35 Burst results for "Financial Markets"
Biden announces sweeping new Russia sanctions
"Announced a series of tough new sanctions against Russia today as the historic adversaries confront one another yet again in cyberspace and on the ground in Europe and beyond. The sanctions target individuals and the state itself. Despite today's move, Mr Biden tried to strike a conciliatory tone at the White House this afternoon. United States is not looking to kick off a cycle of ex escalation and conflict with Russia. We want a stable, predictable relationship. Throughout our long history of competition, Our two countries have been able to find ways to manage tensions and to keep them from escalating out of control. We're also areas where Russia the United States can and should work together. And for more. Here's John Yang. Judy. The administration says today's sanctions are in response to three things. The Russian interference and the 2020 presidential election. Solar winds the big Russian cyber espionage campaign, which the White House officially said today for the first time was carried out by Russian foreign intelligence and for Russian actions in Ukraine. Sanctions target. More than three dozen individuals and entities seek to make it harder for Russia to borrow money on international financial markets and expelled 10, Russian diplomats from the United States.
Fed Will Begin Reducing Bond Purchases Before Raising Interest Rates
"The chairman of the Federal Reserve Jerome Powell, today, suggesting that the Fed would follow the same playbook and develop back in 2013 and 2014 once it decides to reverse what it calls its asset purchase program, meaning tapering off those asset purchases would come quote well before any interest rate increase was part of a virtual conversation sponsored by the Economic Club of Washington. Here's some background since last summer, the Fed has been buying about $80 billion in Treasury bonds and about $40 billion In mortgage backed securities each month is a way to boost the economy and to keep the financial market conditions on an even keel. So for now, you can expect interest rates to remain low. He offered this assessment on the U. S. Economy post Cobain 19. E. I think the first thing to realize is that the structure of the economy is always changing. So the economy that we had back in college was one where low unemployment leads a high inflation and inflation state. Hi. It's very different now. And so we have to constantly update our thinking about the way the way the economy actually worked now bringing that to the present. We're coming back to a different economy. It's not going to be the same economy is the one we left and weigh. Don't know. Exact. What that will be, But we have some ideas and we're going to be finding out. I think you're beginning now. One of them is that they'll beam or, of course, they'll beam or remote working remotely. That's one thing another is we've talked to companies and been consulting firms who have pooped surveyed companies and many, many companies have spent the last year thinking about how they can use more effective technology, perhaps at the expense of of the number of people that need it. So do that. Do Their work with fewer people. And that's a lot of the service industry companies that have been traditionally big hirers of relatively low skilled low paid people. So that's a concern because we still have many millions of people from those jobs who were working in public facing service sector jobs. They don't have a lot of other skills or wealth. And so we need to be thinking about what they're going to do and how how they gonna find their way back to the lives and the working lives that they had, and it'll be different. Other ways as well way we'll be learning about that. And we always try to try not to settle on one model of the economy and think that we really understand this because it's ever
From Ride-Hailing to Fintech: Grab's Journey in the Fast Lane
"Fact fever is heating up to a brand new level here. Grab holdings asia's biggest. Ride hailing and food. Delivery company is looking to go public a merger valued nearly forty billion dollars now. This would be the world's largest back deal ever completed and a major milestone for the frenzy that has swept financial markets the move also means guys grabs valuation has more than doubled in just eighteen months. Have a listen to anthony towns on squawk box earlier. We category leader in ride hailing in food delivery and in mobile payments. And you're talking about a hundred eighty billion addressable market here. Now when you think about how we've grown We've really grown and grown sustainably
From Ride-Hailing to Fintech: Grab's Journey in the Fast Lane
"Fact fever is heating up to a brand new level here. Grab holdings asia's biggest. Ride hailing and food. Delivery company is looking to go public a merger valued nearly forty billion dollars now. This would be the world's largest back deal ever completed and a major milestone for the frenzy that has swept financial markets the move also means guys grabs valuation has more than doubled in just eighteen months. Have a listen to anthony towns on squawk box earlier. We category leader in ride hailing in food delivery and in mobile payments. And you're talking about a hundred eighty billion addressable market here. Now when you think about how we've grown We've really grown and grown sustainably guys. Here's how i see it growth growth everywhere and not a prophet to be seen as anthony. Ten laid out. This is not the uber of asia. It's ride sharing. Its food delivery and key here. This is also a significant fintech company that works with regulators in singapore and beyond if the fact john that it's not even profitable and isn't expected to be so until twenty twenty three even though it's a so called super app begs the question that i know we ask often here as can the gig economy ever be profitable and i'm talking not adjusted dot profitability net income. Not that lhasa. I don't care about profits with this not yet not yet. I mean in. You know this new job better than others we were. We were in singapore almost a couple years ago. I remember meeting with anthony tan more than five years ago over in new york and really what they are is so much. More than ride hailing food delivery. The really are that kind of almost china style app of everything in your pocket. Leading the way to more digital commerce and particularly post pandemic as more and more businesses especially local ones need to move digital and that links into the you know the tourism economy all of that carl opening up the possibility for fresh modes suspending grab has an opportunity certainly in southeast asia which is under penetrated when it comes to technology and commerce to really be a big part of the infrastructure there.
4 victims of California office shooting identified, as suspect charged with murder
"Sir Chang and I'm Audie Cornish. This hour. We'll look at how faith communities approach pandemic lockdown differently. One day, we're gonna look back. And this is just gonna be a story that we tell what kind of story do you want to tell? Also one of President Biden's campaign promises was to overhaul the criminal justice system, and advocates say they are waiting for some real action now. Absolutely anxious form or change to come from this administration on criminal justice reform and how the Biden administration hopes to reverse systemic racism that's been baked into America's infrastructure. Now the news Live from NPR news. I'm Jack Spear. Veteran Capitol police officer is dead and an unidentified suspect was also killed after police say the individual rammed his car into the officers, then into a barricade outside the U. S capital today. We say the suspect was shot and killed after emerging from the vehicle, brandishing a knife and moving towards police. It all happened here. The Russell Senate office building just after one p.m. today still not clear what was behind the incident, though it comes on the heels of the January six attack on U. S Capitol by supporters of former President Donald Trump that also claimed the life of the Capitol police officer. U. S Capitol police officer who died today has been identified as William Billy Evans, an 18 year veteran of the force. A second Capitol police officer was injured. Have the Minneapolis Police Department homicide division testified today. Kneeling on the neck of a suspect who was handcuffed amounts to top tier deadly force and it should have stopped. Lieutenant Richard Zimmerman, a long time officer on the force testified today and travel Derrick Show Vin the actions by the former officers saying they were totally unnecessary putting your neon and neck For that amount of pot that amount of time. Is just Uncalled for. I saw no reason why The officers felt they were in danger if that's what they felt showing faces, murder and manslaughter charges in the death of George Floyd last year, prosecutors say corrected police video shows Trovan, who was white, kneeling on the black man's neck for more than nine minutes. Man has been charged with the murder and attempted murder in the Wednesday attacking a Southern California office building that left four people dead, including a nine year old boy. The Orange County district attorney's office is 44 year old Harmony, a dob galaxy. Gonzalez was charged with the attempted murder of two police officers after shooting at them when they reached the scene. Police say Gaxiola knew the adult victims. It's not clear what the motive was behind the attack. President Biden says the latest jobs report shows the U. S economy bouncing back, But he said the country still has a long way to go towards recovering from the pandemic. NPR's Asia, Roscoe reports employers added 916,000 jobs in March. That was the biggest game in jobs since last August. President Biden says the economy is doing better because of rapid growth of covert 19 vaccinations and government aid. He warned. That is too soon. For Americans to return to life is normal. So I ask I plead with you. Don't give back the progress. We've also fought so hard to achieve. Need to finish this job. Every American to buckle down and keep their guard up. This home stretch bite and also pushed for Congress to take up his $2 trillion infrastructure plan. But some Republicans have opposed the proposal, which would raise taxes on corporations. Aisha Roscoe NPR news U. S. Financial Markets are closed today for good Friday. This is NPR from W. H E News in Atlanta. Good afternoon. I'm Jim Burress. Right now we have clear skies 55 degrees. It's 504 Major League Baseball says this July's All Star game will not take place in the Atlanta area following the signing of a bill that makes sweeping changes to Georgia voting laws. Meal. Moffett reports. Baseball was set to hold its Midsummer Classic and truest Park on July 13th, but Friday announced it would be relocating the game. A Republican backed bill signed into law March 25th has received substantial pushback from voting rights groups and corporations. Measure overhauls many of the state's election laws, including restricting the use of absentee ballot, Dropbox is adding I d requirements for vote by mail and giving lawmakers more control over the state's election board. In a statement, Major League Baseball Commissioner Rob Manfred said moving the game was the best way to show the MLB supports voting rights and fair access to the ballot box. Mio Moffett W. ABC News The Cobb County says it's rental assistance program was the target of a cyber attack. Stephanie Stokes has more The county's program offered $21 million to help tenants who are behind on rent demand was so strong earlier this year that the cab closed applications after little more than a week. Now, the county says it's email for receiving those applications may have been compromised. I found out within five minutes and disabled the email. The county says it also disconnected the affected server. It's unclear how much information was compromised. An investigation is underway. The cab was one of several counties around Georgia who received federal rental assistance funding.
When Currencies Fail: Bitcoin Google Searches in Turkey Rise 400% as Lira Crashes
"Let's move to our main discussion and there are really two parts of the story that we're going to cover. The first is the devastating crash of the turkish lira. The second is the response of people in that country who found their money worth dramatically less than it was just a few days before first of all what happened between sunday evening and monday. The turkish lira fell as much as seventeen percent against the dollar ultimately landing around ten percent down. Turkish stocks also crashed the benchmark borsa. Istanbul one hundred stock index was down as much as nine point four percent which is the biggest sell-off since june. Two thousand thirteen. The nasdaq listed shares. Msci turkey efl seventeen point five percent pre market in the us. The cause of all this on early saturday morning. Turkish president aragon unexpectedly fired nasi ball. though central. Bank governor who had been appointed in november at the center of their disagreement was how to approach inflation. So let's step back and actually look at the scenario inherited oddball. He was the third central bank governor in two years in november the year that he came to power the annual inflation rate was fourteen point zero three percent. According to the turkish statistical institute by december it was up to fourteen point six percent now these are just official numbers and some argue that it's actually much higher on november twelfth twenty. Twenty johns hopkins. Economists hanky tweeted everyday. I accurately measure inflation in turkey today. Measure it at thirty five point six one percent this year as opposed to the official number of eleven point eight nine percent after that fourteen point six percent number came out in december. He said that it was actually twenty. Five point eight five percent per year even holding that aside if you just take the official number nearly fifteen percent inflation a year a staggering that means a having of your purchasing power every year and this has been going on for a long time sue from three hours capital tweeted last night fun fact. The reason turkish lira is t. r. l. is because they've already redenominated before due to massive hyperinflation. Let's add a little more color than about the previous year and a half. The central bank had been keeping interest rates low or at least below consumer inflation. And as we've discussed before on this show. Negative real rates mean investors are discouraged from holding that sovereign debt as well as from holding lira or lira-denominated assets. These have been the policies for eighteen months or more and by fall. The currency was at all time. Lows added to. This fire was the way the turkish central bank had been trying to prop up the lira. Selling more than one hundred billion dollars in us foreign reserves in order to keep the lira from completely cratering in the process this destroyed and depleted their foreign exchange reserves and lead them to actually owing more dollars to turkish banks than the central bank actually had determined. Opposition leaders ask for judicial probe into the official reserves as of november. The country looked to be heading to a full on balance of payments crisis. And on top of this there have been major questions around the independence of the central bank from president. Aragon aragon infrequently given the central bank direct monetary policy instructions had dismissed two governors in the previous sixteen months effectively. When we really take a step back. Turkey has been on the see-saw between currency crisis and inflation. On the one hand and massive austerity and growth slowing interest rate hikes. On the other a currency crisis twenty eighteen led to increase interest rates. And by summer of the next year aragona points quote a friend to cut rates by mid-november when oddball came in it was a swing back to the interest rate hikes austerity side of the pendulum. The first act of akbal as he came in was to immediately raise the central banks one week repo rate which is an interbank lending rate from ten point. Two five percent to fifteen percent now. Interestingly this had started to work things were looking more positive from currency perspective at least in early. Twenty twenty one. Daniel call tweeted this morning. The turkey central bank helped make lira one of the best currencies versus the us d- in twenty twenty one curbing money supply growth via rate hikes helping reduce inflation. The turkish lira was up three point zero seven percent from december thirty first twenty twenty two march nineteenth. Twenty twenty one. It had been down twenty percent the year before it also saw something like fourteen to twenty billion of foreign fund inflows into turkish assets over that same period which reversed years of the opposite direction. Basically the interest rate hikes austerity were performing well in the context of global currency markets. But ogbah clearly didn't believe inflation was getting under control to the degree that he wanted to. He raised rates again to seventeen percent and then finally on the thursday before his dismissal raise them much more than expected to full. Nineteen percent and so the pendulum is swinging back again from interest rate hikes and toward at least in the minds of investors runaway inflation. The newly appointed governor saheb cops. Yo glue said that beating. Inflation is the bank's main objective but also said that they're committed to lowering borrowing costs and bolstering growth. Money managers. basically think he's going to be forced to lower interest rates and accept currency depreciation and indeed the other place. This is showing up is in the cost of insuring. Turkey's government debt against default the price of which rose more than fifty percent over the weekend. What's more this move. And the switch. From ball to cops iaglu super reinforces the narrative that central banks lack independence from erdogan. As well casio glue is a party. Loyalist bloomberg's chief emerging markets. Economists said quote the hit to the central bank's credibility and independence can't be overstated to gone has battered the institutions with interventions that have repeatedly financial markets. Were willing to give ball a chance. His successor will find it hard to build that trust again. So let's talk now about the other dimension to this that you might have caught if you were on twitter. Google searches for the term bitcoin in turkey more than quadrupled over the weekend after akbal sacking wise. That happening while one part of it may be the idea that bitcoin provides in inflation hedge and just a different currency to get away from lira volatility. Which by the way all it using bitcoin to get away from volatility where they don't tell you when they're trying to critique bitcoin is that people can stomach more volatility if there's some possibility that those seventeen percents swings or also to the upside as well but the other part of it is that as i mentioned the new governor has said that they are committed to fighting inflation but doesn't want interest rates to be the tool because they messed with growth. What are there other tools then. Bing bing bing capital controls restricting the flows of capital out of lira and lira-denominated assets so one question might be alongside. Google searches is are we. Seeing an increase in exchange activity owner goes pack. A consultant at the bbc turk pro exchange said that there was a spike in volume and that it was four both usd t tether as an alternative to us dollars and bitcoin on btc turk the bitcoin turkish lira pair has the highest volume with the tether turkish lira pair being the second highest now. This situation is going to evolve a lot. And i think on the one hand you have to just heartbroken. For the turkish people who are stuck between the whims and machinations of politicians and global economic flows that they have no control over when it comes to how much this new set of crypto and digital assets can actually help them escape from those pains. I've said numerous times. One of them remarkable things about this moment isn't that bitcoin and digital assets are going to save everyone from the follies of local currency regimes. That's just not realistic yet. What's remarkable is that for the first time ever the entire span of human history. There is a convenient easy permission. 'less ramp from those regimes for those people. Who have the technical know how to do it. The number of people who have that know how is an ever expanding group and that means that bitcoin and digital assets at an x factor to every single currency crisis. From here on
Survey: Business economists favor increased federal spending
"A majority of business economists think the recovering economy is going to benefit from much more government spending. Despite concerns and financial markets that the $1.9 trillion covert relief measure Congress recently enacted could ignite inflation. That is the view that has emerged from a survey. Today from the National Association for Business Economy Economics from of 205 economic forecasters. The economists were pulled where the new relief measure was under consideration in Congress, but before it was signed into
What's happening in the markets right now?
"Kyle west gray. And jake taylor a joining me for investing mosman group here in q. One it's always great to speak with you and even better to speak to all you have the same time so welcome to the show. Gin's thanks for having us guys. Thanks so i'm sure the audience really going to enjoy this station. And what you guys see in the financial markets right now. Toby whereas and i wrote a book of fairy long time ago now. It's almost a decade since it came out and that's pretty good explanation of sort of the underlying process which is like the screen basically and then under a few things on top of that. I think the most interesting thing in the market at the moment is kathy would and ach. Etf's you might remember. In the early dot com days those funchal janus and the head break performances go great flows like a of flaws as a result and they were focused on smaller quid. Take names said janus had these gripe flows into these very illiquid stocks and they degrade performance as a result and it was probably van driving up. The performance of those stocks has been a similar argument made about ach that they tend to focus on smaller. Non-profitable take stokes and Sorta gigantically big of the last few years. It's now sort of a third or fourth biggest. Ats show out there that flows now that go into these small illiquid tech stocks of they control prices of these textbooks. Had this little wobble of the last few days colson redemptions for them which may cause them to do some selling as well they also have been exposure tasteless I just think that that's the driver of the market at the moment is potentially getting some redemptions having to sell out of some of those stocks which will push an the names and a very sort of beholden to what tesla Much big stuff. But it's still quite volatile. Hasn't made a great deal of money and so there's some risks that creates Cascade selling an odd gets coordinated. And then i didn't know what that does to the rest of the market. That seems to me that there's a lot of money in tessler knocked is fairly new money. Little be sensitive to what happens
How Would Financial Transaction Tax Affect Retirement Plans?
"Biden Well, he wants to study the idea of a financial transaction tax. Lots of your tax that you'd pay each time you buy or sell a stock Congressman Patrick McHenry. He's among those that believe this would be an absolute disaster for our retirement accounts. The financial transaction tax is intended only had Wealthiest, But when average everyday investors still buy stocks and bonds, they're gonna be hit. There's one study that shows that people have to work an additional 2 to 3 years in order to make up the difference for this financial transaction tax, a transaction tax talk. Talk to me about that. How will that affect our retirement badly? Just I hope they stop studying that and work on some other things. A lot of Democrats have backed his tax and its own stock trading. As a way to raise badly needed revenue and address concerns about the health of financial markets. So House Financial services chairwoman and Maxine Waters said she's quote unquote very interested and quote unquote certainly looking at a financial transaction tax, so they want to put a 0.1% federal tax on stock. On and derivative transactions in there saying, Hey, this could raise $777 billion over the next decade, according to a 2018 estimate by the nonpartisan Congressional Budget Office. But first of all attacks like this would have fierce opposition from Wall Street, and it's unclear whether even the moderate Democrats would support it and opponents warn Hey, this is going to backfire on the retail investors by raising costs and making financial markets less liquid. Because look is going to trickle down and everybody who knows stuff like this and what I means not trickle down. Economics is trickle down. If you want to put something every time somebody buys or sells a stock every time. Well, most people inside a four Oh, one case they're buying and selling stocks that that's that's what's going on. It's not going to just impact the wealthy, and if you're going to start putting taxes like that on there, it's going to be hard for people to accumulate more and save more for retirement. When every time you buy and sell is going to trigger attacks blood, there's some other stuff We already know from attacks perspective that that's coming with a new administration. That's bad enough. We don't need this one. But don't you also think that people who maybe want to try their hand it doing buying and selling some stocks, or maybe I just want to dip my toe in it to see if I'm comfortable with it. Well, now, if I know I'm going to get taxed every time, even if I'm just learning the process, I'm going to step back and say Maybe this isn't for me because this had more of a negative ripple effect than they perceive. I don't even think they're looking at that. I think what they're looking at us, man. We're getting ready to write this check for 1.9 Trillion. We wrote trillions last year how we're going to cover this stuff because right Now there is no plan to figure out a way to pay this money back other than keep printing more, and that's not a plan. It's you know, just kind of hoping for that. I'm not even gonna say Get out. Get out frosted hope for the past. Pray for you know, it just it doesn't make. It really doesn't make dollars and sense. The only benefit to this is He is going to raise revenue for the government to cover all the debt that we have. I mean, that's it's not something that's gonna discriminate between the wealthy and the middle class. It's just not going to do that is going to impact everybody and maybe they don't care. I don't know, but it really doesn't make sense. It's just it's a shortcut just being You know really good at what they're trying to do. And just a little loophole here, we're gonna slide this little tax in and maybe maybe maybe nobody knows where people won't think it's so small that it's not that big of a deal, but it is every time that's a huge deal and how you're going to do that on retirement accounts, Retirement Council tax deferred. So now you're gonna have somebody pay a tax on account that's growing tax deferred. So you're gonna have to pay taxes on money that you are using that Shelter, but it's sheltered from income tax. But it's not going to be sheltered from the quote unquote federal just transaction tax like
How The Covid Shock Nearly Destroyed The Financial System
"A year ago. Today we reduced stock market exposure and credit risk in the money for the rest of us plus adaptive model portfolios overall investment conditions were downgraded to read or bearish for the first time since money for the rest of us plus was launched back in december twenty fourteen economic trends have been read for nine straight months but with the uncertainty of the coronavirus and the sharp deterioration of market trends and mark momentum with very high fear among investors. We reduced risk. We took preventive action in the face of uncertainty. We weren't exactly sure what was going on. How bad it could get this past week. I read three government reports the report of the president's working group on financial markets overview of recent events and potential reform options for money market funds was published december. Twenty twenty i read. Us credit markets interconnectedness and the effects of the covid economic shock published by the us security and exchange commission published in october twenty twenty and i read the financial stability report published by the us federal reserve in november two thousand twenty after reading the reports. I was frankly alarmed about how bad things could have gotten had the federal reserve not stepped in in their role as lender and liquidity provider of last resort without the fed and other central banks. There would have been a full-blown financial meltdown. Things had gotten that bad. Even in the safest areas of the market money market funds the trading of us treasury bonds. Then there is an interconnectedness in markets from the riskiest to the safest. That isn't an appreciated. I had an experience. This past week with interconnectedness. It was kind of a bizarre experience and my fault. The prone i had a drive to whitewater draw north douglas arizona in agua prieta mexico. We were there to see the sandhill cranes we decided to take a socratous route on the way back through sierra vista and as i drove through sierra vista i didn't notice that the state route we on turned right i went straight right up to the gate of four. What chuka active. Us army base. I told the guy that gate that we were traveling to tucson passing through. He said we would need a permit to enter the base. I thought i clarified. In order to get the tucson. I needed to go through the base. And he said if you don't go through the base you're going to have to go all the way around and by all the way around. I assume he meant all the way around route. One ninety one. Like we'd come from whitewater draw. I said well. How do i get a permit. And he says you you can get that in this building. And he pointed to it so he drove around went to the building. We started filling out this extensive form. We had to go be processed one at the time so i went up to the counter. I told him you're trying to get to tucson. Needed a permit to get onto the base. He asked why so we were just passing through and it says we don't just pass through military bases. You're going to the west gate. Any changed my form to say. We're going to the west gate but he did an entire background check on me. Took my picture gave me an id and as part of that asks will be coming back and kid all the trouble to actually get a permit to pass through the base in order to get the tucson. That's make this permit as long as possible. We both got our permits. We drove into the base started driving around and trying to find the west gate to get out until we get the tucson. We couldn't find it. We kept driving in circles and again we finally pulled up our map on our phones and on the gps and it kept directing us out of the base through the gate that we came in. Like you said. I missed the turn. We didn't even need to be on the base in this situation. Everybody was just doing their job. I was trying to get home. The guy at the gate was trying to process people. The guy in the building was giving out permits lane in their silo. Everybody hearing but not listening. And not recognizing the interconnectedness that led to an unwanted outcome. I didn't need a permit to get onto the base. I was just trying to get home. And there was a miscommunication. The financial markets are similar participants act in their own self interest. They stay in their lane and often don't realize how financial markets are connected actions by some investors impact actions by others when participants act in a similar way that causes systemic risk. That can lead to financial meltdowns
"financial markets" Discussed on The Munk Debates
"The markets because they have quite a fair market where there is no speed advantage. So what i x has done is we've created a speed bump although the cba is only three hundred and fifty millions of a second which is irrelevant for normal investor. But it's a matter of time. Certain high speed traders need to see and react to information essentially at times trade ahead of other people. So that's a significant issue and when the exchanges are the ones that enable it the only way to really fix it is to be an exchange. A different kind of exchange speech and never be an advantage for trading ever. This is not a game show is not hitting jeopardy button certainly if you trading fundamentals and i had some type of information before you did. There was public knowledge. Certainly i should have an advantage. But using creating data these investors the retail investors on these platforms are the ones that are creating the data that is in being manipulated by these market makers fed back to them and that optically presenting itself office price improvement or good fills. And it's just not accurate in the retail. Clients are so powerful now in aggregate that if you take all that flow in one shot and see it. That is Feed for these market makers and they salivate on that. So of course it's wristwatch trading for them so disagree with that assessment com. Do you want to come back on that point quickly. I i do want to move on to other aspects of this debate. I'm just conscious of our time. I mean listen to this. Debate has been going a long time. You know the the pros and cons of order flow. I mean i can tell you from we we route you know whatever it is close to a million orders day. I'm very clear of the concept. We routed million hours a day. Just just pure customer orders. I get how the system works and the bandages to the retail customer today because of the nature of how far we've come how far the system has matured with respect to you. Know how orders routed and how the brokerage firms themselves you know like we've all created these you know best dex hypoc. Wheels were orders. Go to different places based on quality of fills in stuff like that like good the idea that we're not monitoring a virtually every single fill and the spirit of those spills like again. I disagree more how important you know. Speed is for customers. I couldn't disagree. More like tasty is the only platform in the world is built on high frequency. Middleware for john esters and where we come from. Twenty years ago to where we are today offering retail investors high frequency middleware. So that they're getting twenty to thirty milliseconds fills it's it's just remarkable and the ability to do that. Kind of classic legacy exchange technology never existed never will the exchanges never cared about the retail investor. And all of a sudden. Now there's a subgroup out there which lives in the middle which actually does care about regional industrious because they built a mile around it. It's pretty special right now and it's really it's misunderstood but it's pretty special and allows massive growth. Thanks tom i want to go to the second part of a resolution today which is The game stop. Frenzy is good for financial markets. We've done an excellent job. You know having a debate about the effective game stop on the retail investor. But let's i want to hear a bit more from you danny about your critique as to how game stop to you is doing something negative to the broader financial market. Give us that analysis. I don't know if it's doing negative to the broader financial market. I think it is highlighting some the ignorance it's out there with. How markets work i. What makes me nervous is tom's point is we want more regulation. We also don't want people aimlessly accusing shortsellers being the evil ones. Here right shortsellers. Are i believe good for the market. There's nothing bad about them. Certainly try to manipulate stocks. It's bad enforce the stocks down. But you know they're taking as much risk as as the other person and shortsellers actually provide a lot of information to the market and if you're bullish on the stock and someone's short it short report and if you disagree with it by more that's what we used to do so i think the problem with game saban. By the way there's hundreds of game stops writers stocks that are being moved. We go back to the chat rooms from one thousand nine hundred eighty nine hundred ninety nine. There was this stuff was going on a long time ago. We saw it with the dot com craze at the time. I don't think it's bad to have stocks being talked about stocks being traded but when stocks are trading completely on momentum and not fundamentals. That never ends well. You can maintain momentum for period of time but none of these investors are arming themselves with fundamental information. They're arming themselves with technology and that is not how stock should be traded over a long period of time. So i'm concerned what's bad for the market is that it's going to turn off an entire generation of people that feel like. It's an unfair. No one thought it was unfair when they're all making money every single day in these chatrooms but now it's unfair. They want someone else to blame. I think a lot of the blame lies with themselves of being uneducated in when it comes down to the stocks that they're trading. Do you think they even know what a price earnings multiple is or cash flow and maybe it doesn't matter to oughta people. Maybe it doesn't matter to tom because he ended day you buy stock and it goes up for you if you buy it. Goes down while you still had a great access to the market. So i'm worried about turning off a whole generation of people that are out there but it doesn't bother me that people are able to trade it. I don't know if they answer to question. No that that's an interesting tag. So tom just understand your argument here a little bit. You're you're kind of hearing almost like a creative destruction here. You're you're thinking okay. If these people go in and they're buying game stock and they're losing thousands of dollars. Well you know they're learning. I guess and whether they're losing and learning at the same time you're you're totally agnostic about that my characterizing your position accurately yeah. That's i mean. I grew danny in the in the sense on on short-selling listen i'm hundred percents. New agreement with them. I disagree that it was that it's bad. I mean. I don't like unlike casino owner. I don't want people to come into our casino lose money. I don't like when people is my alike. Newish every customer remained money but they also want people to come in and play and i think ultimately the fact that you know. There's no question there was way more losers in the whole gang. Stop situation then. There was winners and there's also no question that that was. It was the perfect storm. I agree also agree with dan. Bit there is a lot of other kind of game stops out there to symbol of the weeds. But this was the perfect storm and this was an event that in the end when we assess the damage. Yeah there's gonna be a lot more the numbers of losers compared to winters. It's going to be extraordinary. I'm not a person believes them. Fundamental or technical analysis. So i couldn't give a crap about those on. I'm a pure quantum probabilistic strategies. Let's call backs. But so i couldn't care less about bundy technical analysis. But you know that. Said i do think in the end that if there was one hundred thousand people or two hundred thousand people or a million people that lost money in game. Stop even if it's a small amount of money if it was one share to shares rose a robin hood trader trading five shares are a fractional share. I don't care what it is yes. I do think that the end result of that is not that it's going to turn people off in fact i think it's exactly the opposite. I think it's gonna turn people on and we're action seeing that we're seeing the impact where the after effects of what happened in game stop was. the pupil. didn't close down their council. They didn't run away and you know and dig their ball and go home. What they've done is to say. Hey you know what yeah. I think i was a little stupid. I was a little. But now i'm getting into other stop and they're actually engaged so i think they.
Mario Draghi Named Italy's Prime Minister Amid Crises
"Government. Announcing a Cabinet of experts mixed with experienced political hands that once seeking to reassure financial markets and tame a potentially unruly coalition of former rivals. 73 year old druggie replaces Giuseppe Conti, who resigned after a small party yank support. Over the handling of the Corona virus pandemic. More news and more analysis at town hall dot com.
Powell stresses commitment to full employment and low rates
"Federal reserve chairman Jerome Powell is stressing a commitment to full employment and low interest rates in a webcast to the economic club of New York Powell says the job market has improved during the pandemic he's hoping for full employment at present we are a long way from such a labor market Powell emphasized the loss of millions of jobs has fallen disproportionately on the least advantaged councils in addition workers and households who struggle to find their place in the post pandemic economy are likely to need continued support the same is true for many small businesses that are likely to prosper in once the pandemic is behind us Powell showed little concern about the risk of potentially high inflation or unpredictable financial markets at Donahue Washington
Stocks Waver in Wednesday Trading, Pausing Market Rally
"Stocks started the day off and then began to slide. Now they're fluctuating another sign that investors are taking a breather after pushing markets to record highs. Investors are betting President Biden's $1.9 trillion stimulus package will help bolster the economy while vaccinations help reduce covert 19 cases. Let's look at the S and P. It is down. Well, it's little changed down three that out. Jones Industrial average is up 1/10 of a percent of 30 and the NASDAQ is down 3/10 of a percent down 45. 10 Years up 4 30 seconds. The yield 1.14% West Texas Intermediate crude oil's up a half a percent of 58 68 of barrel Comex gold is down 1/10 of a percent 18 36 even per ounce. Dollar yen, one of 4 65 the year old dollar 21 34 on the British pound. Another 38 46, a key measure of prices paid by US consumers, was unchanged for January. This was the second straight month of such was the case, underscoring the pandemics lingering wish strain on inflation. That financial markets seat
Top financial regulators believe markets 'resilient,' after Yellen meeting
"During all that volatility in recent trading. The assessment is the product of a meeting among financial regulators. Treasury secretary, Yellen said. There's agreement on the SEC making a timely study. We've got more from Bloomberg. Steve Matthews There were lots of concerns expressed about what had happened and the unusual trading and SEC is looking into this very closely. And we're still really waiting for the Biden economic team to the fully be confirmed, so I think it may take a while for the study that take effect. I mean, basically, they're saying the system is resilient. No financial stability issues, so the issues are really about trading and that's going to take a little while for that she see the look into Yellen said the SEC and the CFTC and reviewing with a trading practices, a consistent with investor protection and fair and efficient markets. Today's meeting followed a surgeon volatility involving a handful of stocks, and it raised questions over technical regulatory matters as well as concerned over the integrity of financial markets. Here in the U. S. We heard from Pel Itan Interactive after the closing Bell, the company's saying it
Congress gets involved with GameStop and Robinhood
"Story has been crazy but is it all legal whether it's the flurry of retail traders drug stock prices or the hedge funds and partner companies trying to maintain their dominance wall street is entering some new territory and the rules. Aren't really clear here to explain. Why congress is actually starting to involve is recruits. Ronnie mola sherani. Hey daddy so catch me up on game stop so we talked here on the show about retail traders mobilizing on read. It obviously A key part of the internet to buy hundred game. Stop stock right. And then there's this. Hedge fund called melvin capital but hedge for the general were shorting the stock and they lost all this money. What happened since we last talked about game. Stop so basically robin hood. This commission free app that everyone's been using to buy all these memes stocks like games up. Amc announced that it was actually going to restrict trading on certain stocks including game. Stop rate as all. These people were making a lot of money in the stock price was super high. And as a result everyone got really upset especially these retail investors. A lot of people joined this class action lawsuit saying that robinhood manipulated the market by restricting trades and caused them to lose a lot of money. Sort of this. This platform has become Now being dogged by allegations as it's an tank for one side or another. So why would robin and do this. Why would they yup. They're supposed to just facilitate trades and not care whether game stock goes up or down. Don't they make money on volume so they want more activity. But why would robinhood care if some hedge funds were taking a hit. So i don't think robin hood did care that hedge funds retaining hit. There's a lot of confusion about this but basically it comes down to this plumbing about how the market works and how trades are actually executed that you would never really need to know but essentially because all of these people were investing in these really volatile stocks stocks whose prices go up and down. Robinhood has to keep a certain amount of money. These deposits with clearing houses that are based on how volatile a stock is toronto. Keep some money. Just in case stuff goes race yes essentially and because so. Many people were trading in these really volatile stocks. They had to keep a lot more money. Something like tenfold. What they're used to. And they just didn't have the money for so they actually had to get an infusion of cash rely on a few of their investors to give them a billion plus dollars in order that they could keep letting people trade came out said that we didn't want to stop anyone from trading. Anything this has nothing to do with pets funds or anything. This was just a. We didn't have enough money to clear. These deposits okay so for all the conspiracy theories that have been going on about robin hood somehow being on the take or something like that. You're saying the explanation is actually more boring. It's just has to do with the way that complex financial from his actions like this happened right. And i mean it doesn't help that the way that robin hood makes money is it actually has this other company called citadel securities actually executed trades. And they pay robin hood and they make money because they sell the stocks for a little bit more than they buy them for. They make a few pennies on each trade. And then the guy who owns citadel it all securities also owns a hedge fund called citadel which helps bail out melvin capital which was short and game. Stop okay so there's some associations between between Robin hood and the people who were shorting stock. Yes but they're saying this had nothing to do with the decision they made. That was simply because the deposit requirements for too big sure. Sure okay so now what happens now. I mean so. We're starting to see some action in washington about this. Obviously this politically appealing to a lot of people because you can run against wall street running in silicon valley run against the rich people like. Tell me what we can expect. Obviously there's a lot going on dc but the seems like something that could have some. Bipartisan outrage to it yeah you saw lawmakers on both sides of the tweeting and calling for hearings. There's definitely going to be multiple hearings in congress about what happened. Precisely lawmakers are pretty happy to find any reason to call into question. What's going on wall street. And why a lot of this seems very unfair conservative. Republicans like ted cruz want some answers. Progressive democrats warn zero cossio. Cortez are making a big deal about this. Warren obviously has a background in financial regulation. Tell me tell me what she's thinking. About what congress should do about this just so we get a flavor of the types of things being talked about washington. Yeah she's saying there needs to be an sec investigation. The sec needs to do their job. Make sure there's more transparency in financial markets. Make sure it's not rigged. Make sure there's no manipulation so she's sort of just calling for them to figure out what's going on. Are they doing anything about this yet. So the sec side. It's monitoring the situation. It's also going to look into whether any investors were disadvantaged because they weren't allowed to buy these certain securities It's also important to know the sec's in transition right now. They have an acting chair but they're waiting for their nominee Gary gansler to actually be confirmed. But in the meantime yeah. You're you're just gonna see the sec monitoring the situation. They makes me wonder. How does robin feel about sort of these allegations or conspiracy. Theories robert is now being a little bit more open about what happened and they were in the initial kind of crisis mode. Yeah i mean. They've lifted some of the limits that they had on securities. You could now by game stop again if you buy a shares of amc. They're also going on the sort of like pr offensive. Where they're saying exactly what happened. The they wanna tell you all about clearing houses they want to tell you about the deposits the volatility. You know how how they had to spend so much money this time. So like even the vlad ten of went on clubhouse yesterday with your skin kind of tried to explain exactly what happened. you know. And they're just trying to say this wasn't some sort of giant wall street cabal. This was a really boring thing that had to do with deposit requirements.
The GameStop Saga Explained
"Have now. It seems entered the lawsuit phase of the game stop frenzy that is ticker symbol g. m. e. by the way as the volatility and the company's shares and those of amc movie chain blackberry. B b and nokia n. Okay continue to pace this morning. Robin hood platform of choice for a lot of what's been happening and smother retail brokerage firms as well started restricting trading on those shares lawyers have gotten involved in what has been started with. These trades is nowhere near over but we thought it might be a good idea to recap what we know. Look at why it's happening and trying to figure out where it might lead marketplace's refinish is going to do that for us all in two minutes here. You go so game stop. The video game store has not been doing so well. You've got some big investors who are shorting the stock meaning. They are betting. The sock is going to go down like they will make money. If it goes down ed's funds and other investors and other traders believe the game stop is overvalued because it's a brick and mortar chain. John jacobs direct georgetown center for financial markets in policy. And then you've got people who are betting game stop. Stock is going to go up and a lot of these people are non wall street people lots of small day traders who are coming in the marketplace sometimes for the first time these two groups are fighting millions of small day traders chatting with each other on reddit egging each other on to buy more hold onto the stock. Don't value drop make those wall street guys lose their bet that it's movement rising against big bolstered interests guillaume keller is one of those day traders on read it. He's actually based in paris and for him. It's become something more than winning a bed over a random video game store. The retaliation or around the android old rules treats greed for the best years. Keller doesn't actually mind losing a little bit of money in the end. If it costs a wall street hedge fund a lot which it has people keller of driven game stock shares up dramatically in the higher. They go the more a short selling hedge fund loses. James angel is an associate professor of finance at georgetown spikes in prices before. And we'll see them again and usually when they occur they end badly and badly as in the price eventually comes tumbling back down and small traders who had invested their savings hoping to make a quick buck might lose out but finance. Authors zachary care about says. Maybe we shouldn't assume that retail traders don't know what they're doing maybe they do. Rose might lose money. May maybe they said. If if i lose five hundred dollars during this but i could make five thousand. I'll all take that risk. And maybe for them. It's worth it
Biden attends Mass at DC church where he worshipped as VP
"Attended Roman Catholic Mass at the church he used to attend when he was vice president. Asian financial markets closed
Creating 5 Star Special Events in the Virtual Age
"Let me introduce you to our two guests. Today i was page in nineteen ninety-four. Liz established liz page associates and combined her theatrical talent with a passion for the arts and human services under her leadership. Lp has built a reputation for producing special events for nonprofits and corporations that not only meet but exceed significant financial marketing and engagement goals. Engagement goals liz and her team signature experiences with unforgettable power and style tell their next level of success and visibility. It is always nice to talk to liz page liz. Welcome so nice to be here with you. John and having to talk about this fascinating new world refined ourselves so liz is also joined by her colleague. Amanda harmless since joining liz page associates. In two thousand one that would be nineteen years ago if my math is right. Amanda has specialized in turning big ideas into detailed roadmaps. that take clients from their vision to reality. she guides event design and fundraising strategy by partnering with corporate and nonprofit clients. She began her career in development and external affairs at the ywca in boston helping to produce the annual women's event women's leadership event a showcase of top female leaders in greater boston. Amanda it is a pleasure to have you. Thanks so much john. It's great to be here with you today. So liz let's start with you. The challenge of nonprofits being overly reliant on special events. This challenge for nonprofits is actually been your meat and potatoes for twenty five years. And so i'm mostly interested in as a firm that's in the business of special events This must have been a challenging year. For you. And i wondered how you and amanda navigated twenty twenty from a business perspective. Well it was. It has been assassinating journey. I will tell you it started in february when we were producing a conference in lake. Tahoe and amanda said you know. Have you guys heard about co vid. Do we think we need a covert protocol of. What if something happens while we're all gathered In this big Resort in tahoe and ferry. That doesn't serve ury. okay. So amanda put together. What is the scenario of what if thought through but not as detailed as we would find out it would need to be then. We got back to boston and really had an oh shit moment when life stopped and i saw my staff walk out on a friday afternoon never to return until they're still not bad right. You know i feel like. There's a cigarette smoking in an ashtray at a at a desktop. Or there's ice cubes melting in a tumbler. It's just life stopped and Blessing for us. And i have to say. Kudos to amanda. The blessing for us is that within a week she had found a certification course from the event leadership institute where we sent two of our event producers and they became certified virtual meeting and event planners and they learned about this new world and we were able to quickly take to our clients. Who on the precipice. I'll tell you that was the game changer for us and then i have to give kudos the ppp. We got we were one of the first. I worked with a great bank that we had already established a relationship with which was really important. We got p p p funding. And i wanna say it is part of why we are still here today and you are on a very long line of people who are very much saved by that so i know that from my perspective and i also deal with nonprofit clients. Obviously that i've learned a lot about nonprofit leaders this year and before we dig into the details of special events. In what you. I wanna learn sort of big takeaways from your certification to amanda But you know liz. You've been a part of the boston nonprofit community for long time and know a lot of nonprofit leaders. I'd really like to know what you earned about nonprofit leaders this year what did what did you learn about them you know. I learned that they kind of fall into three groups. There's the adventurous and the desperate and they're in one group and they were the ones who clearly saw all my god my special event that is truly we. We work with many nonprofits that it is not half of their budget. Not not after their income. Joan it is like ninety five percent of their income right. which means these events. Are you know for these small organizations. They're mega blasters. You know there are million plus but some of those executive director said. We're going ahead. we're gonna do it virtual. I don't care if it's all on zoom we are going to do something on may twenty first so that was great. There were others who were more cautious. They said i don't know about this world. I don't know how my my sponsors are going to react or how audiences going gonna react. And i am lucky enough. That i have a reserve. I have saved for this rainy day. So we are going to let go of this annual event and we're going to not do it period and there were other brave ones. Who said you know what we're going to be creative. We're going to make this work working to postpone for a few months but then we are going to do something. And let's do it as
"financial markets" Discussed on Marketplace Morning Report with David Brancaccio
"This marketplace podcast is supported by and global market intelligence delivering the essential environmental social and corporate governance intelligence firms need to pinpoint risks build resilience and find new opportunities in the transition to a low-carbon sustainable future. Smp global market intelligence. See what matters heo. It's the remark race host of marketplace's. Podcast this is uncomfortable. And i'm here to tell you that we are back with a new season each week. We take a look. At how money influences everything from our romantic relationships and friendships to our identities and the jobs we go. After new episodes every thursday for financial markets. Today is not just any tuesday in november live from london. This is the marketplace morning report from the bbc world service. I'm victoria craig. good morning. International focus has turned today to election day in america and global stock. Markets are broadly higher in asia the energy and financial services sectors gave benchmarks a lift while strong factory data from china. The us and the zone continued to boost sentiment. It's a similar story here in europe with the stock six hundred index. Up one point six percent. Us stock futures. Meanwhile are up in the one to one point seven percent range gold prices or holding steady and international crew is three percent higher. Russ mold investment director at aj. Bell explains how investors are approaching the next twenty four hours. I think that obviously waiting for the results not just of who wins the presidency. And that's assuming that we do get soclean result which i think is markets preferred scenario. But they're also looking at who wins the house of representatives and who wins the senate and that's the way you get a clean sweep from one party or the other. It's not just who wins. The presidency are investors bracing for turbulence over the next couple of days. Do you think russ the vix index that tries to measure a thing. Future volatility will be. That's averaged a reading of eighteen across these history since nineteen ninety. It closed yesterday so says he six. So i think investors are expecting potential volatility in lumps bumps after the result. Very definitely so the spotlight today clearly on the us election but the coronavirus pandemic is still overall front and center for investors. Isn't it today. Australia's central bank slashed interest rates to a record low. That's after the state of victoria has emerged from. Its second lockdown. Does this maybe foreshadow. Some of the questions that european central banks will be weighing on. I think so we've got the. Us federal reserve on wednesday this week in the bank of england on thursday and there was a gathering sense that they may also look to further loosen policy. Hans believe that may be than it's already running in each lucy staffer with possible Me more quantitative easing on buying to try and make more wing cheap a households and full companies and encourage them to borrow and try and keep the economy going. So i think there is a very wide held market view that there will be more monetary stimulus going forward and also whoever wins in the white house will be more fiscal stimulus government spending and that will probably go for some european economies as well where goldman's a- very much colder by central banks to put the hands in the pockets and the question here is whether we'll have to see negative interest rates in many parts of the world because as you say we're already at record low interest rates. It's the gathering debate the us federal reserve seems to come out very strongly against it. The san francisco fed published a paper. Not toba which was really very damning. Seeing there was no real evidence that negative rates provide what central bankers crave which is consistent growth in steady but low inflation. And that's looking at the record of japan over the last thirty years. European union of last three full. So i think there are lots of questions to ask as to whether it really is a good idea or but one industry that may were like it is the financial markets. Because if you will for somebody free money they'll probably go out and do something with it and nothing central. My financial markets might be happy benefits. Thirty call me very very open to question no lack of news to watch in the next couple of days then russ mold investment director at aj. Bill thanks for your time. Thank you why are card. Is the german payments processor that this summer was accused of orchestrating. Germany's biggest post-war corporate fraud executives had denied any wrongdoing now a new report from the european union's financial watchdog says regulators were deficient in their supervision of the embattled company the. Bbc's theo legged explains the accusations outlined in the new one hundred ninety patriot view. We're quite simply. The german markets regulator baffin was potentially to open to influence from the german ministry of finance so in the raw the drunk and bureaucratic terms. It says. There's a heightened risk of influenced by the ministry of finance bathrooms handling of the wakada inquiry given the frequency and detail of reporting to the ministry of finance in some cases before actions were taken so the was too much of a cuddling up rarely between the german government on baffin and beth and of course it has come in for an enormous amount of criticism since the waikato scandal erupted because rather than keeping a close enough eye on why card itself and we know now that the was very suspect operations going on at. Why can't it went off to journalists. Who reported on potential problems here that baffin was open to political influence. Also a lesser accusation. But it does say that word potential conflicts of interest as well because some staff had been trading securities relating to work out and baffin lacked information about employee shareholdings. But the big one is that potentially baffled was open to open to political interference from the german government. So theo what happens now will be you take action in light of this report. Well that's the question. This is a quite dry bureaucratic reported. One hundred ninety pages long and it looks at every detail of what bathrooms and other regulators were supposed to be doing and how well. They implemented those requirements. This now goes back to the european commission which can digest it on decide whether or not any further measures to enhance european-level supervision as opposed to national level supervision is needed. The bbc's the alleged. Thanks for digging into this for us. It's a pleasure from one report to another as researchers race to find a vaccine for covid nineteen the. Uk's national security organization said today data related to ongoing research is vulnerable to cyber attacks. The national cybersecurity center said it's dealt with a record number of incidents in the last year and more than a quarter were linked to corona virus. The bbc's gordon career has more on that story. The national cyber security centre was called on to respond to seven hundred and twenty three incidents between september. Twenty one thousand nine in the end of august one hundred ninety four of these related in some way to corona virus some involving criminals but the majority linked to other countries in july. The government warned that russia was trying to steal vaccine data and officials say they see an ongoing threat of other states targeting vaccine research and delivery the report also warned about two three fold increase in ransomware attacks in which people and organizations a lockout of their computers by criminals demanding payment. The bbc's gordon career reporting there now all of our coverage on the challenges of getting a coronavirus vaccine to the market lives under the fast-track tab at marketplace dot org finally. Here's a question. What is the most watched video.
"financial markets" Discussed on Knowledge@Wharton
"How do you see in I've seen as role in driving change at after all if I don't invest in these companies and ice cream them out I invested you I screen how these companies are not investing in them. Somebody else's investing for how you really how do you think you're driving change? That's been the argument against investment for quite some time Weber. Out of Harvard has been one of the foremost folks saying also that development doesn't really work and I'm not sure whether or not. You saw the Financial Times article recently where she's surprisingly finally kind of turning a corner and saying, Oh, my goodness. Well, this time maybe divestment is working. When we kind of take a look at the private prison situation. And their share prices. Also, the very steep decline in oil has a direct correlation to the Invest Divest. Movement Inside of public markets and The it is not the divestment doesn't work. It's that divestment that is localized in one portfolio no matter. The size will never have the impact that you need. What's really requires that we build solidarity within the investment world so that our collective actions are actually having an impact on share prices. And just, and it's important to remember this to most of those in the C. Suite, their primary compensation. is coming inside of stock right and that company, and so when your impacting the share prices, you're impacting their take home pay. Right I would also say that you are driving a lot of social pressure and social norms. By. This information. Right. So there's there's power comes from both money and the social pressure. What about returns people are you know as you envision your ETF if you think about your other strategies you know, can one do this without taking a hit to one financial woman? Are we talking concessionary returns? Mark? AVAI- turns. How do you think about this? What do you expect? Well I. think that we have to really be looking at long term returns that in the short term any number of things can happen, and if you're truly investing in alignment with social justice values, you aren't going to move off of that simply because it's a better idea to invest in hydraulic fracturing in north, America in two thousand nine. So maybe in the short term, you'll have or returns however in the long term, what most investors want is sustainable returns and what we know is that long term sustainable returns come from sustainable companies companies that actually take care of their stakeholders, their supply chains, and so what we believe that we're doing is instead of taking large returns upfront and not thinking about the future. What really really doing is looking at what is the long term return that we are wanting to achieve inside of the financial markets and is there a way to do that regenerative -Ly and it's important to say that often the things that are unethical ended up becoming illegal. Or having other unsustainable characteristics and so I think a lot of us in twenty twenty are very happy that we're not invested in fossil fuels or private prisons. At this point as those stock prices have really taken a hit and not come back. and. And the last topic I want to raise with you is your role. Founder as a person of color..
"financial markets" Discussed on Knowledge@Wharton
"What we had to do was nowhere company stand on this crucial crucial issue both for the purposes of doesn't screening, but also for shareholder engagement and unfortunately at that time. There was no database where that that information exists it's not part of what ESPN managers were gathering and. Primarily companies had gone on the record as having ended that practice in response to employees demands. We're employees had done walkouts and that sort of thing when we started there only five publicly traded companies that had publicly disavowed the practice. Let me interrupt you there just as. I don't want to go too far without making sure that people understand what this practice. Explained to us. What's what this forced arbitration strategy is and why it's problematic? So forced arbitration I'm for employees is the process of requiring employees to sign away their right to go to court usually at the beginning of employment if they ever have any claims against the employer up to including sexual harassment claims and the trouble with that is that when there is a sexual harassment claim, it takes the proceedings into a private arbitration process and that private arbitration process is one that has usually a non disclosure agreement around it. So the proceedings aren't public and. It also disproportionately is shown to favor the employer though the employers work with the same private arbitrators again and again and favor the employer. So the employer wins when an employee has brought a sexual harassment claim, the Predator wins as well and is allowed to continue that behavior and not only are they allowed to continue but usually the person who brought the claim is silenced from even talking about it. So that just enable serial sexual harassment in the workplace. And the, and then the climate culture. This company is you mentioned ads right and so in order to screen as you said in order to screen companies on this. you know an idea that you've emphasize his coming from these communities in these to activists. You had to gather the data and find more information and you as in. We created an industry coalition that is investors workers on consumer activists coming together to actually find out which publicly traded companies have this practice in which don't, and in the process of gathering the data providing the evidence to the company's about how all of these stakeholder groups are very interested in the practice ending. So when we started there were. As. I said five companies that had ended the practice and that moment had somewhat fizzled out since we began a couple of years ago we're now at a place where over three hundred companies have ended the practice which impacts over ten million workers and we have a minimum of fifty four billion dollars in assets that signed onto a public statement that we were able to take to these companies. Letting them know that this is something that institutional investors are interested in this like really ending this practice. And it's such an important issue and one that's not easily missed when you are in relationship and conversation with those were closest to the problem they are very happy that people are paying attention to women on corporate boards but that's not actually addressing the core issue and then all of the areas that we're doing work and we're investing we are talking directly to the impacted communities so that we know what the right metric is to measure, and ultimately sometimes that means we have to build the data set in order to measure. and. So what does that look like when it comes to racial justice? Again when I think racial justice, the most obvious indicators that would come to mind is You Know Fun saying okay we're not going to invest in private prison..
"financial markets" Discussed on Knowledge@Wharton
"The Vice Deans for social impact at Wharton and I'm delighted. Today it'd be talking with Rachel Rubbish Ot, who is the founder and CEO of out of Sina Social. Capital. Reach a welcome thanks for joining us. Thank you so much for having me. I'm happy to hear. That's great. So I am just really looking forward to digging into out of seeing the social capital So let's just start with. Who you are, what you do you describe your company as an investment management firm committed to making large scale systemic change through investments in public markets. So let's impact took the moment you're going to make your planning to make your making large scale systemic change. I Sat. Through investments got that in public markets that that. But these are not elements that we normally think of. I think in working together and I'll just say by way of context that. Within the and Social Impact Initiative we did a lot of research training thinking about impact investing typically important destination in private march through venture capital private equity we do also do work on ESPN public markets. You seem to be doing something very interesting, distinctive and a hybrid. So tell us about. Your strategy and where fifth in this ecosystem of investing in es G.. And maybe traditional. Sure Well, we call what we do social justice investing, and so it fits very broadly under the umbrella of ES. GMO TO. kind of cousin but we aren't simply taking into consideration environmental social and governance factors, and kind of our financial decisions about what will be in a portfolio. We're doing something that's pretty different. We're serving as a bridge between social justice movements and the financial markets and the only way to really go about doing that and making large-scale systemic changes to, of course, make impact in your own portfolio but you have to if you're going to make stomach. Change you're actually going to be required to had impact that extends well beyond your own portfolio and the only real way to do that is by organizing other investors and what we do we, we spend a lot of our time doing outside of building portfolios is organizing other investors to focus on the same criteria and metrics that we do, and we get those directly from the social justice organizations that are embedded within the communities that we intend to impact..
"financial markets" Discussed on Venture Stories
"You look at something like Economic nationalism like tariffs and lower immigration. One Way to view that is that it is basically a subsidy or less skilled labor in us. Where if the the advantage of outsourcing is that labor costs are lower a sufficiently high tariff limits. They were cost advantage. So you don't outsource That is about to tax consume in the aggregate. In order to subsidize the workers who are directly competing with actor in other countries and those workers are necessarily be categorized as less gilders so it is a conservative welfare program but is conservative bulletin the sense of the people who advocated also served right now and in the sense that it is advocating. Conserving a the industrial base. So it's conservative in that. It's telling us to do something we already. Let's do. It is trying to line up economic rewards with ever. It's trying to make sure that there are actually jobs available for people and treating access to job for access to stuff as what people really want so it does come back to the question of who that Intra Republican struggle between the sort of donor establishment. Republicans who would have preferred jet. But now they're really rob trump but they're not trumpet so they're sort of route of whatever it is that trump believes the moment versus the actual trump's. I know that the the trumpets are much smaller cohort. But they're younger. Demographics are on their side They're they're super articulate too so they actually have a belief system rather than having nervous talking points. And so they're they're running downhill battle but they are very outnumber. It'll be interesting to see that ends a Rap I guess. Today's been burnt. Hobart If you like you heard even if you didn't Checkout diff- dot Dot Com potassium newsletter and burnt. Thank so much comeback of August. It was great..
"financial markets" Discussed on Venture Stories
"Whether why c should go to a thousand from one hundred or are Richard go from seven thousand to fifty thousand Doubted one thousand. So why he is is a really interesting example of how you would. Actually they basically rebuild a lot of the aspects of college just by accident they copied some things intentionally like the original y each check was designed to be roughly what you get as a Grad student for three months but they ended up evolving into something that looked a whole lot. Like what a cynic would interpret as goal college where it is the process of a getting identified as a decent person by someone who's a trusted authority figure be meeting a bunch of people who are similar view in terms of their ambition. Some you where they are in their life who you can work with ensure nice trusted experiences with In the coming decades there's a little bit of a function of getting potentially kicked out. But it's sort of like getting expelled from Herbert. You'd have to really really try to actually get expelled from a lot of those schools Like worse case you just switched to an easier. Major Ortega a offer something. So it's it's sort of filtering for the very filtering out the worst of the best and then at the end of the school process you are presented as a finished product to people who've been hired and Harvard and Yale Princeton. They all do this. They do this very well. Why see just realized that the part we've actually go to classes at earn things that do way too much of that compared to the value that it adds. If you're the kind of person will get a lot out of that. You'll probably want to do it on your own. And meanwhile that maybe you should spend more time talking to one on one with your professor about the areas of resource. You're most interested it rather than getting the the fairly fairly homogenized iowan along western Civ Cetera. Maybe that's just not the stuff that you should focus on. And they sort of. They slimmed down so it's not the same thing it's not. It's not the same experience. And if you go to lead school because you really really love learning if that is a better option than going to y see because we really love sure is what. Why see tell you as well? But they've also recreated the Endowment Fund because Y C ends up plenty of. He's always companies company Super. Well so why. C has a lot of financial resources. So they they ended up accidentally creating basically every important trait of the elite schools. And then the train didn't turn out to be important. Is the one they have copied so you can see as a competition with the elite schools. Do you think your point about the average outcome verses media not com is really important because the target demo or for Harvard Princeton Cetera. Is is not someone who's aiming to maximize. The average is actually apparent his aiming to maximize the idiot so those schools are just insurance that you will remain upper middle class or better no matter what else happens with you have. That's part of why it's edited is that people are really really competitive and really aggressive at. Burke. Sharp will outside and there are a lot more positive sum and a lot more willing to relax when they're maximize their upside invert because to really maximize. Your personal website isn't necessarily Task because your personal website is something you can offer the world that nobody else can offer so to the extent that you get your contribution right. You should have total opposite whereas maximizing and minimizing downside means. There was a set of mistakes that you want to avoid and since your class positions positional one. There's a set of mistakes you want to be made by people that you have made him. One of those mistakes is not getting into the schools so the schools are offering something different and I think from their perspective keeping class sizes. Really tight so you know having having a restrictive immigration policy into Harvard does keep GDP per capita in that situation very very high and that may be what the constituents they want. They are sort of their nativist They may they may just be hard to shake that senator's because Harvard has to react to the incentives of Not just the students and of course the for the eighteen year old is really good. News is the number of people at Harvard. Kazakhstan connects but for Harvard's employees is inconvenient and it lowers their prestige because now now there are a large good school so they downgraded Hornell Which like if you worked at Harvard. Maybe that is the worst thing that could possibly happen to you It's not really bad but Harvard. People it does There's also the consistency of the all the alumni and the alone. I will outnumber the new students unless you forty x or fifty x the size of your incoming class so the alumni knew that are state comes from how expensive it is. And they'll be up in arms and they're they're a big trough numerically of people involved with their bigger Sean financially so they they may actually have more because the operating expenses of these schools will tend to over time. Tend to scale to return to the Dow so It's it's very hard for the schools to risk giving up donations. So I think they're stuck. I think will happen is lesser. Schools will go bankrupt. And that'll be basically okay. That college degrees will be less mandatory than they were before that alternative credentials will become a lot more popular. That's something that the big companies basically half they have a moral obligation to make that happen. If moral obligation to relax call should be requirements which some of them are doing and then lead schools will just they will still be there still the same. They'll just be less and less relevant here. If you read about ancient room. The Roman Senate Jap meeting in Rome for several centuries after as several centuries after there was an emperor in several centuries after Rogan cocker that they finally stopped meeting in the eleven hundreds so there is a long period where these very prestigious institutions. Just keep going through the motions and nobody cares with them but they're the ones who decide whether or not this process continues. It just continues doesn't matter account had a blog post where basically he said You know Kobe lower the status of progressive politics herbs that progressive bad in general of Jeff. Lewis more poetically says. The virus broke woke So obvious reasons about hey. We need to focus on our safety. But it didn't sort of your After that things are going to go back to normal. The new normal. What does that look like? For for the MAGENTA. The interesting open question. There is what happens within the Republican Party. Because there's this incredibly bizarre dynamic where if you told me in December that there's going to be a pandemic and it's going to start in China what would you think. Donald Trump thinks of that. I would say that the two most notable traits that Donald Trump has verson are that he doesn't like China and he doesn't let germs so this should be his crusade like it should be the should think of himself as the man of the hour as the only person who who should have Who should have been in charge for this? Like he'll actually believe in God instead of just occasionally to urge because he thinks the providence selected assign a phone and Germaphobe to deal with the Koran virus. But that's not what happened because he actually seemed to care a lot more about the market so he tried to downplay it because he knew it'd be bad for stocks to do anything about it and then really bad for stocks to do what you have to do about it if you let it spread in multiple cities in the US uncontrolled for several weeks. And now there's this really odd situation where the within the Republican Party. You have three cohorts. You have never come. He'd be this mean to them but it seems like a jobs program that was established by people who really likes Jeb and still have money. It doesn't doesn't seem to actually connect with the world in any meaningful way in part because Democrats have contempt with contempt for them for being Republicans and the other Republicans have contempt for them for not being on trump and then within within the more relevant cohort of you have this huge chunk of establishment Republicans. Who kind of uncomfortable. With trump responded very well trump drove up everybody else negatives and then you have the actual core ideological trumpets. And that's really rare because I think they would all acknowledge that.
"financial markets" Discussed on Venture Stories
"And that means that the interest rates at interface as low as they can possibly go which means the present value of that by ability because as high as possible and meanwhile equities are still so. Let's the nightmare scenario. That is I know we talked earlier. About how the the launch of effective of nineteen deflationary. That might actually get stuck at this high rate of inflation so we don't have to flation collapses so this is just one of the possible at bats. Bud or means is that engines have been underfunded systematic for a long time. They've taken too much risk now. Both before and Illinois actually requested a bailout with pension liabilities. I think they asked for something. Something like fifty percent of the my ten billion for veterans but given that the Fed is backstopping. You need that is it. Is Possible that every state will just use that to top They can and if they do that and they can finally get pensions actually aligned correctly where they taught them up and they also cut their expected. Return based on the fact that interest rates robot lower. At-bat that next year so they actually have a much bigger pension liability committed to but they can monetize it all because there are they can issue on limited about this so in that case you you actually end up with a situation where balances look a lot worse like it looks. Like the Fed is printing. Gobs of money it looks like every state is running massive deficits but older doing is admitting to a problem that has existed for ten twenty years and has become undeniable in the last few months. Don't ask. Rice is probably that it don't buy equities but they do buy a whole lot more Walter Treasuries corporate bonds so it actually pushes down rates Throughout the yield curve. And that'll have to see what the Fed does about the is. I mean given the amount of of printing where we I wonder why there isn't more serious conversation around like. Hey let's just forgive. Student loans What's another trillion or other sort of your conversations like that? Did you see that happening I I don't know that forgiving student loans would be Would be that is not the kind of debt that I think. We should focus unforgiving because college educated people are actually they? They have higher incomes than average. So it's a will transfer to higher income people. Maybe they would spend that maybe would actually use the economy. I'm not entirely sure that's true. But you could sort of data some host Kinsey In justification for that. But if you're going to dole out that amount of money it would actually probably better from a total utilities point to given to everybody who doesn't have a college degree or at least every especially when he doesn't have college debt so I'm not sure about that. One is Your your sort of your thinking sort of like the Fed here where there is there is an asset. There's a really big fat target and you have your kind of inaccurate explosive bazooka so you can shoot that target. You know you'll blow it up but is that the thing that maybe maybe the goal should be to somehow assemble a sniper rifle and shoot the exact thing that you actually want to get so yes student loans. I'm not not super enthused about doing about that as a priority and you think the college system is broken but existing stocker student loans is probably not the exact place where it is broken right now and also rate right now. College educated people are way more likely to be able to work whereas people who are high school. Now they're stocking shelves driving trucks. They were attending Bar Cetera. They can't really do that. So that's another Another reason that we should not out the the nonsense Americans are colleges is sort of the end of Colleges that aren't you know Harvard or Stanford being accelerated rapidly through this where people are having online education and paying court as as if it were in person realizing it's not worth it or is it more so just proving the power that they have in in that out strong. The brands are that even. If we know it's sort of a sham were willing to pay for people going to school. Shake OUT HERE SENDS. A lot of colleges are planning to do remote the first couple months of the fall semester and at that point people are going to be serious price. Comparisons between college and school. Will and other other education's at in fact. I'm wondering if you'll start to have. People who are called professors go through their contracts with a non compete clause says and see if they could just teach the same class and everyone who signs into the Fed knows them twenty dollars per class. And they actually enigma brower but students pay a whole lot less per credit hour. They get the same information. They don't get the Asian but it'll also there will be a period where a lot of evitable to have gone to college for Awhile and not have got like a lot of people in twenty twenty eight. It doesn't really matter if you technically graduate this year because for the last couple months you would be really hard to fail you and the same time if you had to do something like Kerr of a family member who vowed affected or there was some other way which your life was severely disrupted by this. You couldn't actually or I don't think a lot of employers are going to say you only got three and a half years of your degree and We don't think there are any excuses during a Hanoch coupled with the biggest recession ever for you to not have made your last semester your biggest priority so there could be this weird period where the college degree arm gets wobbly. Meanwhile people get skeptical of going to college. Maybe they decide. I'll I'll go. I'll take a gap year because I burned just as much doing other things and I WANNA go back to start. And then maybe that you're actually ends up leading to a job at But actually requires being at a person get into college and then you also have the demographic factor where the number of people turning eighteen is going to take a fairly steep dive in the next years so already a lot of the more midland colleges are wondering how survived twenty or twenty five and this could accelerate. That process realized that they'd rather die with dignity in short. Were rather that have just a really miserable half decade using I've been thinking about sort of signaling a credentialing recently it. It's interesting that Harvard is only seven thousand students. If you think about Stanford seven thousand Princeton. Six thousand is fewer schools that caliber similar size. You think anyone's GonNa go Stanford could go to Harvard they could expand to thirty thousand fifty thousand without hurting the the the the credential it dumb but you have to. I talked about it with a couple of. They're like well. That's actually a sideshow to the endowment with that sort of the real the real business but I sort of thought about also Y combinator terms of. They've seemed to go from you. Know Twenty companies Two hundred fifty and not really missed a beat. As much I think the power Y C is built their credential on the The magnitude of the biggest outcome they say no matter what every cohort whether there's twenty companies two hundred companies go two thousand companies. There's going to be an AIRBNB and the whole game. Adventure is not missing Airbnb so the I think it's less important About the average company our average person more so the magnitude of the biggest outcomes. Not all twenty or twenty has amazing sort of you know. Average person is incredible yet. That doesn't have any near the CACHET OF Y Year Harvard. Even how do you make sense of this or this general understanding of stealing credentials in and the idea.
"financial markets" Discussed on Venture Stories
"Is. We were totally vindicated and our enemies were humiliated and yet I kinda suspect that everyone's experience like the The New York Times does not have this view that big media companies downplayed the crisis and that in ended experts were the only ones to trust. Their view is a lot more than somebody else. Don't play the crisis it was. It was trump and Hannity and that the times to the extent that it needs to Turkey. Did it defined? You can go back. You can find articles from the Times Think January fifth was the first one. I found on Corona virus talking about this new infection in China. We're getting sick. And that's actually pretty her like they they knew about it very it might have been might have been January but I think it was thinks they are not at that time saying that it's going to be awful saying that would stretch with the US. It looked like a China problem to a lot of people for very long time but they can lease credibly and with technical accuracy say that they were sounding some sort alarmed about this fairly early and I think a lot of people will be doing that. A lot of people be looking at what they said that was ambiguous and if they were wrong did they make up. Prediction or additional prediction Like a lot of a lot of the things people said in January February took the form of if x happens as could be really bad or if y happens this will not be a problem so as long as excellent why somewhat fuzzy definitions than you're safe and for vox traffic. Bus Traffic have not gone down over the last few weeks. Even though in my view it lost credibility There will still want to read them. And if it's a media site it has that wonderful property of defining narratives including it has about self whether that's explicitly your instantly. And so there's there's some some closure there where if you always reeboks and buzzfeed and you didn't know that biology was concerned about this in in in January and February and that there was this really negative recode article making fun of VC's for being too paranoid or recalling Or whatever if you don't know about that because buzzfeed's knocking highlighted for For you then what you see in those online interactions is. Here's this random troll is rich guy and he's just yelling and journalists. Were doing their job. Their job is more than it's ever been so why. Why is this? Was this terrible? I various motive so it may be. The question is not request is not who status has gone up and down but how has the the status service changed and was probably happened. Does that a lot of people feel vindicated now will feel increasingly vindicate over time. So we'll all just be more usually incomprehensible to each other us your thoughts on journalism more. Broadly what one is debate over whether there ever was a golden era of journalism in When it was what that looks like obviously there were you better incentives up because you didn't have at Adas model the way that we have today with everything but at the same time we didn't have social media challenging it the way that we did today so if we had the standards of their house and that we have today which sort of the of what happened old would would view it in the same way. That's one question Jew is what what is the? What is the replacement? Where do you think about the replacement or alternative? That others are stressing which more sorts serves a local citizen. Journalism model Addy make sense that when I go back and read old articles in the Journal or The Times or Fortune. Forever like articles from the fifties sixties seventies. They are really impressive and really well written but when you read about what. Journalism was liked than it does seem like a lot of them like the writers. Were really good but also that sources were the same source problems that we have today where someone will give you a really impressive version of what's going on. You'll write down that version feiger spin on and if you're already aligned with that person than the spin is just want to exaggerate things they were already ecstatic to you. So it's really well written but it's well written fiction that just happened to be set in the present day and it makes me more skeptical and cynical about journalism generally like I think it is It's definitely Bible to about the world. It's valuable to understand what's going on in the world but it's also really hard and I don't. I don't even know the things like the business model right way to look at it. Because both the add model and a subscription model had their own policies so with as your incentive is whatever it gets maximum attention and on. It'll look like she can win. Since drippin's it is to say whatever keeps your subscriber base happy so there tends to be this evaporative cooling effect. Where if you you have a lot of subscribers and some of them are left of center in some of the right of center about more of them you want way you say things that these that audience you slowly lose the other audience until you actually have this. Fury is watch the uniform set our and then you can't eat it at all and they've learned to effort so they actually call you out on. They've learned to expect things the comport with their views of the world. So they'll actually call you have more from them so in that sense. Subscription does also tend to lead to some closure is probably a healthier model. Because maybe it's better to. These results articulates some kind of coherent narrative for some people than it is to just say whatever you think would get the most attention for everybody especially because one way to get attention is to have a lot of people arguing about things so if you just a topic where half people have a strong opinion one half the strong need another way and you know that they will spitefully yell each other twitter facebook over whatever it is. You're saying you have to say it. So the AD driven model has an incentive to produce conflict and then the option model has a tendency to produce passive Russia. Where you give people this really. Well curated news bubble and that they step outside of that bubble people are saying people talking about narratives that they just hadn't heard of and although sound like conspiracy theories because of the Times wasn't performing on it than if even really happen so At least two more more mutual incomprehension now. The best media sources are generally paid media sources. I subscribe to the F. T. like apparently a lot of people in finance financing every democratic socialist. I don't know why they also have been doing it but they actually tasted not respect and the tea does have its own little narrative but since it's also a business publication it has to anchor things to economic reality and. I think that that gets another piece of the the News Economics. All which is they're always been new sources that were fairly factual but they're also very boring because people using them to make financial decisions usually economic news at any level is very incremental. Usually the news is like car production. Everyone thought it would go to percents earlier this month but had actually went up on five so here are by thousand words on the implications of the artistry of your industry. Or you're in. That's why Shane you care very deeply. So it's interesting to you but it's not a gentleman interesting anybody else so ever. You will get mad if they get the number wrong. So that that does provide fact-based media but only for the fact that matter for business decisions and asset prices so like Bloomberg in that case in that sense is a very fact driven organization. They are their mandate is basically assemble as many facts as possible and get them in front of people in real time in a few key strokes as you can see. Look out and they do a good job most people if you gave them a free Bloomberg terminal. They've used it for a little while and think and of active bus view. The word daily caller is something fun. The the we mentioned John is one of the big surprises that China's get implode at any number of of ways Nevada talk about post Kobe. Your China just having a much worse at a brand How do we make sensitive of predictions about China? And then that's declaration about the ball about China's. Brian was out everything. Yeah the first thing with China. Blow thesis is the. That's a possibility for a really long time. And now we can look back at the Mao era and the immediate post Mao era and say that was of like that was mostly civil war. Some parts of actually hot civil war there were there were groups that literally occupied government buildings with guns and the government would send the send food and supplies to the city. It actually gets stolen by the bandits. Who were the true communists in the government was actually the capitalist? Roaders the imperialist faction or whatever shopping. Basically you shut that down That that was probably probably a much more bloody and brutal process than will ever be recorded. Factually anywhere but it did happen. And was clearly a whole lot better for the average person in China than in life under Mao and like onto the mouse immediately thereafter.
"financial markets" Discussed on Venture Stories
"Unless Easy eight Ben. Been Somebody Bernier Warren Not Bad Democratic candidate out of out of all the all the ones in does does he have a chance to review. And you mentioned twenty four. Whoever WINS WON'T BE RUNNING? Is that because you did die. I I think he will retire gracefully afterwards. If he wins or something by twenty twenty four it will be clear that they will need to pick a new candidate for that or one hundred three. It'll be very fair that someone new yeah seems like a really likable guy like. He's he is a natural politician. So it's great for him that he's been able to do what he should be doing with his life for his entire life so it will be more challenging whereas with Hillary had just this residual hatred of the Clintons generally and a lot of trump's demographic is old enough that they were watching the news in the nineties and depending on what they were watching they might have gotten some really interesting stories about Hillary Clinton Or about the Clintons in general so in that sense from head more of a basis for this Trout a lot of people to really dislike. Rubio because a lot of people already dislike crews. Were them to do so JEB. Anyone had a strong opinion on JEB anywhere Except the donors for a while but trump managed to if people feel contemptuous of Me Contempt is is the right word rather than hey that the troops were gonNA driving up negatives and that is one of the negatives and part of that is because trump has this hyper exaggerate hyper American way of presenting himself and his rhetoric like he's he's very. There's reason that when hip hop artists are trying to cite the class. American businessman It's it's trump gates gates is just not not as interesting a or not as interesting of media presented character as trump so so trump is able to really really talk about this paradoxically optimistic view of himself and himself as sort of. Avatar for a set of American values at a lot of Americans take pride in not because they're strictly great values but because a lot of people in other countries look down on Americans for being loud and Brassy and willing to take insane risks and willing to start a company and the totally the ground are Inkosi. This is all stuff that people in Britain and France and Japan would look down on Americans for her so inevitably. We have to feel feel pride in this set of national trip. It's just as a just a sort of low level antagonism with with people who would otherwise nothing highly of us. The is whether it's a U shaped recovery v-shaped recovery all shape recovery is. Is that the right way of thinking about it. I mean those are those are all shapes Some of them will one of them will sort of lineup. Whatever the rabble looks like It's what I would say is the defining factor for L. shapers v-shape versus or other shapes is what happens to small businesses over the next couple of months because pretty much throughout the country. The vast majority of small businesses cannot survive in their current form. Ceo Absent Either. A incredibly generous lender forbearance that we shouldn't expect to happen on. Its own or be massive policy. That somehow works. Its way down to several independent restaurants always other businesses that episode that a lot of these visible under it'll take a long time for For Eighty owners employees of those recover and be for the country as whole to recover from just the lost brand capital the loss team Camaraderie that does increase productivity over time a lot of these intangible benefits just working with the same people at the same job for time so that even if you have the same job title description who doing the same things every day. If you're working for somebody else you won't have quite the same the same productivity so if you think your productivity the first week that you were working in this job versus your productivity and early to collaborate with Joe Workers and your ability to represent the firm outside the firm. All of those things ratchet up a whole lot and they continue to improve the longer you stay company so we lose a lot of that and that doesn't show up on any balance sheet in will show up in a a slower recovery than you'd expect if you thought that it's we have these physical assets. They're still care. We have human beings. Most of them are still here so if we just squish do together we get exactly the same reaction yet. It's the it's not. It's not a chemistry problem. It's actually a jigsaw puzzle and we will be destroying throwing the pieces. What actually happens to the political parties themselves do they. They both seemed broken. Do we have do they disrupt themselves? Do we have new parties? Do they? Reform more incrementally what happens to that? So the line from Adam Smith that someone told him than some policy would be the ruin of this country and he said Sir. There is a lot of ruining the country. And I think that's true of any large institution you just have to make so many mistakes to actually use and it's really unclear if the have made enough mistakes to meet steaks to deserve to but I don't know if justice will be served and also the fact that a lot of times when we go through crisis whether it's the financial crisis or nine eleven or go back to things like the Cuban missile crisis did Always Arabia Nam. Even if it always feels like everything is different and then five years later we remember it and we see some cosmetic differences but a lot of things of the same and ten years later. There are still differences. That's around but almost everything is the same and certainly very few people have been totally discredited and driven of light even if things were quite bad during the crisis and even if you can point to specific mistakes they made a reward about that. They did anyway that they shouldn't have made so matt sounds. Maybe things just keep on going because Whenever there is that drop entrust you still have to have somebody to trust and you trust them less than before. You need to trust somebody more than you did before that they're still the course during moments. I guess it's always most interesting to look at. Who Status has risen? And who's a WHO's decreased of Tupelo comes my Brioni Just keeps keeps him to ride the wave Biology has seemed to increase his team to own journalists in You drink tremendous ways and end. Serve this sort of hatred towards. Vox In buzzfeed seems to bubbled up to a point where where it's exploded. How do you make sense of of of of what happened there? And sort of the rise of all status relative groups. Yeah you know within. My filter is definitely true. But my filter bubble also didn't like those media outlets and did like those people before so what our experience.
"financial markets" Discussed on Venture Stories
"You can also look at the airlines in particular as an interesting case study because the airline industry has has been pretty much zero about before A basically all of the major airlines have gone through bankruptcy so turtles have been by down and one possibility is just a structurally airline industry is not designed for companies for equity holders. To never go under they will probably lose all their money periodically and there are assets actually worked just fine on that basis so there are entities like royalty trust where the trust buys a bunch of land with oil underneath and when the price of oil is positive they get royalties and people drove oil but eventually the oil runs out so eventually by design it goes to zero or you can look at things like the equity tranche of a structure product in the credit space. Where you you bundle a bunch of ads together and you borrow against those assets and you can borrow. You could say so. The borrowings are safer than the average asset in there because they are more collateralized. Some riskier than there's this last slice where it's it's the money that's leftover every every borrower. Get some every borrower within your Lavazza. Pays all of their death all the time? So that's the equity tranches is in two thousand six when this was more light issue. That was the part that was really art. Sell a lot of balance sheets or ended up part of the really complicated fascinating to me trades but that that s it is also designed to have a super high heel that goes to zero in fairly short order and then never comes back that maybe just how airline should operate. Is that every once in a while. Something bad will happen. And they'll all get zeroed out whether that some really high gas prices will prices or a steep drop in demand Austin increase in costs or just some other random factor that causes them to run to a lot of trouble at once it may just be a factor or even just be the way that industry has to operate in what about What about for the first part of the question would about the stock market in terms of retail versus institution? Oh yes so so that Retail dollars are big in the aggregate but a lot of them go into pass vehicles and so a lot of that money just doesn't doesn't change his mind that like a whole lot of retail money in the stock market is invested in onze offered by. Bangor or somebody like that. And these funds just the entire index by mix of stocks and bonds depending on the expected retirement day of the person by fund. So those have an effect demand in the aggregate but they don't have an effect on the pricing of individual activities. Then you have retail investors. Who actually do really crazy solo stuff on Robin Hood at at the Wall Street suffered is incredibly entertaining. I really love reading it but it's also really scary. It's basically the there's a dude. Hold my beer read it. Which is Joseph people who hope he didn't die the Jeff and the mostly basically that for finance so you have people who are a fifty x year today and then they lose two hundred percent of their money in a day but those people are released from the market so they can push around some stocks. The Virgin Galactic was a case. Where basically that stock hype so much by Wall Street bets that it was up? One of the better performers in the market earlier this year there was a Wall Street. That's right out of the lumber liquidators some some smaller retailer like that that actually pushed the stock up fifteen twenty percent on the day this is this is a billion dollar market got companies so not not a penny stock would also not meaningful part of the market no real effect on Mar performance as old and mostly has crack down on that stuff. Because it's it's pretty illegal So so we get back to retail investors do not have a huge impact on individual equity prices they do have an impact on flows into equities in the aggregate and that has impact on the market structure. Because if you have more money. Moving out of actively managed mutual funds moving into passive you get some effects like That the there's there's less price discovery going on on the other hand a be. The people who are active investors at institutions had fun people have actually gotten a lot more informed and just a lot better at risk stocks so So that ends up meeting. Is that a lot of inter order. Newsflow gets digested very quickly. By the market prices tend to be pretty efficient from day to day and then every quarter every time there's an event. Typically a lot of hedge funds is hedge funds are looking at similar data sets talking to similar people talking to one another for their position of one side of the trade. So you do end up with these quarterly. Blow upset seem totally disproportionate but actually makes sense in light of that change in Margaret Structure. You mentioned We're talking about the Twenty first how do the politics of what's happening change Perception response or or effects of what's going to happen the next six months view that in light of the election. Yeah that is clearly. That's that is the big source of political uncertainty in the world is how. How does the epidemic play out the macro every play out like there's actually was back to the institutional frosting where trump Reading actually went up as the crisis got really bad and has since pulled back a little bit but people tend to start finding reasons. Trust whoever's in charge when there's a crisis they really want somebody to be in charge. That doesn't mean his approval. Rating is going to hit fifty percents that that would be crazy but it does mean that the the direct impact. It's it's not like he's getting a continuous performance review from a manager was a list of KPI's and one of the KPI's is don't allow mass casualty event. That is preventable. Add on that this quarter so you get the act it's It's not like that. What what will have to have been is able to see how bad things get both in terms of The the group cases which is at least right now following A healthier cadence that it was a few weeks ago so now now the question is not get freaked out that it's going to get us all under the current status. Whether the question is how does will be about how sustainable status vote Historically when you look at the impact of its talk look at the impact of these. Exogenous wasn't century events on presidential elections because the sample sizes century but if you look at it. The effect of the economy on presidential elections typically seems like momentum matters more than absolute performance. So it's possible that trump can actually do the corporate maneuver of announcing all the possible Economic Bat. Frontloading every possible combat. News in two q one q two of two thousand twenty such that q three is objectively economies experienced but is also a pre rapid recovery from the deaths of two so if unemployment is trending in the right direction and you three and if able are getting back to work if you see more people on the streets. Another Albright Masks and if oil isn't being up if you don't get paid to take delivery of oil then maybe people will feel more optimistic and and trump will get reelected and then there's there's the Biden question both both question of what what kinds of policies see proposals and marketing. What he'd Deuce and also just the Really really good at driving people's negatives like if you look at the Republican primary is basically a story of trump always being the second most popular but kind of a Guy. People have very polarized beings about and whoever was most awkward negatives would keep going up until they were no longer a factor and trump was guy driving up those negatives so when trump focus all of his intention all of his attention on belittling you than You quickly become one of the more hated people at the country. No matter how swab you are the same thing happened in two thousand sixteen that they knew they couldn't get the country to like trump but they could get the country to low Hillary and as it turns out. There's there's always a debate like people like to save a love hate but in terms of driving trauma. It's pretty clear that eight wets so just just from the tactical standpoint. That's how it expect things to play out is that people will find more and more reasons to dislike biden overtime. They'll also get more disgusted with the entire process. And then the other factor that is not as off. I think is super interesting. Is that artifact? Trump won in two thousand sixteen was facebook and it wasn't the Russians or it was just. They ran a conventional art budget. Facebook AD campaign with loss copies. Lots of images. Lots of email capture loss of this recurs of email capture We bugger To get all of your friends in this lube and they could also do things like test campaign messages and ADS head of campaign events. This is all stuff that is pretty standard for large companies. Like if you're launching a new product you might test out highlighting different features in your existing product line seat which features people really crazy for then. That's the upgrade emphasize. The APP launched the next iphone. Whatever best stuff is pretty pretty normal. A the Democrats didn't do a good job of that in two thousand sixteen and that is especially surprising because in two thousand eight twenty twelve. They were doing a lot of micro targeting the although the milk after the clever advertising stuff that were doing but they they did really good job of it in. Obama's are really good job on digital doesn't eight twenty twelve and it seems like all of the institutional knowledgeable that process knowledge somehow got lost in two thousand sixteen and it's looking like at least just in terms of ABC At trump is still well ahead of the Democrats and We'll see if they really ramp things up for the national election but it looks like drunk will still have the facebook advantage on hates band and then of course he has the advantage of always being able to get attention although given what he how he gets the attention of what he does with it it that is not strictly advantage. It's just a thing is biden. If the theory is hate is is Biden.
"financial markets" Discussed on Deep Background with Noah Feldman
"Let's turn to what's going to happen next. You say the bond markets are a little bit nerve are more than a little bit nervous. They're concerned and if you're right you're also suggesting the possibility that the stock market itself could go down. What's going to happen? How prepared is the government for another crisis? You know for the third leg. The W where having boosted US ALL UP. We go back down again. What would that day look like well? So now you're asking me to to about this murkiness that I said was highly uncertain in hard to predict. We'll give us a range of options. How about that in my telling of it having seen what happens where at the first sign of trouble. The government stepped in and arranged marriage in two thousand eight between J. P. Morgan and bear stearns bear stearns needed a rescue and and and so they were saved. The default didn't occur but then with Lehman Brothers the defaults did occur and with General Motors and Chrysler. The defaulted occurrence so there. Is this question of if we really do finite money? If there is something to be believed in what Mitch? Mcconnell said worrying about the total level of debt and said quite instant eerie things about perhaps municipalities need to default so if the if the D. Word is going to be present and causing pain for investors. I think rationing the stimulus to where it's most needed is. Maybe things are going to evolve in so maybe the answer isn't to save every company. That's going to get hurt because of the Cova Christ's but instead protect the jobs of those companies without necessarily protecting the bondholders. And so. That's that's one way could evolve in that way asset prices can go down bond. Prices certainly can go down. Even stock prices should go down and in that world you know perhaps the better spent on the individual investor and it really raises. I think something that's going on right now. We can see. We don't have to wait for the future. This is something I listened with interest to a week ago said by Larry Summers on Bloomberg TV. Which is if you look at. How companies are scrambling right now to raise money. Almost all of that money is being raised in the market. So just ten days ago Boeing raised twenty five billion dollars through more debt. Ford raised seven billion. Gm fourbillion retailers Coles or gap stores came into the market to borrow more money but summers raise the question on. Is that actually the best thing for the company when when it comes to solve siege off. They not raise equity at the same time were raised significant amounts of equity instead of debt as a way to bolster their Balaji. It as a way for them to have cash without having the obligation to pay it back and so in the way that I think a lot of Americans are said when they see companies take money and go buy back shares in a sense. This is like the inverse of it. Well now they're in trouble. Why don't they issue shares? Why don't they raise money? The Way I saw over my career companies do in times of fear like in two thousand and two when we had Enron defaults in WorldCom a lot of companies a point in time to raise equity and so while it is happening today. The International Steel Company Matale raised some equity United Carnival. Did I think the best answer of why it's not happening is that the management is too afraid to dilute their shareholders in so the amounts of money. They need to raise to deal with the. Cova crisis is so great that they would really be hurting their stock price but they would be shoring up their liquidity and solvency in. So that's to me. The next phase is that whether the government's loans come with equity stakes which basically creates that situation where they are diluted or companies. Do it themselves where they access the markets whether they're forced to or want to through equity which would be a much in my view much better outcome for all. Americans and when you say that the corporate management doesn't want to dilute their shareholders do mean that they're basically just worried that than the shareholders will vote them out. Well part of it is maybe just the amount of money they need to raise it so great that they just couldn't get their curiosity with equity but we're seeing a lot of the capital raising done purely on the debt side so it doesn't answer. Why are they not doing both or are they not doing heavy amounts of equity and I think some of it comes back to the greed of not wanting their share price to go down but by taking out more debt? You're creating a more levered situation. A company that is more exposed to a prolonged downturn leading default in so it might be in the shareholders interest. And I think the Fed in somebody's has encouraged by saying they're going to backstop lending to fallen angels and they're going to buy Diaz when really there should be a lot more equity raised when the government signals that it's willing to basically ensure companies. Why shouldn't they go borrow that money in cash? They're gambling that someone's going to back them up if they fell at fair but let me just close by asking you. What should I be asking you about what's going to happen or what is happening that? I haven't I mean there's obviously a huge amount of complexity here and you've gone very far towards clarifying and simplifying it for the listeners. And for me which I'm really grateful for but what am I not asking you that I should be asking you so the thing that I most want to get off my chest is that I see a market that normal non-professional investors believe is driven by fundamental forces. And I see it more than ever driven by technical forces and to find that what technical forces so instead of what's the intrinsic value of a company worth using financial model. It's who's doing what to whom and in what quantity. How many sellers are there? Compared to buyers. What's the relationship between related instruments such as the debt of a company in the equity of a company? And I see large divergences as an investor. I've always been much more focused on relative value on looking at a company. Let's take a united airlines. Which is having a tremendous issues. They had to shelve a debt deal. They were bringing debt. They did bring a little bit about goody beforehand and they have to solve it over lack of demand and I look at the difference in price between the debt of the US airlines and the equity which still has considerable value. And I and I see a dislocation there compared to history. I see that the debt is actually giving a much more negative picture and so when I look at the market today versus five years ago and even much further back see market really driven by technical forces in so the things that are of interest to my relative value strategies are off the charts interesting right. Now there's a type of trade that we've been doing for about a dozen companies that in my twenty two years of doing this type of trade has never been good in normally. Don't expect that to be you know in a market where we're only ten. Fifteen percent off of the high might take away from that is is that markets are highly unstable because relationships that tend to Poorly are right now breaking down. There's a lot of havoc. There's a lot of market segmentation where some investors are only doing one kind of thing and other investors are doing another and it's led to an opportunity set which is really quite exceptional for my kind of strategy but it also even though I don't have more crystal ball than anyone else. It does. Give me great caution when it comes to the direction of markets. I'm quite worried that the markets are going to be headed lower and that the if the becomes the V. Was already mostly priced in and the risk of it not being. V. Is far greater based on current levels. It's not a cheerful moment on which to end but it is definitely honest and I really appreciate it. Thank you so much for your time. Thank you go as his account gives us substantial food for thought when we think about the behavior of the financial markets right now? He's validating our general concern that there's something strange about the way that the stock market the equity markets continue to be behaving as though a v-shaped recovery were to be soon expected going forward. The deep question is whether the different signals being sent by bond markets and the stock market will eventually come into coordination logically speaking if they do. There's only two ways that can happen either. Things can get better in the bond markets and they are now or seems much more likely things in the stock market can get a lot worse above all. I'm really struck. The just as were highly dependent upon scientists in a moment of pandemic to try to explain in ordinary language. What's going on? Were also dependent on financial market experts. Try to explain to the rest of us what they see happening in their own very distinctive and very consequential world until the next time. I speak to you be careful. Be Safe and be well. Deep background is brought to you by Pushkin Industries. Our producer is lydia. Jean caught with research help from zooey win. And mastering Jason Gann brow and Martine Gonzalez are show. Runner is Sophie. Mckibben theme music is composed by Lewis. Garra special thanks to the Pushkin Brass Malcolm glad well Jacob Weisberg MEA labelle. I'm Noah Feldman I also write a regular column for Bloomberg opinion but you can find at Bloomberg dot com slash feldman discover. Bloomberg's original slate podcasts. Go TO BLOOMBERG DOT COM slash podcast and one last thing. I just wrote a book called the Arab winter a tragedy. I would be delighted if you checked it out. You can always let me know what you think on twitter about this episode or the book or anything else. My handle is no are Feldman. This is deep background and now as promised. Here's a very special sneak. Peek of the happiness lab season two. So he tell you doing today now. Gripes somebody gripes. Yeah something that's what I remember something. About gripes these days life seems full of things to gripe about but trust me good things can be found even in the worst of situations when the car can't stop. It was in the fast lane of the freeway believe in Guardian Angels but he just appeared out of nowhere. I'm Dr Larry Santos Iran wellbeing class for my students at Yale University. But I wanNA share the science of happiness with you to and let you in on a little secret everything you think you know about. Happiness is probably wrong. Money does buy a little bit of happiness. But it doesn't by a lot of happiness in this podcast you'll hear from top scientists in my field and from some people regard as being true ambassadors for the good life Mardi Lauren pest control operator and I mentioned that. Pj and Alex from their reply all podcast. You guys know mind. Being Guinea pigs no right. So are you ready to feel better than join me for the happiness? Labs new season launching April. Twenty seven. Subscribe now wherever you get your podcasts..
"financial markets" Discussed on Deep Background with Noah Feldman
"Market. Which is in the aggregate bigger than the stock market? That's the bond market the loan market and I see signs that are much more worrying than the confidence inspired by the recent rally in stocks. Let's turn to that other market. So until now we've been mostly talking about the stock market which has equity which means that. What's being traded our shares? Which means you're still have an ownership stake in that company going forward and even if the company were to fail if you hold shares in it you still have a claim on the assets of the company and if it reorganized itself you're still hold onto your shares. Bond markets are different. There were trading the money that the companies the cash that they oh tell us what are the bad signs the ominous signs that you're seeing there because my impression is that the bond markets do not share the parent enthusiasm of the stock market. Well so firstly their arguments that they ought to share in it because if you look at what the Fed has done some of it is to in fact restore confidence in that market. The Fed hasn't resorted to buying stocks yet but they have agreed to buy basically pools of risky credit not low risk mortgage-backed securities or US treasuries but high risk. In fact things that are called junk. The Fed has gone to buying junk through exchange traded funds and also Lending to companies that used to be investment grade rated junk that occurred late in March because of covert and so we saw most notably happened to Ford and to macy's and two energy companies like petroleum. And so the things that are most worrying to me in the bond market that you don't see in the stock market is that despite that action despite the Fed being there to lend We see a lot of high companies that were already in a pretty risky spot so recently. Jc Penney has announced that it's a skipping its interest payments. It's days away from actually filing for bankruptcy J. crew has filed for bankruptcy neiman. Marcus at filed for bankruptcy. So some of those one might say well they were already teetering for a while. So you know. How unusual is that on the other hand? We've seen companies that were trading very well before it that have been dramatically affected notably hurts which was a company whose bonds were trading at one hundred at the full claim. You you make alone and you're owed back one hundred percent. The bonds of hurts or the gaming reservation Mohegan Sun even above par and now they're down Into the teens or twenty s cents dollar in the case of hurts and Mohegan Sun has fallen in half and so there are a number of companies despite all of this that are defaulting that will default expectations for a default rate is extremely high in credit and also for small businesses in so despite all of this money being offered to airlines to cruise lines. I see continued. Fear in the credit market as evidenced by the price of the bonds and also a market called the credit market and see banks that are using distributors hedge themselves to American Airlines. United Airlines Caribbean forward hedging. In a way that to me the prices suggest these companies have a real chance of defaulting. Even though that is inconsistent with the idea that the government is going to save those companies so from an intuitive perspective. All that makes sense right so I mean to the ordinary civilian. You think of hurts. They're doing just fine. There are well run company. Lots of people. Renting cars fewer people may be owned cars so then in the long run. You expect a lot of people to rent cars. You expect her spill to pay back. Its debts then suddenly. No one's going anywhere and you expect it to be a lot more likely. The hurts won't be able to pay off. It's that sort of makes common sense. And then the thing that you would imagine would not make it go down just be that. The government was going to effectively. Bail out hurts right that the government was going to buy their debt or make their dead in some way and if people think maybe the government won't do that for hurts than what you're describing makes a lot of sense and it seems as though the credit markets are behaving closer to what an outsider to the financial markets would expect and that it's the stock market. That's the surprising. But am I getting that right? Yeah it would be incongruous to have a default rate which is in the double digits. Which is what's really being expected now. So it's not that on bearish mine mine is in the double digits but others are in the single digits. Were expecting a default rate equal or greater to what happened in two thousand eight when we had Leman brothers default in all of the you know General Motors and Chrysler and everything that came after. Were expecting actually a higher default rate and for a much longer period of time and the third part which is pernicious is that the recovery's what the bondholders are getting back for suffering. These defaults are very very low. There was just last week a Auction of the recently defaulted bonds for a company called Whiting Petroleum and those bonds only fetched seven cents on the dollar so normally as bondholder since you have a claim on the assets of the company you might expect a recovery more. Like thirty cents forty cents. Even if you didn't have a security you know like in the mortgage but recoveries have been very low defaults have been high and so it's really historically Inconsistent to have a world where the default rate is high companies are defaulting and the stock market is high at the same time. Of course it didn't have to be this way. Companies could have been less levered which would have given them more liquidity more time to weather the storm but you know there are a lot of signs. Preko vid that leverage was running extremely high at the corporate level and the default rate was even picking up despite the bull market we were in there. Were worrying signs from the the Credit Market. Which is what. I Follow Dane. Day Out which was already giving you pause and here we are. The defaults are not just coming through. I would say. The stigma of defaulting has changed. Because now it's not well we mismanaged the business or X Y and Z. It's blame it on cove. It which is not necessarily unfair but the stigma of missing a bond payment feels. You know I can't exactly say why feel like in the marketplace defaulting is becoming more tolerable. And it's it's contagious. Well you sort of have said why right I mean here. You HAVE COMPANIES. That are already highly levered meeting. They already. Oh as much money as they could conceivably Oh and maybe more than they should and so there were little Tinari and then as you say this is human nature. There's an excuse to do it. You say well you know. It's true that they were contributing factors but really we would have gotten through this. Were it not for this unforeseeable event and it just seems like. That's the way excuses her all the time you know. It's a sort of dog. Ate My homework way of thinking about it. But there's some truth to it if the dog really your homework or at least you know slobber all over it. So I think you've given US sufficient psychological account of why not only companies. Say This but other people would be prepared to listen to it on the contagion point also makes sense if lots of companies are doing it. There's just a limit to how much stigma you can attach to each company. Does it and so pretty soon. There's not that much stigma so that part. I think you've already explained it. It's probably fun to note that there is one person that took bankruptcy to new level. And it didn't stop him from making the most out of it and that's that's our president who whose company suffered bankruptcy dozens of time so anyhow. I don't know if that really has a role but that's actually fundamentally what's happening. The companies are defaulting. We'll be back in just a moment. Hi It's no feldman host of deep background as you may have noticed everything in the world is changing very fast right now. The Corona virus pandemic has forced families into their homes and abandoned the global economy. Which is why I'm here to tell you about a new podcast to help you navigate life. During this uncertain time Bloomberg's Award Winning. Healthcare podcast prognosis has just launched. Its new season early. It's also become a daily show Monday. Through Friday hosts Laura Carlson and Jason. Gail will spend a few minutes with you every afternoon to help you understand life in the time code. Nineteen they explained the latest developments in health and science. And tell you what effect they're having governments economies and your life. You can subscribe to this. Show on Apple podcasts. Spotify OR WHEREVER YOU LISTEN. Thanks and stay safe..
"financial markets" Discussed on Deep Background with Noah Feldman
"It before we start this episode. I want to tell you about a pushkin show. That's been especially helpful in these stressful and troubling times the happiness lab hosted by Yale Professor Dr Lori Santos focuses on how to lead a happier life and how understanding our own well-being has never been more important. Dr Santos Studies the latest research and shares surprising and inspiring stories. They will change the way we think about. Happiness recent episodes delve into the effects of social isolation meditation and Compassion Season Two now in full swing explores the benefits of altruism tribalism finding meeting in our works and more. Find it on apple podcasts. Spotify wherever you like to listen. Stay tuned at the end of our episode to hear a special sneak peek of the second season of the happiness. Lap from Pushkin Industries. This is deep back. Craft the show where we explore the stories behind the stories in the news. I'm Noah Feldman today were returning to. Kovin are once and it seems almost eternal topic. But we're not going to be talking about viruses and vaccines at least not direct instead. Our topic today is the very bizarre behavior of financial markets that were observing right now. Both stock market and the bond market under circumstances of global pandemic to help make sense of the somewhat bizarre anomalous behaviors of the markets. Right now. I'm joined by an expert on those states. He's Boas Weinstein. The founder of Saba capital a hedge fund in Manhattan Boys Has Been Deepen. The markets for twenty years now and he has a reputation as among the most intellectually brilliant students of the subject. We spoke on Monday. Go thank you very much for joining me. I WanNa start with something. Maybe probably is incredibly obvious to people in your line of work but the rest of us are a little bit puzzled. By and that is the economy is in shambles. Companies are shutting down. Thirty million people are just about are going to be unemployed and yet the stock market after an initial marked decline has been climbing. Mostly back up at the most basic level. Why is this happening so I myself? I'm scratching my head wondering how can that be and so there are a number of explanations but let's talk about the best one the easiest understand and so you know. I think nobody would disagree that the economic picture looks terrible. It's worse in the quarter that we're now in in the first quarter was just pretty terrible but stocks represent the future cash flows of company for all of time so a dollar earned in two thousand and twenty two maybe less certain and less valuable than a dollar today but since two interest rates are hovering near zero the difference between those two dollars one earned today and whenever a year from now is not exiting again in a financial model. And so that's what's meant by the time value of money so even if you write off this year as a year where corporate profits in the aggregate are going. Be Quite weak. If you believe that the economy is headed for a v-shaped recovery you can justify stock prices where they are today now. Of course. There's this question is a v-shaped recovery the best. Guess what. The future holds so v-shape recovery. We can all picture it. We shot down on one of the and then we're GONNA shoot back up on the other leg of the V. There are other options though and they all have little letters attached to them. So what are some of the other options? And maybe help us. Y You're describing the different options help us think about whether one is more credible to believe in them. The other right so the cousin of the of the is the year in fact. They're right next to each other in the alphabet which he didn't need to come on and talk about and so in that telling it's unclear where we are in the U. Did we hit the bottom? And we're about to start curving upward or things going to get worse. But we know they're going to get better and I think people can also not fred about stock prices. If they think we're any you and I should also say part of why we even think we might be here has a ton to do with what the Federal Reserve and the government has been doing which we'll get to you. I'm sure in just a minute but aside from VNU. There's then all of a sudden you start getting too much scarier. Letters the L. is dreaded the L. is bad really bad but I think the W is really where my head is that we're going to be in a world where we just don't know and the emotional side of investing is the Fed's interventions going to be enough is the economy can recover. Is they're going to be a vaccine soon enough You know we're going to get these fits and starts and rallies endure. Markets are very very typical. So that in a sense that's not unusual and so for me. The W best reflects the seesaw. There we're going to be so let's talk about the w because in the W we I come down like the beginning of the V. And then we start to come back up again. And we're probably in that second bit of the w where we're coming back up and then it's GonNa go back down again before it comes up and in that theory presumably one of the reasons that we're coming back up is the government's intervention the Federal Reserve intervention of essentially pouring cash into the economy and giving it to investors at incredibly low unimaginably previously low interest rates. Just to raining cheap cash. How is that affecting the market? I mean I've heard people say. And the seems intuitively plausible that. Because there's just so much money coming in that reassures investors to keep the values of stocks high. But I've heard other people saying it's not even that sophisticated. There's no reassurance. It's just free money. And what are you? GonNa do with the Free Money. You're going to have to put it into the markets but you gotta put it somewhere. Well you know you have to put it somewhere in wall. Street's really built on alphabet soup and acronyms and that is best encapsulated with two which is fear of missing out. So if you don't put it somewhere and then things do go up the emotional side of did you miss it. We know why were you not following the herd and then of Course Tina? There is no alternative. Tina's really really special in this market and so to your question you know. It's not just low interest rates. We've been in a low interest rate world forever Well at least for for many years even if it's lower now but it's also the enormous amount of purchasing of US treasuries mortgage-backed securities. Which I think people have to understand. Take them out of the hands of investors and then they have cash. They sold them because they got an amazing price and now the question is where do they put it and they could leave it in cash but the theory of course Is that many of those? Investors will put it somewhere else but the feds backing of the market has extended to the commercial paper funding facility the primary dealer credit facility the Money Market Mutual Fund liquidity facility. And I could name ten more if you only let me in. So they've really gone whole hog. Inter not done yet. And so if you just look in the aggregate of what? The stimulus has been from the three bills. Thus far I'd find this quite shocking. The stimulus in the orbit is greater than the stimulus. That happened over a four year period after the Great Depression. We've already just in a few short months. Spent a bigger percentage of our GDP than was spent to stimulate the economy back in nineteen twenty nine and back then. It didn't quite work right. It wasn't really until I know there's a big debate about this but it really wasn't until World War Two that we got the kind of rise in production that helped get the economy out of the doldrums. Sure so that could be the reason why they have to go bigger this time. So the question is. Was it just a question of size or can the government in the face of incredibly steep correction recession? Maybe even depression can they actually stop all of that. A supply of people who want to exit risk and restore the markets and. I think that question is going to go in fits and starts which is where the w comes in even where we are with respect to the economy turning back on vis-a-vis the the pandemic ebbing and you know all these things are open questions and so. I think one interesting kind of Meta question about the original topic here is why investors have such confidence in it. We're supposed to have confidence in markets that look like markets. We've been in the people that have been trained in finance whether it's at wharton or or Harvard or anywhere else or from the mean streets of of Wall Street have used models heuristic that apply to a certain range of Examples and are not now in uncharted territory for anyone Who was barely alive even during the Great Depression? How can you have confidence that the market ought to be higher than it was a year ago? And that's I think where I start to feel like. This is a lot more to do with temporary factors in psychology and I see examples from a different market than the stock market from the credit.
"financial markets" Discussed on Venture Stories
"That went through pay towel. Rose like much higher you know. People are like frustrated because it doesn't feel completely arbitrary right. It's it's not like the people twenty percent of people that needed it the most Scott. It just like that. Like apply knew how to work. The system in the biggest counterstrike is like a microcosm of a lot of other. People are Out He bought feeling right. I could just feel all arbitrary and no sense of like never talk rec- or whatever in terms like this is getting done like it's you know. Did you know the right people? And Yeah you can say on some level you know the people that acting quicker and they're you know there's more aggressive and so they got it you got you got the loan because they got it in their first and so there's like maybe like some merit in that but like yeah not enough to like you know. Have the program run out. You know because you were four days later than the other guy You know and then what you're talking about where it's literally you know wink wink. You know favors for people for existing clients You know I heard there's a there's a theory he probably conspiracy theory that chase and some of these bigger banks move slow on purpose because they want to fund the kind of get drained the other banks. They didn't want to deal with all this administrative stuff. And so you know chasing particular effort that about again. Who knows but yeah I mean yeah it seemed like the smaller banks Work Work Better for the. Let's go deeper into the Eurodollar. Market is the same more about what's going on there. And and maybe you can get into dollar milkshake theory. But the euro dollar market is arguably the biggest most liquid heavily traded futures market in the world You know historically people think about eurodollars and it's kind of offer. Us deposits Or you know Yeah US dollar denominated deposits in foreign banks. But you know it's more than that it's it's it's it's It's a very you know. The most liquid the most heavily traded features market out there. Mostly you know. Money Market Funds Trade these and picture. What they what they are for the most part You know the investors. The money market funds are very close to the economy And so they're very sensitive And so what I guess you know the takeaway from from from this market. Is You know watching what's going on from the players and and and the the price action in in this market is a very important because arguably the players in that market are are are as close to reality or economic reality as possible. And so you know. There's there's something you look at kind of a euro dollar curves Basically like a yield curve rights at the Treasury yield curve You know is just you know The X axis is what is time. Axis is yield. And you've got a similar thing with the Eurodollar Market. And it's you know right now. It's it's pretty inverted. Meeting nearer term rates are higher than than kind of out out months You know and then it starts to slow back up again. It's Kinda like it's Kinda like smirk of a smile but it's like it goes really started tie and then it goes down and then I can send you a picture at some point. Start Tie and then it goes down for like twelve months twenty four months and then it starts to like slowly tick backup wasted. What it's basically saying is that you know. Rates are going lower in the near to intermediate term You know the the market participants in the most Liquid market in the world the most heavily traded market in the world by the people who are the closest to the economy are basically saying you know rates are going to be lower. Growth is going to be very slow in the in the short intermediate term And then our recovery is GonNa be relatively prolonged as well over the next five or ten years again. These are these are. This is based on Eurodollar future trading met. You know it's happening across all tenures on the curve. That is implying the curve. And it's just right now. It's not speaking to goldilocks. It's not it's not you know saying where rates are going to be. They go back a lot quickly because growth is going to pick backup. Usually when growth is is really high rate. Interest rates are high. I mean generally correlation what it's saying interest rates are going to be low in the short intermediate term and they're going to stay there for a bit and then they're slowly going to go back up Again which to me reads that they're saying things are going to be very slow growth wise in the short intermediate term. And then we're going to slowly start to grow for come out of that at some point so that that's another thing that's a little bit you know. I don't use your words like Wonky is just like you know you look at certain markets and you know Valuation Too High. And you know they're implying pretty high growth etc. You know you look at the Eurodollar market which is again. I keep saying that very very you know. Biggest players in the world are saying now. It's going to be slow. It's it's GonNa it's GonNa be volatile likely as well and we're not just going to see some v-shaped recovery to do you want to get into dollar Yeah I've heard she will talk. I was hoping to get a gauge so my understanding but basically the idea behind the dollar milkshake theory as it relates to the Eurodollar market. Is that as as you have. All these central banks around the world that are ellery system in aim imprinting that mummy. Oughta that liquidity judge actually sucked up into the dollar partially huge Whatever insane amount of money is you asked me a debt that you get paid back in in? Us dollars compared. I guess what the US is now. Zero percent interest rate which is relatively high compared to most most of the places negative negative at this point into like that you that those that money to flow into dollars and strengthen dollar yeah. I've heard this A consulting contractor person. I've worked with for few years. There's some Paid in every month Using transfer lies can the last last six months or something like in Australian dollars the amount on paying him has gone up thirty percent or something just because the doll the US dollar has gotten so much stronger relative to the assure. That news like very interesting because like we're talking about your QB and inflation stoller and Blah Blah Blah. It's like maybe actually the median term implications all the money. The actually makes the. Us dollar much stronger like all that that global money printing get sucked up as as increased demand for dollars and the dollar strength relative to other currencies rises. Yeah I've never heard that before. I don't know it sounds like I should have heard of something like that before. But it makes it makes sense and I know everyone doesn't -pinion on this and there's a dollar shortage out there. I think that flows exactly in the what you're talking about a little bit we're gonNA demand in US dollars so high and that's what's causing the strength and you know to me. I just think about the. Us dollar is Kinda the tallest midget Relative it's sad you know dollar hegemony where we're you know we're the we're the reserve currency of the world and that's us Still I you know I think at the function of that as well but I guess I. Yeah you know you like you said you get the ECB and the Bank of Japan and then giving you know every frigging country printing money you know across the board and mouth mentioned like the Argentina's of the world Yeah the Dow. It looks pretty sweet relative. Relatively speaking you know again what can call the paradigm shift to for the dollar to use for the dollar lose its its Its dominance Again we could. We do a three hour broadcast on that with smarter guests than me But like yeah that. That's I think what you're saying you know. Make Sense Taylor Although I you know there's so many moving parts of that one I I I don't know totally yes. Yes with our with all the stuff that I guess. That's what I keep thinking back to your earlier. Point of like people rushing into the bond market Just seems like a variance outcomes. The cone of future Just like really high. Which makes sense like that's why you know. Volatility is is Kinda like the market's way of throwing up attention saying like I don't know what's going to happen right like volatile we know in the future teams Volatility low any. I'm and vice versa. Yeah and I think I mean you brought up a point About vall kind of going from eighty down to forty or whatever it was and just you know yeah kind of roof and you know went eighty and I don't know where it is right now. It's in the thirties But it's it's crazy. I mean I think I mean you ask the questions like why hasn't the why hasn't evolved persistent and then other people have said that to me to like and my argument is it's still in the thirties the forties you know You know people were. We were talking about it. I mean you can. You can You you can still. There's still options are still not cheap For the most part and I think you know I think when you're comparing the eighty yes but you know when you're comparing into an average Zik so what eighteen or whatever it is over over history It's still pretty elevated And I think that that speaks to your point and that's after the market's already gone up. You know a lot from the lows so you know we're in a situation where vicks Volvo still elevated Relatively speaking to historical long-term historical. You know it's it's well off the near term historical a price levels but you know. The market's gone up a lot and here we still are. And so th- Yeah. I think I think to your point the The market saying the the the the the the tail still relatively fat. At this point. This been a win for in the MD argument or sort of a pro on the MD side lit sort of the Austrian debate. A little bit like learn anything about Bitcoin or not learned about anything about how how it operates as a result of this. You know it's funny. The thing is is i. I'm not that up to speed Iowa's books written on and all these things I know I know generally what it is And again I think people. Can you know details point earlier like look printing a bunch of money? Qe last time in car the ton inflation and look what? Look what happens You know that. That's that's the thesis and that's you know again. I think the sample size is not that great even though yes it's been ten years of kind of these things. I think when you're talking about You Know Inflationary. Y- it's it's you know that's a longer term conversation but but yeah I mean. I think you're going to start to hear that. I mean you start to hear some of this stuff that we're talking about. Echoes Echoes it. You know talking about direct deposits people that you're talking about You know giving people money back Making people whole all these things That you know just just kind of are extremely costly And you know that doesn't mean bringing the whole deficit side of things. Which again is I mean. That seems like also like a fool's errand but I think yeah I think. Mtv is is going to be a big part of the conversation going forward You know or some derivative of it As as right now what we're seeing. It's just it just you can just dismiss it. It's like you know the thing I keep thinking about as a student loan Situation Would Ed. I think the numbers like one point four one point six trillion dollars in student loans. I mean people you know just it. Just forgive him. You know what another one point four trillion on top of the rest of this thing. Let's forgive every student loan like this. Just do it like why not like you know. We're just adding on top of think of the think of what that would do for people you know and then think about what it would do for others but like you know just just just added on top. Why not you know. It's just bailout eleanor's pension bone it's fine. It's just another extra dollars like who you know. I feel like that. Those are the conversations that could be had to your point and You know MTV you know could could very likely be or some version of it A thing in in the not-so-distant future Yeah Ed pertains to Bitcoin. Sorry go ahead. You go sign entertainment. I'll let you get into. Bitcoin is it does feel like this kind of like pulled it like. I mean there was already in the overton window but now it just feels like squarely in the middle of the overton window can now like it's just. It's it's easier to talk about in a way that it wasn't from a political perspective or whatever it is I heard initiative anecdotes. I moved on twitter. Saying like trump was very insistent on. He wanted his signature to be on all the checks that got mailed out to people which is like twisted like a pretty sad a lot of ways but like politically actually very smart right. Like you know who you're sitting at home. Your Jobs Gone. You get the stigma check. Twelve hundred checkered says Donald Trump on it like. Oh Yeah I love that guy right like he said we twelve hundred dollars starts out this kind of like the politics of it like yeah like free money like yeah you definitely get folks like there's no way giving people free money doesn't get you. That's totally couldn't agree more with that what bitcoin did. Oh yes that that you know that it's hell that it's held up relatively well In the context Eric that that you know we. We've had a relatively volatile last three months Bitcoins always volatile You know go through three thousand thirteen thousand and then back to six thousand and you know and I think most Bitcoin Investors traders etc. I know that but the fact that it's it's That it's kind of holding up and and I think the value proposition of it again..
"financial markets" Discussed on NPR's Business Story of the Day
"The global economy is teetering because of concerns over corona virus. The outbreak has caused turmoil in the stock market and then oil entered the mix this dispute between Saudi Arabia and Russia caused panic. Yesterday was Wall Street's worst day in more than a decade after the markets closed president. Trump said he's going to ask Congress for help. We're going to be meeting with house. Republicans Mitch McConnell. Everybody and discussing possible payroll tax cut or relief substantial relief very substantial relief. That's a big that's a big number we've NPR chief. Economics correspondent Scott. Horsely with us this morning. Hi Scott. Good Morning David. Listen to the president there. A big number substantial relief. Can you help us understand? Exactly what he's talking about not exactly He did not offer a lot of specifics during that hastily arranged statement to the news media after the market closed yesterday. He did promise that he'd have more to say today. After he consults with lawmakers you heard him float the idea of payroll tax. Cut there He has also talked about providing some targeted help for industries such as airlines and cruise ships that have been obviously hard hit by the corona virus outbreak. He also mentioned loans for small businesses. That have had their operations disrupted or may have. Their operations disrupted in the weeks and months to come and he also mentioned some help for workers who don't have sick leave. That's important because you don't want people who do fall ill to feel economic pressure to keep going to work and possibly spreading virus. I was interested. They said you know he's going to consult with lawmakers as you said but he mentioned House Republicans and Mitch McConnell but what about Democrats. I mean. It doesn't even need both sides to to make some big moves like this to help the economy he does and an he gives us a conspicuously absent the with no mention of House Democrats who do have the majority and would have to sign off on something like a payroll tax cut now. There are certain things that the administration might be able to do on its own using existing authorities maybe some of those Small business loans for example but it is gonNA take congressional action that means some buy in from Democrats in the house. It does seem as if Both the White House and Congress have now come to agreement that some kind of economic responses needed to the threat posed by the corona virus. But they don't necessarily see eye to eye on what that action by the government ought to be well as I mentioned historically bad day on Wall Street and your head Treasury Secretary Steven Mnuchin speaking yesterday briefing reporters about the Krona virus and trying to reassure investors. Let's listen here. We will provide whatever tools we need that the economy will be in very good shape a year from now. This is not like the financial crisis where we don't know the end in sight. This is about providing proper tools and liquidity to get through the next few months. Sounds reassuring. Sounds optimistic I mean. What do you make of that? Yeah this is the kind of reassuring message you want to hear from the treasury secretary at a time like this. Of course Steve. Emotion is also the fella who continues to insist to this day that the tax cut is going to pay for itself so he may have squandered some credibility here. He is right that this is not like the financial crisis. This is a different kind of economic threat and the decline of new corona virus cases in China does suggest there is an opportunity for The government slow or even stop the outbreak but Europe and the United States are still in the early stages of that curve. So they're still just a lot of uncertainty about what the economic consequences are going to be when people feel uncertain. Not just about investments right. But I mean even their paychecks. I mean whether if businesses really suffer they can be laid off in something like this. Yes and House Speaker Nancy Pelosi a Democrat took a swipe at the president's proposal yesterday. She said it seem as if the White House was trying to prop up the Dow Jones more than it was the Jones family. Democrats are skeptical of the idea of payroll tax. Cut although that is something that was done in the recovery era from the great recession. It's fairly fast. It's fairly easy But it is not. It doesn't help people who are going to for example and not on a payroll the idea of helping people who don't have sick leave so that they don't feel the need to go to work. Does seem to be one area. Potential Agreement between the White House and Democrats on the hill. Could all this taking closer to a recession? The risks of recession has certainly increased before the virus outbreak. Most accounts were not predicting a recession in the US. In Two thousand twenty and now there are some prominent forecasters who say it's more likely than not but there's still a lot of uncertainty and the wild swings you see in the stock market just reflects the uncertainty investors have as they try to Suss out what path is. GonNa Take Scott horsely. Npr's chief economics correspondent. Scott. Thanks so much. You're very welcome..
"financial markets" Discussed on KHNR 690AM
"Income and the financial markets consistent income what that's for your retirement or so you can fire your boss you know a lot of people are just trying to make sure everything longterm his head on the right track and a lot of people also on the other side of that going you know what i want a fire my boss i want to take control of my income and have it come from the financial markets the key to consistent income generation has always been a threepart conversation right how do we make money when the market goes up how do we make money when the mark go sideways and then that big one how do we make money when the market goes down you know ryan is a great question no in fact so many people don't realize that they'd been there blazel i love that word bam blizzard goodwin for for so many years and if thinking that the markets only go up it's the only way they make money in fact i want to give our listeners an analogy and what you think about this because this is exactly how the industry has been treating you all these years you've been told the only way you make money is when the market goes up and when it goes down you're losing money well the analogy is silly if you like me saying to you that in your car for the next week all you could do is drive in forward you can never put it in reverse so all be doing is going around in a circle which is what most people do financially their entire lives and then you have this mechanic is so called investir broker financial analyst who's out they are telling you yeah there's a problem with the car and it's a cautious much more money for us to fix it for you but the bottom line here ryan is there's nothing wrong which shorting the market and being able to sell stocks that you don't own and be able to sell it back at a lower price in there some interesting things going on in the markets right now and were you especially i do a lot of futures trading and so i'm looking at the one i'm looking at the overall indexes i'll look at him in the mornings as the markets are getting ready to open up and get ready for my day but one of the.