index level. Has it sort of revived the demand for for hedge funds, particularly based on on what you talked with with your clients. Absolutely, how is Mike? And this was part of our outlook as well as we anticipated this being a much much better environment for hedge funds that we get clients interested. And the reason for that, I mean, you said it's spot on for

the last ten years. I mean, really, all you had to be is risk on for the most part, with a few exceptions, and you buy the dip along the way, but mostly if you're invested in stocks and hi yield bonds, he probably did just find so he didn't actually need hedge dequity and portfolio and you didn't really need you know, relative value trade and so forth. But that changed dramatically this year, and we anticipated this year to be a year of higher velocity and higher volatility and void do

we get it? And so that's what I think has been so narrative changing for hedge funds is all of a sudden, there's equity volatility to trade, there is the ext income volatility to trade. There's a lot of macro factors are in the driver's seat. So if you look at the hedge fund performance, Mike, you said it, but the overall hedge fund h f R I industries, for example, they're out performing the market nicely. But even if you further dissect within that the global macro funds are doing

really well. And within that, you know, you have some really top core child winners that are really attracting client interest. If you look at relative value hedge funds, arbitrage strategies, um, all of those are delivering above market returns. And also quant quant is actually working this year as well. So I do think in this environment where nothing seems to be working, investors are looking for something that is and

right now that is in the hedge fund space. And Anastasia, just to bring us back to the big event this week, which obviously was the FED, actually was super excited for the Wednesday pressor because you know, we were all having this debate about whether or not we were going to get fifty or seventy five, and we had some people calling for a hundred basis point hike. So can you just lay out for our audience what exactly happened with

the FED this week, what we heard from j Powell. Yeah, well, even what happened earlier in the week, because we got a massive pivot from the fedt during the time when this was supposed to be a no communication and time frame, and we got a pretty strong hand that they're going to go for seventy five basis points, and you know, in retrospect, it makes a lot of sense because the problem with inflation for the Fed right now is they can't just focus on the core because the headline inflation,

the higher gas to lead prices, the higher food prices, that's was driving consumer sentiment, and that's was driving consumers and expectations of future inflations. So as those expectations surge, the FED had to react to it. So here's my couple of takes on you know, what do we think now that they have hike seventy five basis points. You know, first of all, we did anticipate this meeting to be

a howkish one, and it definitely definitely was. But I don't think we can say that it was a hawkish surprise to the markets, and you saw how the markets initially reacted to the path of increases. The reason I say that is a lot of the pricing market price

saying was already in place before that meeting. And if you think about what the markets have been pricing in through February, it's close to four percent UH in the FED funds rate, So I think a lot of that rate increases was already baked in, and that's perhaps why the FED was emboldened to do this. But my other takeaway not a Hawker surprise, but I think a significant

move towards restoring the Fed's credibility. I mean, if when you look at eight point six percent inflation or six percent core inflation, and you'll if you look at the FED funds rate, we were far far forward, too low, and the FED needed to catch off very badly. So I think the fact they're acknowledging it, they're doing it, they're moving it is actually a positive for markets because we feel like the FED has maybe regaining some control.

And then the last thing I'll say about this, the reason why the equiting markets have been so tough this year is because it was really hard to gauge the FED reaction function. They say they're trying to be balanced one week, and then they say, oh, we're going for fifty base once. Now we go for seventy five basis points. So you've got whips thought by this FED communication. But it seems like they're giving us a more explicit reaction function.

The focus now is on headline inflation. If it's surprises to the upside, should expect a more aggressive path of rate hikes, and if it doesn't, perhaps they can pause. So at least we know that now, and you know, perhaps it's little constellation to the markets per se, but at least it does restore credibility in fighting inflation. But isn't there a big risk that it just doesn't work? You know that these supply chain issues continue, and that

oil continues to climb higher. You know, uh, Russia appears nowhere near ready to capitulate in that war. Um, And you know what's the risk there if to the Fed's credibility and the markets in general, if you know, they keep hiking and inflation stays at if not as high as it's been, still well above target. Well, Mike, there's plenty, plenty of risk, right And you know one of the immediate risks is if you look at US gasoline prices, you know, the price you pay the pump close to

five today. I think it goes it could go to six over the summertime. And frankly, there's little the FED can do about this. There's even little the Biden administration can do about this, because the reason why that's happening is it's not so much about the oil supply demand and balance. But now it's about the lack of refining capacity to actually get enough gasoline on the road. So the FED can't fix that, and you know, they tighten policy,

but are people really gonna drive less? Probably not. You know, the FED cannot so, so the risk is that oil prices and gasoline prices may have to rise higher then lower. They have to rise to the point where they start to destroy demand and then they subside. You know. The other risk is with food supply shortages. Again that is not something the FED can fix. We know the bottlenecks that are coming out of Russia and Ukraine. So there's

plenty of risks. But the bottom line, and I think that's why the FED has been getting more more aggressive here. They're trying to control what they can control, and that is the core parts of the inflation. It is wage inflation, and it is slowing down the exuberant in the tech sector and the crypto sector. Uh, it is about slowing down housing and boy was raped you know, close to six percent on thirty or mortgagitory. It's probably going to do it. So they're focusing on the core side of

the equation. So perhaps they can counter balance the headline that they really can't control. So so if you had to sort of handicap the probability of a quote unquote soft landing, um, you know, in other words, the Fed manages to bring down inflation without triggering a recession. Where do you stand on that? What do you what do you think they're your odds are of actually being able to pull that off. Look, I think we have a chance. And perhaps that's a fifty fifty chance at this point.

And I say that while the markets are really not seeing it this way now there right now pricing it close to probability of recession based on the SMB five, based on the credit spreads, but when you look at the economic indicators that the same imply probability of a recession is about for you. But I think we have

to give ourselves a chance here. And I want to draw some parallels to nine four that at the seventy five basis point rate hike, you know, that had aggressive moves hired rates, and yet if you look at the gdp UH during that time frame, it didn't actually go negative. It slowed down from five percent to two percent. And that's sort of what the forecasts are calling for now, you know, we're going from two point seven percent GDP this quarter or next maybe at one point seven next year.

Is that a recession or is it a tought landing. You know, there, of course many ways to define a recession, and you know, some people think of it in terms of sequential slow down, but I think a more proper way is to say negative GDP growth and several quarters of it. And I don't know that that's exactly where we're headed, because what really takes to cause a true deep recession is a lot of imbalances. I think back to the financial crisis. We had the mortgage debt, we

had the consumer debt, we had the corporate debt. We have had the financials levered up, and we had all the video squared. And when I think about those counter parties today, we don't have the same degree of imbalances. So that's why I'm still in a camp of a slow down for sure, but perhaps not the inn our recession.

I know that after the FED meeting, I had read a bunch of notes that that we're sort of looking through Paul's comments and a lot of the takeaways were the some of the stuff he was saying was a bit contradictory. So we got the comments about the next meeting, the July meeting could be either fifty or could be seventy five basis point hikes. So how do you pass through this and how do you make sense of it?

Like what is your your takeaways in terms of some of a contradictory things that we did hear from the FT this week. It's really tough to admit for anybody, for everybody, including a FT your pal, but we don't have a crystal ball. The FED does not have the crystal ball and inflation, and I think we have all collectively as investors, as policy makers, we have capitulated to this view that we just don't know what the next inflation print is going to look like. We're across our fingers.

We hope it's lower than it was the month before, but the reality is we don't know. So the reason why, you know, perhaps we have this I mean, I call it choppy and a little bit sloppy policy from the Fed is because they truly don't know um, but they are preparing the markets for you know, the potential for seventi five basis points. I think that's constructive because that's

what's becoming priced in. But here's what I say, voll Donna, is when you look at the aquadum markets and you have a FED that doesn't have a crystal ball and they're having to adjust to the absence blows of inflation, that is going to create for this lack of predictability, and as you know, that's not good for markets. That's

an environment in which the markets struggle. And that's why it's so hard to make a call on any sort of bottom, and it's so hard to make a call on any sort of buy the dip for this tactical short term rally. It's just not the environment we're in today, you know. And it says you mentioned that notion of sixty forty being under so much pressure this year, you know, both both stocks and bonds just having an awful year. I looked at the Bloomberg Treasury Index. I think it's

basically the worst year the treasury markets ever had. You know. Uh, But has this correction or bear market in both asset classes sort of made sixty forty look look attractive again? Do you think where is there still worth trying to to shoehorn in some alternatives into that space. Well, I think the answer to the two part question is yes to both of those things. I do think that we're

approaching some interesting levels on both docks and bonds. And we're not calling bottoms here, but one thing that we can say we're now excited about in this environment, you can actually get paid in the safest of assets, which is the triple A rate at U S. Treasury. You can get paid three point three percent on a two year treasury not give or take. You know, if the terminal rate does in fact go to zero, you know,

maybe the yield does inch towards zero. That's exciting. What was the last time you could get that safety asset um with that sort of yield. So in this environment where investors grave certainty, grave safety, I think it's a really interesting thing to be adding back to your port folio in terms of sporting um. On the equity levels, I think at some point you have to wonder if enough has been priced in as well. I don't think equities are screaming by yet, and I'll explain that in

just a minute. But if you think about that, of the recession probability has already been priced it. So even if we do have a recession, we probably stay in a pretty good chunk of it, so perhaps you may be able to step in and added crementially um for in order for it to be a screaming by. I think we do have some further room to go in

terms of multiple correction. You know where sixteen times forward earnings, we probably have to step it down to fourteen times forward earnings and assuming the earnings whole, two d thirty five on the SMP five hunter and that gets you to about the SMP so we could still take another you know, well thirteen lower like from here, so at that point that would be screaming by by the bottom line, the answer to the first party of question is we

are approaching some interesting levels in which you may want to add back to the sixty and the forty. But the other part of your question is this still a good time to be an alternative? I mean, frankly, I think it's always a good time to be an alternatives because you just have these extra levels to pool um. We talked about hedge funds and how they are delivering the value in this environment, but think about private credit.

If you look at private credit, most of that is floating rate and an environment where the FED keeps on hiking and hiking, that's the place you want to be. And then the thing that I really like about credit is it's a liquid which means it doesn't trade on technical market dynamics. So when dealers pull back the inventory and you have a number of cells and high yield and leverage loans, that's not the case in private credit.

So as a result, you end up which a much smoother path of returns in private credit versus let's say hi yield. So I think that's still a very interesting place in private equity, I would say, you know, for vintages that have been invested in the last couple of years, of course, this is going to be a tough environment for returns in the next couple of quarters or maybe

a couple of years as a valuation subside. But if you're a new investor in private equity and if you're allocating fresh capital, now, guess what that's going to be deployed at lower valuations that were likely see over the next couple of quarters for a couple of years. So I think a lot of investors should be thinking about this as an opportunity to commit that lawn term capital now to invest it later those lower valuations. So I

definitely think there's room for both. Um, you know, not quite declaring the market bottom here and not quite saying equities are cheap. But I think a combination of all of those dogs, bonds and alternatives that's what makes it

for better outcome. Well, speaking of the clearing a market bottom or not, I know you had sent us some notes before we started the podcast, and I just want to read one of the quotes that says, at current levels, we would not be meaningfully increasing equity allocations until we have seen more evidence of inflation slowing and economic slowdown flattening out, and importantly the FED shifting it's hawkish tone, which to me it struck me as sort of these

things sort of being a really long time off. So if somebody wanted to deploy some some cash right now, what would you be telling them in terms of where

to put it? Yeah? Yeah, So, first of all, I mean a long time it's interesting that common is interesting, and you know, things tend to move quicker in these markets than they have in prior years, So I could actually see a scenario that over the next quarter or two we could be on that you know, other side always slow down, and on the FED that is pausing. I mean, if you think about just basic GDP forecast, but this quarter, next quarter, we're anticipating two point seven percent.

By Q four this year, that's going to step it down to one point seven percent. And that's sort of what the FED expects for next year as well. So by Q four we might actually have seen a slow down in growth, we might have seen a flattening plateau of growth that would cause the FED to carry back

some of that hawkishness. So you know, I think this is a week by week, one by month by month situation, and perhaps this is not actually years in the making by And I'll also say that the time you want to deploy capital is when it feels terrible to do so. And if you look at the percentage of you know, barious surveys out there, you know that most investors feel pretty terrible. Just look at consumer surveys as well, And

so I think you can step in incrementally. But one thing that I really like doing right now is pick your favorite ideas in equities. Maybe it's you know, the cash flowing, you know, digital transformation type stocks, you know, maybe it's some of the winners of decarbonization, where you

have a clearer path to profitability. Pick your favorite spots and see if you can utilize the options market so that rather than just going all in and being long from day one, you know, maybe you still up pot and you collect that premium then gives you a little bit of buffer on the downside. You know, maybe you use that, you know, put option premium to buy a call option. There's really interesting ways to structure different payoffs that are not just one to want in the market.

And I think that's a better risk adjusted way to enter some of these positions, given that we still can't quite call the market bottom yet. Speaking of interesting way to structure payoffs at a stage, I assume you must get peppered with questions from clients about crypto and you know where that fits into sort of a multi asset allocation strategy, uh, that type of thing. You know, how are you thinking about crypto these days? Uh, both as a and as a class itself, and but also how

it sort of fits into the larger eco system. You know, is some of the weakness in stocks related to crypto? Or is the weakness and crypto, you know, related to stocks? How are you thinking about you know, where crypto fits into sort of uh modern markets? Um, you know, it just really feels like a falling knife right now that um, you know, the people who warned that it was the Dutch tool, the bubble of the of the seventeen hundreds. I feel like you're probably taking a big victory lap

right now. I mean, is it that dire? Was this just a manic cheap money bubble? Uh, that's that's going to disappear now? Or or what? How are you thinking about crypto? I guess is the way to summarize that twal party question question just one point. It might be a twenty minute answer, because there's just so much to say about crypto. I promise it won't be a twenty minute answer. But but I will say that for a while, Bitcoin a little bit of vert for being an inflation hedge.

I say that because when inflation was rising and the FED was doing nothing about it, of course bitcoin was the place that people wanted to go. But now that the FED is doing something, doing quite a lot about inflation, you can't make that argument about that being inflation hedge anymore. So then you refer to the other side of the coin, which is that is technology. It is innovative technology, and it is unprofitable. So this is why you look at

how all the crypt ecosystem has been trading. It's been trading in lockstep with the NASDAC and specifically with the unprofitable tech. And so that's why you're seeing this breakdown of momentum to the downside. And until the FED pauses, until we have you know, kind of a cap to the move higher in rate, you will continue to see

pressure in crypto. But here's what I also say, And I was at the Consensus conference in Austin UM last week and one of the quotes from one of the panels was that make sure that you're in crypto for the mission and not the money. And that really struck me because there is so much specular fraud that has been accumulated in crypto and I am so so glad that that is being flushed out as we speak. That needed to break, that needed to be out of the system.

But what's left is there is a significant utility function to blockchain technology. You know, can you build better decentralized application for lending, for market making? Uh? You know, for transaction settlement, for digital privacy. The answer is you probably can. And many innovative technologists are working on this. So there is a big mission driven cohort within the crypto ecosystem and I think that's what's exciting and that's what's here

to stay. But I'm glad that we're seeing algorithmic uh you know, old coins breaking down. I'm glad that we're seeing unsustainable lending schemes breaking down. And I'm hopeful that what this ultimately leads to is regulation. The regulators set back for ten years, let this speculative bubble inflate. And you know how it works. It takes a blow up, if it takes a meltdown for us to finally do something about it and regulated. So I think that is the moment that is ultimately going to be the best

thing to happen for crypto for years to come. Is that regulation. So Mike, Mike mentioned that, you know, probably a lot of clients are asking about that. What else are clients asking you? Is it mainly inflation in the fetter? What else is top of mind for them in terms of worries or concerns. Yeah, it's it's obviously inflation. It's it's obviously recession hedging, and there is a pretty conservative element um to how clients want a position right now.

If speaking of structure and payoffs, a lot of clients are focused on, you know, maybe entering into the equity markets, but giving themselves some principal projection when they do. UM, A lot of clients are looking to volatize this elevated volatility and convert that into sort of a income proxy. And once again, if you can sell a put option and collect the generous premium, that could give you a

pretty nice income proxy as well. UM. And then you know, the big theme that resonates with clients is that you've got to get paid while you wait. I think all of us are acknowledged that we are in a difficult um time frame. It's gonna take a little while to work through this. But where can you get stability working?

You get income in the portfolio because I mean cash and I pay you something, But inflation is still eight point three percent, so we're eight point six percent, I should say, so how do you keep up with that? So that's why ideas in private credit that may be yielding eight percent, that's why ideas in real estate resonated really well with clients and continue to. So bottom line is people want to be comfortable with their allocations right now.

I mean, none of us feel great about the markets, but it doesn't mean that we can't feel comfortable with our portfolios. So it's about right sizing the allocation, making sure you have staying power, and you know what, making sure you have dry powder, because we will have the moment in the market where will say this is a screaming by and let's do increase our allocations sustainably. So um so a combination of those you know, protection strategies,

yield and having the dry powder. That's you know, uh, and says it's funny. Our colleague John Authors writes a column at the end of every year You're called Hindsight Capital, and it's an imaginary hedge fund that invest with the power of hindsight. Uh. You know. In other words, he just looks back at the beginning of the year and determines what did did the best uh that year? And and you know, it's a funny column about how of

course that's what they invested in. I have a feeling Hindsight Capital is going to be like double triple levered into commodities this year. So um, I'm curious, you know how you're thinking about commodities. Obviously, you know, energy energy equities and commodity linked equities were probably one of the only places to hide out this year and and uh, you know, not lose money. Has that ship sailed? Do you think, um or is there still sort of runway

to get into commodities at this point? Well, you know, my there's a big argument to be made that we're in a structural deficit of all sorts of commodities. And it's true for food, it's through, for weed, it's through for um, you know, gasoline, metals, lithium, you name it. Um. I think, while that's true, I think the most likely path for commodities right now is higher first, perhaps in the very near term, and then lower later perhaps I

mean not to distant future. And I say this in order to right size and shift the supply demand and balance. What you really have to do is if you can't fix the supply side, then the demand has to come down. And you know, the FED is obviously trying to bring that demand down, and I think the prices and the FED is not If the FED is not successful, then

elevator prices that what has to do this. So for oil in particular, I think if oil prices search in other twenty barrelers, so that will lead to more pronounced demand instruction. And then you know, as economic activity slows down, I think you see that demand instruction more and more, and so that's what's likely to bring down commodity prices. So I don't know that it's the time to chase the upside uh in commodities. UM. I think there are probably some places that you can make the case for,

you know, longer term investment opportunity. If you think of something like lithium for example, which by the way, speaking of chasing it, it's up over the last year or so. But nevertheless, electrically, coal um penetration in the United States is very low relative to Europe and China, for example, but there's a lot of catching up to do. That's where the world is headed. So I think you can make the case for some of these commodities, but not

a blanket statement right now. And speaking of hindsight and looking back at the past six months of the year, obviously a lot has happened that many people weren't expecting to happen. We had prescious invasion of Ukraine, we had persistently, persistently persistently high inflation, etcetera, etcetera. I'm wondering what from the past six months you're taking with you in the for the next six months in terms of like lessons learned, uh, and what to expect for the second half of the year. Yeah,

it's a really eight um question. And I think the biggest lesson learned is that over the last six months is that we can't apply the playbook of the last several years to the next six months or the next years.

This is truly an unprecedented environment. Um. You know, an eight point six percent inflation print, and inflation that's becoming entrenched in every single sector where you have supply chain challenges not only not related to the pandemic and the kind of the overhang of the pandemic, but just related to the fact that we have not built enough capacity in the refining sector, in the housing sector, and so

on and so forth. So in that environment where you have these imbalances, we can just make blake and statements and assume that we're going to go back to exactly where we started before COVID, and so it is a little bit bimble. It is a little bit more touch and go, and it is a more cautious approach until we finally see that flapping out and it is delaration

or inflation. So I guess the takeaway is, don't apply the same playbook and you know, don't don't make a blanket assumption, but just be more nimble in your portfolios. And I think, by the way, that's the takeaway for the FED as well. Anastasia Amirosso. It's always such a treat to hear your insights, uh and your wisdom. We really appreciate your time. I have to say, though, I'm from Philadelphia, so every time I see your name, I think of the delicious Amirosso Hogi Rolls out of Philadelphia.

I don't know if there's any relation there, but there's no relation, but sounds like we should have that on the podcast next time. Yeah, they're they the top of the league table of Hogi Rolls in the Philadelphia area. So a very very distinguished name from where I come from. Amazing, And what else is distinguished? It is not necessarily the seguay I'm making, but what the that ship is, but um, it's I tried. They're not always going to be good

home runs. Most of the time, they're sometimes yeah yeah, emphasis on some as always filled out. I want to start with you because I know if you've spent hours, hours upon ours reading financial news in hopes of finding the craziest thing in markets for this week, what do you do? But everything this week was a little bit more on the serious side. So I actually had a little bit of trouble. But then I saw this NBC

News story that really caught my eye. So we know that in crypto you have a lot of actually outside of CRYPTI have a lot of people calling crypto stuff, you know, fraudulent and scammy, etcetera, etcetera. So there's this VC news story as it happened. But there's this NBC news story about Anna Delvy. Do you know who she is? That rings but no, I can't. There's a Netflix series based on her where she had been pretending to be an heiress, a German heiress, and she defrauded a lot

of people. And the Netflix series is called Inventing Anna. But anyway, NBC spoke with her and she said she'd never encourage anybody to follow her footsteps, and at the same time, she unveiled an n f T collection, So you you NBC said, you know the infamous socialement at ten n f T s that will grand holders exclusive access to her, including one on one phone calls. So wow, I don't know about that. I uh boy one on one phone calls and n f T with embedded one

on one phone call. It's a rave It's a brave new world. It's kind of like if you've made a cameo into an n f T. I guess you know there's cameos. I gotta watch that show. I'm behind all my Netflix. I don't know. There's so many shows I've missed. I need uh, I need the NBA player your way behind if you've never heard of this one? Yeah, all these shows you guys talk about, I've never seen one of them. I'm thirty years behind. Yeah, how about you at the stage? Have you seen anything crazy this week?

This week, there's been a lot of plenty of crazy market movements. But I ain't gonna stick with crypto and you know what, vill Donno is mentioning. But you know, to me, the crazy thing is we've had the cell serious news and you know, any time you get an offer to park your cash and earn an eighteen and a half percent, you kind of have to stop and ponder and think how and why and is it? You know, is it solid, is it bulletproof? Is it gonna hay out?

You know what kind of credit risk you're taking? And what's really crazy to me is it's some of the stuff that's been built in the crypto ecosystem parkens back to the two thousand and eight era, where just one assumption goes wrong and then everything goes unwound. So to me, that's sort of crazy that we continue to get into some of these speculative bubbles even though we've learned the lessons from the financial crisis. But perhaps so we haven't.

But once again, I guess that's what it takes to uh for the regulators to step in and to make things better in the end. Now they're the the echoes of the financial crisis are are all over the place, you know, the whole notioner re hypothecation and just counter party risk that you don't even realize is there, and it's just it's pretty remarkable. Um So that's a good one. I like that, and I wonder. You know, I do think a lot of people probably piled into these these

lending schemes without really appreciating the risk. But come on, how could you? How could you not? At least the sophisticated under the business must have known that this is this is kind of a house of cards to some degree. But but they still they still chased it. Anyway, I am, for once going back to the traditional markets for my craziest thing, and it is, uh, the energy market, the gasoline market. As we all know, gas prices have famously

risen above five dollars a gallon for the first time nationwide. California, of course, is famous for even higher gas prices uh than that. However, what if I were to tell you, Bildonna, that you could buy gasoline at one station in California for sixty nine cents a gallon? Would that make you want to drive all the way out to California to fill up your taxes? It sounds too good to be true. Well indeed it was, and what happened. It's basically the

equivalent of a gas station fat finger trade. Uh. The manager of the station mensa input a price of six dollars and cents, but he got the decimal in the wrong place and put it up there for sixty nine cents um for whatever reason, and then they don't explain it. This is the story courtesy of the website of CBS thirteen Sacramento. And it's not quite clear why he didn't

immediately fix it. But they began selling guests for sixty nine cents for social media, but one of this, and soon there were lines, uh deep lines at this particular gas station. So of course, as you know, you can probably guess, I have to turn this into an episode of the Prices right right now, So I want you both to guess, how much do you think this fat fingered guest lean pricing at this station tossed the station before they were able to fix it. Should I go first? Okay,

so there was a deep line. He was losing a lot of money he or she I will go with dollars. I'm hoping really quickly. But he had to honor all the people on the line. That's probably true. Yeah, I think maybe that is the big, big problem they faced. How about you in a station? How much do you think this costs this gas station? Oh? That's so tough. I think with the speed of social media. Uh, somebody probably caught him pretty quickly, so I'll take the under

I'll go fifteen pretty good. You guys were both pretty pretty close to the markets sixteen tho dollars, Uh wow station before they could Finally, he's a pretty good guess. They were both pretty good guesses. I don't know what I would have guessed, um, which is sort of the privilege I have as the host of crazy things. What goes up prices right? So they did have to honor

the people online. They did, and the gas station manager got fired, and I guess his families they're worried out and getting sued, even even though I guess there's he probably won't legally be able to get sued for a mistake like this, but they've started to go fund me to recoup the sixteen thousand dollars and hopefully get this guy's job back. So uh, pretty costly era And anyway, some people got gas, so there's there's a silver lining to it. Anyway, I think that is all the time

we have Anastasia amarroso always a pleasure. Hopefully we can tricky into coming back and playing prices right again. Sometime. Let's play this again. We'll be back. Thank you for joining us What Goes Up. We'll be back next week and so then you can find us on the Bloomberg Terminal, website and app or wherever you get your podcast. We love it if you took the time to rate and review the show on Apple Podcasts, so more listeners can find us. And you can find us on Twitter, follow

me at we can anymous Well. Donna Hierarch is at Bolganna Hierarch. You can also follow Bloomberg Podcasts at Podcasts. What Goes Up is produced by Stacy Wang. The head of Bloomberg Podcast is francesco Leavie. Thanks for listening. To see you next time.