TRASHFUTURE - Plan Line From Outer Space feat. Alexandra Scaggs

Episode Date: October 1, 2020

Why is the line detached from the material reality of so many people? Why is the line divorced? Why are there so many zombie companies, and why does it seem like the financial movers and shakers are fine with government stimulus to basically non-functional entities? Well, to answer big important finance questions, we have Barrons journalist Alexandra Scaggs (@alexandrascaggs) to investigate, alongside Riley (@raaleh), Milo (@Milo_Edwards), Hussein (@HKesvani), and Alice (@AliceAvizandum). If you want access to our Patreon bonus episodes and powerful Discord server, sign up here: https://www.patreon.com/trashfuture We support the London Renters Union, which helps people defeat their slumlords and avoid eviction. If you want to support them as well, you can here: https://londonrentersunion.org/donate Here's a central location to donate to bail funds across the US to help people held under America's utterly inhumane system: https://secure.givelively.org/donate/the-bail-project If you want one of our *fine* new shirts, designed by Matt Lubchansky, then e-mail trashfuturepodcast [at] gmail [dot] com. £15 for patrons, £20 for non-patrons, plus shipping.  *WEB DESIGN ALERT* Tom Allen is a friend of the show (and the designer behind GYDS dot com). If you need web design help, reach out to him here:  https://www.tomallen.media/

This week, the chattering classes of this once great nation have been teeming through furious bluster, but not over the authoritarian quest to muzzle honest British men in masks or the ever-present assault on our beloved children's authors, no, they are furious about student accommodation. Time was that student living was about surviving filth and cramped conditions, I for one banged my forehead on many a low doorway, and leaving with some sort of degree and a slew of venereal diseases. But the polenta posadists of Primrose Hill believe that students should not have been

sent back to their halls in the midst of a simple viral pandemic. But what really is the coronavirus, if not a particularly stout, fresh as flu? How do we expect our young people to go out into the world if they cannot survive a respiratory illness with a 5% mortality rate? With the current state of the economy, a moderate Carle of student population is in their own interests. If only 75% can expect to leave with a graduate job, then a death rate of 5% is surely improving their employment prospects.

However, the hummus hoshists of Hampstead Heath don't care about the economy at all. They insist that students were tricked into going back to their halls, where they were promptly imprisoned, when it transpires all their classes will be online and they could have stayed at home in relative safety, all because the universities wanted to get their rent. Is it a crime for a university to knowingly endanger their students to extort money from them? Legally, yes.

But morally, no. Because we have to think of this from the perspective of the universities. If students didn't rent those rooms, whom would they have rented them to? Should a university be left rentless just because of a global pandemic? Surely it is impossible to solve this situation without the valiant sacrifices of a few students. Indeed, if students were so worried about the conditions in their halls, they would have voted with their feet and enrolled in a different university, perhaps in a country like Venezuela where the governing ideology is more to their satisfaction.

And this isn't all that is exercising the Trotskyite Stalinists of the quinoa quarters. They are also frothing with rage, hemp underwear helplessly contorted over the appointment of Charles Moore as Director-General of the BBC. They claim that Moore's hardline right-wing views and staunch hatred of the BBC make him unfit to lead an impartial public broadcaster. But what could be more balanced than an organisation led by someone who hates it? Surely, this is the definition of balance. Indeed, what could be more British than a vast and lumbering bureaucracy hamstrung by

a hatred of its very self? And to suggest that Charles Moore, one of the foremost writers of rambling diatribes of his generation, is unfit to lead a politically neutral organisation because of his hardline politics simply shows how much these people truly care about political neutrality. The point of impartial broadcasters is to never interrogate the views of anyone who works for them or the spectrum of views they allow to be broadcast. That is freedom of speech. If someone is to be on news night advocating the view that climate change is real, decency

demands that their opponent be someone who believes we must blow up the moon to destroy the Illuminati. For as Voltaire said, I may disagree vehemently with what you have to say, but it is fundamental to the operation of civilisation that you be given a sinecured position to say whatever mad thing you want on broadcast media without challenge. But as the risotto rancour in Finsbury Park grows stronger, the number of positions for climate change deniers and race scientists on television grows fewer by the hour, and I fear that the number of these jobs is already fewer than 1,984.

Thank you very much to the TF rationality correspondent Brendan O'Neill for coming in and dropping a few pearls of wisdom for us. He is of course getting into a little Shriner car and driving somewhere else where his big giant brain is needed to defend free speech from the forces of everything. However, I can now introduce our show, it's TF without Brendan O'Neill, and it's me Riley. I'm here in studio with Milo. Hi, I've just come back from serving in the Greek Air Force.

Ah, references to jokes we made before the episode. I don't know about you, that's my favourite type of a thing that we do. I've been dropping plates on a northern Turkey. Exactly. Perfect. You cannot stop me. I will try. I also have Alice and Hussain on the phone.

What's up? It's the podcast hosts you are currently listening to. Yes, right. I have nothing like where's he to say? Sorry. Hussain, there was such a science-tician intro of just like. Yeah, I'm still trying to learn what like a podcast is and like how you do things, how you intro yourself.

So, you know, it's getting distracted by Beyblades. I literally am. I mean, a good thing to be distracted by in fairness. And invented by the Greeks. We have we have joining us today. Finance journalist Alex Skaggs. Alex, how's it going? Hi, pretty good.

Thanks for having me. Oh, pleasure. And so today, we're going to revisit our old friend, the line. What's up with the line? Why does it keep doing weird stuff? How come the line will not go up or down? Why is it gone sideways? The line still governs every aspect of our lives, despite the fact that it

apparently relates to nothing. All of these questions and more will be answered. But first, I would like to start us off with a quick hit, quick hit, quick hits. Starts up, starts up, starts up. No, no, no, I have something for that. But there's a quick hit first, which is friend of the pod. Financial freedom fighter, Lex Greensill. Oh, cool, a man who we have no way of knowing if his giant nature park

in Cheshire is for hunting the most dangerous game. We don't know that. We simply cannot. We simply refuse to speculate one way or the other. He's a simple country money farmer who's gone out to securitize a bunny snag. The simple country money farmer is at it again because he has simply country money farmed more than 15 million dollars in loans from the

Credit Suisse supply chain finance fund that if you recall, he and his firm Greensill were the sole introducers of the one that does everything that he wants it to. Yeah, like perfectly good business reasons that we also refuse to speculate on. Absolutely. He he has apparently he went ahead and just supply chain financed his neighbors company. Absolute mad lad.

Absolute legend. I dared him to supply chain financed his neighbor and he actually did it. Do you think that like Lex Greensill's neighbor is like Tony Soprano and Lex Greensill is like the Kuzumano family and the neighbors are like these like kind of terrifying mobsters who are constantly asking them for favours. And Lex is having to like do like, I don't know. I don't want to get murdered. I don't want to get murdered.

He said he needs me to supply chain financed his sanitation business. So the the company is too small to file financial reports. Now I'd like to turn to our our finance professional Alex when your company is too small to find our finance knowing about professional professional knowing about it and things about finance. What happens when a company that's too small to file reports, any kind of public accounts is supply chain financed by Credit Suisse? I mean, to be fair, I feel like a lot of the companies that are

supply chain financed are too small to file reports because it's basically just like a supplier saying, OK, well, like pay us when you can or when you want to in six months and nine months whenever. So like it but the funny thing is, of course, that like Greensill, their whole deal is like, oh, let's do it with tech and data. So like what could go wrong? Yeah, nothing as far as I'm concerned because it's yeah, technologized and stuff.

They use AI, whatever it is. Trash future have to do more income reporting than we're barone sanitation or whatever. My neighbor's souping up his ute. So I hooked him up with a bit of supply chain finance. I don't see any problem with it. I'm pretty certain that we actually have to do more due diligence than souped up ute's limited.

So the company is provide services for people with learning disabilities and has run by a man named Barnabas Borbley. No fucking way. I am experiencing a brain death DMT hallucination. Barnabas Borbley is just Lex Greensill's neighbor. Barnabas Borbley, who was played by Miles Jopin TV series. So yeah, the company is too small to file public financial statements. Barney Borbley.

Also, it has it has it has no history. It's just getting off the ground and the loans appear to be tied to real estate rather than supply chain assets. Otherwise, it's a totally normal supply chain financing operation. If Lex Greensill goes over for a glass of champagne, he's having a bottle of bubbly with Barney Borbley. If Lex Greensill goes over for champagne, he's like, ah, sorry, I can't I forgot to bring a bottle of champagne.

But why don't I just hook up a bunch of credit to your like box that exists to raise money? I went over with a bottle of bubbly, but I found Barney Borbley in the bubble box. Barney Borbley, born for Brexit. Yeah. Yeah. So yeah. So that's I think that's that's pretty fun. The deputy chief risk officer at Greensill said that the special needs group is a great example of a company that can get fairer access to finance

thanks to Greensill's ability to assess and price risk objectively based on current and future cash flows. You only get it because your boss is neighbors with the most dangerous game reserve allegedly. Alice, anyone can be neighbors with Lex Greensill. That's true. The same way anyone could spend a thousand pounds to go to their local Tory MPs like fundraising dinners. Anybody could be neighbors with Lex Greensill, but not everybody is.

No, that's true. And legally, we can say that. Yeah. I mean, the most dangerous game could be anything. I mean, it could be like a weird game involving nutshots or something. We don't know. We airsoft. We don't know. Very high tension game of Beyblade. Yes. So that's right. Exactly.

So that's that's Beyblade. That is like that is that is like so that is that is like screen. So he appears to have just turned his big money hose that he has. The world's person legally isn't a central bank who has access to one of those. Just on his friends and well-wishers in order to make finance fairer. So we love to catch up with our favorite sugarcane farmer turned money farmer. Here's a low for your friends with your massive money hose. Exactly. So they want these days.

Gross. Yeah, these days. Awful. So I'm now I've got us. I've not got to start up for us, actually, in honor of Alex coming on today. I have picked a financial instrument, a new kind of financial instrument. That's like a startup, but worse. That has just been invented to be made of money. Exactly. Doc Brown in his financial lab. It is called the Nasdaq Velez California Water Index Future.

And it's grown in a very specific microclimate. The microclimate of extreme Southern California drought. It is it is called a clear solution to water price risk management. Hold the fuck up. I've seen quantum of solace. We've done this already in the popular imagination. Surely. Yeah, it's just in this world. James Bond makes sure that those contracts get paid. Yeah, he just he did like kills all of the opposite side of people.

Now, Alex, could the Nasdaq Velez California Water Index Futures, the world's first derivative on water prices is being released by the CME. What is what is your reaction to this being a thing now, the ability to speculate on future water prices through this financial instrument? I mean, I think it's incredible. Do you guys remember like way back when when people were talking about peak oil and like that's what everyone was freaked out about? Like, what if it was actually peak water, like peak drinkable water?

And they're like, OK, well, like that's that's all we've got now. We've only got so much water and we'll just trade that. I'm looking forward to it. Yeah, well, I mean, it's suddenly going to fuck over the Saudis, because if there's one thing they don't have much on. And in that respect, I'm all in favor of it. Yeah, it's just it's it's it's interesting, right? That we've we we looked at the film Chinatown and we're like,

how can we financialize this relationship? Well, it wasn't the whole point of Chinatown that it was already a highly financialized relationship. Well, it's it was that it was a highly exploitative one, which is that it is not that which is that, yes, you it was all about purchasing water rights, but once you had the water rights, then you were able to then divert certain amounts of water. I was I was I was paying attention to be honest.

So basically what they do is they try to spot they track the spot price of water in California based on water rights, which are entitlements to divert from natural sources. And CME says that it hopes that the Chicago Merchantile Exchange, the main commodity trading brokers in the States, hopes that our exchanges rather hopes that this this price, that the price of this future contract will become a benchmark for the cuteness of water scarcity in both California and the world,

highlighting the product's usefulness with regard to the UN's prediction that two thirds of the world's population is likely to face some kind of water shortage by 2025. Just hearing that last bit and having a massive panic attack. I can't see this ending badly. Yeah. I can't see anyone having a big warehouse full of water somewhere. That's the thing, because it's a futures contract, they don't have to.

Alex, can you do you mind enlightening the children as to what is a future? What is a futures contract versus normal option? We get McDonald's on the way home. Oh, it's just I mean, it's just basically betting on the future price and they're they're not all deliverable, even though we did have like a kind of funny situation with that with oil earlier this year, because some futures contracts are deliverable. So like, depending on what kind of contract you got, we became an oil warehouse for a while negative.

Yeah, because people are like, it's actually more expensive to store the oil than it is to like buy it. Basically, so it was so expensive to store the oil that they were like, oh, I don't want to like get stuck owning it. So then oil prices or the price of the oil futures actually went negative because they were like, I don't want to pay that money. But anyway, that's that's because like people don't need oil as much anymore. Like there's, you know, green energy and stuff like that.

But water, I mean, you don't need that. Just just go wrong. Yeah. Yeah. I look forward to. Peak water pricing. Yeah. I don't know what it is you have to make a hole with.

I've not looked into it. It's calm. It's probably calm. Yeah. So I think, yeah, because like if if if the futures contract is just an agreement to buy something at a later date, you agree that price and you say, OK, well, in two months from now, I'll buy this much water from you for this much money. And then those contracts themselves, you can trade.

Yeah. Yeah, right. And so so basically what happens, right, is that it's they this merchandise exchange says, oh, don't worry. This is just a way for like farmers to manage risk because water scarcity is incoming. What it actually means is that it creates an entire speculation market that will allow the derivatives. Well, it is it is a water derivative.

It allows you to like come. Gram. Yeah. It allows it allows you basically to to speculate and profit from spikes in the price of water, usually without yourself ever having to have the capacity to then use that water. You can just you can just own it, drive up the price, especially because the line is imaginary like it always was, but even more so now. Yeah.

So if you buy enough of it, essentially, like much like because if you buy enough of an of any kind of derivative, someone somewhere is going to have to buy the thing that it's a derivative from somewhere to hedge that risk of you buying it someone on the short end of that camera chasing water. Not I don't I don't think a gamma chase is possible with this kind of is this kind of a little too confidently six months later. They're fucking gamma chasing water, guys gamma chasers. I've heard of those on Grindr.

I mean, again, Alex, I don't want to speak out of school here, but I don't I don't think that's necessarily as much of a risk, but it does seem like someone could basically drive up the price of water by buying enough of these futures contracts. Yeah, I mean, absolutely. I'm like, did you guys see that? I think it was a report from Henry Paulson's like consulting firm or something. I forget the details of it, but they were basically saying like, OK, well,

what we really need to do to fight climate change is like monetize every natural resource cap and trade. It's worked so far. Why would it stop now? What could go wrong? It stopped global warming. We just need to keep financializing it. What could go wrong?

I mean, as we know from, you know, friend of the show and famous British success guy, Nick Leeson, futures never end badly for anyone. Oh, that's that's right. Bearings currently the world's most successful bank. Exactly. Well, we banked with them right now. Yeah, we're the where they're only client. Yeah, exactly.

That's how well the podcast is doing, Lance. It's called brand loyalty. Yeah, the futures Nick Leeson was buying was in Trash Future podcast at a time when podcasting didn't exist. Yeah, he bought podcasting futures in 2003. That's how smart he was. So why is this being launched? The following is a quote from an article on MarketWatch.

The water sector had long wished for some market structure for price discovery and the ability to hedge risk, said DeAndre, a managing director in multi-industry analysts at RBC cap markets. If this new futures contract shows promise, it could spend more financial innovation related to water. Wow, boring. They managed to make evil stuff. You now have to rent the water that you're drinking.

Yeah, it's truly like a German level of, you know, kind of like adding boringness to evil, which I have to respect. What do you want from McDonald's? I'm kind of feeling like a McChicken sandwich or something. Maybe maybe a Big Mac and a McFlurry. So yeah, this is and again, like, don't forget, this is this is not just about like actual water. It's also food prices going to be deeply affected by this.

And just the fact of it being a futures market now means that it's open to like wild price swings. It's like expect an avocado that costs like 20 of whatever your local currency is tomorrow, might cost one the next day. You should stop buying avocado toast if I want to afford a house. That's right. You should buy futures avocado toast. Exactly.

Um, and so this is also from the FT, uh, commissioner from the CFTC, the Commodity Futures Trading Commission, Roaston Benham. What? Oh, I reject to this version of reality where there is a man named there. There's a man actively destroying the future of the planet who has a name as stupid as Roaston Benham. That sounds like one of those like southern fast food chains that like only exists in like Alabama and Georgia.

This is like a poorly written climate satire. It's like the futures trading house of Dewey, Roaston and Howe. Now woman go down to Roaston Benham and get them boys a chicken box. Yeah. So, uh, he says water derivatives and other investment products link to environmental, social and governmental factors will help stakeholders manage the risk that's going to continue to present itself to us. Again, the risk is just presenting itself to us.

Of course, Joe, uh, Gastown, breath third one that I can't think of. Oh, the bullet farm. Oh, yeah. Given given what utter fucking vampires these people are, they do seem to like stakeholders a lot. Yeah. So yeah, that's, um, this is, this is the water futures. And by the way, it's currently, uh, sits at 510.99 per one acre foot, which is

like how much it takes to cover an acre and a foot of water. Um, if you order today, you can get three for the price of one. Well, you can't actually because it's return to date has been more than a hundred percent means that the price of water is doubled. Oh, oh, well, that's good. That's good news. So actually this bottle of water that I have on the desk has been, that's an investment.

Yeah. Yeah. Get in water kids. I'm just gonna, I'm just gonna start running the tap in the office because we don't pay for the water bill. Like, I'm going to sell this. You'll see. So, uh, anyone want to guess before we move on to the actual stuff?

Um, who one of the biggest landowners in California is on the basis purely of water price? No, it is, um, no, uh, I, I, that'd be funny. No, he's too busy, uh, dating everyone. Oh, uh, who's saying, what are you saying? I'm just gonna say, I'm just gonna say pizza teal. Uh, no, you're all off by a mile, uh, Milo. Is it?

Think about, no, no, it's not a person. Think about machine, machine. I was like, thinking about. Think about walking between Oxford and Cambridge and not leaving the land owned by certain things. Oh, it's not fucking Trinity College. No, no, it's, it's Harvard. Oh, okay.

I was going to say, if that, that would have been too much. So basically it has now spent $305 million on California vineyards alone that have reliable access to ground water. And we'll now be speculating on water futures. So, um, that organized that institution that spits out your Pete booted judges and then gives his, um, gives his do nothing husband, like a job for, for reminding people of the, the play Hamilton or whatever. That is an organization that is directly contributing to water scarcity around

the world by again, trading in a very financialized form of this commodity. And only, and now it's been invent. There's been a way that's been invented for that to be much easier so that they can just do it by buying contracts rather than farms. Harvard running the university is expensive and they don't have a lot of money, right? They only have a $40.9 billion endowment. Yeah. Me and my goons going around Harvard and going, uh, pretty nice place you got here.

It looks like it's pretty, uh, expensive. It would be a shame if anything would be, uh, financialized or securitized on it. That would be. Yeah. Uh, see, um, anyway, so, but I want to get to Alex, your, your, your sort of reflections on the growth of, of this derivative. I mean, in retrospect, it feels inevitable. Yeah.

Yeah. It's, um, sorry, it's pretty, it's just grim. It's just like this sort of slow financialization of basically everything in American life and global life, um, just happening thanks to Harvard, basically. And also it is extremely grim that it's Harvard doing this because like, I don't know, just like that business school is responsible for so much managerial bullshit that like, you know, next thing, you know, like they're going to be like going on to like the farms or like the water source, whatever that is.

And being like, you know, I think that you guys could probably increase this water flow by like laying off half of your employees and charging them for water. Yeah. We're going to get McKinsey into refine this. Yeah. Yeah. What if we brought in some Japanese management philosophy and had it only rain at the exact moment when you need water?

We're going to, we're going to Harvard is Harvard is basically appropriated all the water, but all the, all of the, um, you know, the direction this is heading is Harvard, Harvard now controlling all of the natural resources in California, increasingly heads it towards the United fruit style role where it deposes Gavin Newsom. That's right. Um, and, and yeah, and then they sent, well, although the thing is they depose Gavin Newsom, but then they'd send in a bunch of advisors, but the advisors only know how to fire people.

And so they would keep firing their own non-stranglers. They would never actually get to do like a contra thing. That is a shame. It was, there was a time was when being a non-strangler was a good union job. You know, you could rely on it. You could support a family. It specifically wasn't. They were, they were contras who were doing that.

It was, they really didn't like you get a pension. But yeah, so, uh, that's, uh, that's water futures. So just another thing that is now subject to like high-frequency trading algorithms that's going to cause everything you interact with to have wild swings in prices. Unless of course your grocery store has a really good currency or future hedge in place themselves, which I'm sure they all will do forever. And those are going to last savings onto the consumer. Finally, finally, the savings will be passed on to the consumer.

Financialization of water seems fine to me. Definitely not Googling how to build own rainwater collector, uh, how to desalinization plants, things of that nature. It's very funny to me that the people who are, the people who are, are a, coming up with this be benefiting from it as the owners and, uh, see, you know, say driving many of these other elements of the process are also the people who created Neon and Saudi Arabia. It's very cool.

Like the guys, like the guys who are, the guys who are like being like, well, time to monopolize all the water are also the ones who went to, um, listen, like Mohammed bin Salman and were like, Hey, we could make you a moon. The people who decided to do a media company called Aussie after Ozymandias, not blessed with a lot of self-awareness, I find. No, I love it when people completely misunderstand something they've read. Like, oh, Ozymandias, cool guy, King of Kings apparently. Sick.

Want to be that guy. So I want to, but I want to move on from water futures a little bit here. Um, yeah. So do I want to not want to fucking kill myself anymore. Yeah. So we're going to talk about, um, we're going to talk about, uh, a little bit more of our visit to our friend, the line. Why is it being weird?

What, what is the economy right now? We are vibe checking the line and we are finding those vibes to be rancid. Hmm. What is up with the line? You know, we see up to these Alex. What's up with the line? Well, the line is going down today, but then it went up yesterday and then it went down the day before it's the lines, just, um, the line's having a little bit of

trouble right now. I think it needs some mood stabilizers. Make up your mind. Make up your mind line. Sorry. A squirrel has just tried to break into the TF studio. Leaping into the line of fire to diagnose himself with a tension deficit disorder. It wants absolutely selling us some not features.

Yeah, I once told the fake cheese. Yeah. So, um, here is, here is, here is what I'm going to say, right? We talked about, about what the consequences say for the line have been from a combination of like, like years of underinvestment from COVID and so on. We talked about how contradictions, if you've, yes, we talked about the contradictions, we talked about how, uh, in March, the global economy kind of stepped off of a, a very high building.

And again, now much understanding of historical materialism is just understanding the forces that are causing it to continue to fall. And I, what I, well, we've always talked about that at a very macro level. And I want to go into a little more about what the consequences of that means at an institutional level. Yeah. Because the micro level is you can't afford water anymore. Yeah.

And boring. Yeah. I'll just drink Mountain Dew. Stop fucking with me. And so what that means, basically, right, is that a higher and higher proportion of companies are becoming something called zombie firms for a little bit of context in Britain. 6% of the economy was zombie firms at the beginning of the pandemic.

And now it's about 21%. That's good. Cause that's growth, right? Yeah. So that's what we want. That's the one line going up is how many zombie firms are exactly. Zombies are good, right? I've not seen many of the films, but they're, they're popular.

Exactly. It's, it's, it's, um, it's great news for, uh, like Epic Bacon 2014, uh, Redditor, YouTuber people, like a lot of zombie steel katana with a, like a neon paracord handle. Yeah. So, uh, Alex, what is a zombie company? So a zombie company is a company that basically is on it. It can't like really survive on its own.

Like there is no sales growth. Um, it can't actually fully cover the cost of its debt with last year's earnings. Um, but it sort of lives on. Like it's not in bankruptcy. It's, um, it's just kind of like muddling along until it either goes into bankruptcy or gets better. Maybe a company that may or may not live next door to Lex Greensill. Yeah.

That's right. Yes. Exactly. Yeah. And so this, this is often connected to like, um, lots of sort of government handouts for companies that tend to ossify them in their current structures. So anything from the coronavirus business interruption scheme to just

interest rates being zero generally, that's sort of the common explanation as to why there are lots of zombie firms. But, uh, Alex, you and I were speaking about this the other day, that there's more interesting definition is non-financial, right? Where it's essentially that the current number of firms is surplus to aggregate demand, but it's politically not expedient to allow them to fail. Right. And a lot of this, you know, okay.

So at least in the U S like, you know, everyone is obsessed with jobs. Like no one talks about like giving people money. Like, you know, the most ambitious, like left stuff that people even think about in the United States is like, Oh, let's give everyone a job. Um, but like the public sector in the U S is so. Unconfident in its ability to do anything that like it can't give people jobs. So it's basically just like paying companies to keep people employed. So there's not like mass chaos and like more riots in the streets and like an

actual revolution, basically. So I mean, these companies are surviving because the interest rates are so low that like they don't necessarily like have to pay down their debt. Now, like they can just refinance indefinitely because rates are zero. Slavoj says that was right. It's, it's liberal communism. We've finally achieved UBI for like jet ski dealerships. Exactly.

Except it's like for the, um, people who are then like, Oh, but like, we don't want our workers to have pandemic assistant payment, a pandemic assistance payments, because then like they might not come in to work. And like for us, we want, we need to be able to like exploit our employees enough to force them to work if they could get sick. Very interesting that a calculation has apparently been made at some level that you personally not being able to pay your rent. The crisis that that like brews up, that's okay.

That's survivable, but your boss not being able to pay like the ground rents. That's the real danger. But also the other real danger is that you might not become dependent on continuing to be employed by your boss. So in that effect, right, it is, we, is that these structures for distributing money, which is firms that have payrolls, even if those firms basically don't trade, those, it's more important maintaining the hierarchies in those structures.

It's more important making sure that as that like, as that money comes down from the state, either in the form of low interest, of zero interest rates or business interruption loans or the furlough scheme, whatever, that your employer is still able to like, decide how much of it you get and keep the rest for themselves effectively. Wait, right. Are you saying our economy is structured around some kind of axis of control? But surely when in the midst of a global pandemic, people who are working

from home were encouraged to go back to the office for no reason because they love the train. Surely that was just because the people love the train. The good trade, the choo choo. The choo choo train. Exactly. They love bands. Yeah, they're like, everyone in this country is Ralph Wiggum.

Yeah. But so I think it's important though to understand, right? Like that we, if we talk about the line going stop, like this is sort of what we mean is that these, that there are these structures that used to, let's say, that used to engage in actual underlying economic activity. It was always invention, but it bore some reality, both like causative and as an effect to something concrete instead of just being one Australian man's game of the Sims.

And so if you want an example, this is a UK example. Retail footfall is down to historic lows since they started measuring, right? People don't want to fucking die. However, steps up the fit. They'll be upset. However, retail bankruptcies are well below even where they were in 2008. It's fine. Huh.

And because retail borrowing is orders of magnitude higher than it's ever been in history since people started measuring. And that can go on forever. Nothing bad will ever happen because you just, you borrow the money and you never pay it back and you, you buy, you buy the futures in water and that ends well. Um, and everything is fine. Alex, that can go on forever, right? What could go wrong?

Well, the interesting thing is that in the U.S., like retailers are filing for bankruptcy, but what that means here is just that like retailer landlords are buying up a ton of retailers. And so like going into bankruptcy for most of these retailers hasn't actually meant going, meant going out of business. It's just meant concentration and having like five retailers left total. I'm pleased to announce that since our merger, Ray's, Pager and fax machine empire is in perfect financial health.

So that's the other question, right? You can go, you can go one step beyond that, which is, okay. Well, then who are the customers going to be for all of those locations? Don't worry about it. Yeah, futures are going to be the derivatives of customers, theoretical customers. Am I interest you guys in buying an extremely rare tulip from me? It's only going to go up. Let's just game that out for a second, right?

If massive consolidation in the retail sector, I mean, this is happening, for example, with the very tech enabled bricks and mortar stores in the UK as well, like next, a lot of them now are entering. So it's weird, powerful stores are entering into agreements with landlords where they say, you'll have a percentage of our revenue when we start trading again, but we're going to stay open. And once again, you cannot make these agreements. No, you of course cannot.

No, then the non-powerful retailers are being, as you say, Alex, taken in the States, at least taken over by their landlords, but like all of those locations are continuing to employ people or continue to be paid or continuing to buy stuff, but then eventually someone's going to have to actually buy something. But what if you just keep rolling the customer forwards forward, like the customer futures? Look, I played musical chairs before. And as far as I know, I've been, I'm still playing.

The music has never stopped. Yeah, it's a game where the music goes on infinitely. The music is always all but the Greek. It just keeps getting faster and faster. The number of chairs stays the same. If anything, the number of chairs increases. That's my understanding. As far as I'm understood, I mean, if you want to actually think about this

really is that this is that again, this, this number of businesses that are now zombies, who are, who are they saying they have the relationship between economic activity and debt and equity has flipped, right? They are, they are now just basically places to put debt and equity. So they are disconnected from the line. They are now lying storage warehouses. They're connected to the line just on the other end of it. They're no longer causing it.

They're now caused by it. Lydian shape. Yeah, effectively. I love how this is now becoming like a sort of Kafkaesque scenario where even the people in charge of what's going on don't really understand it. Like you're getting to the point where Gorka is like, Ah, yes, Mr. Chopper, my, my everyday carry is now a theoretical pistol, a pistol, a future

pistol, which I own and which will only increase in value. You are, you are talking of the economy in terms of people eventually buying a product. I have transcended the concept of products all together. I merely own the possible opportunities to have products, which will never exist. Have you heard of M-Way? Why don't we simply like do an end run around the gun guys by selling them self-defense futures, like you cap and trade, uh, shooting people.

And then that way you make a bet that they will shoot someone in the future. And as a future in not having been shot, and then when you do get shot, it's really valuable. Well, like, so if they, sorry, go ahead. Oh, I was going to say the shooters are going to be the only people who can afford to buy anything. That's true. So, because the only jobs in the futures are going to be security guard

and, and like restaurant waiter or like the, like, 10,000 rich people. Yeah, exactly. Hold on. I'm having a, I'm having, I'm having a pristine, um, uh, reverie where I'm remembering John Delaney's proposal for ending gun violence in the States was that you charge an insurance premium on a gun owner that goes up the more people they shoot so that it makes it economically unviable to be a mass shooter. Wait, hang on.

This is just the Chris Rock bit about what if a bullet cost $5,000? Yeah, it was a, it was a platform from one of the, um, uh, admittedly like one of the trailing leaders, but still leaders of the people who are going to try to win the democratic pop. Oh, hit that nomination half remembering a Chris Rock bit from like 2002. Awesome. What if this was the democratic policy? It was the third billionaire.

It was John Delaney. Yeah. John Delaney, brother of Rob. Yeah. Um, the big strong billionaire. Yeah. Uh, but yeah, so that's, but that's just a memory. But like, I mean, if you think about like why that's a fundamentally like

neoliberal approach to doing anything like this, all of these strange financializations, this little bit, bits of trickery, it's because this is all really about, um, is all really about maintaining homeostasis in a, in a, a system of exchange that's designed to, you know, put certain people in control and certain people will be in controlled and all of these little bits of risk management from water futures to these strange loan agreements to the persistence of zombie companies is just sort of the, um, it is a degenerating system maintaining itself and these are all morbid symptoms.

It's so funny to see a lot of like, uh, let, let's say more, uh, more orthodox financial journalists just being like, huh, why is this happening? Kind of weird. You know, huh? It's really crazy. And well, the funny thing is like when I first started doing finance journalism, I like didn't, you know, I went to college in high school in the United States.

So I like didn't understand like class politics at all and everything was so confusing. And then like you learn a little bit more and, you know, I worked for the FT and was like, Oh, I understand this now. And like all of a sudden every single thing actually makes sense. If you were trying to not use a class politics frame to talk about something like zombie companies, what on earth would you, how would you explain that? Just a bunch of, it's just a bunch of people making decisions to preserve jobs.

Yeah. Why are we preserving the jobs? Because jobs are good because people like them. People like the train. Alex, may I add brains? Alex, I'm interested to know how, how would you go about make it's like accounting for the existence of zombie companies without engaging in class politics? I'm curious to see if you're capable of doing it.

Well, everyone, so that's why everyone blames the Fed, right? Because everyone's like, Oh, well, interest rates are zero. And that's weird because like historically interest rates haven't been zero. And like, that's the thing that's changed. So like, because interest rates are zero, God, that must be the reason they're all of these zombie companies, man, it's the Fed's fault. Yeah, you can then ask why are interest rates zero and why has it meant necessarily that this is the outcome of free money?

I have found your answer, by the way. And the answer is I knew I would get it from the Wall Street Journal. And of course, their answer is it's not happening. And so on the 10th, on the 10th of May, 2020, a nation of zombie borrowers isn't inevitable, even with more debt. What's the, what's the, because the mechanism that I know that these people use paragraph, they say this, this sounds like it makes no sense. I love these kind of articles where they accidentally say the truth and then be

like, but no, that can't be right. Now, here's something insane that is an alternative. I mean, the weird thing is that like what, what financial news pundit people seem to want is for like the Fed to raise interest rates, which also doesn't make any sense because it's like, OK, well, like unemployment is what 8% officially here, even though like the actual job losses and people without jobs is like much higher. And they're like, oh, well, if you just force all these companies out of

business, then like they'll be punished. And then the good companies will like rise from the ashes, not taking into account the fact that like when you have mass layoffs, people suffer. You know, it's like there's no safety net to actually catch anyone. So like, you know, people go into bankruptcy themselves because all of a sudden they don't have health care when they lose their jobs. Well, why don't the health insurers get evicted? Like it just doesn't the actual consequences of this are so big, like

having a ton of companies fail that like people just don't seem to be like connecting those two ideas. Why don't you simply become a zombie person and then your health insurer has to keep paying. Subsist only on brains. Well, Alex, I for one didn't realize that you were going to take up the loony left position of suffering is bad. That's not something that we try and advocate on this podcast.

We're more of like a kind of rational debate space. The final the final paragraph of this WSJ thing, by the way, is the danger is that central banks handing out money doesn't just cure the zombies, but creates inflation. That's not a problem for now. And as Evan G fund manager, Eric Lonegan says, it is easy to fix. If by a miracle we do too much. It's not a problem.

That was going to be the plot of 28 months later. They eventually cure the rage virus, but it leads to inflation, which ultimately was worse. It's not a problem. You just raise taxes. Hmm. No one's a zombie anymore, but now a loaf of bread is £1.50. So I don't know.

No one can say if it's good or not. I love the Wall Street Journal so much. You might say that this makes no sense anyway. Let's let us let us pretend. Come reason with me that it does. Let us imagine for a moment that it does join me in my mind palace. So come come with me to the to the mind dojo where we should engage in the in financial taekwondo.

Yes, that is how you bought your foot gloves. Mr. Chopper. Why? Okay. Why? Why is why is why is James Adomian Sebastian Gorka always addressing a different podcast? I don't know.

Because Mr. Chopper is tremendously Mr. Trash Future is not quite as funny. Yeah, we need to snap your name that fake Gorka can address us. No, it's because the strongest joke in that whole bit is Gorka thinking that Chopper is a single man. Yeah, that's right. So I'm going to steer us back on here. That is wrapping up our interview with the zombies, which is essentially right that when debt and equity rather than being based on underlying

economic activity, thereby generating the line where debt and equity serves as the basis for economic activity that renders the line a kind of measure of elite confidence in a quick recovery. And what we have is the illusion of a normally functioning capitalist system, which is for a pretty considerable slice of the economy. Stop working in March. And what that leaves us is, you know, two questions, which I'll sort of turn to Alex for what happens when the creditors realize as recovery

won't be quick. Uh, it sounds good to me. I don't know. I'm just kidding. Like, is that good? No, um, I feel like, I mean, I think what they're really going to do is go to the Fed and be like, you have to buy high yield bonds now because we're not going to get paid back.

Um, or, and until then it's just going to be like financial market chaos. You just raised taxes. You just raised taxes. Just that. And then monetary policy takes care of the rest because it creates the, it creates the incentives and it to create such great companies as Abek, Noah, green energy, NMC, health care, uh, um, Brighthouse, all these other great companies that have been independently viable.

Yeah. They just live next door to cool guys. Uh, you know, one thing that's amazing too, is that, uh, one of the zombie companies now is Ford car company. Wow. When Neiman Marcus was the last big one that actually like died, right? That collapsed into undeath. Yeah.

Hmm. Yeah. The rest of them are still operating. Yeah. I mean, to be honest, I think it's, it's pretty bad that we're all, we're all having a go at Lex Greenfield, you know, a person from the global south for simply practicing mutual aid, uh, with, you know, some of his struggling, uh, fellow, uh, people of business.

We've got a plan. What we do, we move the entire global economy in next door to Lex Greenfield on the other side. He will have no check. We invite Lex Greenfield over for a cookout. Step one, when he's halfway through a snag. Step one, sign the guy with money. Step two, take all of that money.

Exactly. Make America a better place. Paying and gain on a global scale. So even the second, sorry, the, but what happens when the creditors realize this recovery will not be quick? It seems as though what's going to happen is. As you say, Alex, more money, lend it more money. But the more, but they're basically, this has to go further and further and

further up the chain to the Fed, where eventually that's going to have that will result in either a brutal program of austerity or everyone in the Democratic party having enough heart, having heart attacks in a row such that makes Bernie Sanders the president. Yeah. You're suggesting that Vladimir Putin is going to poison everyone in the Democratic Party, except what you inadvertently recapitulating here is the plot of season one of absolutely dog shit.

Fox show designated survivor. Yeah. Oh yeah. So basically it's can't believe that Joe Biden padlock padlocked himself in a suitcase and jumped out of a third story window. I guess he must have been bottling it up. But essentially what I think I'm kind of saying here, right, is that that story of the Fed buys tons and tons of high-risk bonds.

That's basically tarp and let's troubled asset relief program, the 2008 bailout in slow motion that then that then is going to end up with just brutal austerity unless Bernie Sanders is in like a designated survivor situation. No, no, this isn't this isn't us. We're not sweeping things under the rug. We're sweeping them under this tarp. Yeah, look, Alex, Alex, does that sound credible to you? So, so, like, I think that you're I think you're definitely onto something.

The weird thing is that like the austerity is already starting. But the thing is it's only starting for people who aren't investors. Like it's starting for people who work at restaurants in New York. It's not worried about that. I mean, just those people, but like that's that's a crazy thing about this. And like the weird thing about some of the bankruptcies that have happened to is like none of them are even that contentious. Like everyone's just like, oh, yeah, well, we don't want to like, you know,

have the financial system fall apart. So like, let's just team up and make sure that like the creditors get a deal where they can live with and like, you know, even the shareholders get a little bit of money out of this and like, you know, we're all happy. At the same time, Congress is sitting there saying like, oh, well, like our small business constituents keep telling us that we can't give people money or else they won't come back to work. So we just can't give people money.

I found I found another Wall Street Journal patented solution. I found a way out of this. OK, is it that it's not happening? It's simply that you have your central bank. Just have a negative borrowing rate. Just make all of them debt into money. Yeah, we're just going to we're just going to keep on wishing with paper that all of the production will start up again when there is a physical impediment

to the production happens. It tells us liquidity would be transformed directly into solvency. Ah, that's good. Look out, Selina, guess this old penny. You just you just move the line. You just flip the graph over. You just run it. We just 180 degrees and it's going up. I mean, it is it is very funny that sort of all of these solutions,

whether it is by keeping zombie companies afloat or just with the Wall Street Journal like saying, what if we got a bigger piece of paper to draw the line on? Which the European Central Bank is apparently considering doing. Yeah. Well, what it is, is it's it is it is a it is a firm is an allergy and complete unwillingness, a structural unwillingness to consider any of the actual real stuff in production. You can't consider the actual physical either labor or movement

or transactions or whatever that goes on, because then you're going to have to confront the reality that that's being performed by people with physical needs that we don't like doing that. We like technocrats who can then just say, oh, we just we just set the borrowing rate to minus one percent. And my name is Esther von Pedefili from the European Central Bank. And I don't see any problem with the fact that every glass of water

in Austria now costs 15 euro. I'm fairly sure that with small interest rate adjustment, people can go back to living happy lives in the basement. Right. So before we move on to the to the other other other segment, right? Like I just yeah, I want to see it's like the there is no liberal. There's no liberal solution to what's going on right now, because it just shuts its eyes and refuses to acknowledge the fact that there are going to be more zombie companies.

There are going to be there are. Yeah, that's it. That's just it. There are going to be more zombie companies. Production is going to get less. Economic activity is going to go down and you can't just like draw the line in a different color and then decide that that means something. Count a point for more women debt. Well, like the weird thing, the weird thing is that like what seems to be

happening right now is just that like the investor class is handing itself money over and over and it like has a lot more money to hand to like one another, like, you know, one shareholder to a bondholder or a shareholder to another shareholder. And so they're like, all right, look at all this money. There must be production behind it. But like, there's no actual evidence of the production. We can play musical chairs forever.

We've got so many fucking chairs. Yeah. It's I mean, but they're the Greek Air Force band playing. Yeah, it just freaks me out because like, what if the financialized economy or the like financial system, quote, unquote, is like so separated from like any real concrete production or real economy type stuff that like maybe it can line go stop. Like I don't think it can. Maybe the like I will only go up.

I mean, that's that was my thesis with line go stuff is that like, OK, maybe the lines behavior itself won't be that bad. It just won't bear any resemblance to what's actually happening anymore. It's now it's now the like map of the empire rather than the territory. Hmm. That's been our visit from the line. But from our line to your line, have a happy lines miss. I was like, how about a visit to the line? Yeah. Oh, yeah.

It's a Friday night. You're all gathered around an iPad. Why not, you know, visit the line? Mommy, is that the line? Exactly. Logging on to the Bloomberg app on your iPad. That was the that was the line, sweetie. Now it's just now here. Nothing but a pair of stumps remains.

I can't see this economic information. Let me just use this credit card to sweep this dust out of the way. So let's talk. What is when you talk about SoftBank, because we've talked about SoftBank a lot on this show, right? We talk about their startups. You talk about their vision fund. We talk about all their wackiness.

We very rarely have talked about soft people behind the soft. Yeah. Well, quite quite behind. Literally, we have very we've not done a behind the music on SoftBank. And Alex, you also have had a very interesting article on SoftBank that's come out recently. So but the news hook for this is that they are seeking to pay down their debt level, even as their liabilities increase, they're selling off a bunch of assets, including profit making entities like ARM, Brightstar and so on.

And they are looking at going private. Now, I wanted to know if you could give us your your take on what SoftBank actually is other than a company that makes wholly owned commercials feeling featuring hecking good doggerinos. Invented by the Greeks. Amazing. Well, so it was interesting, right? Because I was like, what is SoftBank?

Anyway, like, you know, you think about the mobile phone company, but like I wasn't around or really paying attention in like the year 2000 because I was 12 and I'm sure you guys were even younger. But like SoftBank itself actually just bought that mobile phone business in 2006, which I didn't realize I was like, oh, it's like a cell phone company. I mean, it turns out its entire deal is like buying things and making ads. Like it's it's just a company that like owns other companies. Like it started off as a software distributor.

And then it bought a bunch of trade publications. And in like using basically stuff that it learned from the trade publications, it like invested in tech companies. And like that was like how it got big. It started selling showercoats to the US military. And from there. I mean, literally the first time we ever heard the name SoftBank was they're like commercials that went sort of semi-viral

where like there's a white Samoyed dog who like talks and is also like passive familiars of a Japanese family. It's very strange. I mean, Samoyed is Russian for self-eating. Well, I guess in a way invented the self-eating dog. That is a metaphor for you having problems with dogs that refuse to eat themselves. Are you a sucker buying food for a dog who doesn't even work for a living? Why not get this dog?

Maybe named for the Sami people, but like go off. Oh, OK. Yeah. Yeah. I like to bring I to bring in the Russians and the Greeks. Yeah, that's right. Dogs invented by Greeks. Masayoshi-san's 300 year vision for again, like a company that was a company that owned trade shows, magazines, distributed some software around and found out.

When it was Banksoft, a company that just did some stuff. His 300 year vision for this, which was again, given 20 years ago before they were even a mobile phone company. This is some deeply Mormon shit. I've got a 300 year vision here, guys. So it's now his 280 or so year vision, which is a technology revolution that will ultimately culminate in a singularity, a point where AI supersedes

intelligence and redefines every single industry in the global economy. Plays Deus Ex once. But really, I think what's interesting about SoftBank is, A, they're not very good at this. No, it's to say the least. But B, most of who they've hired to actually carry this off isn't AI people. It's not technologists.

It's not visionaries. It's not anyone. It's mostly bankers. It's not that cool, futurist guy, Shingy. Yeah. So because, Alex, you're, you're when you see SoftBank, you don't see the PR or the Vision Fund, obviously. But what you see is actually a bank. Yeah, it's just, I mean, it's like a bank investment fund kind of deal. Like it's all it's ever done is invest in companies.

But again, I was like, oh, I thought it like did stuff for at least. I thought it was one of these things where it like used to do stuff and like no longer does stuff. But it is sort of like it was it was ahead of its time. I'll say, if anything, it's time as a Japanese like SIM card retailer through again, a joint venture with Vodafone was more the exception than the rule. Again, that's so close to literally being a fake business plan in the movie Pain and Gain.

And this is also isn't just SoftBank, though. Many most tech companies, rather, like there are especially the big ones, the FAANGs, the Facebook, Apple, Google and whatever the N1 is, the game of conglomerate. One that you can't say. N Balm Incorporated. Yeah, well, they all have so much cash, right? Like, and this is this also sort of speaks back to the thing

about how the economy now is just investors giving each other money. Like Apple, I think, still has like almost two hundred billion dollars on its balance sheet in just like cash and then like bonds. So like basically every one of these big tech companies and now SoftBank are just big investment firms, basically. Like, I mean, they, you know, Apple obviously like makes iPhones and stuff. But like it's such a big part of their balance, right? Yeah, like does your company have a water cooler?

Congratulations, you're an investor, baby. The N in FAANG, by the way, is Netflix, which also fits because Netflix also adopts this kind of scat-a-gun approach of just buying every intellectual property it sees. And like it may be technically is in the business of like entertainment, but what it's mostly in the business of is buying stuff and then just holding on to it. On that note, you know what Netflix has recently bought

and has been desperately trying to get me to watch as though Netflix isn't aware that I've already watched this, is a SAS Ultimate Force showing Ross Kess. That's a pretty solid show of 2005. We should we should watch that for for the pod at some point. So if you look at, but if you look right, if you say the purpose of a system is what it does rather than, you know, what it sort of says it does, doesn't really sell.

What does SoftBank actually do to generate revenue? It doesn't really sell services to the public, or at least not directly, except like for one Japanese phone company. But mostly what it does is it has its two vision funds that engages in proprietary security trading, like prop trading. So it'll invest in options and stuff on the market. And so it's you can now see it's got a long it has a it's a bank without customers. It has a long term or its customers are like the Saudi royal family

or it's a hedge fund wearing a comical disguise. Yes, exactly. It's a hedge fund in a Patagonia vest. Why Mr. Hedge Fund? Oh, I'm Mr. Snir Hedge Fund. Yes, I'm Mr. SoftBank. Yes. And, you know, it is it's just very interesting. It does sound like a euphemism for hedge fund now that you think about it.

It's true. And so when you think, so I mean, it seems almost like obvious for us to say, but, you know, when in 1999, Massa says, my philosophy is that the digital revolution will make mankind happier and more productive and that that philosophy won't change over the next three hundred years. Well, that was a Francis Fukuyama prediction. But but like that, you know, that's pure that's pure marketing

to just try to make your hedge fund look like it's benefiting everyone effectively. Yeah. And and like the funny thing is that like SoftBank moving into like public markets is like a relatively recent thing. And one of the reasons or one of the only reasons it even did that is because another hedge fund, Elliott Management, bought up a bunch of its shares and started leaning on it to be like, hey, you got to give us some of your money, man, you've got too much.

So like, again, just in money circulating within investors, you know, creating more money for Elliott Management. But like, what is it that they're doing? It's because there's not Elliott Management. I'd like to speak to Mr. Elliott Management, please. There's some questions about his financial dealings. So there's this there's this assumption, right, that as investors are trading money between one another, that that must therefore

represent some kind of underlying economic activity. There must be some value. There must be some cuts and some linen happening here. There must be some linen coat being made. Something must be happening. But that these trades are basically being made sort of just on the basis of confidence tricks against one another, right? There is no there is no or there's a shrinking amount of underlying

economic activity being traded on on the basis of Elliott Management trying to get SoftBank to do a big share buyback. Even though much of SoftBank's like a stated value is they'll invest in a company at one valuation, invest in the company again in a sky high valuation and then book the differences profit, which they literally is something that they do, right? That's cool. We made a profit because we basically sold something to ourselves.

It's still less contrived than just just reverse the the borrowing rate, right? Yeah. But that all of these all of these paper transformations are basically just ways to keep the numbers high for a very small amount of people, whether that is Elliott Management, whether that is the owner of a zombie company that wants to stay the owner of something or whatever. It's all just kind of different versions of the same. I love this.

This is so true. I'm just big numbers with the numbers. They're so big. How do you consider it? Sorry. It's all just kind of feels as if like the kind of driver of all, like the only real driver of economic activity is like hyping. Like everything is just about like hyping like hyping companies

that don't really do anything. Hyping companies that won't do anything but making money on the basis of hype. Like really, it's kind of it is a kid, except, you know, I was going to say, it's akin to like a hype beast economy, except I feel like the hype beast economy at least has like some demand supply. At least you get a shirt. Yeah. And at least you get at least you kind of like get some cool stuff to show

your friends, whereas like over here, yeah, you know, a short future. Oh my God. Pimp my economy with Tim's on. That's right. Oh, dog, your economy is looking sad. It's about to say what if it was Japanese? It's a billion dollars now. We say the soft bank doesn't do anything, but they do own a baseball team

in Fukuoka, Japan, the Fukuoka Softbank Hawks. Honkbolu Hooftekasu. I do think we should all get soft bank Hawks hats and like gear. You should. Yes, we will. We're going to get those. We also they own through Fortress Investment Management, which they bought in 2017 to like give them the infrastructure to be a fund that trades basically was a very weird mod for Team Fortress to what they what they did

was they they got that and they purchased that asset manager. And then they through that they now own most local media in the U.S. because that asset manager owns Gannett, which owns most local media in the U.S. So soft bank chances are owns your local paper. That's cool. Yeah, the old soft bank news. I prefer the paper. You might look at paper. It becomes theoretical recently.

I'm a big fan of I'm a big fan of like the soft bank review in the Dartford News Shopper. So the Dartford Softbank Shopper. The other thing is the the guy who's sort of engineered most of these transformations is not actually Masayoshi Saan. It's Rajiv Misra. You know, Alex, who is Rajiv Misra? So he I think he runs the the Vision Fund, right?

He used to be a Deutsche Bank. Oh, well, that's good. He is an interesting guy. Yeah, Deutsche Bank, just a name that inspires trust. Certainly not the recipients of like five of the largest SEC fines they've ever issued. Yeah, Deutsche is actually German for good. Yeah, so it's not as though they could possibly be in bank.

It's not as though they handled all of Epstein's money. No, couldn't be there. Yeah, like it's not like low key extremely early. No, HSBC might allegedly be the bank that you go to if you're allegedly in serious organized crime, but Deutsche Bank allegedly has the most sinister vibes of any of the. I'll have you know that we put all of Epstein's money in a big account that was labeled not for child sex trafficking.

We explicitly said that it wasn't to be used for that. So Misra was this guy at Big Wig at Deutsche Bank, who was in charge of their subprime real estate task in 2006. What a great time. Wow. And now he's in charge of making companies magically worth billions of dollars. Lightning doesn't strike twice.

If this guy was involved in the subprime mortgage crisis, now everything he does statistically has to turn to gold. He's had his big fuck up. One guy couldn't crash the global economy two times. He's the safest person to possibly have. He's he's fucked up, but he's growing. He's learning. He's becoming a better person.

We should give him a second chance. Exactly. Yeah. But other other Deutsche people at Softbank include Akshay Naheta, who engineered the one billion dollar wire card trade that we talked about a little while ago. A good trade. And Colin Fan, who was financial news junkies, will know he was the Wunderkind who made M.D.

at 28 before being improperly fired for improperly profiting from personal activities. I see. He has no new fans. He's also in charge of inventing what companies are worth a billion dollars for reasons of various. It's just it's very strange to me that there's just this massive concentration of mostly Deutsche, some Goldman people who are now in charge of some fraudsters who are now in charge of the

it seems to be the main way that the economy keeps inventing stuff. Yeah. He's got the fraud out of his system now. Yeah. He won't do it again. I mean, Alex, is this at all meaningful to you? I mean, who among us has not accidentally crashed the global economy? Right. Like, you know, twice. Yeah.

He was in his 20s, you know, I don't know. That's why he came out of nowhere. Yeah. Exactly. No, so I'm looking now. I'm trying to find this amazing story about, like, the way that the internal politics at Softbank have worked or within the Vision Fund. I think that's actually a Wall Street Journal thing,

but it's like the news group. It's what's his name? Bradley Hope, who's like pretty good at what he does. But oh, God, I'm trying to remember the details. He like basically was like trying allegedly trying to like entrap his colleagues to push them out of the company because they like said something rude to him once.

Like, I don't again, I don't remember the details, but all the softening people are total psychos. An example. Also, this was just reported in Bloomberg. Navneet Govill, their CFO, just once said Chinese people sound stupid. And Jeff Hausenbould, who Excuse me. Excuse me. Yeah, who has a 20,000 bottle wine cellar, but he's completely tea total and doesn't drink.

That is the most jokified shallower in my life. Would you like to, would you like to come to my wine cellar, Mr. Joppo? How many of his enemies are bricked up in there? Yeah, I was going to say, we do not know if anyone is bricked up in that wine cellar. But maybe they're consented to this. He also is a blue Ferrari, which is the most pervert shit I have seen in my life. Yeah. His name is yellow. Yellow is like, oh, quirky, fun, whatever.

Blue freak shit. Freak shit. Go to jail. Go to fucking jail. His main thing, though, is that he said that that soft banks should invest in Peloton because, quote, men would want to masturbate to workout videos. No, that's not the main thing. The main thing is still the Ferrari. I'm not over the Ferrari.

Yeah. But like, why is he familiar with pornography, like internet pornography? What if you got your porn from a stationary bike? And that's why that's why there that's billions. That's why billions are for them. What if what if the bike had a flashlight on it and as you pedaled, it sucked you off? Yeah, what if that is what they want these days? What if that? And that's why Jeff Hausenbold gets to have a blue Ferrari in a giant prison.

The faster you peddle the bag, the faster it sucks you off. Like, it's something about finance, guys. I'm seeing shades of Epstein's what does that have to do with pussy question in the like points to Peloton. And it's like, so does the guy jerk off in there or what? Like, dude, what I'm always asking at the soft bank investors meetings. What does this have to do with? So what soft bank says, right?

I mean, what it has to do with all of that is that the Deutsche Bank sits at the nexus between soft bank and Epstein. That's what that has to do with that. Allegedly, surely no German. Could you know if you're not allegedly documented, documented by documents? Yeah, it's alleged by documents. But like that, so I want to sort of close on this, right? That soft bank is just it is just a bank.

It is an asset manager. It's a hedge fund, but that their vision, right? Their vision always was still vertical integration by stealth. They wanted to be a global conglomerate that controls the infrastructure for everything specifically like in this all hinged on owning a RM that chip maker was that they have the chips in the handsets, the chips, the internet of things stuff. They have the platforms that they all talk to each other with. You get in an Uber to your OYO hotel.

You order food made in a yummy kitchens, kitchens on a handset with an ARM chip and a soft bank sim and all of those things have been disastrous failures. The vast majority of them have been disastrous failures or sold by soft bank. They seem to you to be failures, Mr. Chopper, twenty five moves of go ahead. But this vision, while it's looking something more distant, I think that ambition is sort of still very much with us and for the for the final final thoughts on on how to understand soft bank, I, of course, would like to turn back to our guest.

Yeah, I mean, it's it's super interesting just because, you know, as they sort of sell the the companies that they owned that like actually did stuff, like they're kind of getting back to what they originally did, right? They're like, they're returning to their roots by just buying a bunch of stuff and selling a bunch of stuff and doing financial engineering. Some old school trash, future shit. Yeah, finally. Yeah. Yeah. We're back to the Zany startups.

We're back. We're finally there. They can get back to what they really like to do, which is Zany startups, because the soft bank vision fund, too, not very Zany yet. No, make more investments in Zany, your companies, Massa. To a vision to fund. Yes, precisely. Yeah, I mean, I haven't felt alive since the WeWork stuff. Come on, guys.

I mean, a bunch of shaved podcasters and journalists need content. Yeah, I need a Bluetooth enabled pepper grinder that will connect to my Wi-Fi enabled salt shaker. Yeah, I just needed like compass. I thought it was like methadone for my for my WeWork high. I just like that you were like, hey, do you want to be on this podcast about like dumb Wi-Fi enabled salt shakers? And we have inadvertently documented the thing that kills the world.

Yeah, it's cool. Yeah. And that I think we went we started off on heroin and then we were on methadone. And I think now we're on Krakadil. I think that's where we're at. That's cool. So with with with all of that, I think it's time to say, see you later. Krakadil. Absolutely. Well, you can expense the precursors

like the codeine tablets, the lighter fluid and the spoons. So can you just tell me what quantities I need all of those things in and also what I have to do to them? Well, we can talk about that off the air because it's time for us. Game 9-11. Yeah. Once again, get back into that. Recare Force doing game 9-11. Yeah, we almost got through the entire episode.

We call it 9-11. We got through almost the entire episode without catching a note. Thought we were going to make it. Episode title, the Recare Force does game 9-11. Yes. But no, it looks like it looks like no. So regardless, I want to thank Alex very much for coming on today. Thanks for having me. Yes. And to and to thank everyone out there for listening to remind you

that of the Patreon five bucks a month second episode comes out in some short amount of time. Think of it as an investment. Yeah, think about it. Think of it as a futures. Yeah, maybe we'll explain game 9-11. No, maybe you might own some bones in the future. Yes. Never will we do that.

We will. I mean, it's really just it comes out of us talking about the J.F. Caver movie, the Oliver Stone J.F.K. movie. OK, so if you know 9-11, now what if you're a fan of 9-11? Yeah, yeah, we will see you all later. You know the usual stuff. Uh, and yeah, that's I really didn't do. I didn't stick the landing on the outro.

Is here we go by Jinseng. Very good. Listen to it early. Listen to it often. Yeah, there it is. There is all the usual theme song is Zorba the Greek by the Greek Air Force. Played an increasing tempo. Yeah, yeah, that's right. The music will never stop, so everyone enjoy the cheap credit roundabout.

See you later.