The Compound and Friends - The Higher the Vix, the Higher the Clicks

Episode Date: July 1, 2022

On episode 53 of The Compound and Friends, Felix Salmon joins Michael Batnick and Downtown Josh Brown to discuss financial media, the state of FinTwit, Elon Musk, leverage in crypto, the art market, billionaires buying sports teams, and much more! This episode is sponsored by The Peak Group. To learn more about investing in single family rentals visit www.thepeak.group/phrfacts. Check out the latest in financial blogger fashion at The Compound shop: https://www.idontshop.com Obviously nothing on this channel should be considered as personalized financial advice or a solicitation to buy or sell any securities. See our disclosures here: https://ritholtzwealth.com/disclosures/ Inclusion of advertisements by podcast sponsors does not constitute or imply endorsement, sponsorship or recommendation thereof, or any affiliation therewith, by the Content Creator or by Ritholtz Wealth Management or any of its employees. For additional advertisement disclaimers: https://abnormalreturns.us5.list-manage.com/track/click?u=f8843b0fc6f0ed7d35e67dcf5&id=33b07916d1&e=4e0f612ef0. Hosted on Acast. See acast.com/privacy for more information. Learn more about your ad choices. Visit megaphone.fm/adchoices

I'm sorry for my next track. I've shown Joe Weisendahl for the first time in like three or four years last week. I was just listening to his podcast in the car with my wife, and she was like, I cannot listen to another minute of this because he sounds so tinny and his audio is so terrible. People hate his voice. It's not his voice. It's his, like, he records out in the f***ing Hamptons or something,

and he's in a tin can, and it's just terrible. It's only Bloomberg. Exactly. You can't really expect them to have a tin can, and it's just terrible. It's only Bloomberg. Exactly. You can't really expect them to have that. You can't expect them to care about audio quality on a podcast. But it was good to see him. He's got a gigantic mustache. Bless him.

Like a prominent, like people were like. I feel like that's something you should have done during the pandemic. I guess he couldn't do it during the pandemic because he was still on the telly then, right? So now he's catching up on all the stuff that everyone else did during the pandemic. I think they do a really good job picking guests. This is my pandemic stash. Oh, you did it too? It looks like a fake mustache.

It really does. It looks false. That I didn't get to. You've got to survive somehow, man. I did a bachelor party in Austin, Texas a couple years ago, and I can't grow a facial hair, but when I do, it comes in white. It's pretty embarrassing. White is great, man.

I dyed it jet black. Wait, your facial hair comes in white? Like light. I dyed it jet black. Mine comes in facial hair comes in white? Like light. I dyed it jet black. Mine comes in white now. I'm old. That's my age. Is this a standard Gen X podcast? What does that mean?

What does that mean? Yes, maybe. What's a standard Gen X podcast? A standard Gen X podcast is people who are just like, ooh, my back. My back. My back honestly hurts. How do you know?

We do open the show with some of my ailments. It's been... All right, so we were just reading about this Enjoy Technology. Did you see this story? No. Okay. It was a SPAC.

When did it... Hang on. Don't... Let me just read the tweet. This tweet is gold. Enjoy Technologies, which went public via SPAC in October, filed for bankruptcy today.

So, but wait. Oh my God. But here's the punchline. The founder of the company is Ron Johnson, the guy who bankrupted JCPenney. But he was hailed as a genius at Apple. It turns out it was actually Apple and not him. What did do at apple was he product no he invented the apple store he created

like yeah and then oh that's right and then he left and they brought in that woman from burberry angela whatever but he like the damage had been done already and then but no, this, I mean, we can talk about this, but like this, this idea that someone who was success at company A, you put them into company B and they have lots of skill and they will therefore be very good at company B. That's all investors. That's what all investors think. It just, it never works out. Can I explain the business model to you? Maybe you'll change your mind. For Enjoy Technology.

Please. Oh, please. Okay. It's better than you think. Founded in 2014, Enjoy Technology sought to bring high-end retail services into customers' homes in North America and Europe. The company has over 1,700 employees, some of whom hand-deliver iPhones and other tech gadgets and use those deliveries to try to sell more of those companies' products. So, in other words, for some reason, you buy an iPhone. You want somebody to bring it to your house.

Yeah, because you want them to show you where to swipe. Otherwise, how would you know? Right. And then pitch you a charger. I can't even imagine who thought this was a good idea. They generated $25 million in revenue, but reported $50 million in operating losses in Q1 of this year. So, well, listen, you've got to spend money to make money. How many staff? 1,700 people.

So, wait, 1,700, 25 million. Wait, can you do the math on this? Can you do the math on this? Like what's that in terms of revenue per person? What's 25 million divided by 1,700? It's low. It's not good. It's extremely low.

In May, Enjoy began a process to sell substantially all of its assets. At the time. Its assets being, I'm not sure. Oh my God. It's 14,700. Mr. Johnson provided 10 million under a secured promissory note to extend the

company's runway to sell itself. So he started putting his own money in to keep it alive long enough to sell it. Wait, so let me repeat this. I'm like, wait, did I miss a comma?

It's $14,700 in revenue per employee. You could have a profit margin of 100%, and that would still be profits of like $7,000 per employee. Oh, my God. Mr. Johnson's nearly 12 years at Apple made him a star. He oversaw the opening of 400 Apple stores, devoted half the spaces to teaching users how to use their devices.

At Genius Bars, later he served as chief executive at jc penny all right so so the good 17 months before he was before things like this are no longer being funded they're certainly no longer going public no but what is the pitch what's the way that was there a jc penny was there a pipe or is it just like a uh spec with like eight dollars did the spec oh yeah no yeah no it a SPAC that bought this piece of shit. But I'm like, was there actual money in the SPAC? Or did everyone pull their money out? It was a ticker.

Right, right, right. But was there a pipe? They all had pipes. BuzzFeed didn't have a pipe. Really? Really. Why? Why do you think?

Because it wasn't worth $10 a share. So no one wanted to pay that much. Nobody wanted to do the pipe. Oh, my God. So enjoy technology, I guess. I love the idea that people come to your house and sell you stuff is, number one, a service, and number two, technology.

Well, I mean, is it technology? Again? Duncan! It's because of the way we have to get... No, it's good luck when he does that. All right. Not working. Delayed. It's working.

All right, so... But, yeah, I mean, I feel like if you go from some pissant little SPAC that no one's ever heard of to bankruptcy, that's less of an implosion than if you're like BlockFi and you go from 4.8 billion to zero. Zach Prince just tweeted, I can 100% confirm that we aren't being sold for $25 million. Lots of market rumors out there.

The plot thickens, as they say. No, they're being sold for $10 million. Unbelievable. Has he denied things that ended up happening previously or no? No, no. Not to my knowledge. Do we understand how BlockFi lost all that money? Were they making unsecured loans to three arrows?

Here's my understanding of this. All of this started when Terra de-pegged and Luna blew up. Right. That blew a hole in three arrows. And three arrows, like Lebowski's wife, was borrowing money all over town. They owed money all over town. Man. Man.

So they owed money. I don't know. There's rumors that BlockFi gave them an unsecured loan. Jackie Treehorn treats objects like women. If it was secured, it would have just auto-liquidated and it would have been a problem. Zach said on a podcast that they have no more exposure.

Anyway, here's, I think that just the customer's left. I think it's like really that simple. That the deposits on their platform left. And the collateral

vaporized. There was a bank run, basically. Yeah. So they never, to their credit, unlike Celsius and Voyager, they never gated withdrawals.

They never stopped paying interest. I have no information, but I suspect that people were just like, I'm leaving. Right. I mean, it makes sense for anyone who has quote unquote deposits in literally any cryptocurrency company

to pull those out right now. There is no equity in keeping those deposits. And you're like, they're paying me 20% a year, but it can go to zero tomorrow? No, I'm going to pull my money out. They actually were raising the rates. Which is always

a sign. Which is not a great law. The rates reset every month. The rates reset every month. Sometimes they're higher, sometimes they're lower. Theoretically, if they're going up, why would they go up now? Because there's more risk that's going after?

That baffles me, because you would think that rates go up if there's more demand for borrowing, but how is there possibly more demand for borrowing? No, there can't be. Cannot be. Because it's a leverage on wine, so where would the new demand come from? But the demand is from BlockFi itself, right?

They are desperate for cash, so they are willing to pay 20% or whatever it is. No, they're not paying 20%. It was Celsius and Voyager. They were like 8%. They're paying 8% on what, USDC? On stable coins, yeah. Which is another interesting thing.

Why would Celsius be able to pay 18%? Nicole, click it up. Let's go. Dude, I don't know. The compound and friends. Say it. Episode 53. Let's go. Dude, I don't know. The Compound and Friends. Say it. The Compound and Friends, episode 53. There we go.

Welcome to The Compound and Friends. All opinions expressed by me, Michael Batnick, and our castmates are solely our own opinions and do not reflect the opinion of Ritholtz Wealth Management. This podcast is for informational purposes only and should not be relied upon for any investment decisions. Clients of Ritholtz Wealth Management may maintain positions in the securities discussed in this podcast. Today's show is brought to you by Peak Housing Reit. A couple of weeks ago on Animal Spirits, Ben and I spoke with Joe Aulis about the single-family rental market.

Josh, what do you know about this? The single-family rental market? I actually own some stocks that are single-family rental REITs. Okay, well, you could do better. So the Peak Group owns 1,850 homes. They're in seven markets, four states. They've got a focus. I don't know if you call this a niche, the Dallas-Fort Worth area. Okay. You bullish on that? Sort of.

We spoke about the Cowboys on today's show. Depends on the price of oil. All right. So the Peak Housing Group, they've got $110 million in equity from LPs. You could own a piece of the real estate market without managing properties, which I've learned is kind of a pain in the ass. So I actually think this is a mega trend. People that are not, I don't want to say forced to rent, but people who decide to rent don't want to necessarily live in an apartment building and don't necessarily want to deal with a single operator who owns one or two houses. I totally agree.

I don't know what the single family rental market is in terms of – I'm sure it's tiny at this point. It's tiny but growing very fast. Yeah. So basically you can rent a house from a corporation. They are spreading their cost out across all of these homes and they can provide all these other services, everything from entertainment systems to alarms to landscaping. You want a ring? So all of a sudden you're not dealing with 80 vendors to be in a home. You're dealing with one company

that's doing it all for you. I think it's the future. To learn more, go to thepeak.group. Hooray! It was John. I just noticed John's not here. What did you do to him? At his cousin's wedding.

Oh, boy. There are a lot of cousin's weddings going on. It's the Fourth of July weekend. It is. It is. All right, listen. We have a very special guest here today. Felix, we do this very professionally.

I can tell. We wrote an intro for you. You don't just throw this show together. No, we really don't. All right. Felix Salmon is the chief financial correspondent at Axios and host of the Slate Money podcast. the chief financial correspondent at Axios and host of the Slate Money podcast. Prior to Axios, Felix was the senior editor at Fusion,

a financial blogger at Reuters, and you have probably written columns for, I mean, I read all your, like, over the years, I read everything. You were writing for Portfolio. Yep. I had, like, the OG econ blog at Portfolio. I had an econ blog for Nouriel Roubini. Did you go back that far?

Did you really? That was in like 2007. So you really came to prominence during the great financial crisis very early because you wrote about the formula that blew up the world, which… David Lee. Yeah. So give us like the background on that. function so um basically the way you were valuing credit derivatives was by looking at um how they had how defaults had behaved in the past and how house prices had behaved in the past

and there was this wonderful thing called the gaussian copula function that um you would plug your numbers into that and out would spit a fair value for synthetic cds on the mortgage market and you would say great okay this is what the computer says it must be true and you'd go out and you you and it was triply rated so you could level yourself up a million times and you and i'm sorry hold on are we going to cut the music what's going on here yeah you have to cut that so felix doesn't start rapping exactly i got distracted getting michael's cable he was about to say my money don't jiggle jiggle i'm just telling you i knew it was coming yeah it does fall sorry sorry go on um so but yeah so the the long and short of it was that the formula was deeply broken. And basically, it was this kind of value at risk formula that told you how much these

CDS could, how much these assets could decline 95% of the time. No one realized that the other 5% of the time, they would just blow up completely. And people believed the formula. And there is not one cause of a financial crisis. There are many, many causes of the financial crisis. But that was, in terms of the deep financial engineering and structure of the financial crisis. But how the hell did you know that?

Are you like a mathematician? He watched Margin Call. Exactly. Margin Call came out later. I'm kidding. But no, it was a bit like that. You know, that kind of, who is it, the Stanley Tucci character in Margin Call who's just like, have you seen this is, you know, five standard deviation events and like we are not set up for this.

And then we wake up in the morning, there's going to be this $2 billion hole in our balance sheet. We'll wake up in the morning. There's going to be this $2 billion hole in our balance sheet. That was effectively what they were doing is they were valuing this sort of toxic waste using the Gaussian copula. Now, when you wrote that, it made a really big splash for, I think, a couple of reasons. The first is it was more sophisticated than anything that The Wall Street Journal or the New York Times were doing about, at that point, the mortgage market. Like they didn't have bloggers. They had really good reporters,

but they didn't, I don't think they had opinion people that understood markets and like could write that way. So I feel like when you wrote that, it almost like ignited something that continues to this day, which is like very well-informed market people doing not only news but opinion for like, you know, deal book everybody. Right. Is that how you see it?

Right. Yeah, exactly. we had a bunch of like really good reporters and I've never claimed to be a really good reporter, but they, what they didn't have was people who just broadly understood how bonds and derivatives work. And that was what everyone was asking. They were like, can you explain how a CDO waterfall works? You know, and I'm like, I can actually do that. So, um, that kind of explanation and understanding of the nitty-gritty of finance became very um popular and useful and yeah and next thing you know you have matt levine yeah well right i was i was gonna say there was like a lineage of some of the better market reporters or commentators and i feel like it really started in that moment. And now it's not uncommon. So like Alphaville was very early on to that. Yeah.

Cardiff and Izzy. Izzy, exactly. And then, yeah, and I'm not sure. I feel like, as we all know, blogs are dead now. So I don't know. There's not like the same kind of intellectual back and forth where I would post something about some obscure derivative and then someone else would reply and then someone else would reply.

And you'd get all of these back and forth with Steve Randy Waldman going deep into the weeds of the bond documentation and that kind of stuff. Or I'd be going super into the weeds about collective action clauses and sovereign debt contracts. Where is that taking place? Is that on Twitter or is that on podcasts? I feel like a lot of it is gone.

It was this brief shining moment where there was this kind of economics grad seminar going on in the blogosphere every day. Nobody has time for that shit. It's boring. They do have time for that shit, but they just waste it all on TikTok. Yes.

So that's, that's where, that's where it's all gone. I actually wrote a chapter of a book about, about the death of the blogosphere in the two thousands. And, and yeah, you can,

there's a bunch of different things that killed it. One was that the mainstream media started buying, you know, hiring all of these bloggers and then putting more constraints and shackles on them. It was Twitter. Joe Weiss is all famously said, most blog posts should be tweets.

But then Twitter was the other one, right? So Twitter comes along towards the very end of the 2000s. And then it's that much more immediate and it does put one of the many knives in the bleeding out body of the bloggers here. The blogs also, myself included, all cut their comment section. Because if you're a solo blogger, there used to be a lot of like great shit going on in the comments. Totally.

Because like people that had nowhere else to go to put their thoughts. There's now like one comment section left in the world, which is Marginal Revolution. And then everyone else is just like doesn't work. Because it's too much trouble to police like i remember convincing barry to kill his comments and it took me like six months to get him over the hump but i said go look at the last 20 comments on the last post you wrote if if five of them are constructive or further the conversation at all i'll never bring this up to you again i had already looked so i knew but it you know,

it's just like, if you're, if you're a one man operation or two person operation trying to do even like a great blog, like calculated risk, right. And you're trying to like put out content and then you leave a comment section, you go to sleep at night, you wake up the next morning and there's all kinds of horrendous shit on there or people saying ugly things to each other, who wants to host that? So I think that that partially helped to just kill off blogs as an interactive medium. And then the other big thing was Google Reader getting killed.

And then those of us who were really deep in the blogosphere, we read all of our blogs that are out there. I remember when they had, was that 2014? That sucked when they killed that was that 2014? That sucked. Yeah. When they killed that thing. And then, yeah, there was no good reason for them to do it. But the minute they killed Google Reader, then that was the end of it.

There were some blogs that lost a third of their views overnight. What do you use now? You use something similar. I use Google News. What do you mean, to find information or to broadcast? Whatever. Do you have an RSS reader that you use? No, but we have an automated email that goes every night based on RSS,

but people have to subscribe to the blog. So they can't wait for an RSS feed that's never going to come. But RSS still exists. Yeah, I mean, podcasts are RSS. So we use it to populate an automatic email. So if I do three posts in a day, those three posts in their entirety will go out via email. And we're doing that with all, we're doing that with yours too, by the way.

I don't know if, I guess, maybe you haven't taken an active interest, but there's an email for your blog. No, it's not the same. It's hours later, I know. It's not the same. We actually could time, so we say 5.30. But so you do a podcast now.

What's your thoughts on podcasting versus blogging? Isn't podcasting so much better? No. Not in this case. Why? I mean, so, yeah, we're having a pool session right here, right? It's perfectly interesting, but it's not, you know, if I wanted to, say, actually give you a good, short explanation

of what I wrote in 2009 about David Lee and the Gaussian copula function. If I had a blog, I would sit down, I would probably skim the article and remind myself what the hell I wrote, sum it up pretty effectively and be a lot more accurate and clearer and useful than I was in my random blathering earlier on, right? And you can be a lot tighter on the blogs.

You can link much more effectively on blog blogs. There's no real effective way of linking out to someone from a blog post. Well, charts and tables belong in a blog post. Yeah, and you get charts and tables, but more so the point, blogs are a conversation, right? And they're a conversation between a lot of bloggers and they're ongoing.

And podcasts don't work like that. There's no cross-pollination. There's very few podcasts who are like, so-and-so just said this on one podcast. I'm going to respond to them and they respond to me. Yeah, it's so funny. That's true. That does happen, though, in other verticals outside of finance. Like all of the TikTok bloggers.

Oh, TikTok is a conversation. But they are going back and forth on each other's shows. Yeah, because that's built, but it's also built into the platform, right? There's this thing called stitching and, you know, it's very, they make it easy to interact with each other in the way that it's very hard in podcasting. Yes. So, right, it would be very rare for, let's say, Cardiff does a show at the New Bazaar and we have a guest that disagrees with what Cardiff was saying would come on our show and say, let's do 25 minutes on why Cardiff is an idiot. Well, you also can't tag someone in a podcast, right? Like they might not even know that you're talking about them unless somebody else tells them.

Right. True. Very true. What do you make of the state of FinTwit overall? of the state of Fintwit overall because I feel like Twitter had a big moment in 2020, 2021. It was like one of the few outlets people had.

Yep. Like not teenagers who mostly went to TikTok. Although actually, to be honest, like the social platform that really had its moment in 2021 was Reddit. Yes.

So Twitter's been on a long, slow decline in terms of quality for the best part of a decade at this point. Yeah. And I would say fin Twitter with it. It's not what it used to be. And once they kill TweetDeck for Mac on, what, tomorrow? Oh, are they doing that?

Then it's just, that's going to be that. It's like that. Killing TweetDe deck for mac is a little similar to google killing google reader why are they doing what is the stated reason of doing that because every power user of twitter i've ever met was a tweet deck aficionado right why would they do why would they take something away from their most active users that they love i've an idea it's a terribly run company. Maybe that's why. So now what do people who are on Twitter all day look at?

They want everyone to go to the web. There is still TweetDeck for web, but that's just... It's an app. Web apps are terrible things. I broke up with TweetDeck like four years ago because my brain was melting.

So I just used the website.'s not great but oh you do yeah okay but the point is like you can't you can't have the website in the corner of your eye you need to actively navigate to it and true yeah and people realize that when they don't actively navigate to it and they don't press that button and load that tab, they're happier. Oh, well. Everyone who gets off Twitter is happier for it. This move is a way to make everyone,

I mean, it's going to make a lot of people happier, but it's going to massively reduce whatever engagement. Twitter is good for anxiety. Yes. It's very good for that. But it rewards just the most toxic behavior, just dunking and so. And it also rewards just like, you know,

cheap snarky jokes. And I love cheap snarky jokes. I used to also. That's not actually. What's the longest stretch you've ever been off of Twitter for? Have you gone a few months? So I've gone a couple weeks. And then the first three months of this year, I was pretty

much entirely off it. I was on book leave and I disappeared off to a cottage on the West coast of Ireland. And I basically just said, yeah, I'm not going to be. But so if you're a journalist, you really, you really can't live without it. I mean, I guess you can, but it's, it makes your life much more difficult. How do you, like, how do you know what people are talking about or like what the. This is the thing, right? The people I follow on Twitter are not my readers.

It's not even the people I follow. It's the people who tweet a lot into my feed are definitely not representative of what my readers hear. No, they're the opposite. I'm just saying for news purposes. So Elon Musk keeps on complaining about bots, right right because he sees a lot of bots in his platform because if you look at the tweets that he sees when he calls up twitter like that is not remotely representative of anything um but he but he seems to he seems to think that that is representative of something.

So he – but yeah, you get a very skewed view of what people care about, what people are talking about. And it's actually – as a journalist, if you wind up writing for what the people who are tweeting at you are saying, you are going to go in a very dark and i think that's a huge part of the political problems that we have is that a lot of people running for office or in office think their job is to please what they see on twitter well that's what worked for trump um right but there's one trump so now you have 500 other people who are basically giving into the most rabid people in the world who are active users although that is also built into the structure of the political system where you know you have this primary system we you know we just had a an election a couple days ago

um i don't know how many of you guys voted but like turnout was tiny because it was a primary and the only people who vote in those primaries are like the rabid you know twitter commenters and so you wind up the people who win the primaries and who wind up eventually because someone who wins a primary is always going to win the general election like that person is always the person who threw enough red meat at the rabid crowd of the people who vote in primaries. And those are not normal people. Yeah. But the people that are very good at getting attention.

But the vast majority of people are not represented by that at all. So if Fintwit is dying, does everybody end up with their own sub stack? But it's not dying. It's just everyone's miserable. No, it's dying. Is it? Yeah. It doesn't have the influence it used to have.

How would you know? Everyone knows. Because Josh is fin to it. Yeah. He thinks he leaves. And he's dying. No, no,

no. People tweeted yesterday. I have to send a, I have to send a tweet like at a, at a pre-specified interval. So I try to send something funny. People send you what? How do you know Twitter's dying?

Because people send me a tweet that's like blowing up and there's like 30 likes on it. Like a really, unless something is overtly about gun control or abortion rights, there's nothing anyone can say about the markets that goes like, that goes big. I mean, really, honestly, what could anyone say? Bitcoin tweet is not going to do 7,000 likes. I remember there used to be a Twitter where things could go really big pertaining to our subject matter. And even if you get away from the metrics, there used to be a Twitter where Joe and Matt and Cardiff and me, we would get into actually actually gnarly interesting conversations and you would learn shit

and we would learn from each other and there would be a super interesting conversation going on there. I can't remember the last time I got into a super interesting conversation on Twitter. That's not what it's for. That's not what it's for anymore. I agree. It's turned into a vehicle with which to express your disgust. It's to score points with your constituents.

With your followers. That's it. Do you think Elon's going to end up owning Twitter? I can't see- I'm 50-50 right now. I can't see how he can get out of it, to be honest. Like that- Okay.

That contract that he signed and where he waived due diligence is a pretty cast-iron contract. He has $33 billion that he needs to pony up so he can't like claim that he doesn't have it right what happens if his stock crashes and he literally can't pay for it well i mean like but that's the point right that his stock has already crashed and he's still worth you know well over 100 billion dollars he owns a huge chunk of spacex like there are lots of ways that he can pay for it. So it's very unlikely that he's going to

wind up where his net worth is less than $33 billion. He literally can't. What if, all right, here's a scenario. He makes it very clear that he's willing to be in court for three years over this. And then the Twitter board decides, yes, the fiduciary responsibility we have is to get that dollar figure, that offer. However, that might not be in our shareholders' best interest to have this drag on for three years. Maybe we're better off rescinding the deal or whatever the legal term is and making a go of it ourselves. Is that possible?

Okay, so here's my theory, is that the market value of Twitter absent an Elon bid is the market value of Snapchat. I was about to say, what's Snap? What is the share price of Snap? Snap has more users. Snap is a bigger company. But there is this weird, if you look pre-Elon bid

yeah Twitter and Snap traded at exactly the same price Snap's 20 billion and what's Twitter right now what's its actual share price oh the share price is 13

who cares about the share price no no this is what I'm saying the share price of Twitter and the share price of Snap always used to be exactly the same and now

you son of a bitch holy shit you son of a bitch he's right when was the break? When Elon made his shit. Yeah. That's hilarious.

And so like... And Facebook since then has been cut in half. That's actually very funny. And so... Oh my God, Felix is super right. Look at this. Yeah. So what you get is that the Twitter board is basically saying,

if this bit evaporates, we're worth, call it $13 a share. So if Elon drags it out into court, they will maybe agree to a settlement where they will let Elon walk away. But that settlement will not be $1 billion. That settlement will be $15, $20 billion. It will be a large amount of money that Elon needs to pay to get out of this deal. Don't think it also might depend on market conditions. If we're in the toilet six months from now and Twitter is

even lower than it would be otherwise, they're going to fight for that $33. Basically, Elon always has the option to start a sale process before he even buys it. Try and work out like who the hell might possibly want twitter um work out and like lose eight billion yeah exactly but you know buy it for 44 billion sell it for 30 billion lose 14 billion and maybe that's the cheapest out that

he has or keep a piece of the equity right Right. We'll sell you 90% of Twitter. I'm keeping 10. I'm going to take a loss. So who is he going to foist it on? But it's a good question because, you know, Lena Kahn's at the FTC. She's not going to allow any of the tech companies to buy it. And quite rightly so.

So it's not obvious who else wants it. Is Disney desperate enough? And for national security reasons, they're not going to let TikTok buy it. They're not going to let, I don't think, they're not going to have another Rupert Murdoch come from overseas and own that asset, I think. Like, I think there would be a political battle.

Oh, Waystar Royco is a natural buyer. Waystar Royco should totally buy TikTok. Yeah, I mean, buy Twitter. That would be glorious. I'd say the worst, but isn't that like the worst potential outcome is some maniac manages to buy it just because they're a steel magnate in some third world country? No, no, that is the base case scenario right now because Elon Musk is that maniac. Okay.

So he's a maniac who resides here. Yeah. Okay. Do you think that— He was born in South Africa, remember? He's not actually, you know, I mean, he became an American citizen, but he's like me. He's an immigrant.

Do you think that he really wants to take that platform and actually spend time on it? Or do you think he could be the kind of buyer who just basically lets people do whatever they want? So, this is interesting. Okay, we're recording this on June 30.

You guys have the things up. It's now, I think, nine days since he last tweeted. Is that true? Oh,

wow. Elon Musk has gone over a week without tweeting, which is unprecedented. No one can remember the last time this happened.

He loves it. He reached 100 million Twitter followers and didn't say a thing. This f***ing guy. Here's his last tweet. it um he reached a hundred million twitter followers and didn't say a thing this guy here's his last tweet yeah i mean he's he's he's like for those listening he's at a gas station he's at a 7-eleven gas station and the price of gas is 7-eleven that's the tweet

maybe they can't do any better than that and he's like that is the best tweet i will ever do and i will just like like, peace out. You know how many retweets this got? You know how many retweets this got? 69,000. 69,000. Of course. The stars are aligning.

Yeah, you know someone at Reddit orchestrated that one. I think the Tesla share price had also hit 711, was part of a joke. Oh, really? Yeah, I think that's why he was, huh. This guy. Maybe I do need to come back. So why is he silent right

why is he saying this is a very good question but just but but in the days before he went silent and he was like easing up on the tweeting in the days of up to it um there was this big public letter from the employees of spacex saying can you please shut the up on twitter because you are really not doing us any service here. And he wound up firing half of the people who put the letter together, but kind of sounds like he was listening to them. Yeah.

Well, they were basically saying, like, you're demoralizing the workforce. So if you really love SpaceX, then spending all that time on Twitter is good. How about being a Twitter employee right now? I mean... Miserable. I mean, on the one hand, you can probably just phone it in, right?

Unless you're the head of product who got fired. That's true. Your boss probably doesn't give a shit at this point. That's got to be tough. That's a tough situation. But Elon has said he's going to fire people before he starts hiring again. And he'll only hire again if he can get it growing again. That's good for morale.

And no one has any real reason to believe that he can start growing it. You know, he, maybe the reason he's tweeted is because he's lost internet access because he's hanging out with Jack Dorsey and Costa Rica, you know. Has any company done less with more than Twitter?

Well, that's a good question. So the wonderful Mark Zuckerberg quote, and like literally Mark Zuckerberg is one of the least quotable people on the planet. You call him the clown car? He said that they drove a clown car into a gold mine. That's what he said about Twitter? Yeah. Okay.

That's actually pretty good. Which is a great quote. Yeah. That applies to so many things. Mark is so funny. Yeah. Oh, that Mark, he's such a cut up. Hard Pivot, you wrote an article after the meme stock craziness, and it's become a 19,000 word essay that's going to go in a book.

And it's about the different generations and how they invest, right? Gen X to boomer. Well, I mean, yes basically starting with with the boomers um and like i actually owe you a lot of credit for this one because you um i accept celsius coin me um like understand how incredibly difficult it was for boomers to invest in the market. You know, like we, like Gen Xers like myself, I remember having on Twitter, actually, a really wonderful sort of, one of those useful conversations

where you actually understand why you're talking about each other. And you go, oh, now I understand what you're saying. Like we were having this conversation about whether journalists should own stocks. And I was saying, you know, because I was on some ethical high horse or something, I was saying like journalists shouldn having this conversation about whether journalists should own stocks and i was saying you know because i was on some ethical high horse or something i was saying like journalists shouldn't own stocks and this other guy was saying of course you should own stocks because you need to you know provide for your retirement and wait you mean individual stocks

so this is why we were where we were talking past each other right was that for me, like owning stocks means, you know, I'll own index funds, I'll own some kind of like robo algorithm thing that invests in the stock market. But I never know which stocks I own or, you know, there's no way that that can really influence my journalism. You have an index. You're not rooting for one stock over another.

But this guy on Twitter I was talking to, it kind of barely occurred to him that that was even possible. That there is an entire generation of boomers who think of ETFs as this newfangled thing and index funds as this newfangled thing. Because what investing is, is you try and work out which stocks to buy and you know which ones you own and you follow them and you try and hold them when stocks to buy, and you know which ones you own, and you follow them,

and you try and hold them when they're going up and sell them when they go down. And, you know, you walk around the— As personified by Peter Lynch, Jim Cramer, like that generation. And you walk around the golf course with background knowledge in your head of which stocks you're long at any given time. And like, who the f*** has time for that? But this is what investing was, you know? And that was like a very difficult, complex thing

which you needed to, you know, have a bunch of time and money to be able to do. Then the passive revolution happens. All of the Gen Xers pile into index funds because it's so much easier and it outperforms, so obviously. But then you get the Great Recession, the millennials graduating into a shitty world of no jobs and no money, this kind of general feeling of nothing is ever going to work for me and I don't have any savings anyway.

And so maybe someone can talk to me about index funds, but it doesn't matter because I don't have any money. And that breeds that and like the zero interest rate policy winds up breeding a sort of YOLO attitude to the market. Yeah. Where you just want to take massive gambles. Right. And that then ultimately manifests itself in crypto, in meme stocks and all the rest of it. And it's a whole new way of thinking about investing. It's just like, where can I, like, where am I going to yolo my, where am I going to, like, degen? How could I 10x my money right now?

Yeah, 10x is nothing. Where can I 100x? Where can I, like, 200x? You know, and that's, yeah. And it brings all of the boomers and the Gen Xers out in hives. We're like, what? You can't do that. You wind up losing all of your money. And they're like, well, I don't have any money to lose,

so what difference does it make? And then a few of them made spectacular amounts of money, which were the examples that their peers would point to and say, what do you mean this doesn't work? This guy's in a private plane, and he just bought the stadium naming rights for two teams. And then you get stimulus checks. Right.

And then all of a sudden you give people money. But the point about the stimulus checks, right, is that they're big enough that if you yolo them into something that 100x is, then you can make real money. But they're too small to actually be a retirement fund in and of themselves, no matter how successfully you invest in them. I had a call set up by a friend of mine. I had a call with a guy last week, just like a hello. He's building something.

He parlayed 30 grand into 8 million between 2020 and 2022. I don't know how much of it he kept, but he is now building an investing app for his generation of investors so this is a guy that went like 30 turned into 90 90 turned into 180 like probably nine or ten trades in a row that just worked worked worked some of the crypto some of it options just worked what so he's one of the ones and now he's like anyone if i can do it anyone can do it so i'm going to build an app to so he's going to build an app where great he's going to build an app where everybody it's like a social network but then it's connected to your actual real trading and you could follow other traders and i'm like like how many times has this app been built i was

going to say like nobody is going to be able to replicate what you just did. So you're going to end up having people that have others follow their trades until they lose money, and then they're going to ghost. So it's not going to be a million people worth following. I feel like this app already exists in, like, 18 different arcades. 18 different versions. There's a bunch. No, but this is the one that's going to bring accountability to the world. Anyway, but I get that mentality if that's where you're coming from.

If you just did that, you believe it's possible because it is possible because you just did it. So, I mean, it's a mindset. Right, and it's the same mindset where you think that if Ron Johnson can do amazing things at Apple, then he can do amazing things at any other company. At some point, everybody gives in. It's like, all right, I've seen this ninth asshole that I know who's getting rich. I got to try. There's only so much you could see of that before you're like, I got to try. And in the pandemic, it's all you saw. There was nothing else to watch. The only thing to watch was people your age, if you were like 25, making like 10, 20, 30x in crypto. And actually, to be fair, I did see a bunch of Gen Xers doing this.

I have this one story about this 13-year-old I know who had like a hedge fund. And he was like, he went around to all of his parents' friends and said, like, give me money. And his parents' friends, you know, his parents were like, here's here's 20 i'm going to open a robin hood account for you go have fun and then he's like no 20 million and then and then he goes up to his parents friends and they're like oh i'll throw in some money how much do you want he's like minimum is a thousand why are you giving this 13 year old-old $1,000? Quarterly liquidity. He didn't.

So the wonderful thing is he didn't even have a spreadsheet or any way to sort of work out who he owed what to. Yeah. He has to calculate time-weighted returns for 30 different investors. In June 2020, I was in my office and my plumber walked in. Naturally, he asked me what I was trading. And he goes, oh, you do this? He took out his phone, whole list of, you name it, Zoom, GameStop, whatever, whatever. It was everywhere.

But he was crushing it also. Oh, my God. Yeah. I mean, he was up a ton, obviously. But he wasn't launching a hedge fund. He's like, I'm an idiot, but look how much money I made. I haven't heard. I'm not going to say he didn't launch a hedge fund.

It's possible. It's possible. It's very possible. What's his chart with the red and blue that we have here? Oh, this is sort of a weird pivot. In the doc, you were talking about media, blah, blah, blah. So I overlaid the VIX and my page views. And this incentives drive everything. And this is why I woke up the other day.

My wife watches Good Morning America. And it was like the mall bombed. We've got migrant workers dead in the truck. We've got the attack on the Capitol. We've got Walmart sued by the FTC. We've got the missing man. It was just one after another. And why? Because hire the VIX, hire the clicks. If it bleeds, it leads. It's just,

that's it. That's the game. That is the game. This net, Duncan, throw up that table. So I was like, all right, that looks pretty close, but let me try and quantify it. So I broke down my average page use by VIX regime. Under 25 is a pretty placid market. This is nuts. Wait, let's, so for the people that are listening, not looking. So basically what this is saying is when the VIX is under 25, which is like a normal market, your page views are, this is monthly? Daily. Excuse me. Not to brag. Not to brag. This is daily page views are about 5,000. VIX 25 to 35, you're over 6,000. The really big jump though, VIX north of 45.

Page views go from 5,000 to almost 14. Right. So that's what it is. People want, people that put out content, they don't want the world to burn, but that's when they do better. And they will accentuate the aspects of the world. I know this.

Like, you know, I'm the guy who made my entire career because there was a global financial crisis and I could talk about it. Felix wants your investment account to go to zero. I totally do. So this is the thing, right? Is that, yeah, when the VIX is up, when there's market volatility,

especially when markets are going down a lot or when you have some very weird thing like GameStop where markets are going up a lot. It breaks through the business pages into general consciousness. Becomes pop culture. And then people are like, oh, I should care about this right now. Of course, that right now is always exactly the wrong time to care about it. That is actually exactly the time when you should just put on your earmuffs and your blindfold.

There's like very few iron rules in finance. That's one of them. Right. But that's when people are like, market, what's the market? And they wind up on your blog. Yeah, civilians who would never read a financial blog or in search of information. Ooh, stocks, what's this? Exactly. Right. financial blog or in search of information.

Ooh, stocks, what's this? Exactly. Right. And so, yeah, so you get the page views of the people who suddenly care at exactly the wrong time. We saw that on YouTube, right, Duncan? The videos went crazy when VIX was- Oh, definitely, yeah. Right.

Actually, let's talk, Duncan, throw this chart up here. That's why when you tell me about our traffic, I want to start VIX adjusting you. Okay. Would that be okay? I want to start adjusting you for volatility. So I made that be okay? I want to start adjusting you for volatility. So I made this, like, I'll give this a shot. You go up, I'm smart. I'm a genius.

And it's like, I should have used leverage. Market starts to roll a little bit. Hey, this is getting harder. Market's that way. Hey, this is weird. It'll come back. What the hell? Oh.

And I kind of think we're like at the old part of the cycle where we're past like the denial and we're at the acceptance. I think we're at what the heck? You think so? Yeah. You think we're like at the O part of the cycle where we're past like the denial and we're at the acceptance. I think we're at what the heck? You think so? Yeah. You think we're higher? Well, wait, stocks or crypto or what? Just general.

General? General. I think now, like it really occurred to me like, oh, we're in a bear market. an interesting theory about this because again if you if you talk to the people who read barons and play golf um they they will or their financial advisors yeah will tell you that there is a kind of um a natural tendency to buy high and sell low of course and josh being a financial advisor is like of course this is this is what people do but i feel like financial like you know how we were saying that you shouldn't consider the people you see on twitter as being representative i honestly think that financial advisors shouldn't consider their clients to be representative that's interesting and that this

to be representative. That's interesting. And this tendency might be true for clients of financial advisors, but I think it's less and less true broadly. It's a tiny, that fear is overblown. Like I can just tell you from experience, we do not have tons of clients that are interested in buying low and selling high.

I know nobody wants to do that, but it's very few people. No, what I'm saying is the opposite thing, where like when the market falls, people are like, shit, and want to panic and sell. Oh, you think they do? No, I'm saying they, no, like. You're saying the kind of person

that has a financial advisor is that kind of person, but that's not everybody. One of the reasons you get a financial advisor is precisely because you're self-aware enough to know that you will panic at the wrong time and you want someone to hold your hand and say just like you know of million dollar households in america 28 are self-directed so two-thirds are working with somebody in some cases that's only quasi getting

advice it might just be a broker but it's also it's also a money thing if you if you are prone to do the wrong things and you have you know forty thousand dollars it's not really going to hurt your future that much. If you've got a million bucks, it matters. There's real stakes there. Yeah, I think... I guess what I'm saying is that there's

this behavioral drag that people love to talk about, that people always do the wrong thing at the wrong time and you're nearly always better off doing nothing. I mean that's true you nearly you're you really are nearly always better off doing nothing but i think what we saw especially in march 2020 was that the anticipated sort of selling of people it never happened it never happened we had a lunch we had examples of the opposite yeah because i called i called my partner, Chris, and I'm like, how bad is it?

Like, are people freaking out? People are adding. He's like, no, you don't understand. People are calling and trying to put money in. Exactly. I actually, okay, so. So I said, complacency. Josh said we're not at the bottom yet.

I think that chart. Tell them no. That chart that Dalbar shows the average investor underperforming inflation is total bullshit. It's been debunked a million times. The average investor is really, really not even close to that bad. Not even close. Yeah.

I think you're right about that. But for the subset of people that very much are prone to thinking they're a genius at the top and wanting to, you know, why didn't we own more of blank? And then at the bottom like oh my god i can't believe i'm living through this get me out for that however whatever percentage we think that is that's real it's people with a lot of money by the way i do i do think it's also i also do think it's true in crypto the one of the reasons that the crypto route is so bad right now is because people just weren't happy being long. They needed to be levered long.

It's all leverage. Crazy to me. The amount of leverage, like the reason why there were high interest rates in the crypto market, the reason why all of these people were offering 8% on stablecoins was because there was just this huge demand for leverage. And you're like, this is insane. You're buying something which you expect to go up 100 times because crypto is going to eat the world or something, whatever your thesis is. And that's not good enough for you.

You need to add a whole bunch of leverage to that. It makes sense to add leverage on an asset that doesn't move like treasury bills, for example. Right. But to add leverage on a 30, 50 vol asset, whatever it is. Well, I asked you that question. I said, why isn't the most volatile asset class on earth good enough one-to-one?

Why does it have to be 20 to one? What is the need for that? I only use five times leverage. You're only five. So what's interesting about this blob, it's institutional leverage being unwound because I've filmed this chart up a bunch. This chart shows the number of addresses

with more than one Bitcoin. It's at an all-time high. It's not, people are, the average Bitcoin investor is not panicking. It's institutional leverage being unwound. Right. Which is madness. How come, like-

And one of my favorite charts that shows that is the discount net. Oh, GBTC. Yeah, the GBTC discount to... What is it now? It's 30. No, it's 30, yeah. By the way, they got rejected last night.

Well, they got rejected, so it's presumably even bigger now because everyone... But that discount, you know, it is a classic case of trying to find the safe arbitrage and then levering up. And then you're like, whoops, it's moved against me. Why is that discount so big? That makes no sense to me. Because there's a bunch of forced selling because right now everything needs to get liquidated.

But it's been at a discount for almost a year now? I would love why was it why did it used to be at a premium that's the even weirder well i can give you an answer i don't know if it's true but the reasonable answer is it's the only way people with an ira for example can own bitcoin by buying that vehicle you can't buy crypto in an ira what changed for it to sell? Well, more comfort level with things like Coinbase and other brokerages. That's what changed. So they're still in the SEC as one does. Yeah, good luck with that.

Yeah, I don't know what that normally turns out. But also like GBTC is this batshit product, right? They're charging 2% a year to sit on your Bitcoins for you. And you don't even have Bitcoins. You can't use the Bitcoins to buy anything. You can't even have Bitcoins. You can't use the Bitcoins to buy anything. You can't send the Bitcoins. You can't do that anyway. I don't know what you would use a Bitcoin for in real life anyway.

I actually bought a bottle of whiskey with Bitcoin once. What was it like? What was the process like? Easy peasy? Actually, surprisingly easy. It was. Can I plug Fort Hamilton Rye Whiskey on this show? Do it, of course.

It's a very good whiskey made in Industry City, Brooklyn. And I was like, I need to buy some Fort Hamilton rye. And I have this Coinbase account with some stupidly tiny number of bitcoins in it, fraction of bitcoins in it that was lying around for no reason. We call them Satoshis. And this wine shop in Brooklynoklyn was like we accept bitcoin so i go on to the thing and it just like connected to my coinbase account and some however many satoshis like pinged over next thing i know i get a package in the mail with a bottle

of whiskey i was like there you go and and then your bank account was emptied overnight by somebody from South Korea. But the fact is that I should have paid capital gains tax on that, and I didn't. So that's the other thing is – Straight to jail. Wait, so that's the other thing. I asked Michael. I really didn't understand this. I know he follows this stuff more closely than I do. I didn't understand how elemental the stable coins were to the asset class, to the ecosystem.

And it turns out, well, I'm an idiot, but it turns out, of course, they're elemental because nobody goes to cash. Well, that is cash. It's digital dollars. No, but nobody goes to cash. It's not like so much. The on-ramps and the off-ramps are just way too. Horrible. No, but also there's tax ram's not like so much. Yeah, the on-ramps and the off-ramps are just way too. Horrible. No,

but also there's tax ramifications of going to cash. No, but there's tax ramifications of going to stable coins too. Hey, hey, is there?

Yes. Felix. Yes. Who said? We have, we have winking. No, the law is that the minute you

go to stable coins. Yeah, that's a capital gain. That's a capital gain. You need to pay capital gains tax on that. But now you're doing that at a brokerage that's based in Singapore. Does that apply?

Yes, you're a US person wherever your brokerage is. All right. Now, you can't easily, though, go to cash cash, which is why nobody does. Right. Because there is no cash in that ecosystem. Right. You would have to take the money off of the platform. So how stupid is this?

Which part? That the government wouldn't make cash part of this crypto ecosystem. How is that a government thing? Wouldn't it be smarter of them to do that? Like, where is this digital dollar? Because wouldn't that replace every stable coin on the first day? Yes. Yes.

Yeah, no, a CBDC would kill every stable coin overnight. What would you need one for? You wouldn't need, yeah. If it was, like, there are different versions of CBDCs, What would you need one for? circle and tether and saying, we want in on that game. They have much bigger macro prudential worries. And what they actually worry about is that would kill banks. Money markets. No, banks. Banks.

Yeah. So if I can- If you could bank directly with the Fed via a digital dollar. If I can just own digital dollars in my digital wallet and use those to transact, I have no need for a bank account anymore. For the storage of the money. You still need a bank for loans. Right. But all bank deposits start becoming like, why do I need to go to JPMorgan Chase to put my money with them?

Why do I need to go to JPMorgan Chase to put my money with them? Which is, remember, basically, in nearly all cases, an interest-free perpetual loan from me to them. And they use that incredibly low cost of funds to shore up their balance sheet and to do all of their fractional reserve banking. Well, they pay you 70 basis points. But the minute that you don't, like, people don't make a profit on their checking accounts. The minute that everyone pulls their deposits out of the high street bank and just keeps it in stable coins because it's so much easier that way

in a central bank digital currency. Like the entire financial system of the United States, like that is a systemic risk. So when they say they're studying creating a digital dollar, does that mean they're- Why can't banks own digital dollars? Why can't you just- So one of the options that they're studying

is that basically stable coins would be issued by banks rather than by the fed and that you would need to sort of go via a bank in order precisely to avoid that kind of does this not seem inevitable to you guys no you do not think it's inevitable no no in fact we keep losing countries that are willing to let this shit go on. China just blanket, no, we don't have this. Well, no, they do have a CBDC. No, no, no. But they just are not allowing any growth or development whatsoever of any coins, protocols, trading. So this is the point, right?

The ECNY is – What is that? ECNY is the central bank, the CBDC in China, basically, is a very powerful tool of surveillance by the Chinese Communist Party. But it's not in any way, shape, or form based on the blockchain. It's not something that you can convert easily from Bitcoin to ECNY and back. It doesn't solve your on-ramp profit problem by design. They don't want to make that easy. They basically tried very hard to ban crypto in China because, you know, it's one of those things a bit like Ant Financial or whatever, where they're like, no, this is not good for society as a whole.

Just because it's creating a few billionaires doesn't make it a good thing. What's the country in Latin America that said that Bitcoin was a currency? El Salvador. El Salvador. So they're going to have a big IMF loan package come due. They're not going to obviously be able to pay it. It's going to be a financial crisis.

That'll probably set back the idea that there's going to be this mass adoption by countries. There was no, yeah, exactly. That's this year that's going to be this mass adoption by countries. There was no, yeah, exactly. That's this year that's going to happen. This guy, Bukele, the president of El Salvador, the hipster dictator he calls himself. He calls himself the hipster dictator. Very chic.

You know, he is basically like the Michael Saylor of heads of state. He's like, every time Bitcoin goes down, he's like, I'm buying just, every time Bitcoin goes down, it's like, I'm buying the dip. And he goes down and it's like, I'm buying the dip. And it's working out about as well for him as you would expect. Michael Saylor's dip purchases are getting much smaller these days. He bought the dip, he paid $10 million.

He's like dropping like $500 million. He's like swiping his credit card at this point. I want to do some art stuff with you, Felix, because you're somebody that actually knows art, and Michael and I are not. But the art world I feel like has never been more – or maybe it has, but maybe never more obviously. The art world has never been as caught up with trends on Wall Street and crypto as it feels like it is now. trends on Wall Street and crypto and as it feels like it is now. And part of that is just because we have $5 trillion of excess money supply running around these ecosystems. What has all of this easy money and digital money and the culture going on in Miami, like what is this all done to the art

world or vice or even view the other way around? Like how much is the art world feeding on this on purpose? Like what do you see happening there? So, yeah, there's a lot of different art worlds. Miami is an art world. Yeah. The reason – one of the main reasons that Miami is an art world is because it has this big annual art fair called Art Bars on Miami Beach. Right. and art world is because it has this big annual art fair called art bars on miami beach right the

first thing you need to know about abmb is that it's the baby brother art fair of art basel which happens just happened like last week in basel and switzerland right and the parties and the celebrities and the nfts and the crypto and the NFTs and the crypto and all the dumb shit that happens in Miami, you don't see any of that in Basel. The grown-ups who are buying and selling real art in Basel, the hype cycle hasn't made it to Switzerland. It's made it to Miami because Miami is an entire city

based on nothing but hype. The city is going to be underwater in 20 years. All they can do is party and try and forget that. Shots fired, Felix. So. Miami's bullshit. Well, no, it is. No, it is.

The half the city was built by cocaine and now they're rebuilding everything and it's all being built with crypto money. Have you listened to Francis Suarez talk? The mayor of Miami? Yeah. Like the, it's all being built with crypto money. Have you listened to Francis Suarez talk? The mayor of Miami? Yeah. He's a bro. He makes Eric Adams seem like really considered an intelligent. Yeah.

There's no- He makes Eric Adams sound like Marcus Aurelius. There is very little substance in Miami, but Miami is very good at hype. And there is definitely a small sliver of the art world that loves hype, you know, that

is active on Reddit, that yolos into NFTs, that speculates on like Anna Wayant or Amarako Boafo or whoever the hot artist of the minute is. There's this guy in LA called Stefan Simkovitz who's famous for speculating on art and buying art for profit and buying low, selling high and all of this kind of stuff right that is a part

of the art world that happens by necessity much more in public compared to the quiet kind of big deals that are done privately and no one really talks about and what happens in museums but eventually it does wind up in museums. So the Brooklyn Museum just had a show of Coors, who's just like a pure hype artist, right? Like street style. Yeah. And we just had a big scandal in Orlando,

which is basically like Miami on steroids, of the FBI raiding a show of fake Basquiat's that was on at the Orlando Museum. And they just like confiscated all of them. And they were like, come on, guys. Wait, Basquiat's aren't for sale in Orlando? I can't believe it. Right.

Yeah. Like there's a bunch of really dumb shit happening. Well, there's always a bunch of really dumb shit. Doesn't it always coincide though with the stock market bubble? And now in this case, a crypto bubble? The art world seems to rise and fall with

people having just incredible gains in speculative assets. At least in my limited life experience. I don't know how far back that goes. It's a super interesting question because the art world still seems pretty healthy. Even given all of the carnage in tech stocks and crypto and all the rest of it, there's It's a super interesting question because the art world still seems pretty healthy, even given all of the carnage in tech stocks and crypto and all the rest of it.

There's still a lot of money pouring into art. It really rises and falls. The core of the art world, the real money and the real wealth and the real assets, rises and rises with the aggregate wealth of global billionaires. Right. So, so long as global billionaires are getting richer. That only goes one way. That only goes one way, exactly. So, you know, as long as they're doing well,

the blue chip art, you know, the amount you'll pay for Velazquez, you know, will always just seem to go up. One of the Walmart heirs doesn't need to panic sell a painting for liquidity. Exactly. So that,

so the claims about art being a portfolio diversifier and being a vehicle for outperformance of whatever you want, real estate stocks, it's, it's grounded in reality.

No, it's grounded, like that is grounded in statistical legitimate and bullshit well most people can't buy all these pieces of artwork so you could not it's not like a vanguard 500 it'd be really hard to approximate yeah okay so number one it's not investable right but number two there's no i mean there's no investable art index. So when people say that art has outperformed the S&P 500, they have to do a bunch of slightly dubious mathematics. Mental gymnastics to get there.

And what they wind up doing, most of the time, not all the time, most of the time, they wind up using this thing called the May-Moses Index, which is owned by Sotheby's now. And the way the May-Moses Index works is that it looks at repeat sales of artworks at auctions. So that if there's a painting that sold at Sotheby's yesterday, and then the same painting sold at Christie's 25 years ago, they can compare the price of that painting between those two data points. And then they aggregate any repeat sales that they can find in the market

among paintings, and they can work out what the up and down trends are in the market. That's the MAMOSIS index. It sounds like a relatively sensible way of doing things. What's the problem? There are two big problems. The first is that the auction houses are very picky about what they accept. If you turn up to Sotheby's with some random piece of shit painting that they're not going to be able to sell, they won't put it in the auction. And more to the point, if it won't, they'll say, well, we might put it in a day sale where you can get $600 for it,

and you'll be like, I paid $20,000 for it. Why would I even sell it for $600? Just hold on to it. So no one sells that. So all of the stuff that goes down never sells, never makes it into the index. The stuff that does sell is the stuff that— So survivorship bias. Massive survivorship bias.

Okay. Yeah. Massive survivorship. Okay. Yeah. And the stuff that does sell, especially at the auction houses, is generally the most hyped stuff of the moment compared to where it might have sold 10 years ago. It might be looking good, but it's just the auction houses

and public auctions are such a small part of the total art market that you can't consider that to be representative at all. And we were talking about your good friend Scott Lynn at Masterworks. He says on the record, very happily, that he will never buy or sell an auction. You know, it's just like the round trip costs are too high. The amount you need to pay to the auction house is too high. It doesn't make sense for him to do that. So they're private sales instead of auctions.

The private sales don't appear in these indices at all. Okay. And if everyone is selling at a loss privately, that never shows up in the indices. So the indices are bullshit, but they're directionally right. No. Okay, so here's the thing. He's saying it's such a tiny slice of the market. No, no, but I'm saying look at the…

Well, just buy the winners. Look at the top 20 highest-growing grossing artists at auction over the past five years. Does that list change a lot? Yes. Oh, it does. Compare that list to the like you're talking about like the compare that list to what to what it was 20 years ago and i've done this exercise and it's like whoa you look at the list 20 years ago and you know you'll see like i don't know if peter halley and julian schnabel and nerd alert you

know this guy's dropping artist names sol steinberg you You know the Saul Steinberg from the New Yorker cover of The View from New York of the Hudson River? That guy was actually briefly at auction. One of the most collected artists at auction was like in that book. You're talking about contemporary art. You're not talking about like old masters. So old masters, there aren't a lot that are on the market. There's no liquidity on there. They don't turn over.

They're nearly all in museums. And the ones that aren't in museums have been in the same family for 500 years. So it's very rare for those to – So you're saying the top-grossing contemporary artists, the index wouldn't look like 10 years ago. Just the top-grossing artists. One thing that has happened is that the top-grossing artists are much, much younger,

and the art has been created much, much more recently than it ever used to be. It used to be that you'd go to a modern art sale at Sotheby's, and most of the art was at least 30 or 40 years old. Now you go to a modern art sale at Sotheby's, and you can buy stuff that was painted three days ago. Yeah, because the artist has a brand and has built a name for themselves while they're working.

Right. Okay. Are NFTs art? No. Okay, why? I don't think so either, but I just think they're ugly. But that's not a good answer. There's two different ways to understand the question.

You can't say NFTs are ugly. They're all ugly, every one of them. So the first thing to say is like an NFT is an arrow, right, which points to something on the internet, on the interplanetary file service or something. And the thing that it is pointing to is nearly always, well, sometimes it's like an nba top shot you know no one considers that to be uh michael does um avid collector but like let's say it's done by

someone who considers themselves to be an artist people people right fine like that art is objectively terrible that is people makes really really bad i wouldn't put one of those f***ing things on my wall if they paid me. If you look at the, there is an aesthetic to those kind, to what you find on OpenSea, and it's very digital and weird. You know, you can look at Beeple's and Bored Apes and Mutant Apes and Pax and you name it, all these people who are selling it. And you can pretty quickly you get a feel for the aesthetic. And the aesthetic is cheap and nasty and terrible and there's no actual like aesthetic value

in there. Right. So insofar as there is any kind of aesthetic object, the aesthetic object is just like bad. Yeah. Almost video game quality. But more to the point, the NFT itself is not the aesthetic object.

The NFT itself is some weird tradable token that is somehow linked to the aesthetic object in some weird way that no one really understands very well. And is mostly just a speculative this guy doesn't understand community yeah oh yeah it's the community you're leaving out it's the community so no so so that's the thing right so like consider the board apes people don't

really consider the board apes to be art they consider the apes to be a community status symbol it's a status symbol exactly so like the what we, and I think one of the things that we have seen in the NFT world since the big Christie's auction of the Beeple is that like for a hot minute there, people thought, oh, NFT is, that's a way for artists to sell art digitally, you know? Which sounded great to me.

Which sounded great for a minute. And then very rapidly, what you saw in the NFT world was that community moving away from that paradigm and towards this idea of collections, whether it was apes or rocks or penguins or whatever you have. And the word art basically just dropped out of the NFT lexicon pretty quickly. Yes. So they became more like collectibles, tokens to join a community.

And that actually makes a lot of sense to me. It's like a backstage pass. The concert ended, but you hold on to the backstage pass because the artist is meaningful to you or you had a great time or you just happened to collect things as souvenirs. I understand that.

I just don't understand why somebody else would buy it. But the secondary market in backstage passes is like, yeah, that's the weird bit, right? I understand that. I just don't understand why somebody else would buy it. But the secondary market in backstage passes is like, yeah. That's the weird bit, right? There are some things that you get like bizarre secondary markets popping up. And baseball cards seem to be like really hot right now for reasons I have no idea. And one of the things we saw in 2021 was a big – or 2020 and 2021 was this really sharp rise in the value of Rolex watches. Yes.

And you're like, okay, so I guess suddenly there's a community of Submariner lovers out there. Let's assume they weren't melting them down, right? No, they're not because the ones that are valuable are all steel. Yeah. And that market is now going down. But, like, yeah, there are little collectory crazes. And so that's, you know, art collectors are collectors. And so there is a little bit of that dynamic of wanting to identify the collector craze and wanting to buy the stuff that

other people want to buy but most art collectors aren't honestly like that most art collectors actually do want to like the art they buy yeah live with the art they buy um but you know no you know they want to hang out with those artists and support artists. And all of that kind of stuff is a much more real and physical form of community than you find in a discus. People that go to gallery openings, people that – right. That's a community. Right. Because, first of all, there's a price to get in. Right.

And, yeah, if you want to go to the opening week of the Venice Biennale when the whole art world is in the same place at the same time, those hotel rooms don't come cheap. Enough of the art. Well, I want to ask one more art-related question. What would Warhol be doing in 2021, 2022? And what would Andy Warhol actually be doing right now? Because from whatever I know about him and what he did and why he was so important and the quote-unquote community around him,

I feel like he would be perfectly at home in this world of crypto and NFTs and everybody's famous for 15 minutes. He would hate it. You think he would hate it? So he loved it in the 70s. So this is the thing. Andy Warhol was a contrarian um he was a he was deeply avant he was a much more avant-garde artist than people give him credit for um he gave up an incredibly

lucrative career as a commercial illustrator to make much much less money making art that people hated and when he first came out with the soup cans and the marathons, people actually hated that. And they called it Neo-Dada, and they thought it was incredibly nihilist, and they hated it. Eventually, all that changed. But when it changed, and when people started loving it and putting it on tote bags, that was when he said,

oh, I'm no longer a painter. I'm not going to do paintings anymore. I'm just going to do films. And he made unwatchable films that lasted for eight hours and were all projected on top of each other and were just impossible to watch. When New York entered a very rough patch economically in the 70s, he created this thing called business art.

Because as everyone was becoming very earlier than now and was extolling the wonders of the abstract expressionists or whatever, he was like, as a f*** you to all of those people, he's like, I'm just gonna make art as a business. I will endorse anything. I will sell anything. If you want me to make your portrait, I will make your portrait for $10,000.

And I'm just going to do, I'm gonna create a business and the business itself is going to be art. And the reason he did that at that time was because it was an incredibly contrarian thing to do and everyone was like how dare you bring money into art like this how dare you financialize art like this art is so then he took it all the way art is like a pure and ethereal thing how dare you attach a dollar value to it so because it was because it was offensive to so many people that's why he did it okay now the art has a dollar value everywhere now that everyone is playing that speculative game he would hate it he never wanted to do what

everyone else was doing okay so i i had it totally backwards not knowing really anything about him other than what everyone else knows i just like i'd see the opportunism didn't seem to me as ironic as you were saying that it was i can again, again, if I can plug a great book, the Blake Gopnik, Andy Warhol biography is very thick and it comes with a huge number of footnotes, but it is the definitive biography of Warhol and you will really understand him if you read that. You wrote about the billionaire class

buying up sports teams in Europe and the US and you admitted somewhere in the piece that this is not teams in europe and the u.s and you admitted somewhere in the piece that this is not your forte um sports in general even even football or what we call soccer here um but like what this this to me seems like it's on a parallel track with all the art stuff and and uh just there being a lot of money available for billionaires to express themselves. There are certain paintings that are true trophy assets. And if your name is Ken Griffin, you really want that one painting, that one Jasper Johns flag, the true trophy.

And sports teams have become trophy assets for billionaires. And it's interesting to see that play out in the UK in particular, or in England in particular, I should say, because this is one area where the English gave up long ago on having any particular sort of, you know, we want our sports team owners to be English. Yeah. Who's buying them, Russians and Americans? It's mostly the Americans now.

Okay. It was the Russians for a while, and there's a lot of like Middle Eastern sovereign wealth funds and that kind of stuff going in. But right now it's mostly the Americans. The person who just bought Chelsea for $3 billion was American. And remember that Chelsea was famous for just being this black hole that Roman Abramovich would pour more and more money into. Roman Abramovich bought Chelsea for however much he paid for it, and then spent another billion

dollars just subsidizing the losses so you know the net present value on any kind of dcf calculation of like how much chelsea is worth is clearly negative but chelsea one chance chelsea became the most expensive sports team ever sold in the history of the world for about three weeks before the denver bron got sold. Right. And so, yeah, you can't back out that valuation in any sort of, any way other than just like, It's a vanity purchase. But that's the thing. There's 30 teams in the NBA.

That's it. There's only 30. And you can't have it, right? Unless you're willing to pay ludicrous sums. And it never makes sense financially. Well, except for, So what's super interesting is that now you have two other things happening. One is that there's a bunch of billionaires who are buying up multiple teams. It's not enough to own the Boston Red Sox.

You also need to own Manchester United at the same time. And then the other thing is that, of course, you know, hedge funds and private equity and the people who actually do want to make money are getting into it because they see line goes up right and they're like i don't care if this loses money on a sort of cash flow basis for five years as long as i have a thesis there's always going to be a billionaire who wants to pay more money for it than probably well when bomber bought um the clippers everyone was like i can't believe he paid whatever he paid three billion two billion i don't know two billion

i think people are like oh what is he doing this it's like dude he has like 40 billion he doesn't give a shit what you think it's worth he wants it so this i mean so this is where it gets really interesting right that when you get the billionaire acquisitions of sports teams, someone like Barmer buying the Clippers, they really are using play money. They can find that in cash very easily. They can pay it. It doesn't affect their standard of living at all.

They don't need to give up anything they love in order to buy it. And that's how everyone thought of Elon Musk'sk's bid for twitter that he was like i'm just going to buy this with play play money yeah then it turned out that the amount he bid was actually much more than play money even for him he's the richest man in the world but like he's not liquid and if he needed to find this money it wasn't going to be easy and that's when he started getting second thoughts and buyers remorse but the billionaires that bought, like the Warriors, I'm assuming they're profitable because they're multiple-year champions and you sell a lot of merch, you sell very high ticket price.

I've never entirely, no one has ever been able to show me that there's any real correlation between winning championships and making money. Well, the TV rights in some sports are shared across all the teams, but in other sports they're not. So, for example, the Knicks Well, the TV rights in some sports are shared across all the teams, but in other sports, they're not. So for example, the Knicks own their own TV rights. Right, but that's got nothing to do with winning championships. Well, not in New York.

But in some markets, if you do really well, the ticket prices can go up and the TV viewership goes up. Let's assume there's something to it. I don't know that there always is, but let's assume there's something to it. The most valuable sports team in the world is the Dallas Cowboys, and they haven't won anything in a living memory. That's assume there's something to it. I don't know that there always is, but let's assume there's something to it. The most valuable sports team in the world is the Dallas Cowboys, and they haven't won anything

in a living memory. That's right. Because in the NFL, the teams share the TV revenue. So explain to me why is it that the Dallas Cowboys are worth three times as much as some other NFL team if they just share the TV revenue?

And when they're not winning championships, what is it that makes them valuable? Because there are far-flung Cowboys fans all over the world. There's something about that team that has a global fan base. And you couldn't say that necessarily about the Kansas City Chiefs.

So how did the Cowboys monetize that fan base? Selling merch. It's like base selling merch it's like big numbers it's like big numbers um but their ticket price is higher there's a lot of wealth in dallas you couldn't necessarily charge the same in green bay even if green bay is a better team than dallas and they usually are um there's something dallas is uh one of those cosmopolitan i will say like i have been to one american football game in my life. What game was it? Cowboy Stadium.

How was it? It was amazing. It was a lot of fun. I didn't realize how similar it was to a rock show. It's very noisy. There's the crescendos. It goes up. It goes down.

Everything is perfectly timed. There's the music. There's the music. There's the... It's a production. The crowd. Yeah. And I could totally understand how you could get caught up in that and really love it.

But, of course, me and the 70,000 other people who were in that stadium that day were a tiny minority of the people watching that game. That's right. And honestly, we could barely tell what was going on on the field compared to people watching it on TV who could really see what was going on. It's a terrible experience in terms of getting the...

Football sucks. You can't really see what's going on. It's much better on TV. Yeah. The football experience is much better with Red Zone, watching all the games at once. And they just show you the team that's about to score. And then they switch to the next game, and you don't even actually have to.

I will say, out of how many podcasts have we done so far on this show? 50-something? Yeah. This is the first time that we covered, we got through one topic, and we've just gone. We normally get through six topics. We're just rambling. We did pretty good, though. It's a good ramble.

It's a good ramble. Actually, we're going to do favorites now. It's also the first one that has talked about sports and art. Yeah. We covered football and bossy. How many topics did we miss? How many topics did we miss in the podcast? I don't know.

There's a bunch of boring shit we didn't get to this time. Six. Well, we're going to talk about Goldman Sachs losing a billion dollars at Marcus. Marcus. You probably have a good take on that. Will they keep going or will they at some point be like, turns out consumers aren't really that interested in us? It's, I mean, right now, I guess, you know,

the interest rate environment is making it a little bit more attractive to play that game. So they'll stick around for a while. How the hell do you lose a billion dollars on that? Are there commercials for Marcus? I only watch streaming at this point. I wouldn't even know. There aren't.

I don't think so. So are they giving away too much on the teaser rate, maybe? There is no teaser rate. They pay like 60 basis points. There's no teaser. Are they losing money on that? No. No.

They're hiring people. Yeah. A billion. Really, a billion. Really? One point. The consumer bank noticed Marcus will lose more than $1.2 billion in 2022, according to the bank's internal projections. Bloomberg News reported on Tuesday. Were they lending to Three Hours Capital?

Like this is the crazy thing, right? They don't have a loan book. It's a dramatic change from three years ago when David Solomon claimed, if Marcus, quote, were out in Silicon Valley and made 20% of the progress that we've made, we could get a lot of credit and people would be throwing money at us to own a piece of this business.

I mean... Not yet. The whole consumer banking thing became super hot for a while and I never understood why. Everyone came out with a checking account with a debit card attached to it, which is very table stakes.

And they're like, it's free. And you're like, great. This is so crowded. High yield savings, by the way, 1% LOL. Is that Marcus's homepage? Automate your investing. See your personal loan options, credit cards. It's so fi.

It's so fi. Marks is his homepage. Automate your investing. See your personal loan options, credit cards. It's SoFi. It's SoFi. But it's also Dave or Varo or Chime. They're all basically the same product. Customer acquisition in that space is so expensive.

But the thing that Marcus and Varo have that Chime and Dave don't is that they have actual banking licenses. They're actual banks. So they don't need to pay a huge amount. So they can actually start doing fractional reserve banking if they want to. But yeah, the whole space seems massively overvalued. And NewBank did a great IPO at the top of the bank, the big one in Brazil. And that's just been falling off a cliff ever since. Part of the rationale behind Marcus at some point had to have been, we'll spin this off and it'll be $100 billion standalone fintech giant.

And that's obviously not going to happen, at least not in this cycle. Right. Looks like every other neobank. Looks like everyone. All right, let's do favorites. Felix, you have Meet Me by the Fountain, an inside history of them all. Tell me about this. Why should we read it?

Alexandra Lange. So number one, Alexandra Lange is just this amazing author and she's done an amazing job of looking at the history of the mall, which now we have to call the mall, right? It's not the shopping mall anymore. But in the early days, it was the shopping mall. And the reason why these things made money

is because there was this thing called the Gruen transfer where people used to go shopping when they needed something. And then at some point, people went to the mall because they wanted to go to the mall, even if they didn't want to buy something. And then once they were in the mall, they wound up buying stuff. And there was, you know, the mallification of America. We used to go to see something. And then once they were in the mall, they wound up buying stuff. And there was the mallification of America.

We used to go to see girls. Exactly. When we were 14, we didn't have driver's licenses. There was no internet. So we would get our parents to drop us off in groups of seven and eight young boys. And we had no money, but we didn't want to buy anything anyway.

There were girls there. That was just how you did it. And you grew up in suburban Long Island or wherever it was. Roseville Field. And that is, you know, as Alexandra really shows, you know, there is this human need, this really, really basic human need and desire to sort of hang out with other people for there to be some kind of a central square where people can go to and can see each other and can interact. So for the suburbs, that's the mall. In the suburbs, the wall was the only game in town.

And as shopping has become increasingly digital, the mall has... I was just down at the South Street Seaport last night, and they have a big mall there, the PS17, and they have a new mall cropping up right next door called the Tin House. And neither of them have a single shop. It's all like food and experiences and that kind of thing. Have you seen a concert on the roof at PS17?

They have concerts on the roof. It's pretty cool. Yeah, great views. Did you know that South Street Seaport is privately owned? It was Howard Hughes, no? Yeah, it's the only privately owned neighborhood in Manhattan. Like the land is owned by the corporation. Really?

And Bill Ackman's on the board. So he owns a piece of Manhattan. But yeah, South Street Seaport is corporately owned. But I think the NYPD have jurisdiction over it. Oh, yeah. I'm pretty sure that if you commit a crime in the South Street Seaport is corporately owned, but I think the NYPD have jurisdiction over it. Oh, yeah. I'm pretty sure that if you commit a crime in the South Street Seaport, the NYPD will have no compunction. Atman doesn't have a private military policing it.

All right. So it's called Meet Me by the Fountain. You liked it? It's a great book. Good book? Okay. Michael, what do you have for favorites? I'm shocked that Shari likes Out of the Old Men.

It's like a little slow. So that's my favorite. Is it yours also? I'll let it be yours. Are you watching this?'s like a little slow So that's my favorite, is it yours also? I'll let it be yours Is this a thing on the telly? It's on FX slash Hulu It's Jeff Bridges Would that change your mind?

I think it's his only TV show he's ever done And he's not playing Older Big Lebowski It's very different I love him. I can pretty much watch. So, but you know who else is in it? Lithgow.

Who's even better? John Lithgow. Yeah, legend. So these are two great actors and it's a really suspenseful, we're on episode three and I think there's four out. I was on the train late the other night

and I had nothing to watch and I saw Reservoir Dogs was on Netflix. I haven't seen that in, like, I don't know, a while. And I just watched, like, the first 10 minutes. Like, holy shit, what a movie. Yeah. Oh, my God. Still watchable.

The first 10 minutes are great. The first 10 minutes is, like, the I don't tip scene, you know? And then goes right into the aftermath of the robbery. Such a good movie. Like, immediately. Yeah. Good movie. You a Tarantino guy or not really? Yeah. Such a good movie. Like, immediately. Yeah. Good movie. You a Tarantino guy

or not really? Yeah. You are? Yeah, no, we did Jackie Brown recently on Slate Money Goes to the Movies and that really,

really holds up. So you and I did an episode of Slate Money Goes to the Movies. We did Wall Street, right? We did Wall Street. Yeah. It was so much fun. Yeah.

So how often are you doing those and you're going away from just Wall Street movies? You're doing, like, all fun. Yeah. So how often are you doing those and you're going away from just Wall Street movies? You're doing like all movies. Yeah. I mean, well, we're not doing... We'll see. Why Jackie Brown?

We had Ben Horowitz on. And I thought he would be a very interesting person to talk about Jackie Brown. Why? He was. Because he grew up basically around Black Panthers and knows the neighborhood really well, knows the shopping mall.

The final scene in the shopping mall. I think he actually saw Jackie Brown when it came out in that shopping mall. People hated that movie when it first came out because it wasn't Pulp Fiction. It's not Pulp Fiction. But it's aged well. It's aged unbelievably well.

I saw that. That was the only Tarantino movie that I hadn't seen. And I saw it a year ago. And it's not Kill Bill or whatever, but it's good. And it definitely ages well. It's his most grown-up movie. Because it's not about De Niro. It's about Robert Foster. It's really about de niro it's about robert foster like it's really about that

character it's also like but but yeah i mean de niro is good has a supporting role but he's very good it's the last time that de niro de niro actually acts well and he's understood and he's understated yeah sorry in the yeah he's not playing Robert De Niro. Right. Okay. But that's not the best Tarantino movie. And Glorious Bastards is. You think it's – Sorry. That's my favorite. My unpopular opinion is the best Tarantino movie is True Romance.

Yes. Well, fine. But that's Tony Scott. But he doesn't have the director credit. But you would say – I mean that's – Yeah, it's amazing. I think that's one of his most rewatchable movies.

Like if I pass him by Pulp Fiction, I can't get – The Dennis Hopper Christopher Walken scene is like a top ten scene. So, okay, you want my little nerdy film dive into that scene? Duncan wants it. Duncan's a film guy. He wants it bad. Yeah. Okay.

So – Oh, God. I'm going to have to make sure I get this right. He's got the thing. He wants it bad. Okay. So, oh, God. I'm going to have to make sure I get this right. He's got the thing wrapped around his hand as he's talking. So that scene is played as a love scene. Between the two of them? Yeah. What? You know who I work for?

Between Dennis Walker. Dennis Harper and Christopher Walken, them? Yeah. What? You know who I work for? Between Dennis Walker, Dennis Hopper and Christopher Walken, right? Yeah. And the music that plays while Dennis Hopper is making that final, he knows it's his final monologue. It's the last thing he's going to say before he gets shot to death. You know what? I will take one of those Chesterfields after all.

Yes, yes, yes, yes. That one. Yeah. The music playing is the flower duet from Lac Me by Deleuze, this very, very... La, la, la, la. This very flowery...

Oh, my God, I can hear it. ...love duet by a very flowery French composer. And it's the same music that British Airways used to use in all of its ads for many, many years, which were also directed by Tony Scott. And... What? And Tony Scott just goes back to this...

You need a minute? You okay? I didn't know any of this. Okay. And so basically the way that scene works is that he shoots it. If you look at the way that the camera goes back and forth between the two men, they're zooming in. They'll listen to the music, listen to the framing. If you watch that scene.

On mushrooms. Like, with only listening to the music and not listening to any of the dialogue, without, like, realizing that someone's tied to a chair and it's all bloodied up. But it's like, it is framed and structured and shot and has all of the music and everything of a complete love duet.

Now, why would he do that? Because he said, I have two of the best actors ever at my disposal, and I want to do it this way. What happens is that Dennis Harper's character forms this incredibly intimate connection with Christopher Walken's character by coming out with this monologue and the history of sicilians he identifies him and he manages to read and then what walken says at the end is like something i can't remember what the line is but he says something along the lines of like no one has ever said anything like that to me before you know it's

you have touched me like he's like i what he says is like that to me before you know it's like you have touched me like he's like i what he says is like i'm gonna kill you myself i've never like i always get like my henchmen to kill you but i'm gonna because because of what you just told me i'm gonna do another movie where it's like finally some a man worth killing like something like that yeah yeah it's something to that effect like this guy was worth my time killing. Right. What a movie. Now I gotta go watch it again. Felix, did you have fun today? I did. It was awesome. So we're gonna start recording now. We're gonna do it for real.

Now that you're all warmed up. You're laughing, but you're not sure. No. 100%. This was a lot of fun for us. I so appreciate you coming by. It's been great. I wanna come back on the Slate Movie Podcast. Come back on the Slate Movie Podcast. Are you doing any more stuff that's like red meat for me? are you going to do Boiler Room? are you going to do Margin Call?

you've probably done all those, right? you know, I'm trying to remember I think we were going to do Boiler Room and then didn't, so maybe we can come back you can't do it with anybody but me we'll do Boiler Room with you I'm going to give you inside shit from the making of that movie you can explain why Ben Affleck is never in seen with anyone else i still never understood the the next the building

next door the empty building with all the phones on the floor what was that i'll tell you but not on this part we're gonna do that on felix's podcast it's gonna happen on my podcast all right where could so people can find you um your stuff for axios yeah there's an email with that axios business suite just go to axios.com and sign up for any of the business newsletters. They're all fantastic. Axios Markets also comes free with Axios Macro by the great Neil Irwin and Axios Closer. And yeah, my one is on Saturdays. I have the Saturday episode, I guess you could call it.

Yeah, I never miss it. And Slate Money is, when does that drop? And that's also Saturdays. It's every call it. Yeah. I never miss it. And Slate Money is, when does that drop? And that's also Saturdays. It's every Saturday it comes out. Okay. So check out Slate Money to hear from Felix and sign up at Axios.com

for the email blast, which I never miss. I think you're one of the best financial writers ever. I've been reading your stuff for like 11, 12 years. It's been a minute. Every time I read something

that you've written, it always makes me think about things in a way that maybe I haven't. So keep up the great work and thanks for coming through. And I hope you get into buying art. It's good for you. I don't have the money yet. I can only do fractional, but we can all dream. Just don't do that.

Nicole, you subbed in for John today. Good job, Nicole. Did you have fun? Yes. Did you learn some stuff today? Duncan, did you learn anything today? Yeah. You did, right? Yeah, I've got to go watch True Romance. I've actually never seen it. What? It's the only Tarantino I think I've never seen.

How are you calling yourself a film person if you haven't seen True Romance? Duncan! I just haven't seen it. Oh, man. You're so lucky. I'm watching Seven Samurai right now. You're into a tree. So now you're watching Tarantino's source material.

Yeah. Basically. All right, great job today. Thanks for coming through. Do we have any announcements to make before we leave? I think material. Yeah. Basically. All right. Great job today. Thanks for coming through. Do we have any announcements to make before we leave? I think we're good. Like and subscribe already, would you please? All right.

We'll see you guys next week. Thanks for listening. Duncan never seems to wake up. I see. How's it going, man? Thank you so much. We go long on this, but...