Full Transcript for Elevated Shepherd's Pie

an interesting note. According to Reuter's, some XAI executives could be given the option to receive cash instead of SpaceX stock as part of the deal, which I thought was interesting. If you work at XAI, would you rather take cash or take SpaceX shares if you had the option. 00:05:51 Speaker 1: To Yeah, I mean this is the thing that people talk about with with the Musk empire. Right, there's been like expanding and contracting, right, Like Tesla did acquire the solar company a while back, and then x and XAI emerged, So like sometimes the must companies combined and sometimes they are new most companies, and in general, it's like a good idea to motivate people to work on stuff by giving them stock and the stuff they work on. Right, It's one reason to have different companies, right, the AI people get paid in AI stock, and the car people get paid in Tesla stock, and the rocket people gets paid in SpaceX stock. And if you mush them all together, then like people have you know, less direct impact on their own compensation, and so there's may be less motivation. So maybe if you're at XAI AI researcher, you're like, I don't know anything. I have rockets, I don't get paid for like rocket launches. I want to Well I'm sure you might think that, but you might just think like I want to get paid cash for my AI contributions and not have to worry about rockets. Yeah, so they have. He reported that they're aiming to go in June because on June eighth and ninth, Venus and Jupiter will have some sort of conjunction and that would be cool. 00:06:57 Speaker 2: That would be cool. 00:06:58 Speaker 1: Now, June ninth also is is six', nine Which i'm SORRY i did got a bigger eye roll, there. 00:07:06 Speaker 2: But, WELL i can't BELIEVE i didn't put that together UNTIL i. 00:07:08 Speaker 1: Know, right it's like one of these things where it's like planets are lining, up but, like, really we're going on six. Nine it's. 00:07:15 Speaker 2: Horrible it's. 00:07:16 Speaker 1: Horrible there's no evidence that they're going. On SO i, mean it's just like that's you, Know elon must probably chuckled about. It. ANYWAY i will SAY i wrote about this AND i was, like you, know it's interesting that the position of the stars is Motivating Elon musk's, decisions although AS i talk about, It i'm increasingly convinced that the numbers six nine is motivating his. DECISIONS i use the word, astrology, yeah and someone emailed me to be, Like Elon musk is interested in, astronomy but that's not, astrology and it's interesting because it's not like signs of the. Zodiac astronomy is the science of like looking at where the stars are. An astrology is the superstitious belief that like human activities are influenced by and like you, should you, know make decisions based on the positions of the stars and the. Planets AND i feel like it's fair for me to say astrology. 00:08:11 Speaker 2: HERE i, mean on this, Podcast i'm declaring you. 00:08:14 Speaker 1: CORRECT i think it's not quite. Superstition it's more like jokey fake. 00:08:18 Speaker 2: SUPERSTITION i, MEAN i would posit that the position of the stars influences all of our behaviors and we just. 00:08:24 Speaker 1: Don't know would, yeah, right of, course, Right BUT i don't Think Elon musk would if you put him to. IT i think that he probably doesn't really think, that but he will act like he thinks it for the. Joke you, know we've. 00:08:36 Speaker 2: Talked about this, before HOW i would love to sit someone down and just have an honest conversation. 00:08:40 Speaker 1: With them about. 00:08:41 Speaker 2: Astrology, WELL i would like to, know, like are you truly interested in? That in? What in? 00:08:47 Speaker 1: Like REALLY i feel like he's. 00:08:49 Speaker 2: Interested is it about six' nine or is it about the alignment of. THE planets i want. 00:08:55 Speaker 1: To BELIEVE that i don't think he CARES like i don't think he thinks that like the lignment of the planets is a special and we'll therefore get him A better. IPO price i think, he's like. Planet's, cool yeah well he's. 00:09:06 Speaker 2: Right, there yeah they. 00:09:07 Speaker 1: Are right it is kind of a motivating factor for building a space. 00:09:12 Speaker 2: ROCKET company i also said to you earlier today that we're entering the year of. 00:09:16 Speaker 1: The horse, oh yes. That's right, You sorry now we'll talk about Your, astrological yeah. 00:09:21 Speaker 2: Thank you i'm. Super psyched is it strictly because you? 00:09:24 Speaker 1: Like horses In the year of? The horse seems like something you'd like? Or like is there more? 00:09:28 Speaker 2: ASTROLOGICAL information, i MEAN so i very glancingly know about the year of. THE horse i don't want about the other years more than the. Other, years, yeah well. 00:09:40 Speaker 1: You're not just like a general connoisseur of, like, no. 00:09:42 Speaker 2: NO no i mean it's served to me all over social media that this is going to be the year of the horse for. Obvious reasons apparently the year of the horse is going to be a lot better than the year that we, just exited, WHICH personally i add a terrible year of the whatever things are looking up, for me Just w but you're the horse in general is all about putting that behind you. And excelling at least that is my understanding looking at. Social media not, An expert i'm sure someone out there listening right now is steeped. 00:10:12 Speaker 1: IN this i assume it's good to spend more time, with horses but maybe that's. 00:10:15 Speaker 2: NOT true, i, MEAN listen I got i got some horses you can hang out with specifically mad, no one not, the listeners not the. General audience let's talk. ABOUT gold i love. This story tether apparently is buying just tons and tons of. Gold LITERAL and i love This because teather isn't trying to become. A bank it's trying to become a. Central man it's. So Cool the heather. 00:10:56 Speaker 1: Is crazy because like the very basic business of, like takeing, you know one

hundred, billion dollars almost two hundred billion dollars of, investor cash parking it in, t bells clipping the coupons of the, t bells doing, nothing else and like being insanely rich with like the simplest business model in the world is. So, Good yes and, they're, like no let's make it. More complicated so like they have reserves. Backing, Tethers RIGHT and i was looking at the, reserves today they have one hundred and seventy four billion dollars OF like us dollars to twether. Liabilities outstanding they have like a seven billion dollar, equity cushion so like the reserves are like seven billion dollars more than, their liabilities and they have seven percent of their reserves so more than their equity cushion in. Precious metals so like instead of just buying treasury bills just keeping your dollars backed, by dollars, they're like let's have some more dollars backed. By, gold yeah which, is like in some ways a crazy thing, to do because like you don't need to take any. Basis risk you can just put it in dollars and live a. Nice life but in, any ways, it's, like yeah it's like a traditional central banks back some of their liabilities. With, gold yeah it's, like FINE so i sort of understand where they. Do it those a by, the way some of their liabilities are bad, by bitcoin which is. Also insane but it's just like if they transcended regular finance and become a central bank and, they're, like yeah we have some big stash of gold in a Vault, In switzerland i'm so. 00:12:17 Speaker 2: INTO it a nuclear Bunker in switzerland that was in, the lead SO obviously i was already going to love. This story they are the largest known holder of gold outside of Banks And. Nation states bloomberg INTERVIEWED, the ceo and he said he Predicted that washington's geopolitical rivals would launch a gold pack alternative to, the DOLLAR which i. 00:12:38 Speaker 1: Also love one thing that they're doing here is they're backing liabilities. With assets, i'm, like yeah. The assets, you know you don't need to diverse by, the assets but like perhaps you want to for. Some reason but the other thing they're doing is they're like skinting where the puck, is going and, they're like eventually gold will be the future, of currency so we'd better, hold, gold, which, like, OKAY whatever, i, mean look. 00:12:57 Speaker 2: Time is a. Flat story to be fair. 00:12:58 Speaker 1: To, them yeah they have been better at predicting the future of currency then, FOR example i. Have been so, you know if they think it's going to, be gold you should listen to. 00:13:07 Speaker 2: That, much yeah maybe, we should, you know not be smiling. So much just to put into context how much gold. They're buying they bought over seventy tons of gold over the course of last year for. Their reserves, all told they own around one hundred and forty tons, of gold which is. A lot and it's interesting that they stepped up their buying and gold has been. Going insane central BANKS and etf investors are collectively buying more than fifteen hundred tons of. The metal but still you. 00:13:36 Speaker 1: Introduced a, central, bank. 00:13:38 Speaker 2: Yes exactly buying gold sort of price. And sensitive so it's definitely a catalyst behind. The, rally yeah, it's great it's. SO great i just want to. Say THAT the ceo, also said so the former nuclear Bunker, in switzerland it's guarded by multiple layers of thick. Steel doors he described it As A james bond kind. Of place. IT'S crazy i want to. 00:14:03 Speaker 1: Go, THERE well i want there to Be a tether gold heist story, because, like okay they're a, central bank they're the largest whatever holder, of gold but like, you know they have ties to the, mighty ducks like they're like a somewhat. Comical organization and For like tether to have a nuclear bunker filled with the one hundred and forty tons, of gold like that's. Really, Good yeah like the person who robs that will not be like. 00:14:28 Speaker 2: It's like at the base of. Some, MOUNTAIN yeah i want. 00:14:30 Speaker 1: To go give me Like A rob. Schneider movie it's going to be. 00:14:33 Speaker 2: Really good someone's starting. The screenplay it's cool that They're. IN switzerland i, cover ETFs as, you know and a lot of the, gold ETFs Including STATE, streets glg which is the. Biggest one they have their Vaults. Underneath, london yeah and that's also a place you. Can't, go NO but i love thinking about where the gold is physically stored just. DELIGHTS me i, don't know it's just so this is. MOUNTAIN is i don't Know if i've told this story on the, podcast BEFORE but i was talking to Someone At state street about the vault at the time WHEN like gld was seeing, crazy INFLOWS and i, was like is the vault? Getting crowded and, they, said no gold is. Really small it just weighs. A LOT and i, was, like, oh yeah, for sure and then had to quickly move. 00:15:18 Speaker 1: ON right i like the idea, of like welcome to our enormous pile, of gold and you open the door to like a cavernice echoing vault and like in the corner there's just like a little pile OF flick i. 00:15:30 Speaker 2: Was, expecting YEAH like i, was Expecting Like harry Potter at gringotts where they opened the door and it's just like piles and piles. 00:15:38 Speaker 1: Of gold and maybe it Is, for tether. 00:15:40 Speaker 2: YEAH maybe i mean it sounds like they're on a mission to, get, There. 00:15:43 Speaker 1: RIGHT like i feel like they would give you Like a goblin powered. Car, ride yeah see. Their, gold yeah that's part of their transparency, slash comedy like they would. 00:15:53 Speaker 2: DO that i think THAT'S why i find it so charming because that's Exactly what, i'm, picturing. 00:15:56 Speaker 1: Right Just from harry that is not going to give you no. Like fun it would be. Very. Sober Right when tether takes you on a tour of their, gold vault they'll be like some loops on, the, track right it's going to be like it's going to be a. 00:16:07 Speaker 2: Little exciting

maybe a smoke machine. Yeah yeah, also Interesting so tether doesn't just want to, buy gold it also wants to. Trade it and this. IS interesting i didn't, realize this BUT so hsbc it lost to senior gold traders Toe. To tether they, hired, them right so they have big, ambitions. 00:16:27 Speaker 1: HERE right i think constantly LIKE if i, RAN tether i would have so few ambitions because like it just gives you billions of dollars a quarter. For, Free yeah, like go here's your billions. Of dollars and then you're like this is only. Tangentially irrelevant but You Know, brad JACOBS the ceo of various logistics COMPANIES. LIKE qxo i think they HAVE the x. Of. THEM ye i think we've talked about it on. This podcast probably one of his amazing things is that he read a Book called How to Make A Few, billion dollars which is a. 00:16:55 Speaker 2: Perfect book he's out with. 00:16:56 Speaker 1: A sequel he's out with. A sequel the SEQUEL that i, JUST found i, might ask is led How to make A few more, billion DOLLARS which i love the conceit that you bought his, Previous book you read his, previous book you took the advice, to heart you put it, into practice, it worked you made a few. Billion dollars and here you are with a few billion DOLLARS thinking i would make a few more, billion DOLLARS but i don't know how to. Make, That yeah And Then brad jacobs comes along with another book and, it's like how to make a few more, billion dollars and, you're, like, oh okay That's how i'll make a Few more like the people who made a few billion dollars are not really reading this book to make a few more. Billion dollars but it's such a, lovely yeah. Conceit anyway tether are the people who, are like HOW do i make a few more? Billion? 00:17:35 Speaker 2: Dollars, yeah yeah they want to trade it and compete with the. Actual banks and just a little bit more on the physicality. OF gold i love it. So much the company is exploring how to make its process of buying gold, more, efficient because according TO, the ceo buying one to two tons per week is a very. Sizable, amount yeah that, seems. RIGHT right i never think, about it, you KNOW. 00:17:56 Speaker 1: Because i never think about how much it would cost in transaction costs for me to buy a ton of gold. 00:18:05 Speaker 2: Every week and then transport it to. Your. Bunkers yeah what a. Charming story. 00:18:26 Speaker 1: So when companies run into, debt trouble they do what people call liability management exercises, or lms where they try to reduce. Their debt often the way that works is like they go out to some creditors and try to pick them OFF that i try to play one set of creditors. Against another there are deals to be done where one set of creditors gets good new collateral at the expense of other sets. Of creditors people sometimes use the term lender on lender of violence or credit creditor and creditor. Of violence and so what happened at this Company called OPTIMUM or ltcusi is that all of the creditors signed an agreement saying they wouldn't, do that they would all. Work together they would only do a deal with a company if two thirds of them voted to agree to. The DEAL and ltus or out them and didn't, like this and they sued the creditors saying you're not allowed to. Do that that's an anti. Trust violation you're all agreeing to basically. Fix prices you're all agreeing that you won't trade your debt with us at anything less than like the price you all, agree, on WHICH like i, Don't know i've never been an anti. TRUS expert i find that like sort of an intuitive but also like very sympathetic with the creditors because when companies run, into trouble like the creditors should kind of get together to divvy. Things up, BUT anyway i don't know what's gonna happen in. The case but it was Brought by optimum's, law firm a litigation Boutique Called kelli CanCon but like their main Lawyer was kirkland and ellis the giant law firm that does a lot of restructuring work and a lot of private equity em and. A, work yeah and what happened next Is that kirkland has resigned From representing optimum in. Its network and the impression that everyone has and there have Been Some financial times articles, about this the impression Is that kirkland may have been sort of behind. This lawsuit kirkland had been suggesting the theory that it's not okay for creditors all get together and sign a, cooperation agreement and the creditors really didn't, like that and they Came to kirkland and said something yeah that might Rhyme, with hey if you if you're involved, with this we won't work with. You Anymore, and kirkland which gets a lot of business from the asset managers in, the complaint decided maybe we Can't represent, optimum anymore which is like an, interesting like like the alleged problem here is that like these creditors have too much market power and they all gang up together and, so optimum we. Can't refinance. It's set and then and when like, You know outum also loses, its lawyers, it's, like oh maybe they did a lot of a. 00:21:03 Speaker 2: Market POWER well i was a little bit, confused because as, you said so the lawsuit was filed by this. Boutique Firm the carters Believe that kirkland had been behind. The Lawsuit did kirkland basically say that yes we were if they resigned as. 00:21:18 Speaker 1: LEGAL counsel i don't think they said yes, we were like they. 00:21:21 Speaker 2: Had like, Or not like directly they said. 00:21:22 Speaker 1: Said in public like creditors should be careful about forming these committees because there might be an actual trustress The prominent kirkland restructuring partners. Of that and so whether or not they, were, like oh we were secretly, behind it it's like they might have agreed with some of the. LEGAL theories i don't know that they conceded that they were the people who pushed for the lawsuit to. Be brought but in, any case like working with a company that sued all of the big private credit lenders for doing this is like maybe

whether or not they were behind, the lawsuit like if they were pressured to quit, the company like that suggests that you're not allowed to work for companies that zero creditors. 00:22:00 Speaker 2: Like, that yeah the ft was talking. About this they called this a gut check Moment that kirkland blinked when the masters of the universe threatened to take their vast. Business elsewhere everyone in high finance and big law. 00:22:14 Speaker 1: HAS noticed i used to be at an, investment bank and we had lawyers on, our deals and like the companies, had lawyers and sometimes the company's lawyers were people who often, represented, us right who often worked for banks and sometimes works. For companies and if you're, a company, that's, Good right like it's good to have a law firm that knows the, banks well because like it's, you know the, repeat players they know, a lot they like know. The banks but it's also a little unnerving because if you're the lawyers who regularly work with, the banks you might not work that hard on behalf of the company at the expense of, the banks because you know you'll be working for the. Banks again and there's something like, that, Here, right like if you're a company that runs into distress and like you hire a big law firm that regularly worked with the biggest, Asset, managers like, that's good they, Have connection they're like they. Have clout but it's, also like are they looking out? For you are they looking out for the asset managers who regularly? 00:23:11 Speaker 2: Hire, THEM yeah i have to imagine that's a more urgent question for a lot of those. Companies. Now yeah in the wake, of This the ft also points out That, in december they reported that many of the same private capital firms that were Upset at kirkland Over the optimum fireworks are also UPSET At jp morgan for providing a two billion dollar rescue loan that shifted some of the collateral out of reach of The existing. OPTIMUM creditors i don't know how YOU Pressure jp morgan though in. 00:23:39 Speaker 1: This. SITUATION yeah i think it's like kind of standard for banks to be involved in loans that credit funds. FIND annoying i can tell you the class accountswer to how you get your revenge on, the banks which, tell Me When city group wires you're nine hundred million dollars, by accident you give, them money which is the. Same thing Like the city worked on a financing that the creditors are, the Company, there's revlon the creditors, didn't like And then city Accidentally wired bundy to the creditors and, they're, like well we're going to. Keep THAT But, jp morgan. 00:24:10 Speaker 2: That's, a really really More, careful yeah that's a really. Special situation seems as Unique to city in some. 00:24:16 Speaker 1: Ways SEEING Of. Jp morgan, oh, yeah, yeah. 00:24:21 Speaker 2: YEAH brutal i lost that in my, copious notes so don't you tell me. 00:24:25 Speaker 1: About it There's A bloomberg, news story not like, foto details BUT Basically, jp morgan senior

leadership quote has told the firms investment bankers that they need to work harder to close the gap, with Rivals Including colmyn sachs on mergers. And acquisitions the co Heads Of global banking said that the group had underperformed in M and a in twenty twenty five and that improvement was needed to start winning back. MARKET share i assume that most bankers get some version of. The speech, most, yours right you always work a little harder seems. 00:24:55 Speaker 2: Pretty, standard YEAH but. 00:24:57 Speaker 1: I read this this week every. So often you good stories about banks telling, their bankers actually you need to work less hard and do. Fewer, Deals right so sometimes that is, like compliance, like right we're Going To swiss bank gets in a lot of trouble for bringing in a lot of bad clients that have a meeting being like maybe bring in. Fewer clients but some of it is like there's a lot of wasted work, at banks and every, so often like a bank will look around and, be, like look you're spinning, your wheels doing a lot of unpaid work for small, time clients hoping that one day they will give you a small mandate where you'll get a. Small fee don't, Do, that like spend more time focusing on clients who will actually give you a deal and pay you a, big fee and just spend less time spinning. Your WHEELS and i always love reading. Those stories but like, in practice when you're, a banker and like you don't want to put all your eggs in, one, basket right and like if you're only trying to get the SpaceX ipo and you don't, get it then your year. Is ruined but if you've also got five other irons in, the fire where like some, you know small utility company will pay you half a million dollars to do a, credit deal like. That's something and so often you do read stories just because they're conterintuitive about bankers being told not to work harder to chase. More clients but this is the more. Normal version just do. 00:26:16 Speaker 2: More deals maybe the pendulum will swing in a couple. Of years. 00:26:19 Speaker 1: Always swings, but YEAH but i think if you're losing, market share you gotta just. WORK harder i also love that there's no. Differentiated strategy how do you get? More deals why you, work harder getting, more planes shake, more. 00:26:32 Speaker 2: Hands focus on This secure maybe is just. 00:26:34 Speaker 1: Do it just do more talking to clients and then the deals, will come which is. 00:26:38 Speaker 2: Probably true how psyched do you Think THE goldman M and a bankers were reading. This story i'm sure. 00:26:44 Speaker 1: They got a talk, being like you need to. Work harder there's no, standing still just yell. 00:26:49 Speaker 2: That, work, harder ye keep feeding. 00:26:51 Speaker 1: The beast maybe, they, think, Oh no morgan is going to. Work, harder yeah maybe i'd be. 00:26:57 Speaker 2: Pretty. 00:26:57 Speaker 1: Psyched yeah it's like it's like a three second moment of victory and, THEN. 00:27:02 Speaker 2: Yeah i got, a plan pick back up. The, phone yeah sometimes that happens. In journalism, you know you're told to write, fewer stories write better once. 00:27:11 Speaker 1: It's right do you ever have the, experience of like you learned that some competitor has been told to work. 00:27:19 Speaker 2: Harder to keep up, With, You, like no That's, really yeah that hasn't happened. To me it sounds like maybe it happened. 00:27:25 Speaker 1: To, you no it Happened. 00:27:26 Speaker 2: To, goldman yeah, all right, Good stuff. 00:27:36 Speaker 1: And that Was The Money. Stuff Podcast I'm matt Levine And I'm. 00:27:39 Speaker 2: Katie greifeld you can find. 00:27:41 Speaker 1: My work by subscribing To The money stuff Newsletter on bloomberg, dot. 00:27:44 Speaker 2: Com and you can find Me ON bloomberg tv every day On the clothes between three and Five. Pm eastern we'd love to hear. 00:27:52 Speaker 1: From you you can send an email To money Pod at bloomberg, dot net ask us a question and we might answer it on. 00:27:58 Speaker 2: The air you can also subscribe to our show wherever you're listening right now and leave us. A review it helps more people find. 00:28:04 Speaker 1: The Show The Money stuff podcast is Produced by Anna Maserakas moses Andam and. 00:28:10 Speaker 2: Alexis HoTT our theme music was Composed By. Blake Maples amy keen is our. 00:28:15 Speaker 1: Executive producer thanks for listening To The Money. Stuff podcast we'll be back next week with. More stuff